red 
“Consumer Safety Technology Act (CSTA)”, which was adopted in the House this week by a 325-103 vote, would require the Consumer Product Safety Commission to launch a pilot program designed to increase consumer safety by identifying trends related to fraud, misrepresentation and financial crime in the cryptocurrency space. The bill would also mandate that the Federal Trade Commission “study and report on the use of blockchain technology and digital tokens.”
The CSTA includes legal provisions that were not previously adopted as part of other laws. Among them is a requirement that the Federal Trade Commission report “unfair or deceptive acts or practices in transactions involving digital tokens[.]” Such reporting may prompt regulatory guidance regarding pumps and other forms of crypto market manipulation.
Although the bill previously died in the Senate, with Democrats now in control, the bill’s future is uncertain. The act has bipartisan support and was sponsored by Democrats Jerry McNerney and Darren Soto, along with Republican congressmen Warren Davidson, Van Taylor, Michael Burgess and Brett Guthrie. With representatives from both parties seemingly supporting the bill, there is reason to believe there is a broad consensus on the need for greater crypto regulation.
Consumer protection is not the only goal of the CSTA. Legislators have made it clear that their legislative intent is to secure the future of financial innovation in cryptocurrencies by implementing stricter anti-money laundering requirements, thereby promoting a safer and healthier ecosystem that would enable the betterment of all market participants.
🇺🇸 Treasury Undersecretary for Terrorism and Financial Intelligence Plans to Prioritize Cryptocurrency Regulation
Brian Nelson, President Biden candidate for the leadership of the Department for Terrorism and Financial Intelligence of the Ministry of Financetold lawmakers that, if confirmed, he would place particular emphasis on anti-money laundering (AML) regulations and their application to cryptocurrencies. While Nelson welcomed the responsible innovation coming from the crypto community, he remains wary of the potential for cryptocurrencies to be used for illicit purposes.
Nelson stated that:
“If confirmed, I will prioritize implementing parts of that bill, including new cryptocurrency regulations,” […] “I think the legislation has given new authority — or clarified the law — that cryptocurrencies or currency in any form, whether virtual or fiat, is covered by the Bank Secrecy Act.”
You can help your company properly identify risk factors related to certain crypto transactions or wallets using tools such as Elliptical Navigator and Lens.
🇬🇧 FCA warns consumers about the risks associated with working with unregistered participants in the crypto industry
Director of the Financial Conduct Authority (FCA) Mark Steward noticed that crypto firms that have not completed and/or obtained adequate regulatory registration pose significant risks to their partners, customers and counterparties, as little information regarding their fraud controls or regulatory compliance policies is publicly available. The strict anti-money laundering regime in the UK can be a challenge for some firms, as the due diligence requirements can be somewhat onerous. Reports indicate that approximately 51 firms have withdrawn their FCA filings. Tools such as Elliptical Discovery can help financial institutions assess the risks posed by certain crypto service providers.
🇿🇦 South African banks ban trading on international crypto exchanges
South African banks have started preventing their customers from using their debit or credit cards to buy cryptocurrencies on exchanges outside the country. Transactions are blocked due to the South African Reserve Bank regulations which do not allow “cross-border or foreign currency transfers for the express purpose of purchasing crypto assets.” The move follows a report produced by the South African Intergovernmental Task Force on Fintech, which recommended that anti-money laundering regulations be imposed on the crypto industry.
🇺🇸 The Wyoming Department of Banking has granted a “Digital Asset Special Purpose Depository Institution” charter to Wyoming Deposit & Transfer Bank
Wyoming Deposit & Transfer Corporation (“WDT”) announced that the Wyoming Department of Banking has granted it a Special Purpose Depository Institution Charter. This makes WDT the third recipient of such a charter under Wyoming’s regulatory regime.
WDT Chief Executive Officer Julie Fellows stated that “the bank’s new charter will enable Wyoming Deposit & Transfer to provide seamless commercial banking along with custodial services for a wide range of tokenized assets and digital and fiat currencies, meeting the needs of fiduciary institutions as well as small and middle blockchain and digital venture assets[.]”
🇫🇷 The Bank of France completed an experiment with SEBA to test cross-border CBDC settlements
Bank of France is finished an experiment that used smart contract simulation to test CBDC settlement on a public blockchain. Although the specific blockchain has not been identified, previous central bank experiments have been conducted on Ethereum. Nathalie Aufauvre, director-general for financial stability and operations at the Banque de France, said: “This experiment has made it possible to demonstrate the possibilities of interaction between conventional and distributed infrastructure[.]”
Missed our last week’s update? Watch here: Texas Hold ‘Em: The Lone Star State Goes All-In on Crypto Custody
Get the latest updates straight to your inbox:
