Displaying items by tag: CryptoAsset

Wednesday, 08 January 2020 17:54

QATAR BLOCKS CRYPTO ASSET SERVICES

The world is divided into parts regarding the cryptocurrency environment. Some advocate a ban on digital currency, others offer only some restrictions, and some states impose a complete ban on cryptocurrencies. The motivation for the ban and restrictions on cryptocurrency is the fight against crime and money laundering.

So the State of Qatar has added to the list of countries with a ban on the circulation of cryptocurrency. A statement by the Qatar Financial Center regulator states that "Virtual Asset Services cannot be held in or out of QFC at this time." It stated that the ban included “anything valuable that replaces a currency, can be sold or digitized and can be used for payment or investment”.

Simplecoin, a Netherlands-based cryptocurrency 'mining pool' set up to enable collaborative discovery of new virtual currency coins, and Chopcoin, a Bitcoin gaming platform, announced they would be shutting down before the EU Fifth Anti-Money Laundering Directive (5AMLD), came into effect in all EU Member States on 10 January 2020. 

The 5AMLD requires providers of crypto platforms and wallets to identify their customers for anti-money laundering purposes.

Source: Intelligence for the Global Adviser and Wealth Manager.

Wednesday, 21 November 2018 17:55

INSTITUTIONALIZATION OF CRYPTOASSETS: KPMG

Cryptoassets have arrived, but what will it take to secure their future? Institutionalization, says KPMG report from 15 November 2018.

Key challenges remain including cyber security, regulatory compliance, fork management and accounting.

The future success of cryptoassets will depend on the ability to institutionalize them by building trust and facilitating scale, with participation from both traditional and emerging players within the global financial services ecosystem, says a new report, Institutionalization of Cryptoassets from KPMG, with contributions from Coinbase and other industry companies.

The report points out that recently there has been a wave of new entrants in the market, such as established financial services institutions, security token platforms and crypto exchanges, who are launching various crypto products and services for the emerging blockchain-based tokenized economy. It suggests the tokenized economy will likely be one of the more significant innovations enabled by crypto.

Authors of the paper also suggest that crypto represents an opportunity to potentially transform the financial services sector and create a truly open global financial system.

The report takes an in-depth look at some of the key challenges facing crypto including:

- compliance with regulatory obligations;

- know your customer (KYC) and asset provenance;

- securing cryptoassets;

- accounting and financial reporting;

- tax implications;

- fork management and governance.

The report says of the 2,000 plus cryptoassets issued or mined, many, including those with high valuations, don't have a functional product associated with them.

Is crypto a solution looking for a problem? No, there are real problems that cryptoassets are looking to address and their staying power will be defined by their ability to reduce friction and inefficiencies that currently exist within the global economy.

Read the report...

Source: KPMG International.

Published in INDUSTRY REPORTS

The Financial Conduct Authority (FCA) published a report on the UK's policy and regulatory approach to cryptoassets on 29 October, as part of the Treasury (HMT) led Cryptoasset Taskforce.

The Taskforce Report has considered the policy and regulatory implications of distributed ledger technology (DLT), and cryptoassets, and at a high level set out some of the opportunities and risks they present. The FCA has previously published a Discussion Paper and Feedback Statement on DLT more broadly. The FCA has made clear that in its view cryptoassets have no intrinsic value and investors should therefore be prepared to lose all the value they have put in.

Whilst the Taskforce appreciates that cryptoassets have the potential to bring benefits to markets, firms and consumers, there remains considerable risks that HMT, the Bank of England and the FCA will take action to mitigate.

Key risks include: harm to consumers and market integrity, the use of cryptoassets for illicit activities and potential future threats to financial stability.

In order to mitigate these risks, the Taskforce has committed to a number of actions, including consulting on:

- Perimeter guidance by the end of 2018 to clarify which cryptoassets fall within the existing regulatory perimeter, and those cryptoassets that may fall outside;

- Whether the regulatory perimeter requires extension to capture cryptoassets that have comparable features to specified investments, but currently fall outside the perimeter;

- A separate consultation by Q1 2019 on a potential prohibition of the sale to retail consumers of derivatives (including contracts for differences, options, and futures) referencing certain types of cryptoassets;

- Given the complexity and new challenges presented to traditional forms of financial regulation, more time is needed to consider how regulation can meaningfully address the risks posed by exchange tokens, such as Bitcoin. The government will issue a consultation in early 2019 to further explore whether and how exchange tokens, and related firms such as exchanges and wallet providers, could be regulated effectively; and

- Implementing one of the most comprehensive responses globally to the use of cryptoassets for illicit activities by applying and going further than the fifth EU Anti-Money Laundering Directive.

The authorities will continue to monitor market developments and work with international counterparts to consider appropriate domestic and international responses. 

Source: Financial Conduct Authority | FCA.

Published in INDUSTRY REPORTS

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