Sweeping, holistic cryptocurrency regulation is trending. On the heels of the landmark “markets in crypto-assets” (MiCA) framework recently codified by the European Council, the International Organization of Securities Commissions (IOSCO) issued broad and overarching recommendations for a worldwide framework detailing crypto asset best practices and regulations.

The recommendations are now open for public consultation as the securities market consortium is anticipating a final report by the end of the year. As such, individuals and organizations interested in commenting on the consultation framework can send remarks to cryptoassetsconsultation@iosco.org through July. After the comment period is closed and final recommendations are drafted, individual jurisdictions will be expected to review their existing regulations and integrate IOSCO’s recommendations into their jurisdictional frameworks.

Jean-Paul Servais, chairperson of IOSCO, said the regulatory coalition is particularly well positioned to make the recommendations as it boasts more than 130 members covering more than 95% of global security markets.

“As the G7 Finance Ministers and Central Bank communiqué of 13 May has once again reminded us, the time has come to put an end to the regulatory uncertainty that characterises crypto activities,” Servais said in a statement. “[The] consultation paper received unanimous support from the IOSCO Board and is the outcome of an intense period of regulatory risk analysis, information sharing and capacity building. As such, it will mark a turning point in addressing the very clear and proximate risks to investor protection and market integrity risks.”

From Twitter

Share_Talk ™ @Share_Talk

"#Bitcoin experienced a 1.5% increase on Tuesday afternoon, climbing back above $27k to reach $27,268, as the initial worldwide attempt to regulate #cryptocurrency assets was initiated. The International Organization of Securities Commissions, responsible for regulating financial markets, introduced an 18-point strategy aimed at establishing protective measures for cryptocurrency investments."

The organization issued 18 policy recommendations covering six separate key areas aimed at addressing market integrity and easing investor concerns. Areas addressed in the paper include:

1. Conflicts born of the potential integration of functions and activities
2. Fraud, market manipulation and insider trading
3. Cross-border regulatory cooperation and risks
4. Client asset protection and custody concerns
5. Technological and operational risks
6. Retail access, distribution and suitability

“The strong support of the IOSCO Board will ensure the timely implementation of the recommendations by all IOSCO members to limit the risk of regulatory arbitrage. Strengthened cooperation between our members while supervising these markets through a global framework will contribute to protecting investors better and to credible deterrence of non-compliant actors,” Servais adds.

According to IOSCO, policy recommendations are specifically designed with “definitional and interpretive jurisdictional differences” in mind. As such, the recommendations attempt to deliver functional risk mitigation that does not rely on a “one-size fits all prescriptive taxonomy.”

“The Recommendations in IOSCO’s Consultation Report set expectations and guardrails to regulate and supervise crypto-asset markets, which are inherently cross-border in nature,” said Lim Tuang Lee, chairperson of the IOSCO Board-Level Fintech Task Force. “Crypto-asset service providers need to address unacceptable conflicts of interest and take far more seriously the right of clients to have their monies and assets carefully minded and accounted for.” 

The European Union (EU) codified a landmark regulatory framework that lays out guidelines for crypto-asset service providers and issuers at a union-wide level for the first time ever.

As such, the European Council, which serves as the political arm of the EU, adopted the “markets in crypto-assets” (MiCA) framework to bolster transparency in the crypto space, protect investors and ensure compliance with anti-money laundering rules, according to the council’s announcement of the decision. “I am very pleased that today we are delivering on our promise to start regulating the crypto-assets sector. Recent events have confirmed the urgent need for imposing rules which will better protect Europeans who have invested in these assets, and prevent the misuse of crypto industry for the purposes of money laundering and financing of terrorism,” said Elisabeth Svantesson, Sweden’s minister for finance.

The move comes in the wake of several high-profile scandals and arrests and substantial market turbulence in the crypto industry. The new rules cover a variety of crypto subsectors including stablecoins, utility tokens and asset-referenced tokens, notes the announcement. It also covers wallets and trading platforms housing the digital currencies. “This regulatory framework aims to protect investors, preserve financial stability, while allowing innovation and fostering the attractiveness of the crypto-asset sector,” according to the EU. “It also introduces a harmonized regulatory framework in the European Union which, given the global nature of crypto markets, is an improvement compared to the current situation with national legislation in some member states only.”

