Encryption Price Check: Regulatory Efforts Going Global
Changpeng Zhao, CEO of Binance, wants the planet to feel better.
“The world needs healing,” CEOs of the world’s largest cryptocurrency exchange by trading volume twitret on July 11th.
The crypto world can certainly use some healing, given the recent collapse.
And if nothing else, analysts say, the price slump seems to bring governments together on the issue of regulation.
Seeing eye to eye on Crypto
Bitcoin, the most popular cryptocurrency, was up slightly to $ 20,589.67 at the last check, according to CoinGecko, while ether up nearly 1% to $ 1,152.46, and dogecoin rose 0.7% to $ 0.064809.
“The United States and Russia do not have much to agree on these days. But there is one thing the two governments are eyeing: cryptocurrencies,” said Winston Ma, managing partner of CloudTree Ventures and author of The Hunt for Unicorns. China’s mobile economy and investment in China. “
Because of its current correction, Ma said, the US Federal Reserve is “paying close attention to the flaws in the cryptocurrency market, which [Federal Reserve] That’s what Deputy Lael Brainard said in a speech in London on Friday. “
Brainard said that “recent volatility has revealed serious vulnerabilities in the cryptocurrency system.”
“Although identified as a fundamental breach of traditional finance, it appears that the cryptocurrency system is susceptible to the same risks that are too familiar from traditional finance, such as influence, settlement, opacity and maturity, and liquidity transformation,” she said in prepared remarks. .
“As we work to secure the future of our financial stability agenda, it is important to ensure that the regulatory perimeter includes cryptocurrency.”
Meanwhile, the head of the Finance Committee of Russia’s lower house of parliament said that a bill on the regulation of cryptocurrencies will be presented in the autumn.
A law on the mining of cryptocurrencies will soon be considered, he said, an area the government hopes to tax. According to regulators, recent volatility has revealed serious vulnerabilities in the cryptocurrency system.
“The year for crypto regulation is rising”
“So the year 2022 of Crypto Winter may also be the year that crypto regulation increases,” said Ma.
David Lesperance, managing partner for immigration and tax advisers at Lesperance & Associates, said the EU “has bravely stepped up with landmark regulations to clean up the crypto ‘wild west’.”
“Markets in Crypto-Assets, or MICA, are designed to make life tougher for many players in the crypto market, including exchanges and issuers of stack coins,” he said.
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Under the new rules, stack coins such as tether and Circles USDC will be required to maintain ample reserves to meet redemption requests in the event of mass withdrawals.
Stablecoins that become too large also face being limited to 200 million euros ($ 201.7 million) in transactions per day.
“The European Securities and Markets Authority, or ESMA, will be empowered to ban or restrict cryptocurrencies if they are deemed not to properly protect investors, threaten market integrity or financial stability or fail to implement anti-money laundering. Know your client treatment, “he said.
“Crushing the options”
In China, Lesperance said, “the government wants to fully oversee citizens’ economic lives to other control mechanisms such as household registration, face recognition and social credit scoring.”
“This is achieved through the introduction of the government’s e-yuan and the smashing of alternative cryptocurrencies,” he said. “First it was to close Chinese stock exchanges, then it came to ban mining, and then there will be a complete ban on alternative cryptocurrencies.”
By making the digital yuan ubiquitous, the next obvious move will be to make the possession of cryptocurrency – other than the digital yuan – illegal.
“This move will be accompanied by a period in which Chinese cryptocurrency holders with cryptocurrencies would be allowed to” exchange “their crypto for digital yuan at prices set by the Chinese government, Lesperance said.” Those with assets in cold wallets or in foreign crypto exchanges will then be asked to switch. ”
If it is found that they hold cryptocurrencies in cold wallets or foreign exchanges, they will be subject to criminal sanctions.
“It is also a safe assumption that the Chinese government has gathered as much information as possible about which Chinese citizens may have cryptocurrencies,” he said.
Stories from the dark web
The information would have come from various sources, such as looking at who bought cold wallets; boasting on social media, and e-mail / electronic communication between China and various overseas crypto exchanges.
Which brings us back to Binance.
Zhao recently confirmed a hack of a billion resident records, including names and addresses, national ID, police and medical records from China.
“Our threat intelligence detected 1 billion citizen records for sale in the dark web, including name, address, national ID, mobile, police and medical records from an Asian country. Probably due to an error in an Elastic Search deployment by a government agency,” he twitret on July 3rd.
Lesperance said that information gathering has received a huge boost from the Binance hack.
“When the government implements a ban on non-state crypto, they will cross-reference this database against those who make the voluntary switch and focus on those who are on the first list, but not the second,” he said.
“Given the Chinese government’s ongoing efforts to fully control its citizens, there is little doubt that the Chinese government will be a dark online buyer.”
