Zambia has reportedly initiated a process to establish an artificial intelligence framework and is collaborating with the Tony Blair Institute to formulate an artificial intelligence strategy. Sarah Luyele Njamu said Zambia can leverage AI for economic growth, improved healthcare, enhanced education, and sustainable development. Zambia Revising Cyber Security and Crime Law The Zambian government has […]
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Zimbabwean Regulators Develop Framework for Virtual Assets Trading
The Securities and Exchange Commission of Zimbabwe (SECZ) and the Reserve Bank of Zimbabwe (RBZ) are reportedly developing a framework for virtual asset trading. The framework aims to provide clear legislation, client protection under the Data Protection Act, and educational support. Challenges include infrastructural investment and licensing fees for foreign-supplied systems. An informal virtual asset […]
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Dubai Financial Services Authority Updates Regulatory Framework for Crypto Tokens
The Dubai Financial Services Authority (DFSA) announced amendments to its crypto token regime on Monday, enhancing the regulatory environment for crypto tokens in the Dubai International Financial Centre (DIFC), a special economic zone. The amendments address investment in recognized and unrecognized crypto tokens, custody and staking of crypto tokens, compliance with financial crime regulations including […]
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White House Opposes Crypto Bill FIT21 — Offers to Work With Congress on Balanced Framework for Digital Assets
The White House has issued a statement opposing the passage of the crypto bill Financial Innovation and Technology for the 21st Century (FIT21) Act ahead of the House vote today. However, the Biden Administration offered to collaborate with Congress to establish a balanced regulatory framework for digital assets. The White House’s statement was preceded by […]
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Global Banking Authorities Extend Crypto Regulatory Framework Deadline
The Group of Central Bank Governors and Heads of Supervision (GHOS) has reviewed the implementation of Basel III reforms and postponed the crypto asset standard implementation date to January 1, 2026. Basel III, finalized in 2017, continues to see widespread adoption, with two-thirds of member jurisdictions expected to implement the reforms fully or partially by […]
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Philippines Regulator to Unveil Cryptocurrency Regulatory Framework in Second Half of 2024
Emilio B. Aquino, chairperson of the Securities and Exchange Commission in the Philippines, announced plans to introduce a regulatory framework for cryptocurrency in the latter half of 2024. Aquino expressed optimism that tech giants Apple and Google will promptly comply with the SEC’s request to remove Binance’s applications from their app stores. Safeguarding the Interests […]
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Cryptocurrencies Not Banned, Vietnam Requires Legal Framework for Regulation — Govt Official
A government official from Vietnam has stated that cryptocurrencies are not prohibited. However, the country urgently needs to establish a legal framework to regulate their use, the official said. The Finance Ministry has been tasked with drafting a framework to govern crypto assets, which is due for completion by May 2025. Finance Ministry Directed to […]
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Indian Finance Minister Says Crypto Assets Cannot Be Currencies — Expects ‘Some Framework Emerging’ From G20 Discussion
Indian Finance Minister Nirmala Sitharaman has stated that it is the position of the Indian government that crypto assets cannot be currencies, which are issued by central banks. She clarified that crypto assets can be used for trading, speculation, profit-making, and various other purposes. Moreover, she noted that India has raised the issue of crypto […]
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China’s AML Legal Framework Set to Target Cryptocurrency Transactions in Major Update
As part of its ongoing efforts to modernize financial regulations, China is revising its Anti-Money Laundering laws to include stringent measures against cryptocurrency-related transactions. This revision, the first since 2007, aims to plug the legal gaps exploited in the burgeoning world of digital currencies.
China to Tighten Grip on Digital Assets With Revised Anti-Money Laundering Law
China is set to overhaul its Anti-Money Laundering (AML) laws, incorporating cryptocurrency-related transactions into its regulatory framework. This major revision, according to an article in Jiemian.com, is the first since 2007 and comes amid increasing concerns over the use of digital assets in money laundering activities.
Prime Minister Li Qiang chaired a key executive meeting of the State Council on Jan. 22, to address the revised AML law. The initial draft for this revision was first proposed in June 2021 and later included in the 2023 legislative work plan of the State Council. The final law is expected to be enacted by 2025.
