Regulation

MiCAR under the microscope – Part 5: Regulatory requirements applicable to CASPs | A&O Shearman

Published

5 months ago

17 June, 2024

The Regulation (EU) 2023/1114 on Markets in Crypto-assets (MiCAR) has further expanded the panel of regulated entities by introducing the regulatory status of crypto-asset service providers (CASPs).

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1. Regulatory requirements applicable to all CASPs

2. Additional regulatory requirements applicable to certain CASPs

According to the taxonomy introduced by MiCAR, CASPs are defined as legal persons or other undertakings engaging in the provision of one or more crypto-asset services (CAS) to clients on a professional basis.

This edition of our “MiCAR under the microscope” series analyses the general regulatory requirements applicable to CASPs providing CAS within the European Union. In particular, after analysing the regime provided for by MiCAR to govern CASPs’ operations, irrespective of their business model and operativity size, this publication will then discuss the additional and more stringent requirements that the European legislator has provided for specific categories of CASPs identified by virtue of their size and/or core business of the activities they (intend to) provide within the European Union.

As better detailed below, many of the obligations applicable to CASPs under MiCAR are largely inspired by the obligations applicable to investment firms under Directive 2014/65/EU on markets in financial instruments (MiFID) or Directive 2015/2366 on payment services (PSD2).

1. Regulatory requirements applicable to all CASPs

1.1 Governance requirements[2]

(a) Fit and proper requirements applicable to the management body, personnel and shareholders of CASPs

Following an approach already (widely) used by the European policymakers under the MiFID framework, the fit and proper regime envisaged under MiCAR is three-fold and consists of:(i) the fit and proper requirements applicable to members of the management body and to any shareholders (or other members) having a qualified holdings in CASPs;

(ii) rules of conduct: CASPs are called on to implement adequate internal policies and procedures to ensure a sufficient level of compliance with the requirements set forth under limb (i) above; and

(iii) reporting requirements to the national competent regulator(s) as to any changes in the composition of the management body

(b) Backup, response and recovery plan

CASPs are required to ensure the continuity and regularity in the performance of their services.

In light of the technological and digital features and implications of their core business (consisting of engaging in activities relating to assets issued, created and transferred in a pure and native digital format as tokens), CASPs’ operational resilience may be seriously challenged by ICT risks (i.e. those risks stemming from inter alia the use of a network and information system and which materialise as an adverse effect in the digital or physical environment).

In light of the above, the adequacy of the measures and arrangements established and implemented by CASPs in order to ensure business continuity and regularity is strictly related to, and dependent on, CASPs’ compliance with the requirements and provisions set out in Regulation (EU) 2022/2554 (DORA) and its relevant implementing acts and regulations which, in line with the phase-in regime, at the date of this bulletin are in the process of adoption both at European and national level.

Among others, the requirements set forth by DORA require that a CASP should:
periodically test its ICT business continuity plan and its ICT response and recovery plan, especially for critical functions;
develop and document backup policies and procedures (supported by backup ICT systems which should be segregated from the source ICT system) as well as recovery procedures and methods;
carry out a business impact analysis of its exposure to severe business disruption;
have a crisis management function and keep accessible records of its activity before and during disruption events; and
report to the competent authorities, upon their request, an estimation of aggregated annual costs and losses caused by major ICT-related incidents.

(c) Record keeping requirements

Similar to investment firms under MiFID, in accordance with Article 68(9) of MiCAR, CASPs are required to keep records of all crypto-asset services, activities, orders and transactions that they undertake.

(d) Outsourcing requirements

MiCAR also provides specific requirements and conditions that CASPs should comply with when implementing outsourcing arrangements. MiCAR’s approach with regards to outsourcing arrangements is largely aligned to that followed under already-existing financial services regulations. As such, MiCAR aims at preventing, or at least minimising, to the extent possible, the risk that the recourse to these arrangements may impact CASPs’ operational resilience or may result in a full delegation of responsibilities and, consequently, lack of efficient supervisory activities.

