Ireland

Ireland’s central bank governor calls for ban on crypto ads targeting young adults: Report

Gabriel Makhlouf reportedly said there was an “uncomfortable” level of crypto advertisements targeting young adults.

Gabriel Makhlouf, the governor of the Central Bank of Ireland, reportedly supports legislation that would ban advertising crypto projects to young people.

According to a Jan. 25 report from Bloomberg, Makhlouf said before the Committee on Finance, Public Expenditure and Reform, that there was an “uncomfortable” level of crypto advertisements targeting young adults. The central bank governor reportedly referred to many cryptocurrencies as “unbacked” assets and suggested lawmakers “find a way” of banning related ads.

Makhlouf cited the implementation of the European Union’s Markets in Crypto Assets, or MiCA, framework as one of the central bank’s milestones for 2023. EU policymakers have pushed back a final vote on the crypto framework to April.

Read Governor Makhlouf's opening statement at today’s Committee here –https://t.co/Ce6CwRWNmu pic.twitter.com/Wa11wELnBq

— Central Bank of Ireland (@centralbank_ie) January 25, 2023

Ireland’s central bank issued a warning in March 2022 about the risks around crypto investments, referring to many advertisements as misleading — “particularly on social media, where influencers are being paid to advertise crypto assets.” Makhlouf has also previously criticized investments in crypto, saying people should be “prepared to lose all their money”.

Authorities in other jurisdictions have also targeted crypto-linked advertisements both online and in the physical world. The United Kingdom’s Advertising Standards Authority cracked down on many ads in 2022, including those part of marketing campaigns from Coinbase, Kraken and eToro. In the United States, the Securities and Exchange Commission arranged a $1.26 million settlement with celebrity Kim Kardashian over a story on her Instagram account promoting the EthereumMax (EMAX) token.

Coinbase secures VASP registration in Ireland

Operations in the country will be overseen by Cormac Dinan, a former employee of Crypto.com, Deloitte and Citigroup.

Crypto exchange Coinbase was granted permission by the Central Bank of Ireland to act as a virtual asset service provider (VASP), according to a Dec. 21 announcement. The company’s operations in the country will be overseen by Cormac Dinan, a former employee of Crypto.com, Deloitte and Citigroup.

Under the VASP registration, Coinbase Ireland will be subject to the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010.

Two Coinbase entities are covered by the VASP registration: Coinbase Europe Limited and Coinbase Custody International Limited. The first provides crypto trading services to European customers, while Coinbase Custody International provides crypto custody services to institutional clients across the region.

Nana Murugesan, vice president for international and business development at Coinbase, commented on the approval:

“Our Irish regulatory approval demonstrates our commitment and collaboration with the Central Bank of Ireland. Coinbase views regulation of the industry as an enabler for crypto’s growth, setting clear ground rules that will create an environment which encourages innovation and strengthens trust in the sector.”

The executive also emphasized the importance of the European Union’s political agreement on the Markets in Crypto-Assets framework in providing one of the most significant regulatory frameworks for crypto worldwide. According to Coinbase, additional registrations or license applications “are in progress in several major markets.”

In 2018, Coinbase started operating in Ireland after concerns about Brexit’s impacts on its business in EU countries. Since then, the company has been active in various activities, including market operations, compliance, cybersecurity, legal and customer experience. Coinbase obtained its first license in the country in 2019 when Ireland’s central bank granted it an e-money license, securing passporting for customers across the EU and European Economic Area.

Alongside Ireland, Coinbase has dedicated hubs in the United Kingdom and Germany; in the latter country, Coinbase is under scrutiny due to the outsourcing of some of its essential banking operations. In September, the company was registered with De Nederlandsche Bank, the central bank of the Netherlands, allowing the crypto exchange to offer its retail and institutional crypto products in the country.

Crypto trading platform Gemini was the first firm in the space to register as a VASP with the Central Bank of Ireland in July 2022.

Crypto adoption in Ireland down over 16% in the last year

Adults in Ireland have become slightly less interested in crypto with a drop in ownership from 12% to 10% in the last year.

The number of crypto investors in Ireland has decreased slightly in the past year, or so it appears, according to recent data from Finder.com.

The report revealed that cryptocurrency adoption in the island nation has dropped by approximately 16.6% within the last year. Of the surveyed adult Irish internet users, 10% own cryptocurrency, as opposed to 12% in 2021.

Finder’s crypto specialist James Edwards commented that such a small decrease is actually a positive shock given the state of the bear market.

“We saw huge drops in the price of Bitcoin at the start of May and June and while we did see a reduction in the number of people holding cryptocurrency it’s not as severe as expected.”

Edwards says the data suggests that despite the selloffs, the low drop in holders signals both hodlers and even more purchasing at discounted rates.

The survey also highlighted the dominance of Irish male investors over female investors, with 72% of surveyed holders being men. This gender gap is in line with the reality of the entire crypto space, which is highly male-dominated.

This is slowly changing as the space continues to integrate with various global industries. According to the BTCM Investor Study Report of 2021, the numbe of women investors that entered the space increased by 126%.

Irish investors are most keen on Bitcoin (BTC) at 35% ownership among local users. This is followed by Dogecoin (DOGE) (26%) and Ether (ETH) (23%).

Generally, Ireland has been a friendly jurisdiction for cryptocurrency companies. In fact, in October 2021, Binance established three subsidiaries in Ireland and a fourth in November.

The crypto exchange Gemini received its virtual assets provider license in Ireland on July 20 of this year. Kraken and Ripple are two other crypto-centric companies that have chosen Ireland for their European headquarters.

Gemini receives virtual asset service provider license in Ireland

New York-based crypto exchange Gemini opened its local office in Dublin, Ireland, last year. Now, it is granted with a VASP license.

New York-based crypto trading platform Gemini claims to be the first one to get registered as a virtual asset service provider (VASP) by the Central Bank of Ireland (CBI). Earlier in February 2022, a company received an electronic money institution (EMI) authorization from the CBI.

The news was reported on Gemini’s official blog on Tuesday. As Gillian Lynch, head of Ireland and the European Union for Gemini, commented on the release:

“Gemini was founded on the ethos of asking for permission, not forgiveness. Since day one, Gemini has engaged with regulators around the world to help shape thoughtful regulation that both protects consumers and fosters innovation.”

Individuals and institutions in Ireland now can access Gemini’s exchange and custody services to buy, sell and store over 100 cryptocurrencies along with the euro and Great British pound.

The EU’s Fifth Anti-Money Laundering Directive, or 5AMLD, was transposed into Irish law in April 2021, making it illegal to operate in the country without the registration from the CBI and carrying out due diligence on clients — including identification, accounting for the origin and destination of their crypto assets and reporting suspicious financial activity.

The e-money license, for which Gemini applied in early 2020 and received in March 2022, has been allowing it to issue electronic money, provide electronic payment services and handle electronic payments for third parties. However, it doesn’t allow entities to operate as an exchange.

Gemini opened its Dublin office in early 2021 and hired Gillian Lynch, a former executive at the Irish banking platform Leveris and Bank of Ireland, as head of Ireland and EU. Kraken and Ripple have also selected the country as their European base, and Binance opened three subsidiaries in Ireland in September.