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Crypto: EMEA Regulators Build up Legal Framework


In Europe, the Middle East and Africa (EMEA) in the past week, lawmakers have moved to better equip regulators with the tools needed to oversee the cryptocurrency industry.

In the United Kingdom, the latest amendments proposed to the Financial Services and Markets Bill will expand the remit of the Financial Conduct Authority (FCA), which will become responsible for regulating all crypto-related activity.

The proposed changes clarify the bill’s approach to crypto assets and enshrine the powers of the FCA and the Treasury when it comes to their regulation and legal status.

Explaining the changes, City Minister Andrew Griffith, who appears to have taken charge of the crypto-related aspects of the bill, wrote: “This new clause amends the Financial Services and Markets Act 2000 to clarify that the powers relating to financial promotion and regulated activities can be relied on to regulate crypto assets and activities relating to crypto assets.”

This is the second time recently that Griffith has proposed amendments to the bill as the government fine-tunes the legislation before it passes into law.

Last week, the Bank of England Deputy Governor Sam Woods also revealed that the central bank is looking to create a regulatory framework for systemic stablecoins. He said a public consultation paper on the new regime will be published next year.

In the Middle East, authorities in Israel and the United Arab Emirates (UAE) have also taken steps to better regulate their respective crypto markets.

Financial Regulations in Middle East, Africa Extended to Crypto Market

The new crypto token regime of the Dubai Financial Services Authority (DFSA) came into effect Tuesday (Nov. 1).

The new framework addresses the anti-money laundering (AML) responsibilities of anyone holding, trading and transferring crypto assets as well as covering consumer protection issues by defining various consumer rights and corporate responsibilities.

See also: UAE Money Laundering Watchdog to Crack Down on Crypto, Real Estate Exploitation

The DFSA has extended the scope of many regulated financial services activities, such as advising, dealing, arranging, trading and custody, to allow firms in the Dubai International Financial Center to be able to provide crypto-related products and services.

Meanwhile, in Israel, the Capital Market, Insurance and Savings Authority has approved the second permanent license to a crypto firm, the broker Bits of Gold. The move comes only a month after the authority issued its first crypto license to the crypto trading infrastructure company Hybrid Bridge Holdings (HBH).

Until recently, crypto companies in Israel had to operate under a temporary business permit.

Absent a proper licensing regime, crypto businesses in Israel have struggled to engage with the country’s banking and financial system, which is subject to especially stringent AML measures.

An amendment to the Bank of Israel’s AML and Terrorist Financing Risk Management Directive, which calls on banks to stop rejecting cryptocurrencies outright and examine each case specifically, is expected to go into effect Nov. 9.

At the same time, the Tel Aviv Stock Exchange is moving to deploy distributed ledger technology (DLT) for issuing and trading securities.

Finally, in South Africa, the Financial Sector Conduct Authority (FSCA) has also been granted responsibility for regulating financial service providers in the crypto sector.

Starting in October, crypto assets became regulated financial products in South Africa, and the FSCA began accepting applications from crypto service providers that want to be granted authorization.

The latest move represents a key interim step prior to the enactment of the Conduct of Financial Institutions Bill, which will legally grant the FSCA enforcement powers in a similar way to what the U.K. government hopes to achieve with its Financial Services and Markets Bill.

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