To prevent the abovementioned risks, MiCAR provides that outsourcing agreements should be duly covered by a specific outsourcing policy, detailing inter alia contingency plans and exit strategies, and shall include a de minimis (pre-identified) set of rights and obligations of the CASP and any delegated third-party.

To avoid any (potential) impact on the business continuity and regularity on theside of the CASPs, no material restrictions or limitations should be placed on the rights of CASPs to terminate the outsourcing agreements.

All the relevant information necessary to assess the compliance of the outsourced activities with the authorisation and operating conditions for CASPs should be made available upon request to the competent authorities. Consequently, CASPs should ensure that their compliance with MiCAR outsourcing requirements is properly documented.

1.2 Conduct of business

(a) Acting in the best interests of the client

As is the case with investment firms under MiFID, when conducting business, CASPs are under the obligation to act in the best interests of the client.

To this end:

(i) the information they provide to clients, including marketing communications, should be clear and not misleading;

(ii) a CASP’s policy on pricing, costs and fees should be publicly available in a prominent place on its website along with information on the climate-related impact of the crypto-assets in relation to which they provide services; and

(iii) a CASP should warn its clients of the various risks to which they may be exposed by transacting in crypto-assets.

(b) Managing conflicts of interest

CASPs are under an obligation to implement and maintain effective policies and procedures to identify, prevent, manage and disclose conflicts of interest. These policies and procedures are to be reviewed at least annually and conflicts of interest are to be disclosed on the website of the CASP.

(c) Complaints handling

CASPs must establish and maintain effective and transparent complaint handling procedures and make them publicly available.

Complaints may be filed by CASPs’ clients free of charge, filling-in a standard template, and shall be investigated by the relevant CASP in a timely and fair manner. The outcome of the complaint shall be disclosed to the client within a reasonable period, although the black-letter does not currently envisage a firm deadline by which a complaint should be handled by the CASP and reported to the relevant client.

(d) Safeguarding of customer’s crypto-assets and funds

In the event that a CASP holds crypto-assets belonging to a client or the means of access to such crypto-assets, it is under the obligation to safeguard the client’s ownership rights, especially in the case of the CASP’s insolvency, and not to use the client’s crypto-assets for its own account.

Where a CASP receives customer funds (other than e-money tokens), it is under the obligation to safeguard those funds by the end of the business day following the day of their receipt, by placing them in a segregate safeguarding account opened with a credit institution or a central bank.

As this regime basically replicates the approach already followed at a European level under other preexisting financial services regulations, CASPs that are authorised under Article 60 of MiCAR as being financial entities providing CAS remain subject to the regulatory regime set forth under that separate EU legal framework.

2. Additional regulatory requirements applicable to certain CASPs

In addition to the de minimis set of rules applicable to all CASPs as a direct consequence of their regulatory status (as summarised above), MiCAR envisages a second layer of provisions (in terms of requirements, reporting obligations and duties) which will be tailored to (and therefore their application is modular on) the CAS performed by the CASP and / or the size of the CASP’s operativity (i.e. the so-called significant CASPs).

Below is a brief summary of the main requirements applicable to CASPs depending on the specificities (and related risks) associated with a specific CAS or stemming from the size of the CASPs in terms of their client base (and consequently activity volume).

2.1 Enhanced supervision of significant CASPs

A CASP is considered to be significant where it reaches on average 15 million active users in a calendar year. Within two months of crossing that threshold, the CASP must notify its competent authority.

CASPs that are considered significant are subject to enhanced monitoring from competent authorities which are also under an obligation to provide additional information and reporting to the

European Securities and Markets Authority (ESMA) in relation to the CASP.

2.2 Specific obligations by type of service provided by the CASP

Type of CAS

Custody and administration of crypto-assets on behalf of clients.

CASPs are required to comply, inter alia, with the following requirements:

a) legally and operationally segregate the crypto-assets held on the behalf of the client from the crypto-assets held for its own account;

b) keep a register of the positions opened for each client and record every movement[3]

c) establish a custody policy to ensure the safekeeping or the control of or the means to access the crypto-assets. Such custody policy is also to be made available to the client;

d) ensure that necessary procedures are in place to return crypto-assets to the client as soon as possible;

e) conclude an agreement with the client which shall include at least the specific elements listed by MiCAR; and

f) have in place a plan that is appropriate to support an orderly wind-down of its activities under applicable national law and ensure the continuity or recovery of any critical activities performed.

