Bepi Pezzulli 🎗️

The Cyprus Securities and Exchange Commission (CySEC) has issued a reminder to Cyprus Investment Firms (CIFs) on the Polish Financial Supervision Authority's (UKNF) stance regarding referral and affiliate programs. The UKNF’s position, dated October 2023, prohibits clients of investment firms or unregulated intermediaries from engaging in individualized client acquisition through these programs. Firms should ensure compliance with these regulations to avoid potential issues. Read More: https://lnkd.in/gRvvHfQu.   #CySEC #UKNF #InvestmentFirms #ReferralPrograms #AffiliateMarketing #FinancialRegulation  

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Overview and detailed guidance note on E-Money Tokens (Fiat referenced Stablecoins) under the EU Markets in Crypto-Assets (MicA) regime: https://lnkd.in/evgF44pS Feedback welcome and please let me know if you would like an updated guide to expand on any aspects or areas of uncertainty :)

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📢 CySEC Ceases New CASP Applications 📢 The Cyprus Securities and Exchange Commission (CySEC) has issued two critical updates in view of the upcoming implementation of Regulation (EU) 2023/1114 on Markets in Crypto-Assets (MiCAR): 1. PRESS RELEASE - CySEC will not accept new applications for CASPs: As of October 17, 2024, CySEC will no longer accept applications for the registration of CASPs under the existing National Rules (either for new CASP license applications or for existing CIFs wishing to extend their license). This step aligns with the transition to MiCAR, which comes into effect on December 30, 2024, governing CASP operations across the EU. 🔗 Read the official announcement: https://lnkd.in/dedXQkeA 2. Transitional Period for CASPs: CASPs registered before December 30, 2024 under the National Rules may continue providing services during the transitional period until July 1, 2026, or until they receive a decision on their MiCAR authorization application. Additionally, CySEC will continue to accept cross-border notifications from EEA-registered CASPs until October 30, 2024. Successful notifications will allow entities to maintain their cross-border operations during the transitional period. 🔗 Read the official announcement: https://lnkd.in/dQEMBzRq CySEC will publish the procedure for CASP authorization, or any other regulated entity that wishes to offer Crypto Services, once the European Commission issues the necessary technical standards. These changes signal a significant shift in how crypto-asset services will be regulated in Cyprus and the EU. Entities should prepare now for the new regulatory landscape to ensure compliance with MiCAR requirements. #CySEC #MiCAR #CryptoAssets #CryptoRegulation #CASP #Compliance #Licensing #CryptoLicence #ComplianceSupport #FiveComply #ARTs #EMTs #RegulatoryUpdate #CryptoCompliance

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U.S. Commodity Futures Trading Commission Issues Order Against Uniswap Labs for Offering Illegal Digital Asset Derivatives Trading The U.S. Commodity Futures Trading Commission (CFTC) states that Uniswap Labs has allowed the offer of "a limited number of leveraged tokens, which provided users leveraged exposure to digital assets such as Ether and Bitcoin", which were not allowed by the CFTC. The interesting part of the CFTC communication however is another. The CFTC indicates that "in order to facilitate access to the protocol, Uniswap Labs developed and maintained a web interface that made it available to users." This sentence essentially highlights the real problem of DeFi. Not only the protocols must be decentralized to not be subject to financial regulations, but also the front ends. If a company is the only one to manage the front end of a decentralized protocol, the supervisory authorities, and not only in the US, will still qualify the platform as centralized and will evaluate it according to the applicable financial regulations. A decentralized protocol must have no owner, to not be supervised. Regulators have learned! https://lnkd.in/dV3USfRE

