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Crypto: EMEA Regulators Build up Legal Framework

In Europe, the Middle East and Africa (EMEA), lawmakers have moved this past week to better equip regulators with the tools needed to oversee the cryptocurrency industry.

In the United Kingdom, the latest amendments proposed to the Financial Services and Markets Bill will expand the remit of the Financial Conduct Authority (FCA), which will become responsible for regulating all crypto-related activities.

The proposed changes clarify the Bill’s approach to crypto-assets and entrench the powers of the FCA and the Treasury when it comes to their regulation and legal status.

Explaining the changes, City Minister Andrew Griffith, who appears to have taken control of the crypto-related aspects of the bill, wrote: “This new clause amends the Financial Services and Markets Act 2000 to clarify that the powers relating to to financial promotion and be regulated. Activities to regulate crypto-assets and activities related to crypto-assets can be relied upon.”

It is the second time recently that Griffith has proposed amendments to the bill as the government fine-tunes the legislation before it is passed into law.

Last week, Bank of England deputy governor Sam Woods also revealed that the central bank wants to create a regulatory framework for systemic stablecoins. He said a public consultation document on the new regime would be published next year.

In the Middle East, authorities in Israel and the United Arab Emirates (UAE) have also taken steps to better regulate their respective crypto markets.

Financial regulations in the Middle East, Africa extended to crypto market

The new crypto-token regime of the Dubai Financial Services Authority (DFSA) came into effect on Tuesday (November 1).

The new framework addresses the anti-money laundering (AML) responsibilities of anyone holding, trading and transferring crypto-assets, as well as covering consumer protection issues by defining various consumer rights and corporate responsibilities.

See also: UAE money laundering watchdog to combat crypto, real estate exploitation

The DFSA has expanded the scope of many regulated financial services activities, such as advising, dealing, arranging, trading and custody, to enable firms in the Dubai International Financial Center to provide crypto-related products and services.

Meanwhile, the Capital Market, Insurance and Savings Authority in Israel has approved the second permanent license to a crypto firm, the broker Bits of Gold. The move comes just a month after the authority issued its first crypto license to crypto trading infrastructure company Hybrid Bridge Holdings (HBH).

Until recently, crypto companies in Israel had to operate under a temporary business permit.

Lacking a proper licensing regime, crypto businesses in Israel have struggled to engage with the country’s banking and financial system, which is subject to particularly strict AML measures.

An amendment to the Bank of Israel’s AML and Terrorist Financing Risk Management Directive, which calls on banks to stop rejecting cryptocurrencies altogether and investigate each case specifically, is expected to take effect on November 9 .

At the same time, the Tel Aviv Stock Exchange is moving to deploy distributed ledger technology (DLT) for the issuance and trading of securities.

Finally, in South Africa the Financial Sector Conduct Authority (FSCA) is also responsible for regulating financial service providers in the crypto sector.

From October, crypto-assets became regulated financial products in South Africa, and the FSCA began accepting applications from crypto-service providers seeking authorisation.

The latest move represents an important interim step before the coming into force of the Financial Institutions Conduct Bill, which will legally grant the FSCA enforcement powers in a similar way to what the UK government hopes to do with its Financial Services and Markets Bill reach.

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