A CASP may make use of another CASP for custody purposes only to the extent that these entities are authorised pursuant to Article 59 of MiCAR. Furthermore, the client should be informed thereof.

Type of CAS

Operating a trading platform for crypto-assets.

CASPs are required to comply, inter alia, with the following requirements:

a) set-out and implement clear and transparent operating rules, which include inter alia non-discriminatory access policies and prior screening as to the proper compliance of the crypto-assets to be admitted to trading with the operating rules;

b) settle the crypto-asset transaction on the distributed ledger less than 24 hours after the execution of the transaction on the platform;

c) make public certain information regarding the bids and transactions related to crypto-assets traded on its trading platforms (e.g. bid and ask prices the depth of trading interests at those prices, the price, volume and time of the transactions executed);

d) keep records related to all orders in crypto-assets for at least 5 years; and

e) have in place a plan that is appropriate to support an orderly wind-down of its activities under applicable national law and ensure the continuity or recovery of any critical activities performed.

CASPs are finally prohibited from dealing on own account on their own platform and may engage in matched principal trading only subject to specific conditions.

Type of CAS

Exchange of crypto-assets for other funds or other crypto-assets.

CASPs are required to comply, inter alia, with the following requirements:

a) establish a commercial policy that states, in particular, the type of targeted clients and the conditions that shall be met by such clients to be eligible to transact with the CASP;

b) to avoid any manipulation on the price of crypto-assets, public disclosure requirements pertaining to inter alia the firm price of the crypto-asset that the CASPs propose to exchange for funds or other crypto-assets and any limit thereof; and information regarding transaction volume;

c) have in place a plan that is appropriate to support an orderly wind-down of their activities under applicable national law and ensure the continuity or recovery of any critical activities performed.

Type of CAS

Execution of orders for crypto-assets on behalf of clients.

Similar to the framework designed by the European legislator for serving MiFID purposes, CASPs are primarily required to act in a fair and transparent manner in order to ensure the best possible result for their clients while executing their orders.

In practical terms, this means that CASPs are expected to implement a specific execution policy, also governing the circumstances and conditions to be met to execute orders outside their trading platform. The effectiveness of the execution policy and relevant implementing arrangements shall be duly monitored.

Period reporting and disclosure requirements are then envisaged in favour of clients both in terms of content of the execution policy and evidence of how clients’ orders have been effectively executed in line with that policy and implementing internal arrangements.

Type of CAS

Placing of crypto-assets.

Before any agreement with a person seeking admission to trading, the CASP must communicate certain information.

Specific conflicts of interest rules are also applicable to the placing of crypto-assets.

Finally, CASPs should have in place a plan that is appropriate to support an orderly wind-down of their activities under applicable national law and ensure the continuity or recovery of any critical activities performed.

Type of CAS

Reception and transmission of orders related to crypto-assets.

CASPs are required to establish and implement procedures and arrangements that provide for prompt and proper transmission of a client’s orders to a trading platform or to another CASP.

CASPs are also barred from:

Receiving any form of remuneration, discount or benefit for routing the client’s order through a particular trading platform / CASP (i.e. the inducements regime);
misusing information on pending orders (and must take appropriate steps to prevent such misuse by employees).

Type of CAS

Providing advice on crypto-assets and providing portfolio management of crypto-assets.

With a view to ensuring adequate protection to end-users, also in light of the high price volatility and underlying complex risks which have so far characterised trading in crypto-assets, CASPs providing advice on and /or portfolio management of crypto-assets are primarily expected to carefully assess the suitability of investments / trading activities in crypto-assets for their clients, duly taking into account a wide range of factors including, inter alia, their knowledge and experience in the crypto-space or their investment objectives.

Similar to MiFID investment advice, there is an obligation to inform the client whether the advice is provided on an independent basis and/or based on a broad or restricted analysis of different crypto-assets. CASPs should also ensure that the person providing the advice is qualified to do so.