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Recent developments have cast a shadow over FXoro ( https://fxoro.com/ ) as the Cyprus Securities and Exchange Commission (CySEC) imposes a hefty fine on MCA Intelifunds Ltd, operating under the FXoro brand. CySEC's decision, announced on April 19, 2024, reveals a total administrative fine of €360,000 due to various violations of The Investment Services and Activities and Regulated Markets Law. These breaches include failure to comply with authorization conditions, lack of honesty and fairness in client dealings, and negligence in ensuring product suitability and client protection. The fine comes after an inspection conducted in September 2022, raising concerns about FXoro's adherence to regulatory standards and commitment to client welfare. CySEC's detailed justifications for the penalties underscore the gravity of the situation. This development prompts investors to approach FXoro with caution, emphasizing the importance of due diligence when selecting brokerage services. Transparency and accountability remain paramount in the financial services industry, with customer experiences shaping perceptions and trust. FXoro's response to these allegations and its plans to address regulatory concerns will be closely monitored by stakeholders. As the investigation unfolds, clients are encouraged to stay informed and share any relevant experiences or insights to contribute to a safer and more transparent financial environment. For further updates and information, investors are directed to monitor official announcements from CySEC and FXoro's statements regarding regulatory compliance and client protection measures. If you have encountered similar challenges or have insights to share about your experiences with FXoro or other brokers, we encourage you to reach out. Your feedback is invaluable in fostering a safer and more transparent financial environment. Connect with us at https://lnkd.in/dPP3UDb8 to share your thoughts.

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🚨 Breaking News in Crypto Regulation 🚨 The Fifth Circuit Court of Appeals has delivered a groundbreaking decision, ruling that the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) overstepped its authority by sanctioning Tornado Cash's immutable smart contracts. This ruling is a monumental moment for the decentralized finance (DeFi) and blockchain community. The court determined that immutable smart contracts, which are autonomous and unalterable, do not constitute "property" or "persons" under OFAC's regulatory framework. This distinction has far-reaching implications for how decentralized technologies are regulated. The judgment overturns a previous ruling and highlights the growing tension between regulatory frameworks and the decentralized nature of blockchain innovations. By emphasizing that autonomous software protocols cannot be sanctioned like traditional entities, the court has set a precedent that could reshape regulatory approaches across the cryptocurrency industry. This decision is a win for innovation but also a reminder of the challenges regulators face in addressing decentralized technologies. The crypto community will undoubtedly be watching closely to see how this impacts the future of DeFi, smart contracts, and blockchain governance. What are your thoughts on this ruling? Does it mark a turning point in how governments approach decentralized tech, or will we see more regulatory hurdles ahead? Let’s discuss! #Blockchain #Cryptocurrency #DeFi #SmartContracts #Regulation #Innovation https://lnkd.in/gCJQJNH9

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ADGM has just released a consultation paper for issuance of fiat-referenced tokens (FRTs) from ADGM. FRTs are a category of #stablecoins, that are referenced to a fiat currency, backed by high quality liquid assets and can be rapidly liquidated with minimal adverse price impact Some of the key highlights: 🎁 ADGM proposes a flexible approach to reserve management, permitting the issuer to set allocation limits, while ensuring that issuers maintain sufficient cash to meet redemption requests. The FSRA is also exploring the use of technological tools for better assessment and monitoring of reserve assets, for greater transparency and security. 💰 Interestingly, it is proposed that issuers could distribute income from reserve assets to FRT holders (think yield-bearing FRTs). However, the FSRA makes it clear: FRTs are not to be promoted as investment or savings products. 💹 The emphasis on rules covering AML, transaction monitoring, IT risk, and Travel Rule requirements, will continue to remain important 📣 Only FRTs approved by the FSRA can be issued, marketed, or accepted as payment within ADGM by the authorised persons. FSRA may publish an accepted list of FRTs and could also undertake review of FRTs on a case by case basis for inclusion in the list. Consultation paper is in the comments.

