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“Cyprus proposes to penalize Crypto Asset Service Providers (CASPs) operating without licenses, with penalties up to €350,000 or five years imprisonment. This rule aims at uniformity in the European Union and protecting investors from financial hazards associated with illicit activities and money laundering.”

The European Union is reportedly discussing stricter regulations on large-scale language models (LLMs) like OpenAI’s GPT-4 and Meta’s Llama 2, aimed at controlling these models without overloading start-ups. These discussions touch on the implications of LLMs, user safety, and ethical AI deployment, mirroring the approach of the EU’s Digital Services Act.

“Komainu, a digital asset custody service, has been authorized by the UK Financial Conduct Authority (FCA) to operate within the bounds of laws concerning money laundering and related funds transfer. This enables them to offer a range of cryptocurrency custody services across the UK, highlighting the growing acceptance of digital assets globally.”

ESMA’s latest consultation paper on Markets in Crypto Asset regulation aims at integrating the crypto market by 2024, focusing on sustainability, consistency in crypto services, transparency in pre, and post-trade data, record-keeping by CASPs and accessible white papers. The initiative stresses environmental sustainability, encourages business continuity policies, and emphasizes real-time transparency in transactions.

This article discusses a project launched by UNESCO and the Dutch government to study AI supervision across Europe, aiming to develop guidelines from best practices. It also highlights the contrast of some nations focusing heavily on AI regulations, while cryptocurrency protocols, such as for stablecoin transactions, are being neglected. The importance is stressed of striking a balance between embracing technological advances and ensuring proper regulation for consumer protection.

The Basel Committee on Banking Supervision intends to mandate banks to disclose their cryptocurrency holdings fully, aiming to bolster transparency. They will detail disclosure requirements for bank’s exposure to crypto assets, with the objective to prevent potential risks within the financial ecosystem. Using this approach, the committee hopes to create increased crypto transparency.

The Dutch court has ruled against the Dutch Central Bank’s (DNB) imposed fees on crypto companies for anti-money laundering compliance, stating a violation of EU law. While the DNB argued that the industry should shoulder these costs, crypto firms believed these fees hindered the growth of the Netherlands’ digital currency sector.

Crypto expert Peter Eberle shares that while inevitable, crypto ETFs’ arrival won’t be imminent. Eberle highlights disparities in crypto financial products that impose limitations such as high fees and insufficient liquidity. He also points towards the need for clearer digital asset regulations. Despite inherent challenges, strategic developments like the EU’s MiCA consultations are charting a better regulatory path for cryptocurrencies.

“Project Atlas, launched by the Bank for International Settlements (BIS) and four European central banks, aims to revolutionize financial authorities’ management of crypto assets by tracking global asset movements. It melds data from crypto exchanges with data from public blockchains, providing tools for accurate assessment of crypto markets’ economic significance.”

“Yield Protocol’s decision to cease operations, impacted by decreased demand and strict regulations, juxtaposes with Wirex’s launch of W-Pay, a bridge for decentralized applications and traditional payment infrastructures. The future of blockchain remains uncertain amid these contrasting developments.”

The European Commission is assessing export controls on AI and semiconductor technologies due to their potential risk, technologically and for human rights violations. Four focal areas for risk assessment are AI, advanced semiconductors, quantum technologies and biotechnologies, influenced by their transformative nature and potential for civil/military fusion.

‘Project Atlas’, pioneered by Bank of International Settlements and various European Central banks, is developing a proof of concept system tracking on-chain and off-chain cryptocurrency transactions. The project aims to understand macroeconomic relevance of cryptocurrency markets and decentralized finance, offering transparency and potential risk mitigation.

“The trial of Sam Bankman-Fried, founder of cryptocurrency exchange FTX, is sparking broader discussions about the nature and vulnerabilities of cryptocurrency exchanges. In parallel, details have emerged about a cryptocurrency laundering operation linked to major exchange hacks, both issues providing overdue clarity on cryptocurrency safety and trustworthiness.”

Mário Centeno, governor of Banco de Portugal, advocates for a universal framework for crypto regulation due to the global nature of digital assets. He believes national efforts alone won’t adequately protect investors, warning against potential regulatory arbitrage and exploitation of gaps by less ethical participants.

Mário Centeno, head of Portugal Central Bank, calls for global cooperation in regulating cryptocurrencies due to the high-stake risks of digital assets and decentralized finance (DeFi). He believes uncoordinated international laws could be exploited by companies and that regulating global players at the national level may be ineffective.