Koda Apex, aka KAPEX crypto, is a utility token designed to reward those who stake its sister token, $KODA. However, this coin can also be used for payments for both products and services. The main difference is the lower fees associated with [KAPEX crypto](https://koda.finance/kapex/).

Koda describes itself as 'a long-term deflationary store of value for SummitBC Ecosystem investors'. Due to its inflationary tokenomics, the project is an excellent choice for long-term investment, it claims.

Let's look at some of the main features and benefits of the project.

## Rewards

As mentioned above, KAPEX crypto is essentially the reward token for those staking on the parent network. In addition, every transaction across the ecosystem increases the token's liquidity.

So other than rewards for passive staking, what other benefits are there to holding the coin? The benefits are wide-ranging and include:

•	Paying of exchange fees.

•	Paying service and product fees.

•	Purchasing of NFTs.

•	Paying staff or contractors.

•	Motivating team members as a bonus.

•	All business-to-consumer transactions.

•	Peer-to-peer transactions.

In addition to the above, the project has very low network fees, resulting in ultra-low transaction costs. Its supply is controlled by algorithmic tokenomics and backed by its sister coin. Furthermore, anyone looking to unstake their KODA will need to pay for this with KAPEX.

It sounds like an excellent crypto to get involved in, and, with prices currently at historic lows, now is a good time to buy. But are there any drawbacks?

## Compromise

Sadly, the program was compromised via both PancakeSwap and SummitSwap on 17 October, 2022, with the loss of some 78 BNB coins equalling £21,561 of user funds. As a consequence, the management team has advised not to buy the coin going forward. The exact details are unclear, but it appears to be the result of a [vanity address exploit](https://koda.finance/kapex-exploit-on-17th-october-2022/).

This hack and the subsequent price drop are obviously alarming and not a great look for the team behind the project.

Both tokens are managed by 'Summit Better Crypto Limited', which describes itself as a "PR and marketing firm specialising in the promotions of projects within the Cryptocurrency world".

As the company was only set up in May 2021, no filings of accounts are available for analysis. Furthermore, the company website states, "SummitBC employs third-party developers to support the projects we are promoting". Make of this what you will.

Something we can take away from this project is the urgent need for comprehensive [regulation in the crypto space](/news/article/crypto-regulation-uk). While there is nothing to suggest that there has been any wrongdoing in this example, the collapse of KAPEX value shows that consumers desperately need better protection.

Furthermore, this example shows that it is important for consumers to carry out stringent due diligence to ensure any investments they make are based on realistic future projections rather than promotional shilling through social media or so-called 'crypto influencers'.


green image of  cryptocurrency with triangle kapex logo

Kapex Crypto: Signal for Tougher Regulation?

United States Senators Elizabeth Warren and Roger Marshall [have proposed](https://fortune.com/crypto/2022/12/21/elizabeth-warren-new-crypto-bill-shockwaves/) the Digital Asset Anti-Money Laundering Act of 2022.
The move comes while crypto players are focused on the turmoil surrounding FTX and the contagion that followed its collapse.
What does the bill state?

The seven-page bill, introduced on 14 December, would regulate digital asset kiosks, also known as automated teller machines or ATMs, and expand the classification of money service businesses (MSBs).

MSBs would be required to have and implement written Anti-money laundering policies. The bill would finalise FinCEN's proposed reporting requirements and impose new ones, such as reporting transactions exceeding $10,000 under the Bank Secrecy Act.

In addition, the bill will direct the Treasury Department to develop a rule prohibiting financial institutions from interacting with "digital asset mixers, privacy coins, and other anonymity-enhancing technologies".

It would necessitate the establishment of review processes for the entities regulated by the [Securities and Exchange Commission](/news/article/sec-crypto-enforcement-warning), the Treasury Department, and the Commodity Futures Trading Commission.

Finally, the bill would impose reporting requirements on digital asset kiosk owners, FinCEN, and the Drug Enforcement Administration.

## Patrick Daugherty view

Patrick Daugherty is a lawyer at Foley & Lardner, where he directs the digital assets and Web3 practice, and teaches at Cornell Law School. He has commented on the bill's pros and cons.

According to him, on the positive side, it grants federal financial regulatory agencies such as the Securities and Exchange Commission, the Treasury Department, and the Commodity Futures Trading Commission the power to audit "money services businesses" for compliance.

However, Daugherty also believes the bill goes too far in defining a "money service business". According to Warren and Marshall, this could include [miners](/news/article/best-crypto-miner), validators, and [wallet](/news/article/best-cold-crypto-wallet-uk) providers.

## Peter Van Valkenburgh view

According to Coin Center's Peter Van Valkenburgh, the recent Elizabeth Warren and Roger Marshall bill may be unconstitutional.
He pointed out that the anti-privacy measures it outlines, making it impossible for users to make anonymous payments, such as political donations, would violate the First Amendment.

Plus, he added, the bill may be unconstitutional under the Fourth Amendment by "deputising" miners and software developers to collect and report private information with a warrant.

## What's next for the bill?

Elizabeth Warren and Roger Marshall introduced the bill in the Senate Banking Committee, intending to reintroduce it during the next congressional session, which begins in January.

