US Lawmakers Unite Against SEC: Cryptocurrency Rules Tighten Around the World

The US Senate recently passed a resolution against the SEC seeking to repeal Rule 129, which requires banks to declare fees for your cryptocurrency balances. However, President Biden has already announced his intention to veto this resolution.

This case is notable because it is the first time that the US Congress and Senate have reached an agreement on the issue of regulation of cryptocurrencies. The resolution was supported by representatives of both parties. Lawmakers are thus gently telling the SEC and its Chairman Gary Gensler that the commission should not abuse its powers in relation to cryptocurrencies and banks.

In mid-May, several large institutional investors caused a stir by announcing their investments in Bitcoin. Hedge fund Millennium invested about $2 billion, and Morgan Stanley - $270 million. The Wisconsin Investment Board also reported an investment of approximately $164 million in Bitcoin ETF Grayscale and Blackrock. In parallel, the US consumer price index for April was 0.1% lower than expected, which contributed to the rise in the price of Bitcoin to $67,000. Last week, spot Bitcoin ETFs in the US raised $948.3 million, according to Farside Investors.

In addition, Pantera Capital has made a significant investment in the TON cryptocurrency, the amount of which, although not disclosed, is likely to exceed the $250 million previously invested in Solana.

Europe is preparing for the full implementation of the MiCA (Markets in Crypto-Assets) cryptocurrency regulation system. However, this initiative raises significant uncertainty regarding the future operations of cryptocurrency companies in the region. This applies to both mid-sized virtual asset service providers (VASPs) and large market players.

In April, Tether CEO Paolo Ardoino said that the company had no plans to obtain a USDT license in the EU. Following this, the Kraken exchange announced that it would delist USDT for its European clients. It is assumed that Tether will develop stablecoins denominated in euros, but it remains unknown how this will be implemented, given that the capitalization of such stablecoins is still relatively small.

At the same time, European countries continue to implement their national regulatory mechanisms for VASPs, requiring any cryptocurrency organizations operating in the country to obtain a license or registration. For example, the French financial regulator Autorité des Marchés Financiers (AMF) reported that the Bybit exchange has been operating illegally in the country since 2022, as it has not received the necessary license. Bybit was blacklisted by the AMF as a company that does not comply with the country's regulations.

Last week, Turkey's ruling party submitted a new cryptocurrency bill to parliament. This bill regulates cryptocurrency entity licensing procedures, compliance, and anti-money laundering measures. The main regulatory body in this process will be the local financial regulator Capital Markets Board (CMB).

Despite the upcoming new elections, the Indian national government has so far resisted legislative initiatives to regulate cryptocurrencies, leaving this task to regulators. The local financial regulator SEBI (Securities and Exchange Board of India) has published its recommendations for regulating cryptocurrency activities. SEBI proposes to split the regulation of cryptocurrency transactions between different authorities: SEBI will be responsible for regulating ICOs and cryptocurrencies treated as securities, the Central Bank will be responsible for stablecoins, and the PFR (Pension Fund Regulatory and Development Authority) will be responsible for registering virtual asset service providers (VASPs). .

PFR began registering VASPs late last year and has already registered 28 companies. Last week, the first two foreign exchanges, Binance and Kucoin, were registered to operate in the country.

Despite the existing economic and political problems in Venezuela, cryptocurrencies are legal in the country, and there are also rules for mining cryptocurrencies. However, last week the local electricity ministry said it would take existing mining farms offline. The government explained this measure by the high load on the country's electricity grid. This decision may also be related to the anti-corruption campaign ongoing in the country - the government previously confiscated 2,000 mining devices in the city of Maracay and 11,000 devices in the state of Carabobo. It is unclear whether the ban on cryptocurrency mining in Venezuela will be temporary or permanent.

Initiatives to ban or limit mining due to high load on power grids are not uncommon. For example, in 2021, Iran banned mining for four months. Central Asian countries such as Kazakhstan, Uzbekistan and Kyrgyzstan have also introduced certain restrictions on the activities of mining operators.

Finally, it’s worth paying attention to an important event in the coming week: the SEC’s decision on VanEck’s Ethereum ETF is expected on May 23. Bloomberg analyst Eric Balchunas noted last week that the SEC would likely not approve an Ethereum spot ETF. He suggested that according to the commission's current position, Ethereum is valued as a security. The probability of failure is really high, but we'll see what decision the regulator makes.