American regulators are pushing hard against crypto: Law Decoded, Feb. 28–March 6
American lawmakers and regulators continue to compete in their creative efforts to propose anything but comprehensive game rules for the crypto industry.
Senators Edward Markey and Richard Blumenthal have penned a letter asking Meta CEO Mark Zuckerberg to deny young adults access to the firm’s metaverse platform. According to the two lawmakers, allowing teenagers between 13 and 17 years old entrance to the virtual environment posed “serious risks,” citing privacy concerns, eye strain and online bullying.
Along with his colleague Jared Huffman, Markey also announced the reintroduction of the Crypto-Asset Environmental Transparency Act in Congress. The bill would require crypto mining companies to disclose emissions for operations that consume more than five megawatts of power, and require the Environmental Protection Agency administrator to head up an interagency investigation of the impact of crypto mining in the United States.
Another group of Senators — Elizabeth Warren, Chris Van Hollen and Roger Marshall — have sent a letter to Binance CEO Changpeng “CZ” Zhao expressing concern over several areas of Binance’s activities. The Senators requested information from the company, including its balance sheet. The trio claim there is evidence that the company attempted to evade U.S. sanctions and facilitated the laundering of at least $10 billion.
The United States Securities and Exchange Commission chair Gary Gensler has again backed a proposed rule that would extend asset custody rules to more cryptocurrencies, saying investors need more protection. The proposed rule would require written agreements between advisers and custodians, add requirements for foreign institutions serving as custodians, and explicitly extend the safeguard rules to discretionary trading.
France on the verge of passing stringent crypto firm licensing laws
The French National Assembly has voted to legislate stricter licensing rules for new cryptocurrency firms to harmonize local laws with proposed European Union standards. The vote was passed with 109 votes (60.5%) in favor to 71 (39.5%) against. The French Senate has already passed the bill, which now goes to President Emmanuel Macron, who has 15 days to either approve it or send it back to the legislature.
If passed, the new law would oblige French-based cryptocurrency service providers to comply with stricter Anti-Money Laundering rules, show that customer funds are segregated, adhere to new guidelines on reporting to regulators, and provide more detailed risk and conflict of interest disclosures as a means to strengthen consumer protection.
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One more free economic zone for digital assets in the UAE
Ras Al Khaimah (RAK), one of the seven emirates that comprise the United Arab Emirates, is set to launch a free zone for digital and virtual asset companies as the country’s approach to the industry continues to attract global crypto players. The RAK Digital Assets Oasis (RAK DAO) will be a “purpose-built, innovation-enabling free zone for non-regulated activities in the virtual assets sector.”
The free zone will be dedicated to digital and virtual assets service providers in emerging technologies, such as the metaverse, blockchain, utility tokens, virtual asset wallets, nonfungible tokens, decentralized autonomous organizations, decentralized applications and other Web3-related businesses.
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Proposed South Dakota amendment would prohibit cryptocurrencies, but not CBDCs
Legislation has been introduced in the American state of South Dakota to amend the Uniform Commercial Code to limit the definition of money to exclude cryptocurrencies. Central bank digital currencies (CBDCs) would still be considered money under the proposed new definition. The 117-page amendment, introduced into the state House of Representatives by Republican Mike Stevens, defines “money” as “a medium of exchange that is currently authorized or adopted by a domestic or foreign government.”
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