ECOVIS ProventusLaw brings you a curated selection of significant developments from the global crypto regulatory landscape in December 2024.
AMERICAS
Court overturns US sanctions against cryptocurrency mixer Tornado Cash
The U.S. Court of Appeals for the Fifth Circuit ruled that the U.S. Treasury Department exceeded its authority when it sanctioned the cryptocurrency mixer Tornado Cash in 2022. The OFAC had imposed sanctions under the International Emergency Economic Powers Act, alleging that Tornado Cash facilitated the laundering of over $7 billion, including $455 million stolen by the Lazarus Group, a North Korean-backed hacking organization.
SEC approves Coincheck as first Japanese crypto exchange on Nasdaq
Coincheck, a cryptocurrency exchange headquartered in Tokyo and a subsidiary of Monex Group, is expected to become the first to debut on the Nasdaq Global Market as early as Dec. 10.
Judge strikes down SEC’s expanded broker-dealer rule, a win for Crypto
A Texas judge has ruled against the U.S. SEC in its enforcement of an expanded “broker” rule that redefined the term “dealer,” impacting both cryptocurrency and traditional financial firms. The court’s decision mandates that the SEC withdraw the rule, which broke with nearly 90 years of established legal precedent.
CFPB finalizes rule on Federal Oversight of Popular Digital Payment Apps to Protect Personal Data, Reduce Fraud, and Stop Illegal “Debanking”
The Consumer Financial Protection Bureau (CFPB) has finalized a rule to extend federal oversight to major nonbank companies that provide digital funds transfer and payment wallet applications. This rule targets entities handling more than 50 million transactions annually, ensuring these companies comply with federal regulations in the same manner as traditional financial institutions such as banks and credit unions. Read more.
18 states sue the SEC, Gensler for ‘regulatory overreach’ on crypto
Eighteen Republican attorneys general have filed a lawsuit against the SEC and its Chair, Gary Gensler, alleging that the agency has exceeded its authority through enforcement actions targeting the cryptocurrency industry. The lawsuit challenges the SEC’s regulatory approach, arguing that it constitutes an overreach beyond the scope of its legal mandate.
Brazil proposes to ban stablecoin withdrawals to self-custodial wallets
Brazil is considering a ban on stablecoin withdrawals to self-custodial wallets, coinciding with the Brazilian real hitting all-time lows against the United States dollar.
FTX sues Binance and its former CEO for $1.8 bln
FTX, the collapsed cryptocurrency exchange, has filed a lawsuit against Binance and its former CEO, Changpeng Zhao, claiming that $1.8 billion was “fraudulently transferred” by FTX management to Binance and its executives. The lawsuit pertains to Binance’s sale of its equity stake in FTX, which it originally acquired in 2019 and later sold back to FTX in July 2021.
Bitcoin strategic reserve bill introduced in Brazil’s Congress
A Brazilian federal deputy has proposed a bill to establish the Sovereign Strategic Reserve of Bitcoins, which would manage up to 5% of the country’s international reserves. The initiative seeks to create a national Bitcoin reserve designed to support the central bank’s digital currency. This reserve would leverage blockchain technology and artificial intelligence to ensure transaction integrity and bolster financial security.
Judge rejects Kraken’s bid to challenge decision in SEC case
A California federal judge has denied crypto exchange Kraken’s request to appeal a decision permitting the U.S. SEC lawsuit to proceed. In an order dated November 18, Judge William Orrick found that allowing the appeal would only delay the resolution of the case. The judge concluded that the SEC had “adequately alleged” that the crypto assets traded and sold on Kraken met the criteria of investment contracts under the Howey test, making them subject to securities regulations.
EUROPE
FCA prepares to finalize UK crypto regulation by 2026
The FCA released statements and a roadmap for finalizing comprehensive crypto regulations by 2026. The FCA’s operations in this sector will significantly increase in the first half of 2025.
ASIA
Taiwan enforces AML registration mandate for crypto providers
Taiwan accelerates its crypto AML mandate, imposing stricter registration rules and penalties for noncompliance. Overseas VASPs must establish a local company, complete AML compliance before operations.
Russia recognizes crypto as property, imposes New Tax rules on mining
The Russian government is rushing to enforce new cryptocurrency taxes as Bitcoin smashes all-time highs against Russia’s national currency, the ruble. The bill classifies crypto as property under the Russian Internal Revenue Code, implementing a tax framework for the digital asset industry. Notably, the legislation exempts cryptocurrency mining and sales from VAT, creating a distinctive regulatory approach to digital asset operations.
Hong Kong warns against crypto firms misrepresenting as ‘banks’
The Hong Kong Monetary Authority (HKMA) has issued a warning regarding the misuse of the term “bank” by certain overseas cryptocurrency companies to enhance their perceived credibility. The HKMA emphasized that it may constitute a legal violation for unlicensed entities to represent themselves as banks within Hong Kong. The authority further noted instances where crypto firms have improperly used the term “bank” to describe their services and products, potentially misleading the public.
Singapore advances tokenization of assets with new frameworks
The Monetary Authority of Singapore (MAS) has introduced two new frameworks aimed at enhancing the commercialization of asset tokenization in financial markets. These frameworks, developed through the MAS-led Project Guardian initiative, focus on tokenization practices for fixed-income instruments and investment funds. Read more.
AFRICA
Morocco central bank to legalize all cryptocurrencies
Morocco’s central bank, Bank Al-Maghrib, is preparing to legalize cryptocurrencies following a ban imposed in 2017 on Bitcoin and other digital assets. The central bank has drafted legislation for cryptocurrency regulation, which is currently under review as part of the adoption process.
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