According to a spokesperson, Senator Warren will continue to work in the next Congress to pass this bipartisan legislation into law.
The bill will be added to an already crowded field of [crypto](/news/article/best-crypto-rewards-card-uk) legislation. Rather than placing investor protection against free market ideals, Hilary Allen, a law professor at American University and one of the witnesses at last week's Senate Banking hearing, claims that the bill could bring in bipartisan support by focusing on national security.


yellow image of crypto coins and legal gavel with elizabeth warren in foreground

Elizabeth Warren Crypto Regulation Bill

On Monday, the [Bank of Canada](https://www.bankofcanada.ca/) released a [Staff Analytical Note](https://www.bankofcanada.ca/2022/12/staff-analytical-note-2022-20/) on fiat-referenced digital assets. It discusses the risks and the potential benefits of [stablecoins](/news/article/what-are-stablecoins). 

It further analyses the working mechanism of these crypto assets and explores how they should be distributed. However, the most critical point that staffers discussed is [stablecoin regularisation](/news/article/euroc). 

## Bank of Canada on the usage of fiat-pegged crypto assets

The report says that the global market of fiat-backed cryptocurrencies has seen a 30-fold growth in the past two years. Currently, the estimated value of this market stands at $161 billion. Yet, these coins have limited usage.

It points out that these assets are primarily used on trading platforms as payment options. However, they may have various other use cases for different users. For instance, they can also be adopted as a payment option for goods and services. 

However, the authors emphasised that it is only possible with “well-designed and appropriately regulated” stablecoins. The note adds that stablecoins could benefit payment services because of their efficiency. They can also help shape a digitised economy, but safeguarding is essential to eliminate the risk of instability, it says.

## The identified risks

The analytical note identified several risks that can cause instability in the financial system. They include run, contagion, concentration, consumer and investor protection, and accountability risks.

Run can happen when fiat-referenced coins lose their peg and cannot be redeemed. A run incident occurred in the market when the [Terra-Luna ecosystem](/news/article/terra-luna-collapse) collapsed in May.  

Similarly, there is a contagion risk because 50% of the trades in the crypto market happen in stablecoins. Most centralised/decentralised exchanges and DeFi platforms are affiliated with these assets. So, if a run happens for a stable asset, the market will likely feel disruption.

Concentration is another issue that can be problematic for investors. The report says that around 90% of the market is dominated by only three stable assets. Only 1% of investors hold more than 90% of these assets.

There are accountability and investor protection issues too. These problems can cause an imbalance in the digitised economy, which is why [regulatory measures](/news/article/g7-crypto-2022) seem inevitable.


Bank of Canada Highlights Stablecoin Regulation

France is under pressure to fix a loophole in upcoming crypto legislation that would give an extended grace period to encourage digital asset businesses to set up shop in the nation with less regulatory monitoring.

Hervé Maurey, a member of the Senate's key finance committee, has offered an amendment to legislation that would remove a provision allowing registered crypto firms to operate in the country without a complete regulatory licence until 2026.

His action puts more pressure on the French Government and regulators over the country's crypto-friendly posture. More rigid EU standards will take effect in 2024, but France plans to keep its existing framework in place for another 18 months.

Critics' fears have grown this year as the values of popular tokens have plummeted, worsened by the collapse of  [Sam Bankman Fried's cryptocurrency enterprise, FTX,](/news/article/ftx-boss-denied-bail-in-bahamas) last month. On Tuesday, US authorities charged Bankman-Fried with crimes, including fraud.

## France crypto position

France has attempted to position itself as one of the most appealing nations for crypto businesses to set up their office, bringing companies such as exchange operator Binance to Paris.

The existing approach permits crypto firms to register in the country without obtaining a full licence, allowing them to operate with limited oversight.

## France crypto firms need to get a licence from regulator

Hervé Maurey’s plan would require corporations to get a licence from the French regulator, the [Autorité des Marchés Financiers (AMF)](https://www.amf-france.org/en), beginning in October next year. Licencing, as opposed to registration, protects consumers and forces corporations to reveal more information about their financial health and control mechanisms. There are more than 50 cryptocurrency firms registered, but none have been awarded a licence.

According to critics, the France crypto existing setup may lead customers to believe regulators actively control crypto enterprises. "The safety afforded by this registration is deficient, if not non-existent," said Thierry Philipponnat, a former AMF board member who left in October.

The Senate approved the proposal on Tuesday. It will be considered by France's parliament in January next year. So far, the French Government has resisted the document, claiming that hastening regulatory requirements could scare away investors.

According to France's Adan, the proposed revisions indicate that the country is "renouncing its desire" to become a crypto centre, and the government is "abandoning an industry of the future" as a result of [FTX's](/news/article/former-ftx-ceo-sbf-arrested) failure.



yellow image of Eiffel tower with crypto falling

France Crypto Rules Under Pressure

Following the collapse of FTX last month, pressure is rising on US regulatory body the SEC to beef up enforcement of major crypto sector centres. 