Specific disclosure requirements towards clients – which may vary depending on the nature of the advice provided (based on a dependent or independent basis) – apply. This includes, subject to some exceptions, the disclosure of periodic (at least every 3 months) statements of the portfolio management activities carried out on behalf of clients.

CASPs are also barred from accepting and retaining any fees, commissions or any monetary or non-monetary benefits from issuers, offerors or persons seeking admission to trading or any third party in relation to the provision of portfolio management of crypto-assets to their clients.

Type of CAS

Providing transfer services for crypto-assets on behalf of clients The agreement between a CASP and its client should include at least the elements prescribed by MiCAR.

Footnotes

1. Please refer to the A&O, now A&O Shearman, fourth instalment of this bulletin series for an insight into this brand new regulated entity and a specific focus on the main steps of the CASP authorisation and passporting regime (available here).

2. Please note that – since this series is intended to focus on the main changes and regulatory implications that MiCAR is about to introduce within the European Union for EU and/or non-EU crypto-market operators – we do not analyse regimes and / or pieces of legislation which, although being of direct relevance for and application to the crypto-market operators, fall outside the MiCAR framework. For example, but without limitation, for this publication we have not taken into account AML rules and related issues stemming from the so-called Travel Rule Regulation (i.e. Regulation (EU) 2023/1113).

3. These records should be made available to the client upon request and at least every three months.

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Regulation

Cryptocurrency Regulation in Slovenia 2024

Published

3 months ago

1 August, 2024

Chain Feed Staff

Cryptocurrency Regulation in Slovenia 2024

Slovenia, a small but highly developed European country with a population of 2.1 million, boasts a rich industrial history that has contributed significantly to its robust economy. As the most economically developed Slavic nation, Slovenia has grown steadily since adopting the euro in 2007. Its openness to innovation has been a key factor in its success in the industrial sector, making it a favorite destination for cryptocurrency enthusiasts. Many believe that Slovenia is poised to become a powerful fintech hub in Europe. But does its current cryptocurrency regulatory framework support such aspirations?

Let’s explore Slovenia’s cryptocurrency regulations and see if they can push the country to the forefront of the cryptocurrency scene. My expectations are positive. What are yours? Before we answer, let’s dig deeper.

1. Cryptocurrency Regulation in Slovenia: An Overview

Slovenia is known for its pro-innovation stance, providing a supportive environment for emerging technologies such as blockchain and cryptocurrencies. Under the Payment Services and Systems Act, cryptocurrencies are classified as virtual assets rather than financial or monetary instruments.

Regulation of the cryptocurrency sector in Slovenia is decentralized. Different authorities manage different aspects of the ecosystem. For example, the Bank of Slovenia and the Securities Market Agency supervise cryptocurrency transactions to ensure compliance with financial laws, including anti-money laundering (AML) and counter-terrorist financing regulations. The Slovenian Act on the Prevention of Money Laundering and Terrorist Financing (ZPPDFT-2) incorporates the EU’s Fifth Anti-Money Laundering Directive (5MLD) and aligns with the latest FATF recommendations. All virtual currency service providers must register with the Office of the Republic of Slovenia.

2. Cryptocurrency regulation in Slovenia: what’s new?

This year, there have been several noteworthy developments in the cryptocurrency sector in Slovenia:

July 25, 2024: Slovenia has issued a €30 million on-chain sovereign digital bond, the first of its kind in the EU, with a yield of 3.65%, maturing on 25 November 2024.

May 14, 2024: NiceHash has announced the first Slovenian Bitcoin-focused conference, NiceHashX, scheduled for November 8-9 in Maribor.

3. Explanation of the legal framework for cryptocurrency taxation in Slovenia

Slovenia’s cryptocurrency tax framework provides clear guidelines for both individuals and businesses. According to the Slovenian Tax Administration, tax treatment depends on the status of the trader and the nature of the transaction.