From Twitter

Patrick Hansen @paddi_hansen ·May 14

"Europe already has the most crypto-friendly banks in the world, by far. With the MiCA regulation coming into force, this global lead could increase even further. Facilitating access to banking services for crypto-asset service providers is explicitly stated as one of its goals."

Per the regulation, the new framework aims to provide fair, consistent rules for dealing with distributed ledger technologies like blockchain and other “transformative technologies in the financial sector.”

“It is expected that many applications of distributed ledger technology, including blockchain technology, that have not yet been fully studied will continue to result in new types of business activity and business models that, together with the crypto-asset sector itself, will lead to economic growth and new employment opportunities for Union citizens,” reads MiCA.

Initially, a preliminary proposal was presented by the European Commission, a 27-member executive component of the EU, in September of 2020. The proposal was part of a broader financial initiative including a separate “digital finance strategy,” a pilot program for wholesale distributed ledger technology use and the “Digital Operational Resilience Act.”

The package as adopted, explains the EU, seeks to balance innovative digital advancements with risk management, regulation and investor and consumer protection. To that end, a negotiating mandate was adopted in late 2021, and a provisional agreement was reached in June of 2022. The recent codification of these rules is the final piece of the MiCA legislative puzzle.

Additionally, the commission announced it has reached an agreement on adjacent tax rules for service providers handling crypto-asset transactions. “Crypto-assets and e-money have great potential to drive economic activity and innovation–but they also carry risks of reducing transparency and enabling tax evasion or fraud. Updating our tax rules to address these issues will help national administrations to collect tax more efficiently and keep up with evolving technology as Europe moves forward with its digital transition,” said Valdis Dombrovskis, executive vice president for an Economy that Works for People, in a statement.

Pending final approval, new tax reporting requirements related to central bank digital currencies, e-money and crypto-assets will go into effect the beginning of 2026.

President Joe Biden announced a plan to impose a 30% tax on the cost of electricity used to mine cryptocurrency in his 2024 budget proposal, which some see as a signal that operations in the U.S. may become fatally cost prohibitive.

The proposal has been deemed the Digital Asset Mining Energy (DAME) excise tax, and the president said levying such a tax demonstrates a commitment to both the economy and the environment. The tax is set to be phased in after Dec. 31, 2023. As such, the tax would be 10% the first year it is enacted, 20% the second and 30% for each year after.  

“Digital asset mining also creates uncertainty and risks to local utilities and communities, as mining activity is highly variable and highly mobile,” reads an explanation of the proposal. “An excise tax on electricity usage by digital asset miners could reduce mining activity along with its associated environmental impacts and other harms.”

Presently, tax law does not provide specific rules to address digital asset taxation, short of certain provisions dealing with cash transactions and broker reporting, notes the Department of the Treasury.

From Twitter

Wayne Vaughan @WayneVaughan ·May 3

"The Biden Administration has proposed a defacto ban on Bitcoin mining in the US via a 30% tax. This tax would make Bitcoin mining unprofitable. This is an element of a broader strategy by Democrats to ban Bitcoin and crypto. https://t.co/IWnNxXCRIs"

As the proposal explains, firms mining digital assets would have to report what type of electricity was used in the process, how much of it was used and in cases where it was purchased externally, the cost to buy the electricity. For firms leasing computational capacity, “the value of the electricity used by the lessor firm attributable to the leased capacity” would represent the tax base.

“Currently, cryptomining firms do not have to pay for the full cost they impose on others, in the form of local environmental pollution, higher energy prices, and the impacts of increased greenhouse gas emissions on the climate. The DAME tax encourages firms to start taking better account of the harms they impose on society,” reads the President’s budget plan.

From Twitter

Sue Ennis @bigsuey

"Nic Carter on proposed 30% tax on Bitcoin miners: “If this precedent is set, any politically disfavored energy consumer will potentially be in the crosshairs. Ie the next DAME tax targeting data-centers running AI models that aren’t sufficiently woke” (…or think states that have banned abortion…) #Bitcoin @nic__carter"

According to Biden’s reasoning, other counties like China and several provinces in Canada have already taken similar measures; as such, the likelihood miners will simply relocate to more mining-friendly destinations is shrinking.

