Upbit executive: Establishing crypto regulations hinges on building trust

Abu Dhabi Puts Forward Legal Framework for Decentralized TechAuthorities in Abu Dhabi, the capital of the United Arab Emirates (UAE) as well as an individual emirate within it, have published a proposed legislative framework for distributed ledger technology.©Pexels/redouan khoulassiThe consultation paper, titled “Proposal for a legislative framework for distributed technology foundations” was published earlier this month by the Abu Dhabi Global Market’s (ADGM) Registration Authority.Promoting investor protectionThe document covers a broad spectrum of aspects relative to digital assets and crypto entities, including corporate governance, insolvency and restructuring considerations, and data protection. The ADGM’s objective with the proposed policy is to advance investor protection, improve market integrity and efficiency, and build towards a comprehensive regulatory framework.Specific proposalsMore specifically, the policy would implicate an enhancement in the protection of whistle-blowers who report misconduct relative to ADGM-regulated companies. Under the proposal, new rules would be introduced to ensure that digital asset platforms operate in a fair and transparent manner. A requirement would be placed on regulated companies to disclose detailed information in relation to beneficial ownership and control structures. Furthermore, the policy seeks to bring about an improved dispute resolution process between the stakeholders involved in ADGM-regulated transactions.Building upon an existing frameworkThe Abu Dhabi regulator’s current legal framework is built upon English common law. It has its own financial services regulator, the Financial Services Regulatory Authority (FSRA) which operates independently and is responsible for supervising and licensing financial institutions and market participants. The FSRA takes a principles-based approach, regulating those market actors attempting to maintain financial stability and integrity, promote market competition and innovation and ensure customer protection.ADGM has sought to act on an international basis by signing agreements with regulatory bodies in the UK, Hong Kong and Singapore, in an effort to enable information sharing and cross-border cooperation.Regulatory activityAt a national level, earlier this year the UAE enacted a digital assets regulatory framework. Earlier this week, the UAE also revealed a federal licensing system for crypto companies. In February, work began on a $2 billion initiative to nurture blockchain and Web3 startups via Hub71, the emirate’s tech ecosystem. The initiative provides startups with access to a broad range of support services as well as potential collaborations with government and investment partners.According to the document, “this Consultation Paper is of interest to any persons operating or planning DLT projects, persons engaging in digital asset-related activities and their legal advisors, as well as DLT participants, associations, and stakeholders.”With that, the ADGM is inviting comments and feedback from members of the public on the proposed changes contained within the consultation paper. To aid public comment, the policy document includes a number of questions that it invites stakeholders to consider as they work towards submitting their feedback.Those interested have until May 12 to take the opportunity to submit their comments and views relative to the Abu Dhabi regulator’s proposed framework.

Audit Finds Excessive Pay Features on China’s e-CNY ProjectChina’s Digital Currency Research Institute, responsible for developing the digital yuan, has come under scrutiny for its excessive pay rises, which exceeded the typical limit for central government departments by eight times, according to a recent audit report. The report, released by the National Audit Office, sheds light on the inner workings of the institute, which oversees China’s widely used central bank digital currency (CBDC).Photo by Eric Prouzet on Unsplash28 percent pay risesIn 2020, employees at the institute received an average salary increase of around 28%, a significant bump compared to the typical government limit. Despite its influential role, the Digital Currency Research Institute maintains a low profile, lacking an official website and public disclosure of its payroll size, budget, and organizational structure.Since the substantial pay increases in 2020, the institute’s growth appears to have accelerated. Job postings indicate that the institute embarked on a hiring spree in the past year, with positions ranging from Beijing-based software engineers for Google’s Android mobile operating system to cloud platform engineers in Suzhou and blockchain experts in Shenzhen.While the Digital Currency Research Institute is among several government agencies flagged for financial irregularities in the audit report, it is essential to note that the institute plays a crucial role in advancing China’s digital yuan project.Ongoing trialsOver the past four years, trials of the digital yuan, known as e-CNY, have rapidly expanded. Currently, there are 26 pilot cities and 5.6 million merchants accepting the CBDC, accessible through official apps and third-party payment systems such as Alipay and WeChat Pay.Despite the progress made in trial deployments, there is no official timeline for the official launch of the digital yuan. The e-CNY has already demonstrated its utility in various contexts. For instance, in major cities like Beijing, Shanghai, and Chengdu, subway riders can utilize e-CNY as a payment option through local transport apps. Moreover, passengers in eastern Zhejiang province can now use the official e-CNY wallet app to pay for the metro, even without an internet connection.While some cities have started exploring the use of e-CNY for bank loan and utility bill payments, the overall adoption of the digital yuan remains relatively slow. The amount spent using e-CNY is still a fraction of the massive 500 trillion yuan in mobile payments made in China last year. Consumers perceive little difference between e-CNY and traditional payment channels when using popular mobile payment apps.Jiangsu Province is establishing use of the digital yuan within its education system. Meanwhile, in the eastern city of Changshu, local administrators are starting to pay civil servants in e-CNY. To encourage wider acceptance and adoption, it will be crucial to further develop the infrastructure and address the concerns of businesses and consumers.As trials continue, it is expected that the digital yuan will play an increasingly significant role in China’s financial landscape, offering new opportunities while transforming the way transactions are conducted.

