UK plan on digital securities sandbox laid before Parliament

The regulations will take effect on Jan. 8, with the Bank of England and the U.K. Financial Conduct Authority operating the sandbox.

The United Kingdom Financial Services and Markets Act’s provisions on a digital securities sandbox are scheduled to come into force in January 2024 after being presented to Parliament.

In a Dec. 18 publication, the U.K. government announced the Digital Securities Sandbox (DSS) regulations of the 2023 Financial Services and Markets Act, which were laid before Parliament, paving the way for crypto firms to test products and services in the country. According to the government, the regulations will take effect on Jan. 8, with the Bank of England and the U.K. Financial Conduct Authority operating the sandbox.

“The DSS will allow firms and the regulators to test the use of new technology across our financial markets,” says a memo explaining the bill. “In particular, this will involve trialling the use of developing technology (such as distributed ledger technology, or in general technology that facilitates what are commonly referred to as ‘digital assets’) to perform the activities of a central securities depository (specifically notary, settlement and maintenance), and operating a trading venue.”

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Majority of UK MPs ‘lack crypto knowledge,’ says industry association

According to CryptoUK, MPs Andrew Griffith and Lisa Cameron were among the top crypto proponents in the U.K. government.

The self-regulatory trade association CryptoUK has reported roughly 5% of all members of Parliament (MPs) in the United Kingdom have publicly spoken on crypto and blockchain, suggesting a lack of knowledge.

In a report released on Dec. 14, CryptoUK analyzed the sentiment of MPs between 2022 and 2023, finding that only 37 lawmakers specifically mentioned crypto and blockchain — 5.7% of the 650 members. Some of the top voices in the U.K. government in 2023, according to CryptoUK, included MP and former Economic Secretary Andrew Griffith and crypto proponent Lisa Cameron.

“It’s important that MPs from all parties and from all corners of the UK get to know the cryptoasset industry better,” said a CryptoUK spokesperson. “Almost five million people […] in the UK have some sort of cryptoasset exposure, while tens of thousands of people work in the industry in the UK, supporting their local economies and helping the British economy grow.”

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Which world leaders have made big promises on crypto?

From Nayib Bukele to Donald Trump, many current and former heads of state across the globe have used crypto and blockchain as political tools.

Few world leaders have been openly supportive of digital assets while in office or while they were campaigning. Though the technology is relatively young and untested as a political issue, many candidates have staked their reputations on crypto and blockchain.

Now the former president of El Salvador as he campaigns for his next term in office, Nayib Bukele is arguably the most outspoken head of state in the world on cryptocurrency. He pioneered a legislative path to make Bitcoin (BTC) legal tender in El Salvador in 2021. He directly tied his presidency to the cryptocurrency, periodically boasting about buys on X — formerly Twitter.

Under Bukele, BTC kiosks have been installed across El Salvador, and the president reported in December that the country’s Bitcoin investments were profitable after the crypto market downturn of 2022. In 2024, El Salvador’s Ministry of Education plans to introduce a Bitcoin education program for public schools.

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Democratic presidential candidate blasts Biden and Trump on crypto: ‘Not the right people to lead’

Representative Dean Phillips was the sole Democratic presidential candidate to address the Crypto Presidential Forum after Republicans Vivek Ramaswamy and Asa Hutchinson.

Dean Phillips, a member of the United States House of Representatives running against Joe Biden for the Democratic nomination in the 2024 presidential election, said there are currently “very few” people in Congress who understand digital assets.

Speaking at the Crypto Presidential Forum in New Hampshire on Dec. 11, Phillips said he didn’t “know it all” about financial technology and cryptocurrency but criticized U.S. President Joe Biden and former President Donald Trump for their positions. The U.S. lawmaker was the third presidential candidate to address the New Hampshire crowd after Republicans Vivek Ramaswamy and Asa Hutchinson.

“The two leading candidates right now, on both the left and the right, for the U.S. presidency are absolutely not in positions to understand it, prepare us for it, anticipate it, and lead us into the next century,” said Phillips, referring to crypto. “Joe Biden and Donald Trump, at their age and stage of life, are simply not the right people to lead us forward.”

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More US senators back Elizabeth Warren’s AML bill targeting crypto

The legislation, reintroduced in July, already has the support of several U.S. lawmakers, but critics have suggested it could threaten financial freedom and privacy.

Massachusetts Senator Elizabeth Warren, an outspoken critic of digital assets in the United States government, has announced that five more senators have agreed to cosponsor one of her bills aimed at cracking down on money laundering.

In a Dec. 11 announcement, Senator Warren said Senators Raphael Warnock, Laphonza Butler, Chris Van Hollen, John Hickenlooper and Ben Ray Luján had backed her Digital Asset Anti-Money Laundering Act, reintroduced in July. According to Warren, the legislation specifically targeted illicit uses of crypto assets for money laundering and financing terrorism.

