Global Tech and Crypto Regulations Tighten as AI, Stablecoin and Crypto Mining Face New Rules
Summary:
The European Parliament has given final approval to the EU AI Act, a landmark artificial intelligence regulation that categorizes machine learning applications based on societal risk. The EU also plans to increase stablecoin regulation under the MiCA framework. Meanwhile, U.S. President Biden has proposed a 30% tax on electricity used by crypto miners. In Nigeria, the government pressures Binance to reveal data on its top 100 local users amidst a crackdown on the exchange. The Dubai International Financial Centre has introduced a new digital asset law and updated existing laws. Lastly, US Democratic Party Senators Reed and Butler have called for a halt in further approvals of crypto ETFs by the SEC.
The European Union (EU) Artificial Intelligence (AI) Act has obtained its final green light from the European Parliament, marking it as one of the globe's pioneering comprehensive AI regulatory frameworks. This legislation will face another round of voting in April before its probable publication in the EU Official Journal in May. The law sorts machine learning applications into four risk-based groups, with the riskiest being subject to the strictest regulations. High-risk applications include systems deployed in critical infrastructures, education or professional training, product safety components, essential private and public services, law enforcement potentially infringing on fundamental human rights, immigration and border control, and justice administration and democratic processes. In additional crypto-assets regulatory developments, EU financial watchdogs wish to bolster stablecoin regulations under the Markets in Crypto-Assets Regulation (MiCA) scheme by rolling out preliminary regulatory norms for stablecoin issuers handling complaints. The European Banking Authority released the Regulatory Technical Standards (RTS) on March 13 to effectively address grievances from asset reference token (ART) holders. These guidelines specify the processes and benchmarks for stablecoin issuers to efficiently tackle complaints.In other news, U.S. President Joe Biden has proposed a 30% tax on electricity consumed by crypto miners in his 2025 budget plan. If enacted, crypto mining firms have to declare the amount and form of energy they consume. Companies will also need to inform the worth of the externally purchased electricity. Crypto miners leasing computational resources have to report the electricity cost of the leasing company. This cost will form the tax base. The tax would apply to tax years post-December 31, 2024, taking effect in three stages: 10% in the first year, 20% in the second year, and 30% in the third year.In another development, Binance is allegedly under pressure from the Nigerian government to disclose the information of its top 100 clients in the country amidst a clampdown on the exchange. Besides this, the Nigerian authorities are also seeking access to Binance transaction data spanning the past six months. Following Binance's approach to engage with the local authorities, two high-ranking Binance executives, Tigran Gambaryan and Nadeem Anjarwalla, were taken into custody. They remain under detention, despite Binance ceasing all naira transactions and peer-to-peer naira exchanges towards the end of February. Opinions from Nigeria's local crypto community remain divided on the government's actions.In another international update, the Dubai International Financial Centre (DIFC), boasting over 5,000 residents and a legal system on par with English law, has introduced a new digital asset law and security law, with amendments to existing laws. The Digital Assets Law spans seven pages, supplemented by appendices. Another law, updating at least six previous ones for digital asset consideration, has been ratified, but it is yet to be available online. The DIFC has stated that it has made electronic records functionally equivalent to paper records through modifications to the Law of Obligations.Meanwhile, US Democratic Party Senators Jack Reed and Laphonza Butler have called on the US Securities and Exchange Commission (SEC) to halt further endorsements of crypto exchange-traded funds (ETFs) to prevent investors from exposure to fraud and manipulation in "thinly traded" markets. While there are eight spot Ether (ETH) ETF applications awaiting the SEC's nod, Reed and Butler have warned against viewing the recent auspices for spot Bitcoin (BTC) ETFs as a basis for additional endorsements. Despite Bitcoin market flaws, they assert that it is more mature and closely monitored than those for other smaller digital currencies.
Published At
3/18/2024 11:00:00 PM
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