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ESMA published an Opinion to support the convergent application of MiCA today. As part of it, ESMA highlights that NCAs should pay special attention to the risks presented by global cryptoasset firms who are seeking authorisation under MiCA for part of their activities but have a substantial part of their group activities outside of the EU regulatory scope. Much of what is addressed in this Opinion was also raised during discussions on the reverse solicitation consultation paper earlier this year. ESMA notes that global crypto firms or multifunction cryptoasset intermediaries (MCIs) have complex structures and that there can be instances where an EU authorised broker routes orders outside of the EU to execution venues that are not within the scope of MiCA, which raises consumer protection issues. As such, ESMA recommends that NCAs remain vigilant to MCIs during the authorisation process and assess the business structures of these firms to preserve consumer protection and orderly markets. It should be noted that this concern was highlighted in a statement in October 2023, however, with these concerns still not alleviated, ESMA has published this opinion. It aims to provide some clarifications regarding the application of certain MiCA obligations, in particular in relation to MCIs that might attempt to structure their business in a way to maintain access to EU clients while minimising the impact of the MiCA regulatory framework on their activities. The Opinion calls for a case-by-case assessment, outlining the specific requirements that should be met regarding:  - conflicts of interest; - best execution; - the obligation to act honestly, fairly and professionally in the best interests of clients; and - the custody and administration of crypto-assets on behalf of clients. This Opinion is part of broader efforts by ESMA and NCAs to ensure effective application of MiCA and convergent supervisory practices throughout the EU. We should note that ESMA also has the power to establish new practical convergence tools to promote common supervisory approaches and practices, including a forum for NCAs. Link to Opinion in the comments

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The Cyprus Securities and Exchange Commission (CySEC) fined IC Markets (EU) €200,000 for allegedly offering 1000:1 leverage through offshore entities, violating the EU's 30:1 cap for FX and CFD brokers. CySEC claims the broker knowingly onboarded customers under offshore entities, compromising investor protection. IC Markets denies the allegations and plans to appeal, accusing CySEC of disregarding audited evidence and relying on information from a former disgruntled employee. The company argues this decision raises questions about the regulator's impartiality and integrity. IC Markets, based in Australia and regulated in multiple jurisdictions, faces stricter leverage rules in the EU and Australia, aimed at protecting retail clients from risky positions. CySEC noted repeated violations by IC Markets despite previous assurances of corrective measures. Investors are urged to stay informed about regulatory standards and the practices of their brokers. If you have lost your funds with this broker, you can contact us at https://lnkd.in/dPWr5pQU

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OFAC has issued significant sanctions targeting Russian financial entities and individuals to disrupt Russia’s ability to fund its war against Ukraine. Key actions include: Gazprombank and Affiliates: Designated along with six subsidiaries in Luxembourg, Hong Kong, Cyprus, Switzerland, and South Africa for facilitating Russia's military payments and evading sanctions. OFAC issued general licenses to manage the wind-down of transactions and ensure continuity in diplomatic and humanitarian dealings. SPFS Warning: OFAC issued an alert on risks associated with joining Russia’s alternative financial messaging system, SPFS. Foreign institutions using SPFS may face sanctions as it aids in evading international sanctions. Banks and Securities Registrars: Over 50 Russian banks and 40 securities registrars have been sanctioned for evasion tactics, including the transfer of securities to local entities under Presidential Decree 840. CBR Officials: Eleven Central Bank of Russia officials were sanctioned for roles in maintaining Russia’s financial connectivity and promoting alternative payment systems. Foreign Branch Staff: Employees at Russian banks’ foreign branches in Shanghai and New Delhi were designated for aiding financial operations linked to the Kremlin. Sanctions block all U.S.-based assets of designated entities and individuals, prohibit transactions involving these entities, and highlight risks for foreign parties aiding Russia’s military-industrial base. The measures aim to pressure Russia to cease its aggression in Ukraine while mitigating collateral damage to humanitarian and diplomatic efforts. https://lnkd.in/dVXSvvxZ

