Navigating Crypto Regulations

👮♂️ Garantex, the notorious sanctioned crypto exchange taken down. Last week, Garantex—a notorious sanctioned crypto exchange—was taken down in a coordinated international crackdown by US and European law enforcement agencies. Earlier that day, Garantex announced on Telegram it was pausing operations after Tether froze $28 million USDT linked to its service. Hours later, its domain was seized. This is a big deal. Garantex has been a hotspot for illicit finance, from ransomware gangs to darknet markets, and Russian money laundering networks. Since it was sanctioned by US OhFac in April 2022, TRM Labs' analysis has found that Garantex is responsible for 70% of all crypto volumes associated with sanctioned entities worldwide. So, this takedown is a landmark moment for crypto sanctions. But, this is not the end of the story. Garantex is unlikely to disappear—it may rebrand, migrate, or spin off new entities to continue its illicit operations. Compliance teams must stay vigilant—while we may temporarily see fewer direct alerts related to Garantex, we should expect more indirect risk exposure as illicit actors move their funds to new wallets. Continuous monitoring, real-time intelligence, and robust risk mitigation strategies are paramount. As the illicit crypto ecosystem continues to evolve, compliance professionals, regulators, and law enforcement must work together to ensure that exchanges like Garantex cannot re-emerge under new names.

The Financial Action Task Force (FATF) has released its Updated Recommendations (February 2025), reinforcing international standards on AML, CFT, and Combating the Financing of Proliferation (CFP). Key Highlights: ✅ Risk-Based Approach (RBA) Strengthened • Countries and financial institutions must continuously assess ML/TF risks. • Proliferation financing risks (linked to WMDs) must now be explicitly assessed and mitigated. • Greater emphasis on data-driven decision-making in risk management. ✅ Stronger Financial Crime Enforcement & Asset Recovery • Enhanced measures to identify, freeze, and confiscate illicit assets, even without conviction-based legal proceedings. • Countries must cooperate more effectively on cross-border investigations related to ML, terrorism, and sanctions evasion. • Expanded legal mandates for regulators to seize cryptocurrency-related assets used for illicit activities. ✅ Enhanced Corporate Transparency & Beneficial Ownership Regulations • Stricter disclosure requirements for companies and trusts to prevent anonymous ownership structures facilitating financial crime. • Introduction of centralized registries for beneficial ownership information, accessible by regulators and FIUs. • Bearer shares and nominee shareholder arrangements are further restricted due to their role in obfuscating ownership. ✅ New Standards for Virtual Assets & Emerging Technologies • FATF mandates stronger oversight on VASPs, aligning AML rules for crypto-assets with traditional financial institutions. • New tech-based compliance controls (including AI-driven monitoring) recommended to enhance financial crime detection. • Stricter regulations for cross-border virtual asset transactions to combat illicit financing and crypto-enabled ML. ✅ Expanded Measures Against Terrorist Financing & Sanctions Evasion • Countries must implement targeted financial sanctions to prevent terrorism and WMD proliferation financing. • NPOS are now required to assess their terrorist financing risks while ensuring legitimate operations are not disrupted. • Greater scrutiny on correspondent banking relationships to prevent facilitation of illicit transactions. ✅ Increased International Cooperation & Mutual Legal Assistance • FATF calls for faster cross-border financial intelligence sharing to prevent criminals from exploiting jurisdictional gaps. • Countries must align with UNSCRs on CTF and sanctions enforcement. Recommandations: 🔹 Implement advanced transaction monitoring using AI to detect suspicious financial activities more effectively. 🔹 Reinforce beneficial ownership compliance 🔹 Strengthen cross-border AML/CFT coordination by fostering partnerships between FIs, regulators, and law enforcement agencies. 🔹 Ensure robust oversight on virtual assets by applying FATF’s Travel Rule to cryptocurrency transactions and monitoring DeFi risks. #AML #FATF #FinancialCrime #Compliance #CryptoRegulation

