The widespread collapse of cryptocurrencies and exchanges in 2022 has led regulators to scrutinize developments in the digital asset space closely. With this scrutiny, comes more rules for trading platforms going forward, as access to crypto become more readily accessible across the world 👀.
In Canada, crypto asset trading platforms (CTPs) are required to enter into preregistration undertakings with regulators, since late 2022. CTPs will also be prohibited from allowing their clients to enter into crypto assets that are a security and/or a derivative. Currently, the Canadian Securities Administrators (CSA) 🇨🇦 has defined fiat-backed crypto assets such as stablecoins as a security or derivative. The CSA also disclosed it would not provide consent for algorithmic stablecoins, possibly following the spectacular collapse of the Terra Luna platform.
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In the U.S, three federal agencies have advised the banking sector to leverage existing risk management principles, while addressing crypto-related liquidity risks. The U.S. Securities and Exchange Commission (SEC) also issued a statement stating that Canadian blockchain pioneer Dapper Labs’ ‘NBA Top Shot’ NFTs may be classified as unregistered securities. NBA Top Shot is a blockchain-based platform that facilitates the buying and selling of NBA collectibles 🏀.
The Prudential Regulatory Authority (PRA) – the banking regulator in the U.K 🇬🇧 – will soon propose rules for issuing and holding cryptocurrencies. These rules will be developed with consideration for Basel III rules.
Moreover, the Financial Stability Board (FSB), the International Monetary Fund (IMF), and the Bank for International Settlements (BIS) will likely deliver recommendations to establish standards for a global 🌎 crypto regulatory framework in July 2023.
It’s no surprise that regulation is becoming an increasingly important subject matter in regards to crypto, though the lack of consistency between countries creates challenges for businesses operating in multiple jurisdictions. To what extent crypto is regulated in different countries remains a difficult, centralized dilemma in what could otherwise be a borderless market and discussion 🌐.