News & Events

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.

Introduction

On October 28, 2021 the FATF issued its promised updated guidance for virtual assets (VAs) and virtual asset service providers (VASPs). The FATF thoughtfully collected insight from the industry and consulted transaction monitoring firms, including Merkle Science, to better-understand how crypto crime has evolved and how crypto is being used for illicit activity. The updated  guidance addresses many of the most pressing issues in the crypto industry identified from the FATF’s Second 12 Month Review of the Revised FATF Standards on VAs and VASPs. It offers clarifications to standards established in its previous draft guidance, including DeFi, peer-to-peer (P2P) transactions, stablecoins, the Travel Rule, and more.

Singapore — October 28, 2021 — Merkle Science, the leading predictive blockchain monitoring and investigative platform, today announced a landmark partnership with Singapore-based major payment institution, FOMO Pay, that enables digital transformation for financial institutions and enterprises. 

On 6 October 2021, Deputy Attorney General Lisa O. Monaco announced the creation of the United States Department of Justice’s National Cryptocurrency Enforcement Team (NCET). The NCET aims to tackle complex investigations and prosecutions of criminal misuses of cryptocurrency, particularly crimes committed by virtual currency exchanges, mixing and tumbling services, and money laundering infrastructure. The NCET will also assist in tracing and recovery of assets lost to fraud and extortion, including cryptocurrency payments to ransomware groups. Recognizing that crypto has become the preferred means of exchange of value on “dark markets” for illegal drugs, weapons, malware, and other hacking tools, NCET also aims to foster the development of expertise in crypto and blockchain technology across all aspects of the NCET’s work. In an interview, Deputy Attorney General Lisa O. Monaco noted that “if cryptocurrency exchanges want to be the banks of the future, we need to make sure people can have confidence in these systems.” 

Last week, Germany became one of the first European countries to require crypto businesses to comply with the FATF Travel Rule. While the Germany regulator may grant VASPs grace periods for up to one year -  perhaps due to the lack of a viable, working solution — VASPs would need to take steps to ensure risk mitigation, such as the prevention of certain types of transfer. 

Global predictive blockchain analytics firm adds venture investment heavyweight Dean Carlson as a board member to support entrance into U.S. market