“Of course, the DAME tax is not a panacea—it is only one example of the Administration’s efforts to fight climate change, reduce energy prices, and increase access to electrified options for all Americans,” adds the proposal. “Similarly, it is just one example of the President’s larger efforts to ensure the responsible development of digital assets, modernize their tax treatment, and mitigate risks to financial stability.”

Ukrainian police and the FBI seized nine cryptocurrency exchange sites associated with money laundering. So reports Bleeping Computer.

The operation was jointly conducted by the Virtual Currency Response Team and the National Police of Ukraine. The seized sites helped users anonymously convert crypto assets into “harder-to-trace coins” in an effort to obscure the origin of ransomware funds. This helped cybercriminals “launder their pilfers without being traced by law enforcement.”

Read the full article from Bleeping Computer.

Online software vendor Kashoo is forming focus group to react to the new features in its software. The Vancouver, B.C.-based company wants feedback on the new features and focus group members may also participate in testing before a broader release this fall.

CEO Jim Secord outlined changes to the accounting software package on the company’s website. Kashoo automated bank reconciliations so the system learns how users categorize accounts, leaving them to handle exceptions. Dashboards, new reporting tools, and business insights have been added and the company has harmonized the software’s look-and-feel for mobile and desktop apps. Kashoo said no more than 10 small business owners will be invited to participate in a 30-minute online session with Secord and his team.

Net@Work has acquired Inventory Management Solutions, the New York-based reseller said this week. IMS provides fixed asset inventory services and training for the Sage Fixed Assets Software Solutions.

IMS Founder Suzanne Pedone, who is joining Net@Work as a subject matter expert for fixed asset management, will be accompanied by three IMS employees, who will continue to work out of Tampa, Fla. IMS was previously a Net@Work Alliance partner, with the two companies sharing resources and collaborating on projects. Pedone’s team will continue to provide barcode labels, software upgrades, services for inventory of assets and specialized Fixed Asset Process training.

U.S. Securities and Exchange Commission Chairman Gary Gensler continued his public campaign to scrutinize the crypto industry with a new “investor-protection video.” So reports Coindesk.

The theme of the video was cautionary as the regulator warned the public about digital-asset companies violating securities law. Gensler said he plans on holding the industry to the regulations laid out in existing securities law even as Congress and the courts continue to examine exactly where exactly the industry lies from a legal standpoint.

Read the full article from Coindesk.

Two computer science experts published research indicating the “nascent cryptocurrency market is beginning to show a level of maturity similar to the traditional equities market.” So reports Cointelegraph.

The pair, Dr. Nick James of the University of Melbourne’s Centre for Data Science alongside Max Menzies of the Beijing Institute of Mathematical Sciences and Applications, Tsinghua University, used a “collective dynamics” mathematical approach to arrive at their conclusions. The data did show progress but does not indicate the crypto market is yet on par with traditional equities, noted the researchers.

Read the full article from Cointelegraph.

An overwhelming majority of American adults who say they have heard of cryptocurrency do not trust it, according to a new survey from the Pew Research Center.

As such, about three-quarters of those asked who reported knowing at least “a little about” crypto said they do not feel confident enough in the ways it is traded, stored and used to invest in the digital assets. Per the data, approximately 88% of those surveyed said they have heard of cryptocurrency, which means about two-thirds of all adults in the U.S. report they are not comfortable investing.

“While concern about cryptocurrency is broad, some groups of Americans are more concerned than others. For instance, adults ages 50 and older who have heard about cryptocurrency are more likely than their younger counterparts to say they are not confident in its reliability and safety,” according to the survey's summary.

Breaking down the results further, about 39% of those asked said they are “not at all confident” and 36% said they are “not very confident” in its safety and reliability. The results show a startling contrast between the top and bottom of the spectrum, as only 2% of those surveyed say they are “extremely” confident while only 4% reported being “very confident” dealing in crypto.

