News & Events

The United States, the European Union, the United Kingdom, Canada, Australia, and Japan have all announced sanctions against Russian financial institutions and oligarchy, while Germany has halted Nord Stream 2, a major Russian gas pipeline project. These sanctions have been issued in response to Russian President Vladimir Putin's decision to deploy additional Russian forces into the Ukrainian territory and recognize the separatist-controlled Donetsk and Luhansk regions in Ukraine as independent states 

On February 14, 2022, the Securities and Exchange Commission (SEC) announced that BlockFi Lending LLC has reached a settlement with it and has agreed to pay a $100 million penalty for selling its crypto-lending product without registering it with the SEC. BlockFi is a financial services company that offers its users crypto wallets, trading, and crypto-backed loans.

The NFTs market has grown exponentially over the past year. Reportedly, the booming NFTs market generated over $23 billion in trading volume in 2021, compared to just $ 94.9 million in 2020. Further, greater commercial viability and an increase in the trading volumes have resulted in increased risk for fraudulent activities such as AML/CFT risks, tax frauds, and copyright violations. The risks associated with NFTs have captured the attention of regulators all around the globe. On February 4, 2022, the U.S. Department of Treasury published a report, warning the investors that NFTs may, potentially, become a tool for money laundering in the high-value art market. Shortly after that, on February 14, 2022, BBC reported that Her Majesty’s Revenue and Customs (HMRC), the chief tax authority in the United Kingdom, has seized three NFTs as part of a probe into a suspected value-added tax (VAT) fraud case involving 250 alleged fake companies.

As the crypto and Decentralized Finance (DeFi) momentum gains traction, there has been a parabolic rise in market participants. The year 2021 saw the influx of both retail investors and institutional service firms space into the market. The surge in the crypto and DeFi’s growth has also garnered the interest of various regulatory bodies including the federal taxing agencies.

On January 20, 2022, the Board of Governors of the Federal Reserve System (Fed), released its long-awaited white paper on central bank digital currencies (CBDCs), titled — Money and Payments: The U.S. Dollar in the Age of Digital Transformation.

With a wide range of digital assets increasing in popularity in 2021, consumer protection looms large over the heads of regulators. Promotions and advertisement of crypto services, in particular, has been drawing a lot of attention. On January 17, 2022, Monetary Authority Singapore (MAS) introduced Guidelines on Provision of Digital Payment Token Services to the Public, limiting crypto firms from advertising their services to the public. The next day, on January 18, 2022, the HM Treasury announced that it will legislate new rules to bring crypto advertisements in line with other financial promotions. Similarly, Spain’s National Securities Market Commission established a preapproval mandate for crypto ads aimed at 100,00 or more people, in addition to stating that all crypto ads will have to include investor warnings. 

On January 12, 2022, the Hong Kong Monetary Authority (HKMA) released a discussion paper on crypto-assets and stablecoins. The paper discusses the adequacy of the existing regulatory framework in light of the challenges arising from the growing use of stablecoins and other types of crypto-assets in financial markets.

On November 24, 2021, the European Council adopted two proposals that are part of the digital finance package — the ‘Regulation on Markets in Crypto Assets' (MiCA) and the ‘Digital Operational Resilience Act' (DORA). Initially proposing the digital finance package in September 2021, the EU Council recognizes that “lack of an overall Union framework for crypto-assets can lead to a lack of users’ confidence in those assets, which could significantly hinder the development of a market in those assets and can lead to missed opportunities in terms of innovative digital services, alternative payment instruments or new funding sources for Union companies.”

On November 14, 2021 Bitcoin Taproot upgrade went live when the Bitcoin blockchain reached the block limit of 709,632. The Taproot proposal was first introduced in January 2018 by Bitcoin core developer Greg Maxes. Three years later, on June 12, 2021, a 90% supermajority of Bitcoin miners voted for the Taproot upgrade. Taproot isn’t just a single update, but a combination of three different Bitcoin Improvement Protocols (BIPs) -— BIP 340, 341, and 342. These protocols seek to introduce more privacy, better smart contracts, and cheaper transaction costs to the network.

On November 1, 2021, the President’s Working Group on Financial Markets (PWG), joined by the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) — collectively referred to as the government agencies — released its highly-anticipated report on stablecoins.