It emerged on Wednesday that the Indian version of the Apple App Store has blocked access to eight crypto exchanges that were recently subject to a show cause notice from an Indian government agency, the Financial Intelligence Unit (FIU). The development occurred only two weeks after these global firms were flagged for allegedly operating "illegally" in the country. The FIU had cited non-compliance with India's anti-money laundering rules. In its statement on Dec. 28, the FIU urged India's IT Ministry to block the websites of all nine services in the country. The affected exchanges include Huobi, Gate.io, Bittrex, Binance, Kraken, Kucoin, MEXC Global and Bitfinex. Binance acknowledged the issue in a social media post, stating that it will continue to work with local regulators. Interestingly, Bitstamp, another exchange mentioned by the FIU, remained operational on the App Store in India. While these apps have been removed from the Apple App Store, they are still available on the Google Play Store in India and their websites remain accessible within the country. Users who had previously installed these apps on their devices can still access them. Photo by Naveed Ahmed on UnsplashTax avoidanceThe backdrop for this action involves a trend where many Indian traders had shifted to global cryptocurrency platforms rather than native digital asset exchanges. India initiated cryptocurrency taxation last year, imposing a 30% tax on gains and a 1% deduction on each crypto transaction.  While Indian-based exchanges like CoinSwitch, CoinDCX and WazirX maintain compliant know-your-customer verifications, global platforms have not followed suit. Notably, WazirX has experienced a drastic 97% drop in trading volume over two years as many traders migrated to global apps. It’s thought that as many as five million crypto users have shifted their trading activity to offshore exchanges. The tax has proven to be controversial and according to Dr. Vikash Gautam, the author of a report on the tax measure published last November, “it just isn’t enforceable . . . It is possible to be done with international cooperation, but we do understand it is a long process. Some of the other countries have some arrangements with international exchanges to track that." Leveling the playing fieldIt’s amid that competitive backdrop that native Indian exchanges lobbied the Indian government through the Bharat Web3 Association (BWA) to take action against unregulated offshore exchanges recently. CoinSwitch's co-founder and CEO, Ashish Singhal, urged offshore exchanges to comply with local regulations, suggesting registration with the FIU and adherence to India's Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) measures. Singhal, whose CoinSwitch platform is a founding member of the BWA industry advocacy group, highlighted that this would not only benefit offshore exchanges but also enhance consumer protection in India through increased regulatory oversight. Earlier warnings from Indian cryptocurrency exchanges foresaw users shifting to decentralized exchanges or non-compliant services due to the New Delhi government's taxation policy on crypto. In response, CoinDCX announced incentives for customers transferring their crypto assets from global exchanges to its India-based platform. Taking to social media on Wednesday, CoinDCX founder Sumit Gumpta stated:”This is a defining moment for [virtual digital assets] in India, and we're dedicated to facilitating a seamless and secure transition for investors navigating these changes.”