Europe: EU / UK regulatory roundup
A round up of recent regulatory developments in the EU and UK.
Norton Rose Fulbright’s global blockchain and cryptocurrency team has produced a global legal and regulatory guide to cryptocurrencies.
The guide is issued in a series of chapters, published monthly.
The topic of Bitcoin and other cryptocurrencies is attracting considerable attention among central banks, regulators and legislators. The potential benefits of these technologies are well known, including their ability to lower transaction costs, reduce payment timeframes and improve financial inclusion. There are also a multitude of perceived risks that the authorities and stakeholders are exploring in order to identify the regulatory measures that may be necessary to mitigate concerns over security, consumer protection and financial crime.
So far, the global legal and regulatory response to cryptocurrencies has been fragmented with a patchwork of uncoordinated initiatives developing in different jurisdictions. In the US and Asian markets, legislative action has already been taken or is underway. There is the potential in the EU, Australia and Canada for market participants that act as gateways between conventional currencies and cryptocurrencies, such as exchange platforms, to be declared subject to anti-money laundering and counter terrorist financing (AML and CTF) requirements. In other regions, activities related to cryptocurrencies may be prohibited or are otherwise heavily restricted.
As a general rule, where no specific steps have been taken to regulate cryptocurrencies in the relevant jurisdiction, it would be necessary to refer to the existing legal and regulatory frameworks to understand how they might apply to the new circumstances that the technology enables. This is particularly important where cryptocurrencies arise in the context of industries that are already significantly regulated, such as cryptocurrency-related insurance or investment products, which we do not consider further in this Chapter.
This Chapter outlines the main regulatory developments affecting cryptocurrencies in the US, China, the EU, Canada and Australia.
If you would like to discuss any aspect of this topic further, please get in touch.
On July 16, 2020, the Court of Justice of the European Union (CJEU) published its decision in the landmark case Data Protection Commissioner v Facebook Ireland Ltd, Maximilian Schrems and intervening parties, Case C-311/18 (known as the Schrems II case).
On July 7, 2020, the Commission de Surveillance du Secteur Financier (CSSF) issued an FAQ document on Circular 02/77 concerning the protection of investors in case of NAV calculation errors and the correction of the consequences resulting from non-compliance with the investment rules applicable to undertakings for collective investment (the FAQ).