In the first TRM Policy Roundtable of 2024, TRM’s Senior Policy Advisors Isabella Chase and Angela Ang were joined by TRM’s Compliance Advisor Tom Armstrong to unpack insights from our global crypto policy report and discuss implications of the shifting regulatory landscape for compliance professionals. Watch the video below for the full scoop, or read the written recap below for the key takeaways.
Regulatory developments in APAC
Angela kicked off by outlining significant regulatory changes in the APAC region, namely in Hong Kong and South Korea.
In February, Hong Kong introduced new regulations targeting over-the-counter (OTC) trading and crypto ATMs to protect consumers from fraud. Additionally, Hong Kong consulted on a stablecoin regulatory framework, with plans to implement the regime by the end of the year.
South Korea is also making strides with its Virtual Asset User Protection Act, set to go live in July 2024. This omnibus legislation marks a significant step in creating a comprehensive regulatory environment for digital assets, and reflects a broader trend across APAC towards robust regulatory frameworks that balance innovation with consumer protection.
Regulatory trends in the US
Next, Tom provided insights into the US regulatory scene, noting a continued emphasis on enforcement. If the recent Notice of Proposed Rulemaking (NPRM) on mixers and mixing transactions passes, it will significantly impact the crypto space by imposing reporting and recordkeeping requirements on transactions that obscure their origin.
The approval of spot Bitcoin ETFs has been another major development in the US. While many heralded it as a step towards institutionalizing crypto, comments from SEC leadership reveal a mixed stance, indicating ongoing skepticism from regulators. The entry of traditional finance giants like Fidelity and BlackRock into the ETF space contrasts with other institutions' reluctance, illustrating the diverse approaches within the financial sector.
European regulatory landscape
Isabella noted that Europe has also been busy, making significant strides in anti-money laundering (AML) regulations. The Anti-Money Laundering Regulation and the establishment of the Anti-Money Laundering Authority mark key milestones. These regulations, set to come into force in 2027, will impose new standards on crypto-asset service providers, among others.
The implementation of the Markets in Crypto-Assets (MiCA) regulation also continues, with consultations on legal clarifications and reverse solicitation underway. These efforts aim to create a coherent regulatory environment across Europe.
Global enforcement trends
In recent months, we’ve also seen a global acceleration of enforcement actions, signaling a new era of regulatory scrutiny.
In the US, significant fines imposed on crypto exchanges for compliance deficiencies underscore the high stakes for crypto compliance. And in APAC, authorities are focusing on scams and fraud, with several high-profile takedowns already this year. This trend aligns with regulatory efforts to protect consumers and disrupt illicit financial activities, with emphasis on the importance of public-private partnerships.
Looking ahead
The webinar concluded with a look at upcoming events that will shape the crypto policy landscape in 2024.
In APAC, Hong Kong's grace period for virtual asset trading platforms operating without a license is quickly approaching. In the US, the election season will likely influence regulatory priorities. And in Europe, the implementation of MiCA and AML regulations will be pivotal to the integrity of the bloc’s digital asset sector.
Across the board, compliance professionals will need to focus on adapting to these new regulations, enhancing the effectiveness of their compliance programs, and preparing for a future where real-time supervision becomes the norm. The year ahead promises to be dynamic and challenging, but also filled with opportunities for those who stay informed and proactive.
For more updates and in-depth analysis on what’s new and coming soon in global crypto policy, tune in to our next roundtable on June 25 or June 26.
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