The failure of [FTX](https://www.wsj.com/articles/sec-faces-calls-to-boost-crypto-exchange-enforcement-after-ftx-collapse-11670474070) focused attention on crypto exchanges, which serve as key hubs for individual investors and provide services such as digital-coin sales, financing, and asset storage. Despite spending more than six years studying various sector aspects, the Securities and Exchange Commission regulatory agency still needs to sue a major cryptocurrency exchange.

According to sources familiar with the topic and regulatory disclosures, the [SEC](/news/article/xrp-vs-sec-lawsuit-update) is investigating exchanges such as Coinbase Global Inc. and the US operations of Binance and FTX. It has penalised or sued dozens of token creators over the past six years.

According to the SEC, several cryptocurrencies qualify as [securities](/news/article/sec-vs-ripple-news) that should have traded under stock and bond laws. The firm's Chair Gary Gensler says that exchanges are breaching the law by selling unregistered securities and failing to follow standards that the NYSE and Nasdaq Stock Market follow.

## Lawyers believe SEC crypto enforcement is not enough

Some attorneys argue that, despite such claims, regulatory enforcement measures have yet to go far enough as the sector has matured and ordinary people are committing their assets to crypto enterprises. Mr Gensler risks substantial criticism if he does not get things going", according to the report "former SEC enforcement attorney John Reed Stark.

It was a flaw in their plan not to pursue these entities, Mr. Stark explained. 

The exchange kept trading six assets after the SEC sued a former Coinbase employee in July, alleging that the business sold seven improperly issued securities. They could have sued Coinbase, but they chose not to. According to a Coinbase spokesperson, the company thinks that none of the six digital currencies are securities.

## Crypto exchanges believe SEC is using the wrong crypto enforcement laws

According to industry lawyers, the SEC crypto enforcement approach is exhibiting signs of wear and tear after years of the SEC utilising its enforcement arm to drive the industry into its supervision.

According to some industry attorneys, the activities of cryptocurrency exchanges are so unlike those of stock exchanges that compliance with their standards is impossible.


sec logo with hands shaking in the background

SEC Crypto Enforcement Warning

New UK regulation could restrict crypto adverts, criminalize the provision of services by unlicensed operators, restrict foreign companies' involvement, and control how companies are wound up. 

## Urgency to create order 

The urgency to create order in finance’s “wild west” has been necessitated by crypto exchange [FTX’s collapse](/news/article/ftx-collapse-blockfi-suspend-withdrawals) last month after filing for US bankruptcy court protection. Sources told the [Financial Times](https://www.ft.com/content/481d45d8-943e-484b-84ca-3b11f02c0ee4) that the planned package of regulations gives the Financial Conduct Authority (FCA) sweeping powers to rein in the sector. It also allows the FCA to check how crypto firms operate and advertise their products. The laws could also limit how overseas firms access the British market.

The UK House of Commons unanimously passed the new Financial Services and Markets Bill that restricts crypto adverts and criminalizes unauthorized crypto operators last October. The committee added the measures to those agreed upon earlier, notwithstanding industry concerns that the new regulatory regime would make it harder to get crypto ads approved.

## Crypto regulation UK agenda

While he was still Chancellor, current Prime Minister Rishi Sunak announced a [grand plan](https://www.cnbc.com/2022/04/04/uk-to-mint-its-own-nft-and-push-forward-with-crypto-regulation.html) to make the UK a crypto hub. The Government pressed on with its crypto regulation UK agenda amid the political turbulence that precipitated the fall of Boris Johnson and then Liz truss as leader.

Minister Andrew Griffith [told lawmakers](https://publications.parliament.uk/pa/bills/cbill/58-03/0146/PBC146_FinServMarketsBill_1st8th_Compilation_01_11_2022.pdf) on 25 October that the new laws would enable regulating stablecoins and activities relating to other crypto assets like Bitcoin (BTC) and Ether (ETH). The original bill primarily focused on introducing a stablecoin as a means of payment that would be tied to tangible assets like the British pound.  
    
British crypto firms and investors were optimistic that Sunak, a former Goldman Sachs analyst and [a vocal crypto advocate](/news/article/rishi-sunak-crypto-believer-uk-pm), could turn around the UK's diminishing crypto aspirations. However, the persisting political instability, punishing digital asset prices, and a slew of corporate bankruptcies have left many industry players wondering how much he could do to change the fortunes of the crypto market that's still licking its wounds.   
  
Crypto regulation UK may not exactly be on Sunak's priority list, but some insiders feel there's reason to be optimistic. While the FCA has faced criticism for its snail-paced approach in licensing crypto firms, leading to some companies winding down and relocating elsewhere in Europe, the recent licensing of the [fintech app Revolut](/news/article/revolut-business-account), after numerous extensions, offers a ray of hope.


Crypto Regulation: UK Efforts Ramp Up

US Deputy Treasury Secretary Wally Adeyemo has emphasized the need for the United States to collaborate with other countries to develop cryptocurrency regulations effectively.

This development comes a few weeks after FTX, the second most popular crypto exchange, based in the Bahamas, [became insolvent](/news/article/ftx-bankrupt-who-to-blame). CEO Sam Bankman-Fried declared that the protocol did not have sufficient assets to meet customers' demands.

Speaking at the [Reuters NEXT](https://events.reutersevents.com/next) conference, Adeyemo said countries must enact regulatory laws to protest investors, promote financial stability, and block illicit crypto users.