Individuals: Income earned from cryptocurrencies through employment or ongoing business activities is subject to personal income tax. However, capital gains from trading or market fluctuations are exempt from taxation.
Society: Capital gains from cryptocurrency activities are subject to a corporate income tax of 19%. Value added tax (VAT) generally applies at a rate of 22%, although cryptocurrency transactions considered as means of payment are exempt from VAT. Companies are not allowed to limit payment methods to cryptocurrencies only. Tokens issued during ICOs must comply with standard accounting rules and the Corporate Tax Act.

4. Cryptocurrency Mining in Slovenia: What You Should Know

Cryptocurrency mining is not restricted in Slovenia, but the income from mining is considered business income and is therefore taxable. This includes rewards from validating transactions and any additional income from mining operations. Both natural persons and legal entities must comply with Slovenian tax regulations.

5. Timeline of the evolution of cryptocurrency regulations in Slovenia

Here is a timeline highlighting the evolution of cryptocurrency regulations in Slovenia:

2013:The Slovenian Tax Administration has issued guidelines according to which income from cryptocurrency transactions should be taxed.
2017:The Slovenian Tax Administration has provided more detailed guidelines on cryptocurrency taxation, based on factors such as the trader’s status and the type of transaction.
2023The EU has adopted the Markets in Cryptocurrencies Regulation (MiCA), which establishes a uniform regulatory framework for cryptocurrencies, their issuers and service providers across the EU.

Final note

Slovenia’s approach to the cryptocurrency industry is commendable, reflecting its optimistic view of the future of cryptocurrency. The country’s balanced regulatory framework supports cryptocurrency innovation while protecting user rights and preventing illegal activities. Recent developments demonstrate Slovenia’s commitment to continuously improving its regulatory environment. Slovenia’s cryptocurrency regulatory framework sets a positive example for other nations navigating the evolving cryptocurrency landscape.

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Regulation

A Blank Slate for Cryptocurrencies: Kamala Harris’ Regulatory Opportunity

Published

3 months ago

1 August, 2024

Chain Feed Staff

A Blank Slate for Cryptocurrencies: Kamala Harris' Regulatory Opportunity

Photo by The Dhage of Shubham ON Disinfect

As the cryptocurrency landscape continues to evolve, the need for clear regulation has never been greater.

Vice President Kamala Harris is now leading the charge on digital asset regulation in the United States, presenting a unique opportunity for a clean slate. This fresh start can foster innovation and protect consumers. It can also pave the way for widespread adoption across industries, including real estate agencies, healthcare providers, and online gambling platforms like these online casinos in the uk. According to experts at SafestCasinoSites, these platforms have advantages such as bonus offers, a wide selection of games, and various payment methods. Ultimately, all this increased adoption could push the cryptocurrency market forward.

With that in mind, let’s take a look at the current state of cryptocurrency regulation in the United States, which is a complex and confusing landscape. Multiple agencies, including the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Financial Crimes Enforcement Network (FinCEN), have overlapping jurisdictions, creating a fragmented regulatory environment. This lack of clarity has hindered innovation, as companies are reluctant to invest in the United States, fearing regulatory repercussions. A cohesive and clear regulatory framework is urgently needed to unlock the full potential of cryptocurrencies in the United States.

While the US struggles to find its footing, other countries, such as Singapore and the UK, are actively embracing the cryptocurrency industry with clear and supportive regulatory frameworks. This has led to a brain drain, with companies opting to set up in more hospitable environments.

Vice President Kamala Harris has a unique opportunity to change this narrative and clean up the future. cryptocurrency regulation. By taking a comprehensive and inclusive approach, it can help create a framework that balances consumer protection with innovation and growth. The time has come for clear and effective regulation of cryptocurrencies in the United States.

Effective regulation of digital assets is essential to fostering a safe and innovative environment. Key principles guiding this regulation include clarity, innovation, global cooperation, consumer protection, and flexibility. Clear definitions and guidelines eliminate ambiguity, while encouraging experimentation and development to ensure progress. Collaboration with international partners establishes consistent standards, preventing regulatory arbitrage. Strong safeguards protect consumers from fraud and market abuse, and adaptability allows for evolution in response to emerging trends and technologies, striking a balance between innovation and protection.

