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In the House of Representatives of the US Congress, a major law related to the regulation of digital assets was adopted. The Stablecoin Payments Clarity Act provides a regulatory framework for asset-backed stablecoins issued by US entities while prioritizing technological innovation while protecting consumers.
The Regulation includes significant provisions relating to the disclosure of assets held as reserves for regulated coins, promoting appropriate auditing standards and helping to build consumer confidence in issuing products. This transparency is in stark contrast to some previously issued coins which are, in effect, black boxes, without any ability to verify the claims of coin issuers.
In addition to the mandatory disclosure provision, language is included that mandates significant controls related to liquidity, capital requirements and risk management processes. Implementing a strengthened compliance function creates an environment where consumer protection and insulation from financial crime risks are endemic to the ecosystem. This makes it clear that establishing a culture of compliance is an asset to the long-term health of stablecoin issuers and will be a key mandate for regulators when considering new applications under certain regulatory regimes.
While challenges remain in getting the bill through the Senate, there is now a clearer path than ever toward creating regulatory clarity around the issuance of stablecoins. This will allow good actors to create cross-border functional dollar tokens, reducing rent-seeking behavior in remittances and driving a broader move towards blockchain infrastructure within the traditional financial sector.
The Bank Policy Institute supports the Digital Assets Anti-Money Laundering Act
The Banking Policy Institute (BPI) has come out in support of the Digital Assets Anti-Money Laundering Act, an act proposed by Senator Elizabeth Warren that seeks to establish stricter financial crime compliance requirements for crypto service providers and related entities.
The endorsement of the bill by a leading financial services advocacy group represents another important milestone in the evolution of the integration of traditional finance (TradFi) and cryptocurrencies. Only by creating a system that is more averse to financial crime, using block analysis tools related to wallet verification and transaction tracking, can institutional trust be truly built in the sector and the financial potential of existing products be fully realized.
The SEC charges Richard Heart with misappropriating and offering unregistered crypto-asset securities
The Securities and Exchange Commission (SEC) charged Richard Heart – also known as Richard Schueler – along with companies Hex, PulseChain and PulseX, for offering unregistered securities that were used to raise more than $1 billion from investors.
Eric Werner, director of the Fort Worth regional office, said: “Heart invited investors to buy crypto-asset securities in offerings that he failed to register. He then conned those investors by spending some of their crypto assets on overpriced luxury goods. This action seeks to protect the investing public and hold Heart accountable for its actions.”
This represents the latest action by the SEC against a cryptoasset service provider for offering unregistered securities. Although the facts here are unique, the Commission has made clear that it views many assets as securities and will shy away from using its regulatory powers.
Stablecoins compliance regulation
