The U.S. House Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion was educated on the uses of blockchain technology in a hearing titled “Cryptocrime in Context: Breaking Down Illicit Activity in Digital Assets.” The meeting began with a discussion about Hamas’s use of cryptocurrencies to raise funds. However, the committee’s chairman, Rep. French Hill, stated that since “the telephone and the Internet are not guilty of terrorist financing,” cryptocurrencies should not be either. Witnesses, including representatives from Consensys and Chainalysis, spoke about the need for international and public-private collaboration to stop the misuse of digital assets, the need for well-crafted legislation, and the complexities of blockchain research.
In another hearing held by the Senate Special Committee on Aging, US Senator Elizabeth Warren highlighted the dangers of cryptocurrency scams. Steve Weisman, a renowned scam and cybersecurity expert described by Warren, confirmed that unlike credit card fraud, which can be quickly identified, stopped and tracked, cryptocurrencies pose greater transparency challenges. Weisman expressed his support for Warren’s Digital Asset Anti-Money Laundering Act, which seeks to ensure that digital assets are subject to the same anti-money laundering laws as traditional fiat currency.
Meanwhile, the New York State Department of Financial Services (NYDFS) revealed new restrictions requiring crypto companies to submit their coin inclusion and exclusion policies for NYDFS approval. The company’s policies will be compared to stricter risk assessment standards established by the NYDFS to protect investors. Token technological, operational, cybersecurity, market, liquidity, and illicit activity risks are among the factors NYDFS must consider. The incoming changes apply to all digital currency business entities licensed under the New York Codes, Rules and Regulations or limited purpose trust companies under the state’s banking law.
Vivek Ramaswamy slams sanctions on mixers in his crypto program
United States Republican presidential candidate Vivek Ramaswamy unveiled a crypto policy framework called “The Three Freedoms of Cryptocurrencies.” Ramaswamy promises to “order government prosecutors to prosecute bad actors, not the code they use or the developers who write that code” if he is elected president. In an accompanying speech, Ramaswamy specifically targeted sanctions against cryptocurrency mixer Tornado Cash, stating: “The case brought against the people at Tornado Cash, for example. […] “You can’t go after code developers.”
The presidential candidate also promises to provide regulatory clarity that gives new cryptocurrencies “safe harbor” exemptions from securities laws for a period of time after their launch and prevents any federal agency from creating rules that limit the use of self-hosted wallets.
Australia to impose capital gains tax on wrapped tokens
The Australian Taxation Office (ATO) has published guidance on the capital gains tax (CGT) treatment of decentralized finance and crypto token wrapping for individuals, clarifying its intention to continue taxing Australians for the capital gains from wrapping and unwrapping tokens. In May 2022, the ATO outlined crypto capital gains as one of four key focus areas. Building on the initiative, the Australian tax authority recently clarified a number of taxable actions in its jurisdiction. The transfer of cryptoassets to an address that the sender does not control or already has a balance will be considered a taxable CGT event, the ATO said in its statement.
South Korea’s Democratic Party forces its candidates to reveal their cryptocurrency holdings
The Democratic Party of Korea, which holds 167 of the 300 seats in the National Assembly, has forced potential candidates to disclose their digital asset holdings ahead of the 2024 general election. The disclosure will be part of the party’s effort to show the “high moral standards” of its candidates. In case of false allegations, the party will cancel the candidacy of that person. However, there would be no consequences for holding cryptocurrencies. Information about potential candidates will be made available to the public on a separate online platform that will include details of their careers, educational backgrounds, and plans for legislative activity.