Encryption Regulatory Latest Developments

Recently, multiple U.S. government departments have made new moves and statements regarding cryptocurrency regulation. The Treasury Department and the IRS announced that, until relevant regulations are issued, businesses are not required to report digital asset income like they do for cash income. The Securities and Exchange Commission has expanded the definition of "dealer," which may cover certain encryption companies that need to register with the SEC and comply with federal securities laws. The Energy Information Administration has been authorized to conduct a temporary investigation into the electricity usage of some U.S. cryptocurrency mining companies, planning to collect data monthly from February to July 2024.

The Commodity Futures Trading Commission has accused a certain digital asset platform of fraudulent misappropriation of client funds and issued a warning to the public about scams related to AI and encryption assets. The CFTC chairman emphasized the importance of federal legislation for the digital asset spot market.

In Congress, several lawmakers have proposed bills and resolutions related to encryption currencies, including information sharing, reviewing SEC announcements, and more. Some lawmakers have also expressed concerns to the heads of relevant departments regarding stablecoin legislation and regulatory gaps.

The Ministry of Justice has taken action on multiple criminal cases involving encryption, including charges against individuals related to a defunct exchange and prosecuting suspects in SIM card hijacking fraud cases. The Ministry of Finance has released a new risk assessment report highlighting the illegal fundraising risks associated with virtual assets.

At the international level, the EU has reached a temporary agreement on a new anti-money laundering plan, requiring encryption service providers to conduct due diligence on large transactions. German police carried out a large-scale cryptocurrency seizure operation. Countries such as South Korea and Thailand have also taken regulatory measures against cryptocurrency platforms suspected of illegal activities.

The Bank of England and the Treasury have released a consultation document regarding the digital pound, emphasizing privacy as a core design feature. A report from the United Nations discusses the use of encryption in illegal activities in East Asia and Southeast Asia.