"This is a global phenomenon," Adeyemi said. He added that the US would work closely with international partners to design a regulatory framework to protect the global economy, especially with crypto innovations.

The Deputy Treasury Secretary noted that since FTX was not based in the US, regulatory efforts must be broadened.

## Crypto regulation post-FTX collapse

FTX declared insolvency and Bankman-Fried resigned from his position as CEO on 11 November, a few days after the world's biggest crypto exchange, Binance, dumped a deal to rescue the exchange. This was followed by angry traders pulling $6 billion out.

As a result, Rostin Behnam, chairman of the Commodity Future Trading Commission (CFTC), urged lawmakers on Thursday to quickly design a regulatory framework for crypto assets.

After several congressional hearings to examine the collapse of FTX, members of the Senate Agriculture Committee asked Behnam if the FTX collapse would have been controlled with better oversight.

However, the recent setback in the crypto market has not affected the banking sector. This is according to Janet Yellen, the US Treasury Secretary, who remains skeptical about the crypto industry. She believes in the need for adequate regulation.

While speaking at the DealBook event hosted by New York Times, the Treasury Secretary said adequate customer protection is needed in the crypto sector.

Just like Wally Adeyemo, she agrees that it is important to remain open to financial innovations, given that cryptocurrencies can lower the cost of cross-border transactions and promote financial inclusion.

"I have been skeptical, and I remain quite skeptical," Yellen said. She noted that recent developments are not centered on financial inclusion and cross-border payment.



Wally Adeyemo Calls for Crypto Regulation

Although Bitcoin has not been officially recognized as legal cash in Brazil, the country has enacted a law recognizing crypto as a valid payment method across the country, providing a regulatory boost to the growth of the digital currency industry.

The regulatory framework established by the Chamber of Deputies in Brazil makes it possible to utilize cryptocurrencies as legal tender. [Signed under the code PL 4401/2021](https://news.yahoo.com/brazil-legalizes-crypto-method-payment-042930754.html), the legislation expands the meaning of "payment agreements" to include virtual currencies and airline frequent flyer incentives (the popular "miles").

## Brazil crypto acceptance

Legislation approving cryptocurrency payments for goods and services, but stopping short of making them legal tender, has already passed both houses of parliament and only needs to be signed by the President of the Republic to become law.

When it comes to Bitcoin regulation and investor adoption, Brazil has made significant strides. As well as having the largest number of cryptocurrency exchange-traded funds (ETFs) in Latin America, most of the country's main banks and brokers also provide services related to cryptocurrency investments, such as custody or token offerings. One of Brazil's major private banks, Ita, is also looking into the possibility of tokenizing assets as part of a future suite of investor services.

Only tokens classified as securities fall within the jurisdictions of the CVM, Brazil's counterpart to the SEC. 

After the law goes into effect, it will be up to the executive arm of government (the president and its ministers) to decide the body or institution in charge of regulating the situation. The country's Central Bank and the CVM have been the primary public agencies active in the area thus far.

The Brazil crypto law also regulates the provision of services related to the custody and administration of cryptocurrencies by independent third parties, such as Bitcoin trading platforms. Although the law does not address the issue of a digital currency by the country's central bank, significant progress has been achieved in this area.

A crucial part of the Brazil crypto rules is that service providers must keep their own money separate from their customers' money [to avoid a repeat of the FTX case](/news/article/ftx-exchange-under-investigation), in which the exchange is accused of utilizing its customers' money for its financial operations.


Brazil Crypto Acceptance Official

Rishi Sunak is a crypto advocate who has taken several initiatives to promote digital assets in the country.

When Sunak assumed the [position of United Kingdom](https://www.cbsnews.com/news/rishi-sunak-appointed-prime-minister-of-the-united-kingdom/) Prime Minister, he had become the wealthiest, youngest, and the first British Asian PM in the country's history. Sunak's rivals withdrew themselves from the race for Conservative Party leadership. This left him as the only candidate for the post. It is the third change in UK's premiership in the last two months.

Nonetheless, the blockchain industry and cryptocurrency investors are hailing the new PM because they see the Rishi Sunak crypto stance being positive.
Interestingly, he has replaced [Liz Truss](/news/article/liz-truss-prime-minister), who was pro-crypto. She had to resign after 44 days of her premiership. Unprecedented economic turmoil in the UK and the criticism from the masses forced her to step down.

## What's the Rishi Sunak crypto stance?

Truss was his predecessor and rival in the previous Conservative party elections. She was also a FinTech and digital asset supporter who backed the movement for welcoming cryptocurrencies. She also shared anti-regulatory views.

Unlike Truss, Sunak supports a regulated market. Also, he is ambitious to transform Great Britain into a global hub for cryptocurrencies and FinTech.
The newly appointed PM previously served as Finance Minister under then PM Boris Johnson. He assumed the office in 2019 and is known for his role in crisis management during COVID-19. He also took various formidable initiatives during this period to promote cryptocurrencies.  

## Initiatives for promoting blockchain and cryptocurrency

A significant step has been the advancement of fiat currency-pegged digital tokens, known as stablecoins. The Rishi Sunak crypto stance advocated using stablecoins as a legit means of payment in the country. 