Crypto regulation is no longer a wild frontier. It’s becoming global, structured — and strategic. The newly released PwC Global Crypto Regulation Report 2025 marks a regulatory turning point for digital assets. Here are some key takeaways worth your attention: 1) US Pivot: A clear shift away from “regulation by enforcement” toward well-defined frameworks. Spot Bitcoin & Ethereum ETFs are just the beginning — Staked ETFs are coming next. 2) MiCAR in Full Effect: The EU now has a single market for crypto. Authorization, whitepapers, and AML rules are now standard. 3) Stablecoins in Focus: Regulators worldwide are setting strict, but innovation-friendly rules. Europe treats them as payment tools, while the US signals support for bank-issued stablecoins. 4) DeFi Under the Microscope: Expect more scrutiny. Global regulators are applying “same risk, same rule” logic to lending, DEXs, and even mixing services. 5) Tokenization Rising: From pilot programs in the EU to SEC-CFTC coordination in the US, real-world asset tokenization is becoming a regulated frontier for capital markets. Regulatory clarity is no longer optional. Time to adapt, align, and build responsibly. #CryptoRegulation #MiCAR #Stablecoins #Tokenization #DeFi #DigitalAssets #Web3Policy #PwC #FutureOfFinance

India is one year away from a global shift that could quietly redefine how countries see and supervise crypto. By 2027, more than 70 countries are preparing to begin the automatic exchange of crypto-transaction data under the Crypto-Asset Reporting Framework (CARF). This means that for the first time, tax authorities worldwide will gain a standardised, cross-border view of crypto activity. Our policy team has produced a report outlining global progress on CARF implementation. The findings show substantial variation in how countries are operationalising the framework. -Some jurisdictions have directly transposed CARF into domestic law. -Others are updating existing reporting systems to achieve the same objective. We also observe that jurisdictions such as the UK, EU member states, South Africa, Brazil, and the UAE have not only made political commitments but have already moved ahead with draft legislation, regulatory rulebooks, and operational planning. By contrast, India has strengthened its domestic reporting capacity through Section 285BAA of the Income Tax Act, 1961. Across these diverse approaches, one trend stands out: crypto-asset reporting is shifting from fragmented national rules to a coordinated global architecture. For everyone involved in the crypto industry, this marks an important transition. This shift brings structured global reporting to crypto, building trust and paving the way for massive growth ahead!

2nd Global Cryptoasset Regulatory Landscape Study by University of Cambridge and Swiss Secretariat of Economic Affairs SECO The global #Blockchain and #Cryptoasset landscape is evolving rapidly, with regulators facing the challenge of balancing financial innovation and risk mitigation. The Cambridge Centre for Alternative Finance (CCAF) has released its second comprehensive study on the #Cryptoasset regulatory environment, analyzing approaches across 19 jurisdictions. Key Findings: 🔹 Diverse Regulatory Approaches Regulatory frameworks remain highly fragmented, with some jurisdictions embracing bespoke regulations while others retrofit existing frameworks. Some Emerging Markets and Developing Economies (EMDEs) continue to impose bans, often due to concerns about currency substitution and capital outflows. 🔹 Stablecoins & Market Integrity #Stablecoins are a key focus for regulators, with Advanced Economies (AEs) leading regulatory developments. While ensuring stability and redeemability remains a priority, approaches to reserves and governance structures vary significantly. 🔹 Classification & Definitions Remain Inconsistent Jurisdictions differ on terminology—terms like "cryptoasset", "virtual asset", and "digital asset" are used inconsistently. Many regulators prioritize consumer protection and classify cryptoassets as speculative investments rather than currencies. 🔹 Licensing & Compliance for Cryptoasset Service Providers (CASPs) Regulators are tightening requirements for #FinTech firms offering staking services, custody, and exchange operations. Some jurisdictions mandate that a share of customer cryptoassets be stored in cold wallets for security purposes. 🔹 Anti-Money Laundering (AML) & Consumer Protection AML compliance remains a regulatory priority, with most jurisdictions aligning with FATF standards. Measures such as blacklists of non-licensed firms, advertising restrictions, and financial literacy initiatives are being deployed to protect retail investors. 🔹 Future Outlook: Regulation of DeFi & Tokenization The study highlights early regulatory initiatives around Decentralized Finance (DeFi) and the tokenization of financial instruments, though regulatory frameworks in these areas remain nascent. Authors & Contributors: 📄 Research Team: Hugo Coelho (Principal Researcher), Alexander Apostolides, Keith Bear, Nick Clark, Natalia Cordeiro de Lima Fleichman, Kalliopi Letsiou, Aarvi Singh, Bryan Zhang 🔍 Reviewers & Contributors: Parma Bains (IMF), Cristina Cuervo (IMF), Nobuyasu Sugimoto (IMF), Jon Frost (BIS), Jamere McIntosh (BIS), Nico Hess (FINMA), Yann Thorens (FINMA), Gabrielle Inzirillo (ADGM), Dr Rhys Bollen (ASIC), David Halperin (ASIC), Joachim Schwerin (European Commission), Thomas Puschmann (Global Center for Sustainable Digital Finance, Stanford & Zurich University), Dea Markova (Forefront), Charles Kerrigan (CMS), Mike Ringer (CMS), Gabriel R. Bizama (University of Bern). #Blockchain #FinTech #DeFi

