How does excessive regulation threaten the industry and how will MiCA affect it, how effective are sanctions and what needs to be changed in Russian legislation? This is told by the guests of the All Time Half (ATH) conference organized by ForkLog.
https://www.youtube.com/watch?v=xUcrQ7hKr4YWhat is the craziest trial in relation to cryptoplatforms?
Sergey Mendeleev (Exved.com ): Harassment of TornadoCash developers. The most serious in terms of consequences for the industry is the SEC's lawsuit against Binance, the most relevant is the filing of claims against Uniswap.
There are no such high-profile trials in Russia. Instead, there are many trials of P2P merchants who were secretly used by scammers. People are being punished for things they didn't do. You need to pay attention to this.
Is Russia using cryptocurrencies to circumvent sanctions?
Sergei Mendeleev: It's not about the restrictions imposed on Russia. Cryptocurrency is a convenient way to send millions of dollars without going through dozens of crazy procedures.
It is used by exporters and importers all over the world. The turnover of Tether (USDT) on some days exceeds its issue, which is about $ 100 billion.
If you look at the indicators of global foreign economic activity (FEA), it becomes clear where such figures come from.
https://forklog.com/exclusive/ot-kritiki-do-obeshhanij-zashhitit-bitkoin-chto-i-pochemu-politiki-ssha-govoryat-o-kriptovalyutahHas the black market of cryptocurrencies emerged in Russia due to the lack of regulation?
Sergey Mendeleev: Prohibited goods are traded on black markets, and cryptocurrencies are not prohibited in the Russian Federation. In the case of exchangers, we are talking about the gray market, and in the case of foreign economic activity — about the white one.
Regulation in Russia is just being formed. The authorities discuss new bills on digital assets almost every day. For example, the Central Bank recently supported the use of cryptocurrencies for cross-border settlements.
However, when agencies allow something, they forbid everything else. It is necessary to be very careful about legislative initiatives, given that experts and representatives of the community are not allowed to develop them.
Are large crypto exchanges still working with clients from Russia?
Sergey Mendeleev: I don't see any serious limitations. The largest world exchanges operate in Russia: Bybit, OKX, HTX, as well as Russian sites, although the latter are under economic pressure.
Recently, the SDN list included an exchange that allowed P2P transfers to sub-sanctioned banks. But all the listed platforms have such a function. There is more politics than economics in this decision.
Will the SEC continue to pursue crypto exchanges under the pretext of protecting against terrorism? Which platforms should I prepare for?
Sergey Mendeleev: To everyone. Under the guise of good intentions, the supervisory authorities overreact.
There is an attack on decentralized services. I do not exclude that they will get to blockchains. They will come to the Ethereum validators and ask why they conducted terrorist transactions through their nodes.
At the same time, terrorist organizations do not need cryptocurrencies. They use traditional financial instruments more effectively. I don't trust hawala much more than digital assets: transactions on the blockchain are easier to track.
The financing of terrorism must be combated. But it is not enough to mark transactions: the community must squeeze out those who are associated with such activities from its ranks.
Self-regulation is already taking place, at least in Russia. If a person has ever been exposed in connection with bitcoin laundering or drug trafficking, they are expelled from the professional community — they stop communicating and are removed from chats. This rule is strictly followed.
Is the cryptocurrency legislation outdated in the Russian Federation?
Andrey Tugarin (GMT Legal): Not really. The federal law "On CFA" initially could not regulate the huge turnover of cryptocurrencies in Russia.
He introduced two concepts: "digital financial asset" and "digital currency". It's been 3.5 years, but people still haven't figured out what the difference is between them. Actually, there are only one and a half articles about cryptocurrencies in the law.
I cannot say that regulators are not trying to solve the problem. They are constantly putting forward and discussing new bills, which are quite adequate. But it doesn't come to acceptance. And if there is no law, then there is nothing to change with the industry.
What laws are needed to fully regulate cryptocurrencies in Russia?
Andrey Tugarin: We need a new definition of digital currency that is suitable for different assets, not just bitcoin. The term itself is not important, the main thing is what will happen after the dash.
After that, you can add a description of the market participants. For example, what is an exchanger in the Russian Federation, what rules it must follow, and which registries to enter. Specify the requirements for the amount of authorized capital, employees, and managers.
These texts are already ready: I personally read them and suggested edits. But for some reason they are not published.
How will the entry into force of MiCA affect the industry?
Andrey Tugarin: It is already affecting users and service providers: exchanges are temporarily removing pairs with stablecoins for customers from Europe.
The authors of the bill have done a lot of work: they have divided cryptocurrencies into types, prescribed licensing rules, as well as requirements for issuers and service providers of virtual assets.
This is the first attempt to unify regulation in such a large area. It remains to wait for the EU countries to integrate MiCA and act according to the requirements. They have until the end of 2024.
https://forklog.com/exclusive/ai/kak-evropejskij-reglament-ob-ii-povliyaet-na-industriyu-i-lyudej-razborCan businesses benefit from the introduction of regulation?
Sergey Mendeleev: It depends on how smart it will be. Casinos were regulated so that they disappeared or went underground.
People have not stopped playing, but the state has lost control of the industry and the lion's share of taxes. The Central Bank has to deal with illegal casinos tied to crypto processing, P2P payments and acquiring through third countries.
An example of good regulation is a taxi. In such cases, business meets legislators halfway.
We will adapt, even if the state imposes a total ban on cryptocurrencies, and we will even earn more.
Andrey Tugarin: I will support Sergey. Stupid regulation will force businesses to move into black and gray zones. Laws should provide users with a real opportunity to protect their rights.
Are we in danger of excessive regulation?
Sergey Mendeleev: Global regulators want to know who is behind each address. Judging by the bills being passed, in the near future they will divide cryptocurrencies into two parts: with and without KYC. Assets in the gray zone will be blocked until verification is completed.
It all depends on us. We need to define the rules of the game, otherwise the regulators will crush everything. And then we will face a reality in which the owner of 100 BTC will not be able to do anything with them.
Andrey Tugarin: Already, American and European supervisory authorities equate anonymous assets and mechanisms to increase privacy with money laundering.
How should we treat this approach? The question is rhetorical. We have been living in this reality for several years.
Will major platforms introduce new identification methods like WorldCoin?
Andrey Tugarin: It is difficult to make significant changes to established practices. In addition, a large exchange cannot exist without KYC.
When the platform reaches certain trading volumes, regulators pay attention to it and require compliance with the rules. This happened recently with Uniswap.