Crypto: EMEA Regulators Build Legal Framework

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

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

The proposed amendments clarify the Bill’s approach to cryptoassets and entrench the powers of the FCA and the Treasury in terms of their regulation and legal status.

City Minister Andrew Griffith, who appears to have taken responsibility for the crypto-related aspects of the bill, explained the changes, writing: “This new clause amends the Financial Services and Markets Act 2000 to clarify that the authorities relating to financial promotion and regulated activities can rely on to regulate crypto-assets and activities related to crypto-assets.”

This is the second time recently that Griffith has proposed changes to the bill as the government fine-tunes the legislation before it is passed.

Last week, Bank of England Deputy Governor Sam Woods also revealed that the central bank wants to create a regulatory framework for systemic stablecoins. He said a public consultation document on the new regime would 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 the Middle East, Africa extended to the crypto market

The new crypto token regime of the Dubai Financial Services Authority (DFSA) came into effect on Tuesday (November 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 expanded the scope of many regulated financial services, such as advisory, trading, arranging, trading and custody, to allow firms in the Dubai International Financial Center to offer crypto-related products and services.

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

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

In the absence of a proper licensing regime, crypto businesses in Israel have struggled to engage with the country’s banking and financial system, which is subject to particularly strict 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 investigate each case specifically, is expected to take effect on November 9.

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

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

As of October, crypto-assets became regulated financial products in South Africa, and the FSCA began accepting applications from crypto service providers seeking authorization.

The latest move represents an important interim step before the passage of the Conduct of Financial Institutions Bill, which will legally give the FSCA enforcement powers in a similar way to what the UK government hopes to achieve with its Financial Services and Markets Bill.

For all PYMNTS crypto and EMEA coverage, subscribe to the daily Crypto and EMEA newsletters.