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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EU Commission targets X over ‘dissemination of illegal content’

X owner Elon Musk told advertisers to “go f— yourself” on Nov. 29 after many left the social media platform in response to antisemitic content and a report on hate speech.

The European Commission said it had opened formal proceedings to investigate X — formerly Twitter — over content related to the terrorist group Hamas’ attacks against Israel.

In a Dec. 18 notice, the commission said it planned to assess whether X violated the Digital Services Act for its response to misinformation and illegal content on the platform. According to the government body, X was under investigation for the effectiveness of its Community Notes — comments added to specific tweets aimed at providing context — as well as policies “mitigating risks to civic discourse and electoral processes.”

“The opening of formal proceedings empowers the Commission to take further enforcement steps, such as interim measures, and non-compliance decisions,” said the notice. “The Commission is also empowered to accept any commitment made by X to remedy on the matters subject to the proceeding.”

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Warren’s surveillance legislation is tailor-made to help big banks

Warren’s Digital Asset Anti-Money Laundering Act would shut crypto providers down, playing into the hands of the banking industry.

It seems that every time Massachusetts Senator Elizabeth Warren fails to get an anti-crypto bill passed, she introduces a new draft. She has the strategy of messaging bills — legislation introduced for the purposes of media attention and fundraising more than actual passage — down to a science.

Warren’s latest legislation, the Digital Asset Anti-Money Laundering Act, threatens to undermine crypto’s core principles of freedom and personal sovereignty. While Warren argues that her bill is necessary to combat illicit activities, a closer look reveals its potential to stifle innovation, endanger user privacy and play right into the hands of big banks.

The bill, co-sponsored by Kansas Senator Roger Marshall, is based on the premise that digital assets are increasingly being used for criminal activities such as money laundering, ransomware attacks and terrorist financing. While some bad actors exploit digital assets, the bill’s approach of treating all developers and wallet providers as potential criminals is not only impractical but also dangerous.

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What happened in crypto this weekend?

Tether is working closer with U.S. law enforcement, revealing it has already frozen 326 wallets linked to criminals, while VanEck CEO has pled a bullish case for the future of Bitcoin.

Stablecoin issuer Tether (USDT) has revealed it has frozen 326 wallets linked to criminals, totaling $435 million as of Dec. 15, and is working closer with U.S. law enforcement agencies than ever before.

“We have assisted in freezing, as of the date of this letter, approximately 326 wallets totaling approximately USDT 435 Million,” the firm’s CEO Paolo Ardoino explained to Senator Cynthia Lummis and U.S. Representative French Hill on Dec. 15.

Tether said it also onboarded the United States Secret Service into its platform to strengthen its compliance measures with U.S. law enforcement and is in the same process with the FBI.

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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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CoinList agrees to $1.2M settlement over apparent US sanctions violations

The crypto exchange processed 989 transactions for users in Crimea from April 2020 to May 2022, according to the Office of Foreign Assets Control.

CoinList, a United States-based cryptocurrency exchange, has agreed to a $1.2-million settlement with the Treasury’s Office of Foreign Assets Control (OFAC) following allegations the firm facilitated transactions in apparent sanctions violations.

In a Dec. 13 notice, OFAC said CoinList had processed 989 transactions for users in Crimea — the peninsula formerly a part of Ukraine currently occupied by Russia — from April 2020 to May 2022. OFAC said the apparent sanctions violations were “non-egregious” but “not voluntarily self-disclosed.”

“[CoinList’s] screening procedures failed to capture users who represented themselves as resident of a non-embargoed country but who nevertheless provided an address within Crimea,” said OFAC. “In particular, [CoinList] opened 89 accounts for customers, nearly all of whom had specified ‘Russia’ as their country of residence but all of whom provided addresses in Crimea upon account opening.”

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Binance, crypto firms optimistic about UAE amid potential US regulatory shift

Ghaf Capital managing partner Feras Al Sadek argued that the UAE’s “regulation by education” sets it apart from other jurisdictions.

Binance and other cryptocurrency firms based in the United Arab Emirates are optimistic that the country will remain a hotspot for virtual assets despite a potential shift to the United States should the Western superpower become a more crypto-friendly jurisdiction.

The “regulation by enforcement” regime in the U.S. has pushed global crypto firms to move to locations such as the UAE, the United Kingdom, Switzerland, and Singapore. However, the idea that companies could potentially return to the U.S. should there be a change in direction was floated during a panel discussion on Dec. 11 at the Global Blockchain Congress event in Dubai.

Highlighting the UAE’s approach toward technology and innovation, Alex Chehade, Binance’s general manager for the Middle East and North Africa, said the local government has built infrastructures around numerous initiatives that encompass not just AI but also Web3, sustainability, and other verticals:

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SEC pushes deadline for decision on Invesco Galaxy spot Ethereum ETF to 2024

The commission had until Dec. 23 to decide or punt on approval or disapproval for the spot crypto investment vehicle.

The United States Securities and Exchange Commission has delayed its decision on whether to approve or disapprove a spot Ether (ETH) exchange-traded fund, or ETF, proposed by Invesco and Galaxy Digital.

In a Dec. 13 notice, the SEC said it would designate a longer period on whether to approve or disapprove a proposed rule change that would allow the Cboe BZX Exchange to list and trade shares of the Invesco Galaxy Ethereum ETF.

The proposed spot crypto investment vehicle is one of many being considered by the commission, which to date has never approved an ETF with direct exposure to Bitcoin (BTC) or other cryptocurrencies.

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Dubai regulator grants crypto license to Bahrain’s CoinMENA

The permit allows CoinMENA to provide retail and institutional customers in the United Arab Emirates with the ability to deposit and withdraw in UAE dirhams.

Dubai’s Virtual Assets Regulatory Authority (VARA) has awarded a virtual asset service provider (VASP) license to Bahrain-headquartered cryptocurrency exchange CoinMENA to operate and offer services in and from the Emirates.

The license acquired by CoinMENA FZE, the Dubai subsidiary of CoinMENA B.S.C., permits the platform to offer virtual asset broker-dealer services, the Dec. 12 announcement shared with Cointelegraph said. It comes a year after the platform obtained a provisional license from the Dubai regulator.

The exchange said it is already in partnership with digital banking platform Zand.

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