This comprehensive amendment is a response to the evolving nature of financial crimes, especially with the advent of virtual currencies. Wang Xin, a professor at Peking University Law School and an expert in the discussion of the Amendment Draft, emphasized the pressing need to address the legal challenges posed by cryptocurrency in money laundering. He noted that while the revised draft targets digital asset money laundering, there is an apparent disconnect due to the absence of detailed operational guidance on issues such as seizure and freezing of assets linked to these crimes.
China’s stance on cryptocurrency has been stringent. In 2021, the country imposed a sweeping ban on cryptocurrency use, shutting down offshore exchanges and halting all forms of mining activities. Despite these measures, advancements in technology and the decentralized nature of cryptocurrencies have allowed users on the mainland to continue accessing crypto markets, presenting substantial money laundering risks. The upcoming amendment aim to introduce stricter regulations to curb such activities effectively.
China’s revised AML regulations represent a part of its broader efforts to tackle financial crimes. The amendment aims to broaden regulatory oversight to include specific non-financial institutions, aligning with international standards established by organizations such as the Financial Action Task Force (FATF). This expansion is vital, as explained by Wang Xin, for effectively monitoring and controlling various forms of money laundering, thereby fulfilling China’s commitments to international anti-money laundering frameworks. Additionally, the amendment is expected to refine the definitions, obligations, jurisdiction rules, and penalties under the AML laws.
These legal changes also intend to demonstrate China’s commitment to strengthen its financial regulatory systems, involving key authorities like the People’s Bank of China in the process. This effort is seen as a strategic step to boost China’s standing as a responsible international actor and enhance its influence in global financial regulation, which could aid in attracting foreign investment and preventing capital flight.
However, experts such as Wang Xin and Yan Lixin, the Executive Director of the Anti-Money Laundering Research Center at Fudan University, emphasize the need for further enhancements. They advocate for improvements in judicial relief mechanisms and the establishment of a comprehensive financial intelligence network, which are crucial for the effective enforcement of AML laws and for safeguarding citizens’ rights and interests.
Will this update to China’s AML regulations be a net positive for Chinese citizens? Share your thoughts and opinions about this subject in the comments section below.
Polygon Labs Execs Outline Regulatory Framework to Combat Illicit Activity in Defi
A paper prepared by two Polygon Labs executives and a former Financial Crimes Enforcement Network (FinCEN) director presents a framework to combat illicit activity in decentralized finance (defi) markets. The document proposes three different classes for defi platforms, including platforms controlled by centralized actors, genuine defi systems, and critical communication transmitters, describing the level of oversight each one should face.
Polygon Labs Execs Propose Defi Regulation Framework
Alternative views on how to regulate and control decentralized finance (defi) platforms are surging. A paper titled “Genuine DeFi as Critical Infrastructure: A Conceptual Framework for Combating Illicit Finance Activity in Decentralized Finance” describes a new way in which illicit activity can be monitored and controlled in the defi world.
The paper, authored by Polygon Labs CLO Rebecca Rettig, former acting director of the Financial Crimes Enforcement Network (FinCEN) Michael Mosier, and Polygon Labs Senior Public Policy Lead Katja Gilman, aims to start a discussion on the best way to regulate defi systems, considering that these escape regulations designed for other centralized structures.
The report proposes to classify these platforms into three different categories. The first would include all the platforms that, while classified as defi, depend on centralized actors and are decentralized in name only. These are described to be more likely to be subject to regulation depending on a case-by-case analysis.
The second category would be composed of decentralized systems (“genuine defi”) that would be classified as critical infrastructure under the oversight of the Treasury Department’s Office of Cybersecurity and Critical Infrastructure Protection (“OCCIP”).
Rettig, Mossier, and Gilman stress that “genuine defi should not be designated as ‘financial institutions;’ and ‘critical infrastructure’ is wholly separate and apart from this concept.”
Finally, the third category encompasses businesses that interact with “genuine defi” systems but that are not financial institutions, like RPC node providers, who would be grouped under the classification of “critical communications transmitters.” These would have some obligations but would be excluded from complying with Bank Secrecy Act (BSA) determinations.
“Constructive dialogue is the best way to move the industry forward, and we look forward to developing these concepts further with industry and government collaboration,” Rettig concluded.
What do you think about the defi regulation proposal from Polygon Labs execs? Tell us in the comments section below.