Moreover, he also developed an FMI Sandbox (regulatory sandbox for financial market infrastructures). It aimed to bring forth innovation in the FinTech industry and was expected to be operational by next year.

He also expressed interest in launching the Bank of England's central bank digital currency (CBDC). He stated that a CBDC could act as a new means of payment. The swift introduction of a [CBDC in England](/news/article/cbdc-bank-of-england) seems quite unlikely. But a crypto believer's government might boost the chances.  

## Rishi Sunak's resolve to make the UK a global crypto hub

Apart from that, what defines Rishi Sunak as a crypto enthusiast is his resolve to transform the UK into a [global cryptoasset technology hub](/news/article/cryptocurrency-investment-uk). While sharing his views on regulatory reforms and the introduction of stablecoins, he stated it was his ambition to turn the country into a "global hub for cryptoasset technology".

It was a clear statement that could define the future of blockchain technology and digital assets. As per this stance, we might see regulatory changes in Britain’s policies promoting cryptocurrencies. Also, investors might expect the introduction of digital tokens as a recognised means of transaction.

However, the youngest PM of the UK in the modern era has stepped in during a period when the UK is facing economic headwinds. Amid this scenario, the tall claims might fall flat.



Rishi Sunak, crypto believer, becomes UK PM

Witnessing the FTX collapse and volatility of the crypto market, German regulator Mark Branson has called for global crypto regulations.
 
The collapse of Bahamas-based FTX, which was widely regarded as one of the most reliable names in the industry until recently, has raised new concerns about the unregulated nature of crypto companies and what safeguards are in place to protect clients' assets. 

Crypto winter has severely affected the market resulting in ongoing crypto failures. Renowned firms have been closed due to liquidity issues. [FTX](/news/article/ftx-bankrupt-who-to-blame) is the latest in significant cryptocurrency failures this year, including hedge fund Three Arrows Capital, crypto lender [Celsius](/news/article/celsius-data-breach) Network, broker [Voyager](/news/article/crypto-lender-voyager-sells-assets) Digital and [Nuri bank](/news/article/nuri-bank-users-withdraw-funds).

## Mark Branson's statement at Frankfurt

According to German regulator Mark Branson, [crypto assets must be subject to global rules](https://www.bloomberg.com/news/articles/2022-11-14/german-regulator-bafin-sees-need-for-global-crypto-rules) if they are to be adopted by mainstream finance and exposed to banks and a broader range of investors.

At a Frankfurt event on Monday, the German regulator stated that the recent crash in digital assets was well-timed because the links between traditional finance and crypto are still limited, implying that it may not pose a risk to financial stability.

When asked about the fallout from [FTX](/news/article/ftx-collapse-blockfi-suspend-withdrawals) Group, Branson avoided mentioning any specific companies and said his comments applied to the industry as a whole.

Continuing his statement, Branson added that consumer protection is the most disturbing aspect noted in recent months.
The BaFin chief stated that cryptocurrency should either be shut out by building a "very, very strong wall" around the conventional banking system or by regulating the industry and seeing if "crypto money is in real competition with fiat money".

According to Branson, cryptocurrency is "massively susceptible to money laundering risks and doesn't have a handle on these". He stated that a set of rules for the industry would need to be addressed on a global scale rather than just in Europe.

Separately, Branson stated that despite recent issues in the cryptocurrency market, he does not anticipate a ripple effect affecting Germany's financial stability.


German Regulator Demands Crypto Regulation

Financial Action Task Force ([FATF](https://www.fatf-gafi.org/)) is a global financial policy-making body founded to combat money laundering and terrorism financing.

It provides guidelines for anti-money laundering ([AML](/news/article/crypto-aml)) and counter-terrorist financing (CTF) laws. In 2014, it expanded its mandate to digital assets, too. It was to prevent the misuse of funds for illegal activities.

Now, to ensure the FATF [crypto regulations](/news/tag/regulation), the organisation is planning to grey list the countries that fail to comply with its laws. According to an [Al Jazeera report,](https://www.aljazeera.com/economy/2022/11/7/countries-to-face-grey-list-for-shunning-crypto-guidelines) the financial watchdog will conduct annual surveys for each country’s performance. It will examine the countries’ measures to ensure FATF crypto regulations.  

## Annual reviews for FATF crypto laws compliance

The organisation has opted for annual reviewing instead of evaluations on 5-year cycles. This move reduces the time window for countries to impose terrorist financing and anti-money laundering regulations. Moreover, there will be the added pressure of greylisting. It will force them to bring virtual asset service providers and users within the country under regulations. 

The automatic greylisting of countries may affect their overall ratings. This may also result in being blacklisted by the organisation if no significant changes are evident in the country. 

## Response from the crypto industry

The industry leaders have responded to this move from the financial watchdog. They may reveal a plan of action in the Summit of G20 Leaders, which is scheduled this month. It is likely to highlight the difficulties cryptocurrency investors, exchanges, and other stakeholders face due to harsh regulatory measures.

