european union crypto

Lawyer Accuses Huobi of Operating a Cryptocurrency Exchange That’s ‘Held Accountable Nowhere’

23/01/2022 by Idelto Editor

Houbi Global, which is based in Seychelles, has been accused by lawyer Jonathan Levy of operating without accountability to any jurisdiction. The lawyer adds that the exchange’s physical address in the island nation is for mailing purposes only.

Accountability Issues

U.S.-based lawyer Jonathan Levy has accused Huobi cryptocurrency exchange of running a decentralized global operation that “operates everywhere but is held accountable nowhere.” Levy’s accusation follows the Seychelles registered cryptocurrency exchange’s alleged intransigence which eventually led to a French national losing their funds to a Chinese fraudster.

Before the Chinese national’s disappearance along with the stolen funds, the unnamed victim had — with the aid of Ciphertrace — successfully located the fraudster’s account with Huobi. Based on the victim’s efforts, the French National police had opened an investigation as well as requested the cryptocurrency exchange’s assistance in recovering the funds.

Huobi’s Seychelles Presence

However, according to a statement released by the lawyer, the fraud victim’s attempts to recover their funds were ultimately frustrated by Houbi’s refusal to cooperate with both French and Seychelles law enforcement. He explained:

Huobi Global misled the French Police and claimed they were under the jurisdiction of Seychelles. This delay allowed the criminal to escape with their loot. When the Seychelles Police finally investigated it was already too late and by their own admission, they lacked jurisdiction over the crime since Huobi’s presence in that island nation is just a mailing address.

Levy, meanwhile, points to this latest incident as another example of why authorities in Europe need to establish a crypto industry-funded “Superfund.” He said such a fund would prove to be useful to victims of crypto crime, like the the French national, whose only hope of recovering the funds now hinges on the European Union or the OECD’s intervention.

Concerning leading crypto exchanges’ ability to make sufficient contributions to any such superfund, Levy argues that platforms like Huobi (whose daily crypto volume reportedly exceeds $10 billion) and the other top ten exchanges, are well placed to make such contributions.

What are your thoughts on this story? Tell us what you think in the comments section below.

Spanish Ministry of Economy Proposes to Create a Financial Customer Ombudsman for Crypto-Related Matters

13/03/2021 by Idelto Editor

Crypto regulation in Spain remains on the political talks amid the current bull-run seen in the bitcoin prices. Now, the country’s Ministry of the Economy is about to create a new Financial Customer Ombudsman for crypto-related matters.

Independent Financial Customer Body Will Abide by the MiCA Ruling

Per La Información, Minister Nadia Calviño seeks to extend its guardianship to the financial body to cover topics such as protecting consumers in cryptocurrency services. To make it a reality, the minister will submit the initial proposal to a public consultancy “as soon as possible.”

Overall, Calviño also wants to canalize all conflicts between banks and their customers through the Financial Customer Ombudsman, including all businesses in the fintech sector.

However, the Ministry clarified they’re expecting to abide by the rulings of the future “Regulation Of The European Parliament And Of The Council On Markets In Cryptoassets and the Markets in Crypto-assets Regulation” (MiCA). Such ruling, however, is still in development in Brussels.

According to the media outlet, Calviño’s proposal wants that the Independent Financial Customer Ombudsman’s future decisions will be binding, but up to a certain amount on a dispute. Sources quoted by La Información claim that such an amount could be around 30,000 euro ($35,800).

European Regulation Could Be Incompatible With Defi Industry, Experts Say

There are no major details on who could be leading the independent body overseeing crypto-related matters with consumers. If the proposal is granted a green light during the public consultancy, it will be the only independent resource to solve conflicts for all financial matters in Spain.

But the fact of abiding by the in-development EU MiCA rulings is still sparking controversy among the crypto sphere.

In fact, a survey performed by the International Association for Trusted Blockchain Applications (INATBA) unveiled that European crypto experts believe incoming legal frameworks could be excessively challenging for the industry.

Moreover, these rulings could have an “incompatibility” with decentralized finance (defi) applications and protocols.

What do you think about the proposal presented by the Spanish Ministry of Economy? Let us know in the comments section below.

EU to Launch Comprehensive Crypto Regulation by 2024: Report

20/09/2020 by Idelto Editor

The European Union is planning to implement comprehensive cryptocurrency regulation by 2024, two EU reports have reportedly revealed. This follows five European finance ministers calling on the European Commission to put in place “very strong and very clear rules” on cryptocurrency.

EU Crypto Regulation Coming Soon

A comprehensive cryptocurrency regulatory framework is expected to be put in place within four years, according to two EU documents, Reuters reported Friday, elaborating:

By 2024, the EU should put in place a comprehensive framework enabling the uptake of distributed ledger technology (DLT) and crypto-assets in the financial sector.

“By 2024, the principle of passporting and a one-stop-shop licensing should apply in all areas which hold strong potential for digital finance,” the documents further state.

According to Euractiv, a pan-European publication specializing in EU policies, the European Commission will publish the Digital Finance Strategy together with its new rules on cryptocurrencies later this month. They outline the Commission’s priority actions by 2024.

In addition to the existing cryptocurrency proposal, European Commission Executive Vice-President in charge of Economy and Finance Valdis Dombrovskis said the Commission may also update “the prudential rules for crypto-assets held by financial firms, which could force banks with these digital assets to hold more capital as a cushion, given the volatility and risks associated with these assets,” Euractiv described.

The two documents note that the draft law will clarify how existing rules apply to cryptocurrencies and set out new rules where there are gaps, Reuters explained, adding that it “should also address the risks associated with these technologies.” The documents also detail that the Commission “wants to make it easier to share data within the financial sector to encourage competition and a wider range of services, while upholding the principle of ‘same risk, same rules, same regulation,’” the news outlet conveyed.

Moreover, the European Commission wants to increase the use of digital finance as 78% of payments in the eurozone are currently in cash, the publication noted, adding that the new rules should be in place within four years so new customers can start “using financial services quickly once anti-money laundering and identity checks have been completed.”

Last week, the finance ministers of France, Germany, Italy, the Netherlands, and Spain called on the European Commission to include “strong rules” in its upcoming cryptocurrency proposal, particularly for global digital tokens like Facebook’s Libra. In a joint statement, they said stablecoins should not be allowed to operate in the EU countries until legal, regulatory and oversight challenges had been addressed. “We’re waiting for the Commission to issue very strong and very clear rules to avoid the misuse of cryptocurrencies for terrorist activities or for money laundering,” French Finance Minister Bruno Le Maire was quoted as saying.

What do you think about the EU’s plans to regulate the crypto industry by 2024? Let us know in the comments section below.

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