Cryptocurrencies have had a volatile week with news of regulatory crackdowns across different continents dominating the news.
Earlier in the week cryptocurrencies were hit with a “double whammy effect” with both the EU and the US imposing new regulatory requirements. Bitcoin fell below the key support level of $30,000, but later recouped its losses and rose above the support level later in the week.
Here are the top stories that caught our eye.
EU unveils plans to make it easier to trace cryptocurrencies
European regulators announced plans on Tuesday to make it easier to trace cryptocurrency transactions.
“Given that virtual assets transfers are subject to similar money laundering and terrorist financing risks as wire funds transfers, it is to requirements of the same nature they must also be submitted and it therefore appears logical to use the same legislative instrument to address these common issues,” the European Commission said in a statement.
The new rules pave the way for any company that transfers any crypto to store information about both the recipient and the sender. The aim of this is to prevent crypto being used for criminal purposes.
Any companies participating in the crypto space will also be required to ask for personal details such as the customer’s name, account number, date of birth and details of the recipient too. There will also be a limit of €10,000 on very large payments.
The US calls for greater oversight of stablecoins
US Treasury Secretary Janet Yellen on Tuesday moved to establish a regulatory framework for stablecoins, which have also alarmed regulators.
Stablecoins are a rapidly growing class of virtual currencies which involve the cryptocurrency being fixed to another cryptocurrency, fiat currency or a basket of commodities. The USD Coin and Tether are the most popular stablecoins.
It is not hard to see why regulators are getting uneasy about stablecoins. In effect, they are “shadow currencies” – notionally pegged to the value of a major currency such as the US dollar but without any of the regulatory or governance apparatus.
Regulators agreed at a meeting that greater due diligence is required for stablecoins.
“In the meeting, participants discussed the rapid growth of stablecoins, potential uses of stablecoins as a means of payment, and potential risks to end-users, the financial system, and national security. The Secretary underscored the need to act quickly to ensure there is an appropriate US regulatory framework in place,” the US Treasury said.
Crypto miner Core Scientific will go public via $4.3bn Spac deal
Cryptocurrency mining firm Core Scientific –one of the world’s largest digital asset miners, based in North America –revealed on Wednesday it is going public through a Spac deal with Power & Digital Infrastructure Acquisition Corp. The deal, which is roughly worth $4.3bn, will see Core Scientific list on the Nasdaq exchange, but it remains unclear when shares will start trading on the…