Al Jazeera reported that Ron Tucker, the co-founder of the International Digital Asset Exchange Association (IDAXA), is of the view that it may cause trouble for the end user. The reason is that the greylisting fear will force “countries to unbank crypto exchanges.”

Ron Tucker also indicated risks to financial inclusion. He mentioned that the users of this asset class in developing countries would be affected. 
 



Defiance of FATF crypto laws may lead to countries greylisting

Crypto [Hong Kong regulations](/news/article/is-crypto-legal-in-hong-kong) are likely to see new laws for virtual asset investment. The Securities and Futures Commission (SFC) intends to introduce a consultation paper with the suggested regulations for cryptocurrencies. The regulatory body is also planning to launch cryptocurrency exchange-traded funds ([ETFs](/news/article/crypto-etfs)).

This step will likely give easy access to institutional and retail investors in the country. At the initial stage, only [BTC](/coins/btc) and [ETH](/coins/eth) will be available for futures trading on the Chicago Mercantile Exchange.

On 31 October 2022, the government released a [policy statement](https://www.info.gov.hk/gia/general/202210/31/P2022103000454.htm) about crypto Hong Kong regulations. It shared the government’s vision about the future of virtual assets in the country. Also, it discussed the regulatory approach and the anti-money laundering laws. Along with that, it also discussed cryptocurrency ETF. 

The Financial Services and the Treasury Bureau believe that using cryptocurrencies as a medium of investment by individuals and institutions is growing. That’s why they are introducing ETFs to facilitate investors. 

The bureau expects that launching such products will engage digital asset investors with financial institutions. This will allow them to avail of the products through a secure channel. Also, it will play a significant part in promoting digital assets in the market.

## Crypto Hong Kong policies for ETF service providers

[SFC](https://www.sfc.hk/en/) has also mentioned details about service providers who can operate in the market. According to SFC, only the firms with a “good track record of regulatory compliance” and dealing with [ETFs](/news/article/crypto-etf-uk) for a minimum of three years will be given the approval.

Moreover, these finance management firms would be required to maintain active management strategies. The strategy should be flexible for portfolio management and disruptive market events. All in all, Hong Kong has so far been eminent in drafting policies that aim to promote cryptocurrency adoption. 





Crypto Hong Kong regulators may allow ETFs

Is crypto legal in Hong Kong? It looks like it will be soon.

Hong Kong is taking steps to reclaim its position as a worldwide cryptocurrency hub. It intends to achieve this by launching several legal initiatives related to the crypto industry.

The Chinese city is willing to differentiate its crypto regulation approach from the crypto ban in mainland China.

Years of political upheaval and Covid restrictions prompted a talent departure from Hong Kong, undermining the city's claim to be Asia's financial hub. Officials are now attempting to repair some of the damage by luring businesses back, though how successful they will be remains to be seen.

## Crypto legalisation in Hong Kong

Hong Kong intends to legalise retail cryptocurrency trading to become a crypto hub.

The government unveiled a master plan to become a leading Asian crypto hub with legalised retail trading and digital-asset exchange-traded funds to reestablish the city's credentials as a financial centre.

According to a government statement issued on Monday, a consultation will begin on how the retail sector "may be given a suitable degree of access" to tokens. The city has invited global crypto exchanges to explore opportunities.

The Securities and Futures Commission detailed criteria for authorising crypto ETFs for the first time, which would initially only allow investment in Bitcoin and Ether traded on CME Group Inc. exchanges. The permitted futures portfolios could grow over time, according to the regulator.

According to SFC Deputy Chief Executive Julia Leung, asset managers and banks can apply to roll out such ETFs right away. She added that retail customers would be able to purchase the products.

In a policy paper, Hong Kong stated that it would be cautious about the risks to retail investors, improve education, and ensure the proper [regulatory](/news/article/uk-crypto-exchange) framework is in place.

The government also stated on Monday that it is willing to review property rights for tokenised assets and the legality of smart contracts.

The Hong Kong Special Administrative Region's government announced a bill suggesting creating a [regulatory framework](/news/article/g7-crypto-2022) for companies that offer virtual asset services. City authorities want to make Hong Kong an "international virtual assets centre" by embracing new technologies like non-fungible tokens and the Metaverse.

## Hong Kong crypto adoption 

Reports claim that Hong Kong has so far been successful in promoting the adoption of cryptocurrencies. In [a study](https://forexsuggest.com/worldwide-crypto-readiness-report/) by Forex Suggest released in July 2022, the city was ranked the best-prepared country for widespread crypto adoption, taking into account several factors, including crypto ATM installations, pro-[crypto regulations](/news/article/uk-crypto-regulation-eu), and start-up culture.


Is Crypto Legal in Hong Kong?

South Africa's crypto regulation is being redefined as authorities recognise cryptocurrencies as financial products. It will likely include all digital tokens and assets in the country's financial laws. This move is a long-awaited step towards the complete [regularisation](/news/article/crypto-regulations) of the cryptocurrency market in the country.

On Wednesday, October 19, the South African crypto regulation authority, the FSCA (Financial Sector Conduct Authority), notified the public about the [update](https://www.greengazette.co.za/notices/financial-sector-conduct-authority-finansi%C3%ABle-sektor-gedragsowerheid-1350-financial-advisory-and-intermediary-services-act-37-2002-declaration-of-a-crypto-asset-as-a-financial_20221019-GGN-47334-00000.pdf). It briefed about the amendments in the Financial Advisory and Financial Intermediary Services Act (FAIS) of 2002.

