Legal Round-Up #21

Adam Berker

The 21st issue of our legal round-up (May, 2022).

The 21st issue of our legal round-up (May, 2022).

We continue with a series of round-ups prepared by Mercuryo Legal Counsel Adam Berker to keep you updated on crypto regulations.

Regulators React to the UST Stablecoin Dollar Collapse

Following UST and USDT stablecoins’ dollar depeg, authorities issue their statements regarding possible regulations. Thus, the EU Commission considers ordering the issuers of any stablecoin with a market capitalisation exceeding €200 million and one million transactions daily to cease issuances until these figures come back below the threshold.

However, the US SEC’s commissioner Hester Peirce backed a regulatory framework for stablecoins that allows “room for there to be failure”. In her opinion, this is part of trying new things.

Pro-Crypto Tax Approach in Germany

The German Ministry of Finance issues a guideline on paying taxes on incomes from cryptocurrencies.

The main provision of the document underlines that individuals are exempt from paying taxes on crypto gains if virtual currencies were obtained at least a year before the sale. In addition, this one-year deadline is not extended if one stakes or lends their crypto funds.

Even though it is an interim regulation, such a pro-crypto approach will definitely attract new investors and crypto services providers to Germany.

UK will Adopt Bills Supporting the Crypto Industry

On Tuesday, the UK Prime Minister’s Office issued a publication on regulatory plans in several areas, including the financial sector. The publication included, inter alia, plans on adopting Financial Services and Markets Bill, and the Economic Crime and Corporate Transparency Bill. 

The first one aims to harness the opportunities of innovative technologies in the financial services, including supporting the safe adoption of cryptocurrencies and resilient outsourcing to technology providers. 

The second bill proposes creating powers to seize and recover crypto assets more quickly and efficiently to mitigate risks for individuals targeted by ransomware attacks.

Taking into account that the UK is a role model for most of the European jurisdictions in terms of regulating crypto, we may also see the EU or its member states adopting the same favourable approach for crypto.

Global Crypto Regulator is Likely to be Established Next Year

The International Organization of Securities Commissions (IOSCO) announced its plans to establish a global regulatory body for cryptocurrencies and crypto service providers.

Ashley Alder, the chair of IOSCO, underlined that a global group that tries to align crypto rules was clearly needed, likening it to various set-ups already in place for climate finance, including one under the G20 group of leading economies.

The establishment of such a global authority will very likely lead to the creation of a unified licensing and trading regime for crypto exchanges that will significantly ease their operation in various jurisdictions around the globe.

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