Dubai's financial services authority seeks to regulate cryptocurrency with new law

Dubai's Financial Services Authority (DFSA) released a 56-page draft cryptocurrency consultation paper yesterday called the The Dubai Virtual Asset Regulation Law (DVAR).

The UAE emirate of Dubai aims to become a global player in the cryptocurrency economy with this new virtual assets law.

“The future belongs to whoever designs it,” Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum said on Twitter.

The new bill is aimed strictly at cryptocurrency tokens, and it excludes utility tokens, non-fungible tokens and central bank digital currencies, “We are proposing to exclude NFTs from the scope of our current proposals on the basis there is no Financial Service being provided,” said the consultation paper.

The DVAR has specific provisions that forbid the use of anonymous cryptos and algorithmic tokens which alter their supply to stabalize the price.

The new bill will be submitted for approval after it passes the amendments period.

The final version of the DVAR will be released to the public before being passed.

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Biden to sign executive order to examine impact of cryptocurrencies on U.S. national security

According to unnamed sources within the Biden administraion, a new executive order on cryptocurrencies will be signed by the president this week.

Bloomberg reports the new order will set the tone and posture of the U.S. government’s approach to regulation of the cryptocurrency industry, with a particular focus on sanctions enforcement.

The executive order will instruct agencies of the federal government to study potential alterations to the current regulatory landscape.

Additioanally, the new order will examine the impact of cryptocurrencuies on American national security.

The Biden administration has placed strong emphasis on cryptocurrencies in light of the Russian invasion of Ukraine and the heavy sanctions that have been applied on Russia as a result.

There are concerns that Russian oligarchs under sanctions may be using crypto to bypass the sanctions.

In related news, the largest U.S. crypto exchange, Coinbase, announced today it has blocked 25,000 crypto addresses connected to Russian citizens engaging in offenses, "Once we identified these addresses, we shared them with the government to further support sanctions enforcement." said Coinbase on their blog.

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Russian central bank boosts interest rate to 20% to save ruble from crash

The Russian central bank increased the interest rate from 9.5% to 20% as the ruble plunged on Monday to a record low against the U.S. dollar as a result of severe sanctions placed on Russia due to the war in Ukraine.

Russia's central bank said the dramatic rate hike should help counter the rapid depreciation of the ruble for the time being.

Over the weekend, Russia's central bank also suspended the ability of foreigners to sell Russian stocks and securities to soften the blow to the Russian financial system.

The ruble crashed in early trading on Monday by more than 30% against the dollar.

To help ease pressure on the banking system, Russia's central bank will make available 733 billion rubles to local banks to prevent a liquidty crunch.

Western nations have agreed to block major Russian financial institutions from the SWIFT interbank messaging system, which interconnects banks in over 200 countries.

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Korean crytocurrency exchanges begin to enforce Travel Rule

Cryptocurrency exchange Upbit will begin to comply with the Travel Rule from March 25. South Korean users will only be allowed to make withdrawals to wallets hosted by registered domestic virtual asset service providers.

On February 24th, Upbit sent a notice to all their clients on the upcoming Travel Rule implementation.

The Travel Rule is a system in which virtual asset service providers (VASPs) collect and track the identity information of the sender and recipient. Cryptocurrency transactions exceeding a threshold of 1 million Korea won will be reported to the financial authorities.

Upbit said it has plans to allow deposit and withdrawals to foreign exchanges that comply with the Travel Rule. The company has also not released details on which domestic exchanges are currently supported.

Direct withdrawals to foreign subsidiaries of Upbit are also currently suspended.

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Russian financial markets under pressure as Germany halts Nord Stream 2 pipeline

Russia's stock market and currency, the ruble, took a big hit as a result of President Putin's recognition of former Ukranian territories of Luhanks and Donetsk, as independent states.

The MOEX, Moscow's stock index declined 10% on Monday, which brings total losses since the start of 2022 to more than 20%.

While the ruble declined against the USD to 81 rubles per dollar, a new record low. The steep declines forced the Russian central bank to step in and provide support to financial institutions.

Analysts expect incoming sanctions from the United States and Europe to put further pressure on Russian economy and finances. Today, Germany announced certification of the Nord Stream 2 pipeline has been halted.

Capital Economics analysts expect heavy damage to the Russian economy if Russia is blocked from the SWIFT payments system. So far, sanctions from Western allies have been fairly light and mostly symbolic.

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The FED bans its senior officials from trading in crypto, stocks, commodities and forex

On February 18, the Federal Open Markets Committee issued new rules on allowed investments for senior officials of the Federal Reserve.

Senior officials such as board members, presidents, first vice presidents, research directors and others who hold seniors posts, can no longer deal in stocks, derivatives, ETFs, cryptocurrencies, commodities, or foreign currencies for investment purposes.

Senior members may hold cetain assets such as foreign currencies as needed for daily use or when travel abroad for speeches and conferences.

The new rules were put in place as a result of former FED governor Richard Clarida, who was forced to resign in January after it was revelaed he profited from stock trades by buying and selling ahead of Federal Reserve announcements.

Other FED members have also come into the spotlight recently for making individual stock trades and profiting from privileged information.

Robert Kaplan, former president of the Federal Reserve Bank of Dallas, resigned in 2021 for making large stock trades, while former Boston Fed president Eric Rosengren, resigned in 2020 because of trading real estate securities while the FED was intervening in the mortgage-backed securities markets.

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Justice department appoints director for new cryptocurrency task force

The DOJ announced last week it will be setting up a new division to investigate serious cybercrimes involving cryptocurrencies.

The new division, The National Cryptocurrency Enforcement Team (NCET), was unveiled by Deputy Attorney General Lisa Monaco.

The group is tasked with determining the allocation of investigative resources to cases related to crypto.

The new division will be lead by experienced prosecutor Eun Young Choi, who has decades of experience as Assistant U.S. Attorney for the Southern District of New York, where she investigated and prosecuted complex cyber fraud and money laundering crimes related to the dark web.

Lisa Monaco unveiled the new division during her Munich Cyber Security Conference speech.

Monaco said the new division will focus its efforts on cryptocurrency exchanges, ransomware, and mixers, a type of blockchain software for anonymizing transactions.

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Russian stocks, currency take a hit as Ukraine crisis intensifies

Russian financial markets turned red on Friday as market participants priced in the knock-on effects of the Ukraine crisis and potential financial sanctions from the U.S.

The VanEck Russia ETF (RSX), which is composed of some prominent Russian equities, experienced declines of more than 4%, adding to declines from Thursday that exceeded 5%.

Russia's currency, the ruble, was also hit today in international FX markets.

The ruble declined 1.98% against the U.S. dollar, while losses against the euro, Japanese yen and the British pound came in at 1.67%, 1.88% and 1.85%, respectively.

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