## A new definition of cryptocurrencies

The notification declared that the cryptocurrencies are "a digital representation of value". Moreover, the new regulation defined them as values that can be traded, transferred, and reserved on a distributed ledger. It also maintained that these are to be recognised as "financial products".

Therefore, all the laws that apply to traditional financial products will also apply to cryptocurrencies. The update in the act is likely to boost the regulatory efforts in the country.

## Earlier indications for South Africa crypto regulation upgrade

Earlier this year, in July, the regulatory body and the South African Reserve Bank (SARB) indicated upgrades in monetary laws. It specified that BTC and altcoins will be defined as assets. 

However, a [draft](/news/article/south-africa-crypto-regulation) for this declaration was published back in November 2020. After that, in mid-2021, The Intergovernmental Fintech Working Group (IFWG) proposed a complete roadmap in a [position paper on crypto assets](https://www.resbank.co.za/en/home/publications/publication-detail-pages/media-releases/2021/IFWG-CAR-Working-Group-position-paper-on-crypto-assets). 

It discussed in detail the anti-money laundering ([AML](/news/article/crypto-aml)) laws and the KYC (know your customer) requirements for service providers. Also, among the digital asset community in RSA, there were debates about their inclusion in monetary laws.

Thus, the step was highly anticipated among virtual asset holders and issuers. And now, they have finally made the reforms in the laws with the FAIS Act 2022. It will guide them on how the market will shape RSA in the coming years. 

Besides, RSA is a growing country for cryptocurrencies; many firms are providing related services. With the introduction of this act, authorities will be able to manage them efficiently.


South Africa Crypto Regulation Update

The European Union has released a set of documents relating to an EU crypto regulation action plan for implementing the European Green Deal and the REPowerEU Plan. Both are intended to save energy by digitising the energy sector. It shows that [crypto miners](/news/article/crypto-mining-farms) are on the radar of European energy planners.

## The REPowerEU plan

[The REPowerEU Plan](https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52022DC0230&from=EN) was unveiled in May in response to Russia's invasion of Ukraine, which significantly impacted European energy supplies. The document outlines the EU's strategy for achieving energy independence from Russian fossil fuels by 2027.

The document was a follow-up to the first 'REPowerEU' document, released on March 8, 2022, and outlined steps to avoid Europe's fuel dependence on Russia becoming a weapon against the bloc.

### REPowerEU's primary goal is:

•	Ending Europe's reliance on Russian fossil fuels as soon as possible, ideally by 2027, with a two-thirds reduction in Russian gas consumption by the end of 2022.

•	Securing the EU energy system's long-term sustainability, cost-effectiveness, and energy supply through a controlled exit from this long-entrenched relationship with Russia.

## Commission Staff Working Document

According to the document, Europe accounts for about 10% of global crypto mining, with Germany and Ireland leading the continent and Sweden seeing a significant increase in activity after [mining was banned in China](/news/article/chinas-ban-on-crypto). The European Securities and Markets Authority is expected to draft technical standards for the crypto-mining industry.

The paper also stated that investors require more information about cryptocurrencies' energy consumption. It echoes the EUBOF document, that the EU crypto regulation should take the lead in developing international blockchain standards.

According to a communication from the Commission to bodies including the European Parliament, Council, and European Economic and Social Committee, energy consumption for cryptocurrency mining has more than doubled in the last two years. The proposed [Markets in Crypto Assets (MiCA)](/news/article/euroc) legislation would require crypto-asset market participants to make environmental disclosures.

Meanwhile, due to the tight energy situation this winter as a result of disruptions in Russian fuel supplies, the European Commission, the EU's executive branch, is urging member states "to implement targeted and proportionate measures to lower the electricity consumption of crypto-asset miners to put an end to tax breaks and other fiscal measures benefiting crypto-miners in the longer term".



EU Crypto Regulation to Save Energy

Fintech (financial technology) has created numerous opportunities for disruptive economic entrepreneurship. More companies in Singapore are looking to provide services for buying and selling digital payment tokens (such as cryptocurrency) or a platform for exchanging such digital payment tokens.

As a result, the Monetary Authority of Singapore (MAS) enacted the Payment Services Act (PSA) to accommodate and regulate such payment service transactions, requiring any business that intends to provide digital payment token services first to obtain the necessary licences.

Recently, the Singapore-based arm of the US cryptocurrency exchange [Coinbase received Singapore's MAS "in-principle approval"](https://www.coinbase.com/blog/singapore-ipa-announcement)to provide crypto services in the country.

![Coinbase.PNG](https://s3.eu-west-2.amazonaws.com/prod-monitalks-media/Coinbase_3caa112189.PNG)

Hassan Ahmed, CEO of Coinbase Singapore and the exchange's regional director for Southeast Asia, told in a statement that Singapore is a critical institutional market for the exchange in Asia because businesses there continue to show interest in crypto and digital advancements. 

