The Australian Treasury has initiated efforts to further fine tune regulation around cryptocurrency. It has published a consultation paper titled “Regulating digital asset platforms” to outline its approach. Instead of creating new rules specifically for cryptocurrencies, the regulation of crypto exchanges will be carried out under existing financial services laws.
The main focus of this regulatory framework is to oversee and regulate cryptocurrency exchanges and service providers, rather than individual cryptocurrencies or tokens. The Australian Treasury is considering making it mandatory for crypto exchanges to obtain a financial services license from the local financial regulator. These proposed rules will only apply to crypto exchanges holding more than $3.2 million ($5 million AUD) or more than $946 ($1,500 AUD) per individual.
Why does it matter?
With a quarter of Australians owning some sort of cryptocurrency, the treasurer, Jim Chalmers, stated that they are taking swift and systematic action to create a regulatory framework that balances consumer protection with the promotion of innovation in the digital asset industry.
Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets, and amending regulations. The EU market rules for crypto-assets
Crypto-assets are one of the main applications of distributed ledger technology. Crypto-assets are digital representations of value or of rights that have the potential to bring significant benefits to market participants, including retail holders of crypto-assets. Representations of value include external, non-intrinsic value attributed to a crypto-asset by the parties concerned or by market participants, meaning the value is subjective and based only on the interest of the purchaser of the crypto-asset.
In light of the recent legal cases and lawsuits against companies from the cryptocurrency industry, the US Commodity Futures Trading Commission (CFTC) filed a suit against world’s biggest cryptocurrency exchange Binance. The Binance exchange, and the company CEO Changpeng Zhao are accused of trading violation, by not registering with the US regulatory body.
Binance
The commission has been investigating the online exchange since 2021 and this is a final step in their investigation. The CFTC claims that Binance also allowed US citizens to buy and trade cryptocurrency on its platform, back in 2017. Currently, the US citizens are not allowed to trade on the exchange which implements Know Your Customer (KYC) procedure. The companies CEO Changpeng Zhao is accused of having numerous accounts on the exchange which he used to trade against their customers.
The Binance exchange started in Shanghai and it now holds companies in a couple of world jurisdictions, with a yearly revenue of $20 billion. Mr Changpeng Zhao has Canadian and Chinese passports, while living in Dubai.
According to a report from Reuters, the world’s largest payment processor companies, Visa and Mastercard, are pushing back the launch of products and services related to crypto, until market conditions and the regulatory environment improve. Visa and Mastercard already have a card issued in partnership with the cryptocurrency exchange Binance, and it offers a fiat-to-cryptocurrency gateway for Binance users.
Anyhow, companies shared concerns about the future of cryptocurrency regulation in a midst of the recent collapse of large players in the crypto industry, such as the FTX. A hard year for crypto companies, pushed Visa and MasterCard to delay the proposed partnerships and decide the way forward after a clearer regulation perspective is established.
At the outskirts of the G20 summit in India, the International Monetary Fund Managing Director, Ms Kristalina Georgieva answered the questions from media around the cryptoassets and digital currencies. In her words, the IMF is very much in favor of regulating the world of crypto and digital money. The IMF, alongside the Bank for International Settlements and the G20s Financial Stability Board (FSB) believes this is a top-priority in the forthcoming period.
She pointed out the difference between legal tenders (national currencies) which are backed by countries that issue them, and the ‘publicly issued cryptoassets and stablecoins calling them ‘just a speculative asset’. If such assets start to pose a threat to the consumers and/or financial stability for countries we should have a mechanism to ban crytpoassets altogether. We have requests from our members not to rule out the mechanism for the total ban. If there are strong consumer protection laws set in place, we will not need a ban. The ban of cryptocurrencies is indeed a tool of last resort, she added in her interview.
This action comes after Paxox received a notice from the US Security and Exchange Commission (SEC) that BUSD stablecoin is a financial security and that Paxos needs to register with the Commission. Stablecoins are cryptocurrencies that are pegged to the US dollar or other national currency. The regulatory battle around the stablecoins will continue as Paxos complained to the decision from the SEC. Meanwhile, all deposits of the BUSD will be halted. BUSD is a stablecoin used on a cryptocurrency exchange Binance as a stablecoin pegged to the US dollar. The Binance online exchange is the world’s second largest cryptocurrency exchange based. Binance announced that this will not affect their business.
Stablecoin regulation will be on the agenda of the G20 Finance Ministers meeting on February 24-25 in India. Regulation around this issue might need an overarching regulatory approach.
With the overall goal of identifying deceptive marketing practices across the digital economy, the ACCC plans to analyse influencer marketing practices across several social media platforms such as Instagram, TikTok, Snapchat, YouTube, Facebook, and Twitch. The authority is also looking at the role that other parties such as advertisers, marketers, brands, and social media platforms may have in facilitating misconduct.
Google has committed to introducing changes to better inform consumers about their purchases via Google Store, Google Play Store, Google Hotels, and Google Flights, as a way to comply with relevant consumer protection rules in the EU. The commitment results from a joint action by European regulators, led by the Nederlands Authority for Consumer & Market and the Belgian Competition Authority.
• more precise information on final prices on Google Hotels and Google Flights; • limitation of Google’s right to unilaterally cancel orders or change prices in the Google Store; • more accessible report for regulators regarding illegal content; • make it easier to consumers to find out information about sellers in Google Store and Google Play Store; • feature the option to make purchases using all EU payment methods in Google Store; • improve the application of geo-blocking rules enabling consumers to download their apps anywhere in the EU.
The Consumer Protection Cooperation Network (CPC) will monitor the implementation of these adjustments and commitments, while the EU national authorities will track and enforce compliance where concerns remain.
The US Department of Justice (DoJ) and eight US states filed a lawsuit against Google, accusing it of illegally abusing its dominance over internet advertising business and limiting fair competition.
The lawsuit by DoJ alleges that Google used anti-competitive methods to eliminate or drastically reduce any threat to its dominance over the technologies used for digital advertising. Allegedly, Google has undertaken a systematic campaign to take control of a wide range of high-tech tools used by publishers, advertisers and brokers to facilitate digital advertising and manipulate the mechanics of online ad auctions to force advertisers and publishers to use its tools.
The suit, filed in the state of Virginia, asked the US District Court to force Google to sell its suite of ad technology products, including software for buying and selling ads, a marketplace for completing transactions and an online ad-serving service. The lawsuit also asked the court to stop the company from allegedly engaging in anti-competitive practices.
The European Parliament adopted a report on consumer protection in online video games, calling for better protection of gamers from addiction and manipulative practices. The report notes the need for harmonised rules that would give parents an overview of and control over the games played by their children. It also highlights the importance of clearer information on the content, in-game purchase policies, and target age group of games.
In the view of the European Parliament, online video games should prioritise data protection, gender balance, and the safety of players and should not discriminate against people with disabilities. Moreover, cancelling game subscriptions must be as easy as subscribing to them. The purchase, return, and refund policies must comply with EU rules.