From Twitter 

Dooridoori @DooridooriCoin

“From a coin's perspective, the weakening of the dollar is happening, whether intentional or not. In the anti-Western camp, monetary reform is underway in a blockchain-based form. Formation of regional economic blocs: South America, Middle East, Africa, ASEAN, BRICS Implementation of common currency within economic blocs Adoption of ‘Bitcoin’ as a buffer zone between national currencies *Both individuals and nations can only trust Bitcoin. - Doori Doori –” #Bitcoin #Cryptocurrency #Crypto #Blockchain #BTC #DigitalCurrency #Decentralized #BitcoinNews #BitcoinRevolution #CryptoMarket #Doorinati"

“Attitudes also differ based on whether someone has invested in cryptocurrency,” notes the report. “While one-in-five cryptocurrency users say they are extremely or very confident that it is safe and reliable, that share drops to 2% among those who are familiar with cryptocurrency but have not invested. Still, many who have invested in cryptocurrency also have concerns about its security: 43% of this group say they are not very or not at all confident in it.”

Additionally, across the last several surveys, data shows the number of crypto users in the U.S. has barely changed since 2021. To that end, the share of adults in the nation that report engaging with the digital assets has remained at around 17% in the last three surveys.

While most individuals who have engaged with crypto still have at least some assets, about three of every 10 U.S. adults who once used them no longer have any form of cryptocurrency, it adds.

“Those who live in lower-income households (43%) are more likely than those in middle- (30%) or upper-income (21%) households to have given up cryptocurrency,” notes the report. “And women who have ever used cryptocurrency are more likely than men in this same group to say they currently do not have any of the currency (37% vs. 29%).”

Cryptocurrency and its underlying technologies have had some tough sledding recently as several high-profile scandals made their way into the mainstream news. Recently, the U.S. Department of the Treasury also published its 2023 DeFi Illicit Finance Risk Assessment, which shed some light onto some of the most problematic areas of the digital asset space.

DeFi, or decentralized finance, does not have an official definition, notes the department, but the assessment broadly refers to virtual asset services and protocols aimed at allowing automated peer-to-peer transactions using blockchain technology.

The treasury assessment illustrates, at least in part, the uphill battle the crypto industry faces as it tries to gain mainstream traction. “Our assessment finds that illicit actors, including criminals, scammers, and North Korean cyber actors are using DeFi services in the process of laundering illicit funds,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “Capturing the potential benefits associated with DeFi services requires addressing these risks.” 

Gary Gensler, chairman of the U.S. Securities and Exchange Commission, called for additional employees at the agency as the crypto space continues to play out like the “Wild West.” So reports Benzinga.

Gensler delivered his comments at a Subcommittee on Financial Services and General Government meeting where he pointed to a rapidly growing and changing market as cause for the additional hires. As such, the chairman said he was hoping to add 170 new positions and fully fund the staff hired in 2023.

Read the full article from Benzinga.

California’s county of Santa Cruz adopted and implemented government level blockchain-based solutions. So reports Cointelegraph.

To that end, official document processes and government services like tracking volunteer hours, RV parking registration and bicycle registration will be blockchain compatible. A three-stage pilot powered by Humbl is expected to begin in July.

Read the full article from Cointelegraph.

Polkadot, a layer 0 blockchain operation, filed a trademark registration for an apparent “blockchain-based messaging application.” So reports Coindesk.

As such, the phrase “Polkadot Converse” has also been trademarked. Polkadot is the 11th biggest cryptocurrency and has a market capitalization of close to $7.5 billion.  

Read the full article from Coindesk.

Industry insiders say the demand for development in blockchain has never been higher despite tumult in the cryptocurrency space. So reports Decrypt.

To that end, demand for programming skills was up by 522% last year, per a report from DevSkiller. Among the areas looking ripe for more labor are finance companies building blockchains and peer-to-peer gaming.

Read the full article from Decrypt.

StarkWare, an Israeli fintech startup, plans to develop what it is calling an “uncheatable” blockchain technology available for mass use. So reports the Times of Israel.

The company, which is valued at around $8 billion, developed a “proof system based on cryptography and modern algebra,” in order to protect against crypto fraud plaguing the industry. The infrastructure improvements can be applied to NFTs, gaming, exchanges, governance and voting.

Read the full article from the Times of Israel.