According to Ahmed, the city-state also serves as Coinbase's Asia-Pacific tech hub, with an on-the-ground team of engineers in charge of the company's international expansion efforts and platform localisation.

With the new approval to offer Digital Payment Token services, Ahmed said [Coinbase](/news/article/blackrock-crypto) would seek to collaborate with regional platforms and expand its fiat capabilities. Coinbase was already offering services, including its institutional platform, under an exemption granted by MAS.

The exchange claims it has ongoing collaborations with regional Web3 organisations like the Singapore Fintech Association(SFA) and the Association of Crypto-Currency Enterprises and Start-ups (ACCESS).

## Other firms to qualify for in-principle approval

Under a new regime, approximately 180 crypto companies applied for a crypto payments licence with the Monetary Authority of Singapore in 2020. Following extensive due diligence, the country has granted 17 in-principle approvals and licences.

Among those who have received licences are Coinbase, [Crypto.com](/news/article/crypto.com-news-uk-approval), and DBS Vickers, the brokerage run by the country's largest bank DBS (DBSM.SI).
 



Coinbase gets Singapore in-principle approval for DPT license

The comprehensive [measure](https://www.thecoinrepublic.com/2022/10/05/this-economically-full-fledged-country-experimenting-with-blockchain-technology-once-completely-avoided-crypto-2/), which has received its second reading in parliament and is currently under consideration by a committee, broadens the scope of the legislation to include stablecoins, clearing the way for their use as a form of payment in the United Kingdom.

## Is UK crypto tax pragmatic or legal?

Crypto assets, according to HMRC, can be located anywhere the beneficial owner resides, according to the Society of Trust and Estate Practitioners. This view is from a pragmatic conclusion rather than a legal foundation.
 
Difficulties occur when a third entity, such as an exchange or custodian, holds the private key required to access such assets or when numerous persons jointly possess the assets. 

Furthermore, it is uncertain if different coin assets are grouped when declared property. Also, should utility tokens, which give holders access to blockchain-based services, be classified similarly to payment tokens, essentially vehicles of exchange? 

## How is crypto taxed in UK Pensions?

If tokens are considered property, depositing them into a pension plan might result in income tax savings. HMRC currently contends that they cannot use [crypto assets](/news/article/crypto-assets-banking) to make a tax-free contribution to a registered pension scheme because they do not qualify as money or currency. 

Will government officials insist that privately produced coins be subject to distinct regulations? If so, CBDC is considered money and eligible for pension plan [tax relief](/news/article/crypto-tax-japan-reforms).

## UK crypto tax - IME exemption 

According to a recent declaration by the British government, the "Investment Manager Exemption" (IME), which covers a substantial chunk of the fund management business, would now encompass coins.   

Since most global funds do not have a location in the United Kingdom, the IME makes it clear to non-resident funds with a UK- based investment manager that they do not have a taxable presence in the UK. 

[Crypto assets](https://themarketperiodical.com/2022/10/01/selecting-your-crypto-slots-site-top-5-factors-to-consider/) are currently not on the Investment Transactions List (ITL), which also assesses who qualifies for the exemption. 
The primary purpose of HM Treasury's policy is to position the United Kingdom as a leading location for digital asset investments and job opportunities.



UK crypto tax regulations

The Financial Conduct Authority ([FCA](https://www.fca.org.uk/news/press-releases/fca-establishes-temporary-registration-regime-cryptoasset-businesses)), responsible for cryptocurrency regulation in the UK, has closed its TRR program. The TRR, or Temporary Registration Regime, was a scheme that allowed digital asset firms to get an interim UK [crypto license](/news/tag/crypto-legal-news). 

Through it, the firms could start their operations in the country while they wait for complete registration. 

However, now the FCA has ended the temporary licensing program for the companies. This step was taken after the digital banking platform [Revolut](/news/article/revolut-news-approved-eea) acquired FCA registration. The company was the last among five waiting for the regulators' approval. As it secured the authorisation, regulators shut down the program.

## UK crypto license TRR initiative

The British regulators took the initiative of interim authorisation in 2020. At that time, it was for the virtual asset firms already providing their services in the country. More than 100 cryptocurrency-related firms entered this scheme to acquire the regulatory body's approval. However, it only deemed 38 among them to be following the [regulations](/news/tag/regulation).  

The program would have been shut down earlier as the British regulatory body announced March 31 as the deadline for complete approval. However, a few companies, including Revolut, got an extension to secure the approval. 

Five digital asset firms were still working in the country in early April without complete authorisation. Besides Revolut, [CEX.io](https://cex.io/), [GlobalBlock](https://www.globalblock.eu/), [Copper.co](https://copper.co/), and [Moneybrain](https://www.moneybrain.com/) were the remaining companies. All these four companies were denied authorisation or withdrew themselves by the end of June. 

On the other hand, Revolut remained the last company on the list. It secured registration in September, marking the TRR program’s end for a license. 

British regulators are known for their absolute measures for [anti-money laundering regulations](/news/article/crypto-aml). That’s why cryptocurrency firms do not get registered easily in the country. With the closing of TRR licensing, they have ensured that non-registered companies [do not operate](/news/article/ftx-uk-ban) in the country.


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