ECOVIS ProventusLaw brings you a curated selection of significant developments from the worldwide crypto regulatory landscape in August 2024.
AMERICAS
IRS Unveils Revised Draft for Crypto Reporting Form
The IRS has updated its draft Form 1099-DA, which will allow U.S. taxpayers to report crypto transactions starting in 2026. The revisions remove the need to report specific transaction times, broker types, wallet addresses, and transaction IDs. This change aims to simplify crypto reporting requirements and provide clearer guidelines for taxpayers. Read more
FINRA Provides Update on Member Firms’ Crypto Asset Activities
As part of FINRA’s mission to protect investors and promote market integrity, FINRA is focused on addressing the regulatory challenges presented by our member firms’ crypto asset activities. Read more
Wyoming Plans to Launch Stablecoin in 2025
Wyoming is preparing to issue the Wyoming Stable Token (WST), a state-backed stablecoin pegged to the U.S. dollar, by early 2025. The stablecoin will be backed by U.S. Treasury bills and aims to boost state revenues, with proceeds directed to public projects like schools. The state hopes to use blockchain technology to facilitate everyday transactions and lead innovation in the U.S. crypto space.
FBI Uses NFTs to Contact Victims of CluCoin Fraud Scheme
The FBI will utilize NFTs to notify victims of the $1.14 million CluCoin crypto fraud, where the founder, Austin Michael Taylor, misappropriated investor funds for gambling. Taylor pled guilty to wire fraud and is set to repay the stolen funds. This marks one of the first instances of NFTs being used in law enforcement communications. Read more
US Senators Introduce Bill Expanding Secret Service’s Power in Crypto Crime
Two U.S. Senators, Catherine Cortez Masto and Charles Grassley, introduced the “Combatting Money Laundering in Cyber Crime Act of 2024.” The bill expands the Secret Service’s authority to investigate cryptocurrency transactions linked to unlicensed money transmitting businesses and financial fraud. It aims to strengthen law enforcement’s ability to combat crypto-related financial crime and protect U.S. financial institutions.
Canadian Crypto Platforms Must Finalize CIRO Membership
Canadian crypto trading platforms have to complete their registration with the Canadian Investment Regulatory Organization (CIRO) to operate as full investment dealers until the end of 2024. Initially allowed to operate under interim rules since 2021, these platforms must now meet the regulatory standards. Some exchanges have left the Canadian market due to stricter regulations, while others, like Coinsquare, have already achieved full membership.
EUROPE
UK’s FCA Updates Crypto Advertising Guidance for Compliance
The UK’s Financial Conduct Authority (FCA) has issued new guidance for crypto firms on complying with promotional rules introduced in October 2023. These include implementing a 24-hour cooling-off period, personalized risk warnings, and enhanced due diligence. The FCA found some firms inadequately addressing UK-specific regulations, instead relying on comparisons with industry practices. Non-compliant firms must meet the new standards by January 2024, as the FCA pushes for higher industry-wide standards.
Bank of Lithuania publishes its expectations for crypto-asset service providers under MiCAR
The Bank of Lithuania has issued guidelines for crypto-asset service providers ahead of the EU’s Markets in Crypto-Assets Regulation (MiCAR), effective December 2024. The bank emphasized transparency, risk management, and compliance with AML/CFT rules. It also outlined the application process for licenses, stressing the need for detailed business plans, robust internal controls, and operational readiness to meet MiCAR’s stringent standards.
MIDDLE EAST
Dubai Court Rules Cryptocurrency As Valid Form Of Salary Payment
In a significant update to the United Arab Emirates’ judicial approach to cryptocurrency, the Dubai Court of First Instance has ruled that cryptocurrency salary payments are valid under employment contracts. Read more
Abu Dhabi Regulator Proposes Supervision for Stablecoins
Abu Dhabi’s Financial Services Regulatory Authority (FSRA) has proposed a regulatory framework for fiat-referenced tokens (FRTs), a type of stablecoin backed by fiat currencies. The rules include strict operational requirements, such as daily asset valuation and segregated reserves for multiple FRTs. Public feedback is invited until October 3, 2024, before the framework is finalized. This move reflects Abu Dhabi’s growing role as a crypto-friendly hub.
ASIA / Pacific
Thailand SEC Launches Digital Asset Regulatory Sandbox
The Thailand Securities and Exchange Commission (SEC) launched a Digital Asset Regulatory Sandbox on August 9, 2024. This initiative aims to foster innovation by allowing companies to test digital asset services under flexible regulations. Eligible services include exchanges, brokers, dealers, fund managers, and custodial wallet providers. Participants must meet specific criteria and can test services for up to a year, with extensions available. Applications are now open for interested parties.
Russia to allow crypto payments in international trade to counter sanctions
The law, which become effective next month, is said to be part of the country’s efforts to circumvent international sanctions for Russia’s invasion of Ukraine. Read more
New Zealand Adopts OECD Crypto Reporting Framework
New Zealand has introduced a new tax bill aligning with the OECD’s Crypto-Asset Reporting Framework (CARF). Starting April 2026, crypto service providers must report user transactions to Inland Revenue, with international information exchanges beginning by September 2027. Penalties for noncompliance range from $186 to $62,000. This move enhances transparency and ensures crypto trading profits are taxed properly.
Hong Kong’s Project Ensemble Launches for Asset Tokenization Testing
The Hong Kong Monetary Authority (HKMA) has initiated Project Ensemble, a sandbox to explore asset tokenization using central bank digital currency (CBDC). The project focuses on tokenized assets, including investment funds and sustainable finance, aiming for technical interoperability. Leading banks like HSBC and Standard Chartered are participating. Real-world applications have already been trialed, such as digitizing charging piles and tokenized electronic bills of lading.
AFRICA
South Africa Unveils National AI Policy Framework to Drive Innovation and Economic Growth
The new AI Policy Framework aims to boost economic growth, digital inclusion, and South Africa’s global competitiveness.
Bank of Ghana unveils draft regulations for cryptocurrencies and other digital assets
The Bank of Ghana has introduced draft regulations aimed at establishing a comprehensive framework for Ghana’s digital asset sector. The proposed guidelines are designed to foster financial inclusion, ensure economic stability, and provide protection for consumers in the rapidly evolving cryptocurrency market.
GLOBAL
Basel Committee Warns Banks About Risks from Public Blockchains
The Basel Committee on Banking Supervision released a report highlighting risks banks face when using permissionless blockchains, such as Ethereum. Key concerns include money laundering, governance challenges, and reliance on unknown third parties. The report suggests potential mitigations like off-chain asset registries and privacy-preserving identity verification. However, these solutions are still in development and need further testing.
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