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TDM IACL Case Report Cyprus Popular Bank Public v Hellenic Republic - ICSID Case No. ARB/14/16 - Award - 15 April 2021 by Vishal Aggarwal, Editor Ignacio Torterola Summary Tribunal found that a wrong committed by a State against an investor gives rise to a right to reparation of the economic harm sustained, in accordance with principles of general international law and that the that the standard is thus that of full reparation. There must be a causal link between the State's wrongful act (cause) and the damage suffered. Tribunal observed no loss of opportunity in the present case. The Tribunal found that the Respondent must pay a total of EUR 34.5 million (for Loss 1 and Loss 3 Sub-Head 1), to the Claimant, as compensation for breach of Article 2 and 3 of the BIT. Main issues The quantification of damages and interest of the claims over which the Tribunal has decided it has jurisdiction, namely violation by Respondent of its obligations under Articles 2 and 3 of the BIT and consequences that follow from such violation. Free Download: https://lnkd.in/ePPD9Wxy Other Case Reports: https://lnkd.in/gFjR8dm 👉 Follow us on Linkedin https://lnkd.in/gYuVebTS

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Italy Strengthens Crypto Regulations: Key Highlights and Global Relevance 🌍 🚨 Italy plans to adopt measures to enhance surveillance over cryptoassets, including imposing hefty fines for market manipulation. 📜 Key Highlights: • Fines ranging from €5,000 to €5 million for insider trading, unlawful disclosure, or market manipulation. • Central bank and market watchdog Consob designated to oversee cryptocurrency activities. • Aims to preserve financial stability and ensure orderly market functioning. • Part of a broader European regulation framework. 🔍 Why Blockchain Regulation Matters: Blockchain technology, while innovative, poses significant risks due to its potential for misuse. • Prevent Market Manipulation: Protecting investors from significant financial losses. • Prevent Fraud: Ensuring consumer protection and trust in the financial system. • Ensure Financial Stability: Mitigating risks associated with the high volatility of cryptocurrencies. • Enhance Security: Protecting against cyber threats and hacking. Indian Scenario: India is also grappling with the need for robust cryptocurrency regulations. The Reserve Bank of India has expressed concerns over the macroeconomic and financial stability risks posed by cryptocurrencies. As India deliberates its regulatory framework, lessons from Italy's approach could be invaluable. 💬 Discussion: How can countries balance innovation in blockchain technology with the need for stringent regulation to prevent misuse and ensure market stability? #Cryptocurrency #Blockchain #Italy #CryptoRegulation #FinancialStability #MarketWatch #IndiaCrypto #BlockchainTechnology #CryptoNews #InnovationAndRegulation Disclaimer: The Content in this post is for informational purposes only derived from references and does not constitute any professional advice. We do not claim ownership of any data or Information referenced

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🇪🇺 Crypto Regulation News (MiCAR): ESMA Opinion on Broker Models 📌 MCIs are individual companies or affiliated groups that offer a broad range of crypto-asset services, products, and functions, typically centred around a trading platform. Due to their substantial influence on the markets, MCIs require careful oversight, as demonstrated by the large-scale impacts of the FTX collapse. 📌 The ESMA has expressed concern that some MCIs may use complex group structures to bypass regulatory compliance. Specifically, MCIs might try to circumvent EU regulations by operating from non-EU countries while continuing to target clients within the EU. ESMA is particularly concerned about non-EU firms seeking authorization in the EU, cautioning against using EU-based entities as mere "legal covers" to access the EU market through MiCA-authorized entities, while still conducting operations primarily outside the EU. 📌 For applicants who are part of larger groups, NCAs should review the organization's current and planned structure, as well as its marketing strategy. This assessment should determine how the applicant's activities align with the group's overall strategy and interact with other entities in the group. NCAs should also verify that the group's main activities and services are not conducted within the EU without proper authorization. 📌 It's common for non-authorized entities to serve EU clients through EU brokers authorized to "receive and transmit orders for crypto-assets on behalf of clients" or "execute orders for crypto-assets on behalf of clients." While each case should be assessed individually, NCAs should watch for indicators of illegal solicitation by non-EU trading platforms. These include: ▶ EU brokers consistently routing orders to non-EU execution venues. ▶ Lack of consideration for alternative execution venues, with insufficient justification for their exclusion. ▶ Heavy reliance on the non-EU exchange’s reputation for marketing, blurring the lines between broker services and the group's execution venue. ▶ Unusually low revenue from EU brokerage activities or revenue patterns that don't align with typical independent brokers. ▶ Preference for riskless transactions with affiliated execution venues over risk-facing ones. 📌 MCIs must manage and disclose conflicts of interest effectively, particularly when services span across affiliated groups. Furthermore, MiCA mandates that any entity involved in crypto-asset custody must be authorized under EU law. Non-EU venues can temporarily hold assets for settlement but must not assume custodial roles without authorization.