Global #crypto regulatory trends for 2025 include: ◦The U.S. moving towards regulatory clarity with a new administration revisiting crypto bills to clarify oversight and establish regulatory guardrails. Approval of staked ETFs is expected , and comprehensive stablecoin legislation is anticipated. Integration between TradFi and DeFi is likely to increase. ◦Asian financial centers like HK SAR and Singapore are stepping up their crypto frameworks to foster growth while managing risks, including new licensing regimes and #stablecoin requirements. ◦MiCAR's transitional period in the EU creates uncertainty due to varying timelines across member states, requiring firms to navigate these inconsistencies while preparing for full compliance by mid-2026. ◦The UK is progressing with an extensive regulatory framework for cryptoassets, aiming to bring a broad range of activities into the regulated financial services perimeter. ◦New regulatory regimes are taking shape in the Middle East and emerging markets, such as the UAE, Bahrain, and South Africa, with a focus on attracting #fintech investment and implementing licensing rules. ◦Global stablecoin regulation is intensifying, with jurisdictions introducing tailored rules to ensure reliability and reserve backing . MiCAR now fully regulates stablecoins in the EU, and proposals are under debate in the US and UK. ◦Regulators are strengthening data governance frameworks for digital asset transactions, requiring robust data management practices. ◦Stronger AML and transparency standards are being implemented globally, including the FATF "Travel Rule," to combat illicit finance. ◦Integration of crypto into traditional finance is increasing, with jurisdictions launching sandboxes and approving crypto-based investment products •Global standard-setting bodies (SSBs) like the FSB, BCBS, FATF, and IOSCO provide important roadmaps for national authorities, although their recommendations do not have legal status. EmpowerEdge Ventures

India’s decision to mandate CERT-In–empanelled cybersecurity audits for crypto exchanges and VDA firms is a strong step forward, one that finally moves the sector from policy intent to verifiable assurance. For years, the conversation around digital asset security has lived in the space of ambition; this mandate begins to ground it in accountability. Yet, the real test lies not in the rule itself, but in its execution. But here’s the truth: resilience isn’t built through checklists. If these audits devolve into checklist exercises, we risk mistaking theatre for resilience. Crypto custody is too complex for generic compliance playbooks. Auditors must be crypto-native, capable of evaluating MPC key ceremonies, hot–cold wallet segregation, withdrawal risk controls, and HSM posture. These are not “nice to haves,” but non-negotiables if we are to safeguard assets in an environment where attack surfaces are constantly evolving. Why this matters now? 🔹 CERT-In’s 2022 directives (6-hour breach reporting, log retention, NTP sync) will only realize their potential when tightly aligned with these audits—helping trace funds across mixers, privacy coins, and cross-chain hops. 🔹 Compliance costs may drive consolidation, favoring large custodians. Regulators must keep an eye on avoiding single-point concentration risks that could magnify systemic shocks. 🔹 This won’t work without teeth. Time-bound remediation, tiered penalties, and repeat-offender sanctions will separate genuine security uplift from compliance theatre. 🔹 The move aligns India closer to MiCA and Japan’s custody frameworks—strengthening investor confidence and enabling better cross-border seizure cooperation. In fact, true security leadership in this space should look like: 🔹 MPC with geographic/org segregation 🔹 Quarterly key attestations 🔹 Anomaly-gated withdrawals 🔹 Secure SDLC for bridges and admin functions 🔹 Hardware tokens for sensitive actions 🔹 On-chain analytics embedded into AML workflows And at the governance level: 🔹 A crypto-specific control catalogue mapped to ISO/SOC2/FATF 🔹 A public incident transparency portal 🔹 Joint supervision and annual crisis simulations What responsible players should do now? 👉🏻 Firms shouldn’t wait for enforcement. The time to invest in continuous control monitoring, crypto-TTP red teaming, proof-of-reserves plus liabilities, Travel Rule integration, and appointing a Head of Custody Security is now. And for consumers? 👉🏻 Choose platforms that prove their safety posture, not just claim it. Look for independent audit disclosures, MPC custody, proof-of-reserves with liabilities, and explicit 6-hour breach-response commitments. India has taken a strong step forward. Whether it truly strengthens the ecosystem or merely adds another layer of paperwork, will depend on execution. The difference lies in whether we choose resilience or settle for theatre. #CybersecurityWithAmitJaju