The benefits of effective cryptocurrency regulation are many and far-reaching. By establishing clear guidelines, governments can attract investors and traditional users, spurring growth and adoption. This, in turn, can position countries like the United States as global leaders in financial technology and innovation. Strong protections will also increase consumer confidence in digital assets and related products, boosting economic activity.

A thriving cryptocurrency industry can significantly contribute to GDP and job creation, which has a positive impact on the overall economy. Furthermore, effective regulation has paved the way for the growth of many companies such as tech startups, online casinos, and pharmaceutical companies, proving that clear guidelines can unlock new opportunities without stifling innovation. This is a great example of how regulation can alleviate fears of regressive policies, even if Kamala Harris does not repeal the current progressive approach. By adopting effective regulation, governments can create fertile ground for the cryptocurrency industry to thrive, driving progress and prosperity.

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Regulation

Think You Own Your Crypto? New UK Law Would Ensure It – DL News

Published

3 months ago

1 August, 2024

Chain Feed Staff

Think You Own Your Crypto? New UK Law Would Ensure It – DL News

The UK Law Commission has developed a bill that will address a situation of legal uncertainty.
The commission’s goal is to ensure that cryptocurrencies are legally treated as personal property.

UK law is not entirely clear whether cryptocurrencies can be considered personal property.

This is according to the UK Law Commission, which argues that while most investors assume that when they buy cryptocurrencies, they are “acquiring property rights in the same way as buying, say, a watch or a laptop.”

“As the law currently stands, this is not necessarily the case,” the respected legal body said in a new report on Tuesday.

The report was accompanied by a solution: a new bill to consolidate the legal status of digital assets as personal property.

This could be huge for the estimated 4.7 million Britons valued hold cryptocurrencies.

“This will allow the courts to determine a range of issues,” the report says.

If passed, the law would help clarify how cryptocurrencies are treated in cases of bankruptcy, estate planning or theft.

Flexible law

The commission is an independent body responsible for reviewing UK law. It began investigating whether English and Welsh property laws apply to digital assets in 2020.

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At the time, then-Chancellor of the Exchequer Rishi Sunak expressed ambitions to transform the UK into a cryptocurrency hub as Britons invested more.

In 2023, the commission decided that, in most cases, the legislation of England and Wales is sufficiently flexible to regulate cryptocurrencies.

This means that any asset, from Bitcoin to non-fungible tokens and some types of digital contracts, can be considered personal property, without Parliament having to write extensive new laws.

There was one small area of uncertainty, however: it was unclear whether cryptocurrencies fell within the two categories of personal property recognised under UK law.

These two categories are made up of tangible assets (cars, laptops, bags) and intangible assets (contracts, stocks, and debt).

The bill that will now go to Parliament to be converted into law aims to remedy this situation.

Without that clarification, courts may try to lump cryptocurrencies together with intangible assets, said Adam Sanitt, head of litigation, knowledge, innovation and corporate support EMEA at law firm Norton Rose Fulbright. DL News in March.

This is problematic because intangible assets are creations of the legal system, while cryptocurrencies are not.

“How the law treats digital assets, what rights you have over them, how you own them, how you transfer them to other people—that treatment is different, because digital assets don’t exist by virtue of the legal system, but independently of it,” Sanitt said.

The money in your bank account, for example, is a legal creation. The government could pass a law to cancel it.

However, if the UK passed a law banning Bitcoin, Bitcoin would not cease to exist.

Sanitt said: “That’s why digital assets are so important: neither the government nor the legal system can take them away from you.”

Contact the author at joanna@dlnews.com.

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Regulation

The Solution the Cryptocurrency Industry Needs

Published

3 months ago

1 August, 2024

Chain Feed Staff

The Solution the Cryptocurrency Industry Needs

The cryptocurrency industry has performed remarkably well since its inception, but now faces a critical hurdle that requires careful consideration and regulatory expertise to overcome. Despite the industry’s rapid growth and rate of global adoption, the gap between the industry and global regulation is only widening as new innovations break through into the public domain.

Although efforts are being made on both sides, regulators’ lack of familiarity with cryptocurrencies and the industry’s lack of regulatory expertise are hindering innovation in the sector. To address this issue, traditional financial institutions (TradFi) such as MultiBank Group have started venturing into the cryptocurrency sector.

