On May 3, 2022, the Securities and Exchange Commission (SEC) announced that it is nearly doubling the Crypto Assets and Cyber Unit, bringing the headcount to a total of 50 positions. The SEC said that the 20 new additions include investigative staff attorneys, trial lawyers, and fraud analysts.
On April 7, 2022, the U.S Secretary of Treasury Janet Yellen delivered her first speech on digital assets at the American University’s Kogod School of Business Center for Innovation.
On April 4, 2022, the United Kingdom unveiled its plans to become a global cryptoasset technology hub. The UK’s vision was set out in a speech by the Economic Secretary to the Treasury, John Glen, at the Innovate Finance Global Summit. “If crypto technologies are going to be a big part of the future, then we in the UK, want to be in, and in on the ground floor,” stated Glen.
On April 5, 2022, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) announced that it has sanctioned the world’s largest and most prominent darknet market place Hydra Market and Russia-linked crypto exchange Garantex. These sanctions form a part of the coordinated international effort to disrupt the proliferation of malicious cybercrime services, dangerous drugs, and other illegal offerings available through Russia-based sites. The news follows German authorities’ announcement that they have shut down Hydra after securing server infrastructure and seizing 543.3 BTC worth around $25 million. Additionally, the OFAC added more than 100 crypto addresses belonging to Hydra and Garantex to its SDN list.
On March 24, 2022, the Bank of England (BOE), the Prudential Regulatory Authority (PRA), and the Financial Conduct Authority (FCA) released interrelated documents outlining crypto-related financial stability risks and analyzing the current state of crypto regulation in the UK.
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 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 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.