Learnings from Three Regions After expanding CoinJar's operations across Australia, the UK, and Ireland, I've gained some insights into how regulation shapes both business operations and user behaviour. 🇦🇺 AUSTRALIA When we launched in 2013, the tax authority was first to take notice. Initially, Bitcoin faced double taxation when used to buy goods and services which hampered adoption. Working with The Treasury as part of the FinTech Advisory Group, we helped secure GST (Goods and Services Tax) exemptions for crypto transactions by 2017. Today, AUSTRAC oversees over 400 registered digital currency exchanges, but the big question of whether ASIC considers various cryptocurrencies (Bitcoin, Ethereum, stablecoins, memecoins) to be financial products is still unanswered. 🇬🇧 UNITED KINGDOM Since our FCA registration in 2021, we've adapted to an increasing list of requirements: ➡️ Mandatory disclaimers on all communications ➡️ 24-hour cooling-off periods for new customers ➡️ Online "appropriateness tests" for users ➡️ Zero-threshold Travel Rule compliance (requiring destination details for every withdrawal) Our analytics clearly show the impact: many users abandon transfers rather than complete these steps. There may be privacy concerns, but it’s not just that. It's a VERY cumbersome user experience. 🇮🇪 IRELAND Since late 2024, we've been regulated by the Central Bank of Ireland as a Virtual Asset Service Provider. This regime will be superseded by MiCAR – perhaps the most comprehensive crypto framework globally. MiCAR raises some fascinating questions: ❓ Can the EU achieve unified regulation across all member states? ❓ What role should regulators play in decentralized communities? ❓ Can innovation flourish under strict oversight? The answers to those questions will come in the next 1-3 years, and they’ll have major implications for crypto all across the EU. It’s going to be fascinating to see how it develops. **** Managing these regulatory differences does create challenges for our global team of ~50. Everyone in our team (especially those in Engineering and Marketing) must understand multiple regulatory environments. More importantly, these differences significantly influence consumer behaviour and market dynamics. Some for the better, but no doubt some also for the worse. Do you think crypto will flourish in more or less regulated jurisdictions? Love to hear your observations.

The FCA just said your crypto wallet might need a license. The UK published CP26/13 on the regulatory perimeter for crypto assets. The key position: if your website or app lets a user place an order to buy or sell a crypto asset, you are likely "arranging deals" — a regulated activity requiring full FCA authorization. This covers frontends. Wallets with built-in swaps. Aggregators. Browser extensions. The FCA is explicit: smart contracts and decentralization do not change the analysis. If there is an identifiable person running this as a business in the UK, it is regulated. Breach of the general prohibition under FSMA is a criminal offense. Up to two years. Unlimited fine. Or both. Meanwhile, the SEC said on April 13 that wallet interfaces are NOT brokers — no registration needed if you do not solicit, do not custody, and do not execute. Same product. Criminal offense in London. Exempt in New York. Comment deadline: June 3. New UK regime starts October 2027.