The regulatory gap

Over the past decade, the cryptocurrency industry has grown dramatically as tech entrepreneurs and forward-thinking thinkers have founded a plethora of crypto platforms and protocols to push the boundaries of the space. The problem faced by these newcomers, who are often unfamiliar with the hurdles posed by financial regulators, can quickly overwhelm and stall operations.

On the other hand, regulators more attuned to TradFi systems may be equally stifled by the complexities of decentralization and blockchain technology. The unfamiliarity experienced by both innovators and regulators creates a stark regulatory divide between both sides, leading to misunderstandings and potential conflicts.

To overcome this lack of communication, a bridge must be built to bridge the gap, ensuring future stability for the cryptocurrency industry and clearer legislation from regulators.

Efforts to bridge the gap between industry

The gap between the cryptocurrency industry and regulators is slowly narrowing as efforts to regulate cryptocurrencies and Web3 space activities are gaining momentum. Specific regulatory actions are taking place in many countries, aimed at providing greater oversight of cryptocurrency transactions, cryptocurrency exchanges, and initial coin offerings (ICOs).

Despite being a positive step in the right direction, these new regulations can differ significantly between jurisdictions around the world. This fragmentation results in a regulatory environment filled with obstacles, bottlenecks, and varying requirements and prohibitions. As cryptocurrency companies and TradFi institutions attempt to navigate the minefield, the regulatory maze becomes increasingly convoluted.

TradFi institutions like MultiBank Group are working to solve this problem, as one of the largest financial derivatives institutions in the world with over 12 licenses across all continents. Founded in 2005, the Group has an impeccable and trustworthy reputation globally, extensive expertise in financial regulation and has now ventured into the cryptocurrency space via MultiBank.io.

MultiBank.io: TradFi Excellence in the Crypto Space

Expanding into the cryptocurrency space via MultiBank.io has enabled MultiBank Group to provide regulatory clarity and trust to the digital asset industry. With a substantial daily trading volume of $12.1 billion, the timely decision to enter the cryptocurrency space has the potential to set regulatory precedents and standards for years to come.

By helping to develop sensible and well-considered regulations, MultiBank.io’s established reputation allows the company to communicate effectively and clearly with regulators. Unlike others in the industry without regulatory expertise, MultiBank.io facilitates the Group’s commitment to rigorous regulatory standards, the scope of oversight and establishes the necessary transparency.

The company’s approach ensures that regulatory licenses are pre-acquired, compliance is met globally without jurisdictional barriers, and transactions remain secure at all times. By helping to create robust regulations that are both clear and innovation-friendly, MultiBank Group looks forward to standardizing the entire cryptocurrency industry for other potential innovators.

One of the biggest challenges in establishing a clearly constructed bridge between regulators and the cryptocurrency industry is effective communication. By leveraging its institutional background TradFi and acting as an intermediary with regulators, MultiBank Group is able to translate the needs of the industry to those who shape it.

This quality of mediation is essential to ensure that regulation helps develop essential technological advances rather than hinders their establishment and growth. Through the lens of TradFi when looking at the complexity of the cryptocurrency industry, MultiBank Group is able to deconstruct unfamiliar crypto arguments for regulation and create a safer and more secure space.

Where TradFi and Crypto Meet

Regulations are crucial for traders, investors, and everyday users of crypto platforms and their safety when participating in crypto markets. While strict regulations are necessary for stable market integrity, innovation should still be considered, something MultiBank Group considers a priority.

Where TradFi and cryptocurrencies converge, the Group is there to provide a balanced approach to ensure promotion for both the cryptocurrency industry and regulators seeking to protect both retail and institutional investors. This balance is critical to maintaining a thriving space where cryptocurrency innovation can thrive without compromising the security of user funds or data.

As more TradFi institutions like MultiBank Group enter the cryptocurrency space with ever-expanding expertise in regulatory understanding, the future of the industry is increasingly encouraged. The financial freedoms of the cryptocurrency space coupled with regulatory oversight for financial security will be the guiding lights for the future success of the entire cryptocurrency industry.

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