Monthly Report: UAE regulators embrace trading of crypto assets, Turkey state leader rejects cryptocurrencies

Monthly Report: UAE regulators embrace trading of crypto assets, Turkey state leader rejects cryptocurrencies

By Sam Grant - min read

The debt crisis involving China’s second-largest property developer, the Evergrande Group set off a sell-off across cryptocurrency markets at the beginning of the week. Here is a summary of other top cryptocurrency news:

Dubai World Trade Centre Authority to add support for crypto trading

On Wednesday, the UAE’s Dubai World Trade Centre Authority (DWTCA) and the Securities and Commodities Authority (SCA) reached an agreement to allow the offering, listing, regulation, and trading of crypto-assets in the country. 

Helal Saeed Al Marri, the Director-General of the DWTCA explained that alongside the growth in the industry, the DWTCA needed to establish support for crypto tech products such as NFTs, which are expected to play a huge role in the future finance world. Further, it is expected that the SCA will help provide the necessary regulatory guidance towards the adoption (issuing and listing) of these assets for all the entities seeking to operate crypto assets under the DWTCA’s jurisdiction. 

The FCA would be required to supervise, control and investigate the entities licensed to operate within the free zone. The UAE has previously (July 2021) stated that it plans to launch its CBDC by 2023.

Suex sanctioned over illegal operations

The US Treasury Department took a rather unique step on Tuesday when it said that it was enforcing sanctions against crypto exchange Suex over its connection to money laundering for ransomware offenders. The exchange was sanctioned as it had been identified to have processed ransom amounts for at least eight ransomware variants.

The Czech-based crypto exchange sanctions come at a time when President Biden's administration grapples with getting a foothold on crypto and the laws around it. Previously, such ransomware activities have been associated with extremist groups, but even nation-states are suspected to be involved in some cases. For instance, earlier in the year, the Treasury Department found out that a Russian intelligence Agency had ties to a ransomware group, Evil Corp–a group that came into the limelight for a ransom attack on Colonial Pipeline.

Further, the treasury said that even though cryptocurrencies may be legal, the technology facilitating payments in these currencies could be easily exploited to allow rogue actors to get away with the money. Several institutions in the US have been victims of ransomware attacks in recent months. The rise of these ransomware attacks has resulted in losses of $400 million in 2020, an over 300% increase from 2019.

FTX to extends presence to the Bahamas and Gibraltar

The crypto exchange FTX has enjoyed good fortune this week as the exchange announced on Monday that it had received the legal go-ahead to operate in the Bahamas through its subsidiary in the country. This added to late last week's announcement of a similar arrangement in Gibraltar.

FTX, through its Zubr Exchange subsidiary, gained a license from the Gibraltar Financial Services Commission (GFSC) to operate as a DLT provider. However, the approval was contingent on addressing issues raised from the regulatory feedback it had received. At the time, CEO Sam Bankman-Fried had lauded the move as one that would push FTX towards compliance and trust for all users around the world.

In the Bahamas, FTX’s subsidiary, FTX Digital Markets was registered as a digital asset business with the securities commission in the country. With the announcement, it was revealed that Ryan Salame would head the FTX Digital Markets, with headquarters in Nassau, Bahamas.

CEO Bankman-Fried has taken a more positive approach towards regulatory requirements. He has in recent days been pro-regulation, arguing that without the regulations, illegal activity (scams) would cause the regulators to clamp down on the industry further. 

Coinbase calls it quits on Lend program plans

Crypto exchange Coinbase had planned the scheduled release of a new Lend feature for months now, but the SEC intervention may have well led the Lend product to its demise. Coinbase announced at the end of last week that it would halt the planned launch of the lend feature as it seeks to understand the regulatory hurdles put against it. The exchange added that even pre-launch, hundreds of thousands of customers had already signed up to the program. 

The exchange reassured its customers that it would continually find ways to offer its customers ‘innovative, trusted programs and products’. The Coinbase decision comes even as the SEC chair Gary Gensler takes an even firmer approach towards crypto. 

Gensler told the US Senate Banking Committee that the crypto set-up needed to talk to the regulators. He also noted that given the diversity of tokens on these platforms, there was a huge likelihood of some of them being securities, which have to be registered under the law. In the particular case of Lend by Coinbase, the SEC was of the opinion that the feature was a security but Coinbase didn’t think so.

Turkish President declares war on crypto

Bloomberg reported that the President of Turkey, Recep Tayyip Erdogan said on Saturday that the country was at war with cryptocurrencies, with several measures established to streamline their use even as the country plans to test and launch its digital Lira. As he spoke to students from 81 provinces, the Turkish president said he had no standing issues with the spread of digital assets but he insisted that the sovereignty of The Turkish Lira would have to be retained. 

Erdogan explained that the country's currency was part of its national identity. Turkey has been unfriendly towards crypto. Back in April, the Turkish central bank banned the use of crypto in making payments. 

The bank cited the market volatility, regulatory uncertainty and criminal activity involved with crypto as the main reasons for the ban. A month later, the Turkish government placed all crypto asset providers under existing anti-money laundering and terrorism financing regulations, as instructed by a presidential decree.