REGULATION
US Bank Regulators Confess Mistakes
US bank regulators have admitted to errors in supervision after high-profile bank failures, with the New York Department of Financial Services publishing its review of Signature Bank and the US Federal Reserve Board releasing its review of Silicon Valley Bank.
EU Drafts AI Bill to Address Copyright Concerns
The European Union has passed a draft bill that will classify AI tools according to their risk level and impose stricter transparency procedures for high-risk tools. The bill is part of the EU’s Artificial Intelligence Act and aims to address concerns around the use of copyrighted materials in AI training.
US House Committees To Hold Joint Hearings On Digital Asset Regulations
The US House Financial Services and Agriculture Committees, along with the Digital Assets, Financial Technology and Inclusion Subcommittee, and the Commodity Markets, Digital Assets, and Rural Development Subcommittee will hold joint hearings in May to establish regulatory clarity for the digital asset ecosystem. Representative Patrick McHenry, the House Financial Services Committee chairman, has announced that the hearings aim to establish a bill providing regulatory clarity to the crypto sector, which adds to the work on a bipartisan bill led by crypto-friendly Senator Cynthia Lummis and Senator Kirsten Gillibrand.
EU to Regulate AI Use of Copyrighted Material
The European Union has passed a draft bill to regulate AI use of copyrighted materials. AI tools will be classified according to their risk level, with high-risk tools subjected to stricter transparency procedures. The bill is part of the EU's Artificial Intelligence Act and aims to strike a balance between protecting citizens and fostering innovation.
Blockchain Fights Climate Change
The World Economic Forum (WEF) has published a white paper outlining how blockchain technology can aid in the fight against climate change. Blockchain can improve market transparency, enhance trust and ambition within climate negotiations, democratize access to climate action, and funnel more funds to project developers. The WEF also stressed the need for constructive regulation to support digital climate innovation.
South Korea Grants Central Bank More Power Over Crypto
The Bank of Korea (BoK) has been given more power to investigate cryptocurrency service providers, including the ability to request transaction data from crypto exchanges. The move comes amid ongoing discussions on virtual asset legislation in South Korea, with the Financial Services Commission (FSC) holding the final say on the regulation of the digital asset sector. The two institutions have been at odds for several years over crypto regulations.
US Treasury Suggests Easier Oversight for Nonbank Financial Institutions
The US Treasury and top financial regulators have proposed new rules to ease the Federal Reserve's designation of nonbank institutions as systemically important. Treasury Secretary Janet Yellen raised concerns over nonbank institutions' lack of supervision and the potential for financial contagion during periods of distress.
Biden's Communications Director Restricted From Handling Crypto Firms
President Joe Biden's communications director, Ben LaBolt, will be barred from handling matters related to any cryptocurrency or technology firms he previously represented, but he will be allowed to advise on crypto regulation. LaBolt has disclosed owning $50,001-$100,000 in Bitcoin and $15,001-$50,000 in Ethereum 2. The restrictions are in line with ethics rules followed by senior White House staff.
US Treasury to Increase DeFi Regulation
The US Treasury conducted a risk assessment of DeFi, finding it lacking in AML/CFT compliance, and reported money laundering, scammers, and North Korean hackers benefiting from the sector. The Treasury response to Biden's executive order suggests more regulation for DeFi, including compliance with the Bank Secrecy Act.
European Union Introduces Comprehensive Crypto Law
The European Union has introduced a new crypto licensing regime called Markets in Crypto-Assets (MiCA), making it the first major jurisdiction in the world to introduce a comprehensive crypto law. The EU also voted in favor of a Transfer of Funds regulation that requires crypto operators to identify their customers in a bid to halt money laundering.