“I’m glad that five new senators are joining the fight to take action, including three members of the Banking Committee,” said Warren. “Our bipartisan bill is the toughest proposal on the table cracking down on crypto’s illicit use and giving regulators more tools in their toolbox.” 

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US senators target crypto in bill enforcing sanctions on terrorist groups

Senator Elizabeth Warren isn’t leading the charge on this bill linking crypto transactions to terrorism; it comes from Senators Mitt Romney, Mark Warner, Mike Rounds and Jack Reed.

A bipartisan group of lawmakers in the United States Senate introduced legislation aimed at countering cryptocurrency’s role in financing terrorism, explicitly citing the Oct. 7 attack by Hamas on Israel.

In a Dec. 7 announcement, Senators Mitt Romney, Mark Warner, Mike Rounds and Jack Reed said they had introduced the Terrorism Financing Prevention Act. The bill would expand U.S. sanctions to include parties funding terrorist organizations with cryptocurrency or fiat. According to Senator Romney, the legislation would allow the U.S. Treasury Department to go after “emerging threats involving digital assets” in the wake of the Oct. 7 attacks as well as actions by the terrorist group Hezbollah.

“It is critical that the Department of the Treasury has the necessary counter-terrorism tools to combat modern threats,” said Senator Rounds. “The Terrorism Financing Prevention Act takes commonsense steps toward rooting out terrorism by sanctioning foreign financial institutions and foreign digital asset companies that assist them in committing these heinous acts.”

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Bitcoin’s many deaths: Is crypto market past ‘point of no return?’

Bitcoin has been declared dead more times than you’d think amid downswings in the market, but it’s always managed to bounce back.

Bitcoin and the broader crypto market have been gleefully declared dead more than a few times during bear markets, but some experts say it would take a genuinely extreme set of events for it to truly die.

According to 99Bitcoins — a website that, among other things, tracks how many times Bitcoin (BTC) has been declared dead by mainstream media outlets — the largest crypto by market cap has died 474 times since 2010.

Often, the proclamation is met with cheering by crypto skeptics as evidence that BTC is not a viable asset, but it might not be so simple to kill off crypto — at least according to some experts in the space.

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AI regulations in global focus as EU approaches regulation deal

Concerns over the potential misuse of AI have prompted the U.S., U.K., China and the G7 to speed up regulation of the technology, but Europe is already ahead.

The surge in generative artificial intelligence (AI) development has prompted governments globally to rush toward regulating the emerging technology. The trend matches the European Union’s efforts to implement the world’s first set of comprehensive rules for AI.

The EU AI Act is recognized as an innovative set of regulations. After several delays, reports indicate that on Dec. 7, negotiators agreed to a set of controls for generative AI tools such as OpenAI’s ChatGPT and Google’s Bard.

Concerns about the potential misuse of the technology have also propelled the United States, the United Kingdom, China and other G7 countries to speed up their work toward regulating AI.

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‘If I was the government, I’d close it down’ — JPMorgan CEO on crypto

Jamie Dimon has previously referred to cryptocurrencies as “decentralized Ponzi schemes” and Bitcoin as a “fraud.”

JPMorgan Chase chair and CEO Jamie Dimon told several United States lawmakers that if he had the authority in government, he would try to shut down crypto.

In a Dec. 6 hearing of the Senate Banking Committee on oversight of Wall Street firms, Dimon responded to questioning from Massachusetts Senator Elizabeth Warren, who claimed North Korea had funded much of its missile program using “proceeds of crypto crime” in addition to funding Hamas. The JPMorgan Chase CEO said he had “always been deeply opposed to crypto” and associated digital assets with “criminals” and “drug traffickers” in addition to tax avoidance.

“If I was the government, I’d close it down,” said Dimon.

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Crypto-friendly US lawmaker Patrick McHenry won’t seek reelection in 2024

All 435 seats in the U.S. House of Representatives will be up for grabs in the 2024 election, with the future of crypto bills in the House Financial Services Committee uncertain.

Representative Patrick McHenry, chair of the United States House Financial Services Committee and a proponent of many pieces of crypto-focused legislation, will be retiring from Congress.

In a Dec. 5 statement, McHenry said he would not seek reelection to the U.S.

“This is not a decision I come to lightly, but I believe there is a season for everything and — for me — this season has come to an end,” said McHenry.

During his time as chair of the House Financial Services Committee, McHenry was one of the few crypto proponents in Congress who pushed for passing bills to establish regulatory clarity for digital assets.

“Chairman McHenry is an unparalleled leader who has consistently recognized the importance of responsible innovation and fit-for-purpose regulation in the financial sector,” said Sheila Warren, CEO of the Crypto Council for Innovation.

Related: Rep. Patrick McHenry blames White House for lack of urgency on stablecoin bill negotiations

Jake Chervinsky, soon-to-be former chief policy officer of the Blockchain Association, thanked McHenry on X (formerly Twitter) for his “leadership on crypto policy.” Some industry leaders on the social media platform expressed regret at the North Carolina Representative’s departure, including Coinbase president Emilie Choi.