This week, new MiCA crypto regulations make Coinbase take action, US election candidates address crypto, US firms to settle $32B with regulators, and the UAE approves its first stablecoin.
Coinbase acts on stablecoins as MiCA crypto regulation deadline looms
The US-based crypto asset exchange Coinbase is set to clear out all non-compliant stablecoins from its exchange in the European Economic Area (EEA). This is intended to comply with the EU’s Markets in Crypto-Assets Regulation (MiCA), which came into effect for stablecoin issuers like Coinbase in June 2024. It requires stablecoin issuers to be licensed to trade in at least one EU member country.
One stablecoin that developments could dramatically impact is the prominent Tether (USDT), which is not yet licensed in the EU. Tether CEO, Paolo Ardoino, attributed this apprehension to the rigorous cash reserve requirements stipulated by MiCA. If this compliance is not achieved, Coinbase might have to delist USDT from its European platform.
MiCA requires stablecoin issuers like Coinbase to implement a raft of compliance regulations by December 31, 2024. Coinbase intends to limit trading on non-compliant stablecoins by December 30 and assured users of the exchange that advice on converting to compliant options will be issued in November 2024.
Find out more on this story at Coinmarketcap.com.
Crypto regulation report compares policies of US election candidates
A report by crypto company Galaxy has compared the attitudes towards crypto policy and legislation of the two major running candidates in the US election race. The report was issued in a scorecard format, which analyzed the relative views of Democratic presidential candidate Kamala Harris and her running mate, Tim Walz, on the crypto industry, as well as the positions of Republican candidates, Donald Trump and JD Vance.
Overall, Harris is deemed more accepting of the current crypto industry across most of the seven issues Galaxy used as criteria than the outgoing President Joe Biden; and more positive on both attitudes to legislation measured in the report. However, like Biden, she remained ‘extremely hostile’ on ‘IRS & tax issues.’
Trump, meanwhile, was assessed to be ‘somewhat’ to ‘extremely’ positive about most of the current crypto industry issues and legislation. The only commonality Galaxy found between the two presidential candidates was on the issue of ‘Treasury & Sanctions,’ of which both were seen to be ‘somewhat hostile’. The election is set for November 5, 2024, and the US crypto industry is watching closely.
Find out more on this story at Cointelegraph.com.
Crypto regulation report finds US crypto firms were issued $32B in settlements since 2019
A report by digital currency research company Coin Gecko found that US crypto firms were issued $32B in settlements via 25 lawsuits with various regulatory bodies in the period from 2019 to October 2024.
Sixteen of the settlements, worth $30B, were issued in 2023 (eight settlements worth $10.87B) and 2024 (eight settlements worth $19.45B) alone.
The $19.45B that crypto firms were issued in settlements by regulators in 2024 represents a 78.9% increase from 2023. The year is also likely to see a record number of settlement payments. The 2024 numbers dwarf the $24M from the single settlement issued in 2019.
The largest overall settlement so far is the $12.7B jointly issued to FTX and Alameda and announced in August 2024 by the Commodity and Futures Trading Commission (CFTC). $11.2B is reserved to compensate the victims of the 2022 FTX collapse, while the CFTC is also pursuing individual lawsuits against FTX’s former executives.
Find out more on this story at Coingecko.com.
UAE Central Bank set to grant AED Stablecoin approval in crypto regulation first
The Central Bank of the United Arab Emirates (CBUAE) approved AED Stablecoin’s ‘in-principle’ on October 14, 2024. The ruling will make the crypto firm the first regulated stablecoin pegged directly to the Dirham in the Emirates.
Although AED Stablecoin hopes to launch the Dirham-backed AE Coin soon, the CBUAE’s licensing framework still retains strict requirements for stablecoins. Issuers will still need to back their stablecoins with equivalent cash amounts deposited in a UAE bank or split their cash ‘insurance’ fifty-fifty between reserve assets and secure investments in local government bonds or CBUAE-issued Monetary Bills.
While not yet in force, the ruling is a significant step in the UAE’s development of a productive and regulated domestic cryptocurrency industry and supports the country’s Digital Government Strategy 2025.
Find out more on this story at Cryptonews.com.
Phishing scam drains crypto whale address of $36M
Reports from various blockchain security companies, exchanges, and industry analysts have confirmed that about about $36M or 15,079 of fwDETH (DETH) has been drained from the wallet address of a so-called ‘crypto whale’ – an investor with a high and possibly influential amount of a particular cryptocurrency.
This resulted in disruptions to DeFi markets, causing DETH to get ‘depegged’ after losing its 1:1 exchange rate with ETH. The scam has been linked to the Angel Drainer phishing group: an organization believed to offer ‘draining-as-a-service’ (DAAS) to fellow criminal entities on the blockchain.
In 2023, phishing services added to $295M stolen from 324,000 victims. Meanwhile, the Web3 Anti-Scam platform Scam Sniffer reported that the third quarter (Q3) of 2024 alone saw phishing scams cost nearly $47M stolen from 10,805 victims.
Find out more on this story at Cryptoslate.com.
Compliance insights from IOSCO’s 2024 Crypto Assets Report
Last week, the International Organization of Securities Commissions (IOSCO) released its 2024 report, which focuses on investor education in crypto assets.
The report emphasizes important areas for compliance officers in Virtual Asset Service Providers (VASPs), including investor protection, market transparency, systemic risks, and the changing regulatory environment of crypto assets. This summary provides practical insights that compliance officers can use to improve their strategies and ensure compliance with new and evolving guidelines.
For our key crypto regulation takeaways from the 2024 IOSCO crypto assets report, click here.
