Crypto Regulatory and Policy News Roundup July 12 2022

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Singapore considers further restrictions to crypto trading for retail investors

Earlier this week, in response to a parliamentary question, Tharman Shanmugaratnam, Senior Minister and Minister in charge of the Monetary Authority of Singapore (MAS) said that they have been “carefully considering the introduction of additional consumer protection safeguards”.

Shanmugaratnam said that this may include “placing limits on retail participation, and rules on the use of leverage when transacting in cryptocurrencies”.

MAS previously placed restrictions on the advertising and marketing of cryptocurrency services in public areas, as well as ordering the closure of bitcoin ATMS operating in the city-state.

Bank of England Publishes Financial Stability Report

The Bank of England published its Financial Stability Report on July 5th. The report noted that “risky” assets such as crypto had fallen markedly since the beginning of the year.

It also noted that while the downturn has exposed vulnerabilities in the crypto market, it does not yet constitute a risk to wider financial stability.

The report did acknowledge that, if not addressed properly, crypto could become a systemic risk in the future. This could particularly become an issue as the popularity of crypto grows, and it becomes more interconnected with the rest of the financial system,

These events did not pose risks to financial stability overall. But, unless addressed, systemic risks would emerge if cryptoasset activity, and its interconnectedness with the wider financial system, continued to develop. 

This underscores the need for enhanced regulatory and law enforcement frameworks to address developments in these markets and activities.

Bank of England, Financial Stability Report July 2022

US Treasury Publishes Framework for International Engagement on Digital Assets

On July 7th, the US Treasury published its Framework for International Engagement on Digital Assets.

The framework sets out how the US will continue to work with international bodies and organizations, such as the FATF, G7, G20, and Financial Stability Board to develop standards with a view to:

  • protect consumers, investors, and businesses
  • protect financial stability and mitigate systemic risks
  • mitigate national security risks posed by the misuse of digital assets.

Bad news for Voyager…

Following its filing for bankruptcy protection earlier in the week, it appears that crypto broker Voyager could be subject to an investigation by the Federal Deposit Insurance Corporation (FDIC).

The FDIC is investigating claims that Voyager may have implied its customers would be protected by federal insurance, with reference to its deposits at Metropolitan Commercial Bank, in the event of the company’s insolvency.

Metropolitan Commercial Bank subsequently issued a statement on its website:

FDIC insurance coverage is available only to protect against the failure of Metropolitan Commercial Bank. FDIC insurance does not protect against the failure of Voyager, any act or omission of Voyager or its employees, or the loss in value of cryptocurrency or other assets“.

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