September 16, 2023

Welcome to the Global Crypto News hub! Articles by Killerwhale go over the news you may have missed that involves crypto, but had a real world effect. Sit back, relax, and enjoy! News is gathered throughout the week and posted every Saturday!

European investors and Companies are already subject to many regulations when it comes to Crypto; Know Your Customer (KYC) verification, Proof of address (POA) and so one. Companies in the crypto-currency sector are even more regulated by the European Union to ensure tax compliance, and will be even more so in the months to come.

As a matter of fact, a new layer of regulatory obligations involving increased monitoring of crypto transactions, is already under discussion. All will be tracked for transmission and exchange between local tax authorities and tax departments, thanks to a system of automatic information exchange to be set up under the new European legislation.

The name of this new threat is "DAC8", requiring digital asset service providers to report all crypto transactions involving EU customers to local tax authorities.

At its sitting on Wednesday September 13, the European Parliament unanimously accepted the Commission's proposal. 535 MEPs voted in favor of CAD8, while only 117 voted against, including 60 abstentions.

The way is now wide open for this directive, which mandates constant tax surveillance in the cryptosphere. The deadline for EU member states to get ready for the implementation of these regulations is December 31, 2025. After that, CAD8 will go into effect on January 1st, 2026.

Such a decision is nothing less than an obvious invasion of privacy on the part of European governments, who, despite all odds, never pass up a chance to generate money.

As for companies operating in the sector, they will have to increase their compliance departments, implying a possible resilience as well as discouraging innovation in the crypto sector in Europe, as companies may be less likely to launch new products and services if they are subject to increased regulation, especially for smaller exchanges or those with limited resources.

Moreover DAC8 presents a potential downside by limiting access to crypto-assets for European investors as some exchanges may decide to stop serving EU customers altogether. Striking a balance between these regulatory objectives and maintaining a welcoming environment for cryptocurrency innovation and investment will be crucial in determining the future of European crypto businesses.

In any case, what we can be sure of is that this parliamentary decision will make international headlines in the months to come, and could even become the keystone of a new regulatory system.

Source: europal.europa.eu

When Gary Gensler, the Chair of the Securities and Exchange Commission (SEC), appears before the Senate Banking Committee, his primary objective is to reaffirm his stance that certain cryptocurrencies should fall under the regulatory purview of the SEC; “Given that most crypto tokens are subject to the securities laws, it follows that most crypto intermediaries have to comply with securities laws as well,” as he said in his testimony.

This testimony assumes crucial significance within the backdrop of the crypto industry, which is currently grappling with heightened global regulatory scrutiny. A notable example of this is the recent European Union regulation discussed above. During this session, Gensler is expected to field inquiries related to recent judicial rulings that have influenced the regulatory landscape.

Just last month, the US Court of Appeals for the District of Columbia Circuit issued a verdict in favor of Grayscale, instructing the SEC to reverse its previous rejection of Grayscale's application for a Bitcoin ETF based on spot prices. The court's ruling was grounded in the view that there was no valid rationale for the SEC to approve Bitcoin futures-based ETFs while denying spot Bitcoin ETFs.

In a separate legal matter, a US court ruled in favor of Ripple in an ongoing lawsuit initiated by the SEC. The court asserted that the act of selling XRP on exchanges, in and of itself, does not constitute an investment contract. Nevertheless, the federal judge also decreed that XRP qualifies as a security when it is sold to institutional investors, as it fulfills the criteria established in the Howey Test, as Gensler compares the cryptosphere to “what we had in the 1920s before the federal securities laws were put in place.”

Furthermore, Gensler may also field questions about the SEC's litigation against cryptocurrency exchanges Coinbase and Binance, as he stated “we have brought a number of enforcement actions—some settled, and some in litigation—to hold wrongdoers accountable and promote investor protection.” while the litigation is centered on their non-compliance with registration requirements as recognized exchanges.

These instances are of particular interest, considering that some legislators have expressed apprehensions about the escalating regulatory oversight in the United States, contending that it is compelling crypto enterprises to seek refuge elsewhere.

Senator Bill Hagerty (R-Tenn.), for instance, recently voiced concerns that the lack of regulatory clarity in the US is fostering an unfavorable climate, motivating crypto firms to explore more accommodating regulatory environments overseas. This viewpoint was articulated during Hagerty's address to an audience at the Cato Institute, a think tank with libertarian leanings.

Nonetheless, the forthcoming Senate hearing stands as a pivotal juncture for Gensler to elucidate his vision regarding cryptocurrency regulation and to confront the apprehensions of legislators and industry stakeholders alike. The outcome of this hearing could wield considerable influence over the trajectory of crypto innovation within the United States as the current market is essentially made up of “ individual investors participating more than ever before.”

Source: sec.gov