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FINMA's New Stable Coin Guidance: Sacrificing Privacy for Transparency FINMA has recently released a new Guidance regarding the issuance of stable coins. The most significant statement is the prohibition of anonymous transfers between unhosted wallets. This means peer-to-peer transactions will only be allowed once the (Swiss) stable coin issuer has identified both the sending and receiving wallets. The justification for this restriction, citing the prohibition of bearer savings books, does not address the fact that cash can still be transferred peer-to-peer. I believe this practice will soon be adopted by other states as well. This raises the question: is this an attempt to create obstacles for private stable coins to support Central Banks Digital Currencies? Time will tell how this prohibition will be implemented. While I hope technology will facilitate a smooth transition, allowing stable coins to be used for secure and legal immediate worldwide transactions, I fear this may create another bureaucratic hurdle and restrict global transactions. In the end, to combat the 0.2% of users who misuse stable coins for criminal activities, 99.8% of consumers will bear the consequences. https://lnkd.in/dUcaevQm

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So apparently the industry is fighting back. The Swiss Blockchain Federation has issued a strong statement against the Swiss Financial Market Supervisory Authority FINMA Guidance on stablecoins. https://lnkd.in/dQ_X-Bdz For those who may have forgotten, the last time the Swiss Blockchain Federation was made aware of the issuance of FINMA's Guidance on staking, they issued a preventive statement, which resulted in the FINMA staking Guidance becoming a useful instrument for the crypto and finance sector. However, this time, FINMA issued the Guidance on stablecoins without any prior consultation, and it is now facing criticism. It will be interesting to see how this battle evolves.

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On 19th June 2024, the EU has published the AML/CFT legislative package in its Official Journal, comprising of the AML/CFT Regulation, AMLA Regulation and the 6th AML Directive. Jonathan Camilleri delves into this legislative package in the news item below. #AMLR #AMLAR #AMLD6

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Tornado Cash is a piece of blockchain code which can be used to obfuscate transactions. Recently one of its developers was found guilty of money laundering. Authorities in the US are now prosecuting the other two developers. Code can be used for many purposes. Legitimate uses do exist. Some people genuinely do have a lot of tokens and would be in mortal danger if their token holdings are exposed. Just because some bad actors used the code for their own unlawful purpose, doesn't mean that the coders violated the law. Otherwise we'll have to file a law suit against manufacturers of knives - for facilitating stabbing attacks. Knives can be used as scalpel - to save lives. Knives can be used as weapons - to maim and take away lives. There is also the issue of mens rea and actus reus.  To accuse the developers of money laundering, you'll have to show that they did in fact launder money. Which the defence says, they did not.  Next we'll find nightclub owners guilty of committing adultery. That's because some rich man decided to commit adultery in a nightclub. Even though the nightclub owners themselves may be as chaste as a nun and never ever thought about committing adultery themselves. But the mere existence of the nightclub facilitates adultery. So the nightclubs themselves must be guilty of adultery. Sounds a bit extreme. But in an ancient law, the selling of grapes to a wine maker is an offence if you know that the wine maker will use the grapes to make wine. (Trust me on this, I studied it back in uni.) Similar reasoning. Hopefully the defence will prevail. Otherwise future generations of developers will be in peril, for pursuing greater anonymization and decentralisation. #blockchain #crypto #tornadocash  https://lnkd.in/eKbvQfmz

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