US and Swedish authorities report tighter crypto oversight as UK banks restrict transfers to digital currency exchanges

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Topline

Financial regulators in Sweden and the United States both hinted at impending crackdowns on largely unregulated cryptocurrency markets over Memorial Day weekend, noting the absence of a coherent framework for the new technology, the specter of financial crime and the risks to consumers posed by crypto exchange platforms, to which a number of UK banks have reportedly blocked customers from transferring money.

Highlights

Michael Hsu, the New interim controller of the currency, Told the Financial Times he wanted US agencies to coordinate and define a “regulatory perimeter” for cryptocurrencies and take a more active role in regulating the market, which he said there was appetite for.

On Monday, the governor of the Swedish central bank, Stefan Ingves, Told Stricter Bloomberg regulation is likely on the horizon for bitcoin and other digital assets, especially when the market is so large that “things like consumer interests and money laundering come into play.” .

Specific monitoring “will likely occur at different times in different areas,” Ingves said.

Asa Lindhagen, Swedish Minister for Financial Markets, Told Bloomberg, the country, is already cracking down on trading platforms and working with other regulators around the world to tackle the problem of money laundering.

Lindhagen said international efforts are a “work in progress,” while stressing the inherent cross-border dimensions of financial crime.

A number of banks in the UK, including Starling, Monzo and Barclays, have would have suspended payments to cryptocurrency exchanges in recent weeks in an effort to address “high levels of suspected financial crime with such a payment,” according to The telegraph.

Key context

The extreme volatility of the cryptocurrency markets, the high risks of financial crime and the growing popularity have prompted financial regulators around the world to think about how best to implement the necessary collateral in the digital ecosystem without suffocating. innovation. China – which like Sweden is developing its own digital currency – cracked down on financial institutions that trade digital assets in May, contributing to a rapid market contraction of nearly 30%. The Biden administration is actively investigating “gaps” in crypto oversight, and SEC Chairman Gary Gensler recently Told a House committee on the fact that there was a potential need for dedicated legislation governing crypto exchanges. Money laundering and illicit activity are at the center of the Treasury Department’s crypto efforts, he said.

Crucial quote

Hsu, in a testimony from Congress in May, mentionned he felt a “déjà vu” about the current enthusiasm for financial innovation and the years leading up to the financial crisis. The new tools under development “bring great promise … but also risks,” he said.

Tangent

President Biden’s law enforcement plan, which will help fund his plan for American families, explains the crypto boom. It extends financial movement reporting metrics to crypto platforms to detect unreported income.

Further reading

Bitcoin unlikely to escape regulation, says Riksbank governor (Bloomberg)

U.S. regulators report bigger role in cryptocurrency market (Financial Times)

Banks block payments to crypto exchanges (Telegraph)

Biden officials reportedly discussed ‘loopholes’ in cryptocurrency rules in response to wild price swings (Forbes)



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