Bit coin officially broke through $100,000 yesterday (12/5)! On 12/3, South Korean President Yoon Seok-yeol announced a state of emergency near dawn. As soon as the news came out, the currency price plummeted, with Bit coin falling below $94,000 and even dropping to $60,000 on the Korean exchange Upbit. Those who took the opportunity to buy at the bottom must have been overjoyed, but Bit coin broke through $100,000 in just two days!
Ether also broke through $3,900 from $3,500, and although it is still far from the historical high of $4,800, the second-largest coin has finally followed the overall market upward, breaking its rebellious trend of moving in the opposite direction of the rest of the market in the past few weeks (crying).
Bit coin breaks $100,000, is crypto regulation coming?
However, as the market capitalization of the crypto market gradually increases and receives more attention, governments around the world have also begun to notice this once unregulated area. The EU's MiCA law on stablecoin regulations officially came into effect in June this year, and will be fully implemented on 1/1 next year. Taiwan also officially established the Virtual Currency Association in June this year, and on 11/30 officially announced the "Self-Regulatory Rules for Customer Protection of the Virtual Currency Commercial Association of the Republic of China" and on 12/1 officially implemented the "Registration System for Crypto Exchange Operators", so what impact will this have on operators and investors? Let's take a look at the regulatory content!
Further reading:
Regulations for exchanges (Registration system for crypto exchange operators):
-Virtual asset business registration system: Effective as of 12/1, exchanges that have not completed or have previously completed the anti-money laundering compliance declaration must submit an application, otherwise they will not be able to continue operations. (Those who have already submitted must reapply!)
-KYC (Know Your Customer): Exchanges must conduct real-name verification for new users to ensure that the identity of all traders can be traced and to know whether the customer has been listed as a rejected customer by other operators. Exchanges that do not complete this procedure may face operational restrictions.
-Fund segregation: To prevent fund loss in the event of platform collapse, platforms must separate customer assets from their own assets and adopt a dedicated trust mechanism to safeguard customer funds.
-Compliance review and application: According to the FSC's regulations, all exchanges need to submit a complete compliance application to the competent authority, including anti-money laundering (AML) procedures, information security review, and cold/hot wallet fund management processes.
-Listing and delisting review: To prevent more investors from being harmed by "shit coins" and "air coins", the self-regulatory rules require the listing and delisting process of crypto assets to include the project's white paper, in-depth risk assessment report, and background investigation of the issuer.
Regulations for crypto KOLs and media:
-Advertising compliance: The self-regulatory rules require that any media and individuals promoting virtual assets must clearly mark the advertising nature and provide risk warnings. For example, if a crypto project has high volatility, the KOL must indicate the potential losses that investors may face.
-Prohibition of misleading statements: Prohibit the use of exaggerated returns, guaranteed profits such as "zero risk" or "guaranteed profits", as well as superlative terms like "minimum", "unique", "best", "lifetime" or their synonyms, violators may be banned from participating in related industry activities.
-Transparent business relationships: KOLs need to publicly disclose their business cooperation relationships with the projects they promote, undisclosed cooperation may lead to legal disputes.
In addition, any "tipping" behavior may be illegal, as tipping may be considered "unauthorized financial services", which may be viewed as providing investment advice or asset management services, and these activities usually require relevant financial licenses. The "Self-Regulatory Rules" also explicitly prohibit exaggerating returns or guaranteeing profits, as well as engaging in unfair trading practices, such as misleading others into high-risk investments.
The self-regulatory rules protect investors, but what else do we need to pay attention to?
In addition to the regulations mentioned above, as customers and investors in the crypto space, we can be protected by these rules, such as exchanges needing to segregate funds, which reduces the risk of us losing our assets. But there are also rules that we need to comply with and pay attention to.
The following behaviors may result in your account being risk-controlled:
-Account cash flow: Engaging in large-scale or short-term intensive buying/selling/exchanging behavior that is inconsistent with one's identity and without reasonable cause, new registered accounts or accounts with long-term inactivity suddenly showing up with large or frequent transactions.
-Abnormal trading patterns: Using the same IP address to operate multiple unrelated accounts for trading, without reasonable explanation.
-Splitting transactions to evade regulation: Splitting transactions into small amounts and multiple operations to accumulate to a specific amount within a short period of time, in an attempt to evade identity verification requirements or regulatory thresholds.
-Rapid conversion and suspicious fund destination: Quickly transferring out or converting virtual currencies received into other virtual currencies, accumulating a certain amount or frequency within a short period of time.
In simple terms, just operate your account normally and you'll be fine! Don't let other people's money flow into your account, or have abnormal fund flows, otherwise your account may be risk-controlled by the exchange, temporarily frozen, causing you to miss out on market opportunities.
The above are the key points of the "Registration System" and "Self-Regulatory Standards" released by the Virtual Currency Association. It should be noted that if the operators do not complete the anti-money laundering registration, they will be in violation of the Criminal Code! If you are interested in learning more about the complete content of the "Self-Regulatory Standards", you can check here. Although the increased regulation may lead to higher transaction fees due to the rise in platform costs, it can provide us with more protection and a set of standards to follow.
〈Bitcoin Hits $100K! Crypto Regulation Upgrade, VASP Self-Regulatory Standards Fully Explained〉 This article was first published on《NONE LAND》.
