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EU hammering out cryptocurrency regulations that could set global standard – National

Europe prepares to lead the world in regulating the freewheeling cryptocurrency industry at a time when prices have plunged, wiping out fortunes, fueling skepticism and sparking calls for tighter scrutiny.

The European Union took a first step late Wednesday by agreeing on new rules subjecting cryptocurrency transfers to the same money-laundering rules as traditional banking transfers.

A much bigger move was expected as EU negotiators hammer out the final details late Thursday on a separate deal for a sweeping package of crypto regulations for the bloc’s 27 nations, known as Markets in Crypto Assets, or MiCA.

Like the EU’s trendsetting data privacy policy, which became the de facto global standard, the crypto regulations are expected to be highly influential worldwide.

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The EU rules are “really the first comprehensive piece of crypto regulation in the world,” said Patrick Hansen, crypto venture adviser at Presight Capital, a venture capital firm.

“I think there will be a lot of jurisdictions that will look closely into how the EU has dealt with it since the EU is first here,” Hansen said.

He expected authorities in other places, especially smaller countries that don’t have the resources to draw up their own rules from scratch, to adopt ones similar to the EU’s, though “they might change a few details.”

Under the Markets in Crypto Assets regulations, exchanges, brokers and other crypto companies face strict rules aimed at protecting consumers.


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Cryptocurrency industry has rough week amid market uncertainty


Cryptocurrency industry has rough week amid market uncertainty – Jun 14, 2022

Companies issuing or trading crypto assets such as stablecoins — which are usually tied to the dollar or a commodity like gold that make them less volatile than normal cryptocurrencies — face tough transparency requirements requiring them to provide detailed information on the risks, costs and charges that consumers face.

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Providers of bitcoin-related services would fall under the regulations, but not bitcoin itself, the world’s most popular cryptocurrency that has lost more than 70 per cent of its value from its November peak.

The European rules are aimed at maintaining financial stability — a growing concern for regulators amid a string of recent crypto-related crashes. The stablecoin TerraUSD imploded last month, erasing an estimated $40 billion in investor funds with little or no accountability.

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Shouldn’t stablecoins be stable? What’s behind TerraUSD’s collapse

The meltdowns have spurred calls for regulation, with other major jurisdictions still drawing up their strategies. In the U.S., President Joe Biden issued an executive order in March on government oversight of cryptocurrency, including studying the impact on financial stability and national security.

Last month, California became the first state to formally begin examining how to broadly adapt to cryptocurrency, with plans to work with the federal government on crafting regulations.

The U.K. also has unveiled plans to regulate some cryptocurrencies.

A few European countries, like Germany, already have basic crypto regulations. One of the EU’s goals is bringing rules in line across the bloc, so that a crypto company based in one country would be able to offer services in other member states.

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The EU rules, which would still need final approval and are expected to take effect by 2024, include measures to prevent market manipulation, money laundering, terrorist financing and other criminal activities.

On Wednesday, EU negotiators signed a provisional agreement for the bloc’s first rules on tracing transfers of crypto assets like bitcoin, which is aimed at clamping down on illicit transfers and blocking suspicious transactions.

When a crypto asset changes hands, information on both the source and the beneficiary would have to be stored on both sides of the transfer, according to the new rules. Crypto companies would have to hand this information over to authorities investigating criminal activity such as money laundering or terrorist financing.

“For too long, crypto-assets have been under the radar of our law enforcement authorities,” one of the lead EU lawmakers negotiating the rules, Assita Kanko, said in a statement. “It will be much harder to misuse crypto-assets and innocent traders and investors will be better protected.”

The EU institutions are working out the technical details before the crypto tracing rules receive final approval.


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Bitcoin, ethereum, Ripple XRP, Solana and Cardano prices plunge in $250 billion crypto crash

Crypto investors were lulled into a false sense of security after a steady three weeks, but now cryptocurrency has plunged again.

A major cryptocurrency crash has wiped away the gains made in the last three weeks, sending the values of the digital tokens plummeting to dangerously low levels.

Crypto prices tanked overnight, with the most popular ones falling by as much 13 per cent.

In total, cryptocurrency’s market cap dropped by eight per cent, from US$2 trillion (A$2.7t) to U$1.84 trillion (A$2.5t).

That represents an eye-watering loss of US$160 billion. (A$215b).

Terra’s LUNA coin slid the most out of the top 10 crypto tokens, plunging 13 per cent in the past 24 hours, and 28 per cent over the past week.

Avalanche fell by 12.6 per cent, Solana by 13 per cent and Cardano by 12 per cent.

Bitcoin and ethereum, the two most valuable crypto tokens, also took a serious battering.

Ethereum was down 9.7 per cent, worth just US$2,989 at time of writing.

Bitcoin has also massively declined, down eight per cent to come in at US$39,578.

For the past three weeks, cryptocurrency has held steady, particularly bitcoin, so the latest drop has sent shockwaves around the industry.

BTC’s price peaked for the year at $48,200 on March 28 but now, just a few weeks later, it is once again tragic.

Analysts believe crypto investors are spooked as markets around the world lose their steam.

In Asia, the Hang Seng closed down three per cent on the day in Hong Kong, while the Shanghai Composite Index finished 2.6 per cent lower.

Germany’s DAX traded 0.77 per cent in the red at the time of writing, as did London’s stock market.

Australia’s ASX is expected to dip when it opens this morning.

Tony Sycamore, senior market analyst at City Index, said in a note to news.com.au: “Bitcoin has cratered to be trading at $39,446 (-6.36 per cent) in line with the sharp fall in US equities.

“As we continue to note, Bitcoin is a risk asset, tightly linked to the performance of US equities and, in particular, the Nasdaq.

“Both have benefitted from an extended period of ultra-easy monetary policy and excessive liquidity, which is now being hastily removed.”

Another explanation for the drop could be new bans imposed on cryptocurrency as Russia continues to try to evade economic sanctions amid its illegal invasion of Ukraine.

Just before the weekend, the European Union banned the use of cryptocurrency services to Russia.

The new rule blocks deposits to Russian crypto wallets — including popular cryptocurrencies like bitcoin, ethereum, BNB, XRP, cardano, solana and luna.

It came after the European Central Bank president Christine Lagarde warned that cryptocurrencies posed a “threat” to efforts to curb Russia’s economy.

The EU will put “a prohibition on providing high-value crypto-asset services to Russia,” the European Commission announced.

They added: “this will contribute to closing potential loopholes.”

India’s cryptocurrency industry could also be dragging down the overall market.

Crypto research firm Crebaco found trade volumes had dropped massively in the country ever since a new tax rule was introduced on April 1.

India now requires a 30 per cent tax on any profits generated from cryptocurrency transactions and doesn’t allow offsetting gains with losses, according to CoinDesk.

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