Stablecoins haven’t looked so stable recently. The United Kingdom doesn’t seem to be too worried
The announcement comes after criticism of the Luna Foundation Guard's "lack of transparency."
The IMF has today published a report on how crypto assets might be used to circumvent capital flow management measures, undermining the stability of domestic economies and the global system
Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Blockchain, Crypto, Digital Assets Regulations
UK Court recognizes NFTs as ‘private property’
CoinTelegraph | David Attlee | May 15, 2022
At the beginning of May, the British Web3 community celebrated an important legal precedent — the High Court of Justice in London, the closest analog to the United States Supreme Court, has ruled that nonfungible tokens (NFT) represent “private property.” There is a caveat, though: In the court’s ruling, this private property status does not extend to the actual underlying content that NFT represents.
The theft of Boss Beauties
In February 2022, Lavinia D. Osbourne, founder of Women in Blockchain Talks, wrote on Twitter that two digital works had been stolen from the Boss Beauties — a 10,000-NFT collection of empowered women that was created by “Gen Z change-makers” and featured at the New York Stock Exchange. The tokens came with a number of utility points, such as access to exclusive events, free books, and licensing fees. Osbourne claimed that the pieces, stolen from her MetaMask wallet, later emerged on the OpenSea market. She traced down the NFTs with the help of the security and intelligence firm Mitmark.
See: NFT Boom Will Surely Lead to Questions Over Copyright, Control and Plagiarism
The matter was brought to court in March, and on April 29, The Art Newspaper reported on the ruling of the United Kingdom’s High Court, in which the judges have recognized NFTs as property protected by law. The court issued an injunction to freeze the assets on the accounts of Ozone Networks (the host of OpenSea) and compelled OpenSea to disclose information about the two account holders in possession of the stolen NFTs. Shortly afterward, OpenSea halted the sale of these NFTs — Boss Beauties number 680 and 691.
As the identities of the wallet holders remain uncertain, the injunction was granted against “persons unknown.” In its comment on the decision, Stevenson Law firm called a freezing injunction “quite a draconian (i.e. old fashioned and harsh) remedy,” describing it as a “nuclear weapon” of law.
The token versus the asset
Racheal Muldoon, the counsel on the case, highlighted “the utmost significance” of the ruling, which, she said, “removes any uncertainty that NFTs are property in and of themselves, distinct from the thing they represent, under the law of England and Wales.” But it is exactly the aforementioned detail that made other experts skeptical of the groundbreaking importance of the court’s decision.
See: 7 Essential Ingredients of an (Open) Metaverse Framework
While the NFTs are already enjoying the status of property in their treatment by the U.S. IRS, the proclaimed difference between the token and the underlying asset does little to fill the current legislative vacuum in the U.K. and United States. “So if you have a token, you have a token. But not necessarily any rights in anything else,” as Juliet Moringiello, professor at Widener University Commonwealth Law Schoo, noted to Artnet News.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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US Treasury of Foreign Assets Control Sanctions Virtual Currency Mixer (First Time Ever)
Mayer Brown | May 13, 2022
On May 6, 2022, the US Department of the Treasury's Office of Foreign Assets Control ("OFAC") designated crypto mixer Blender.io as a Specially Designated National ("SDN"), marking the first time a virtual currency mixer has been sanctioned. The move is the latest in a series of sanctions designations and enforcement actions in the virtual currency industry based on a determination of involvement in malicious cyber attacks and laundering the stolen virtual currency proceeds of illicit ransomware attacks.
See: NASAA: Crypto scams are the leading threat to investors in 2022
The May 6 designation follows several sanctions actions in the past few weeks alone in the virtual currency sector, including:
- The April 20, 2022, designation of Russian crypto mining firm BitRiver and 10 of its subsidiaries for facilitating sanctions evasion by Russia and Russian entities
- The April 14 and April 22, 2022, designations of several Ethereum addresses as being affiliated with North Korea's Lazarus Group and involved in the $625 million Ronin bridge hack
- The April 5, 2022, designations of the world's largest darknet market, Hydra Market; virtual currency exchange Garantex; and over 100 virtual currency addresses based on their roles in enabling the transfers of ransomware proceeds and other actions deemed a threat to US national security and foreign policy interests
Virtual currency mixers such as Blender.io receive a variety of transactions and mix them together before transmitting them to their ultimate destinations. Although proponents of mixers tout their utility in increasing privacy in virtual currency transactions, enforcement officials have highlighted concerns about the exploitation of mixers to assist in sanctions evasion and laundering the proceeds of malicious cyber attacks and other criminal activity by obfuscating the original source of the virtual currency.
See: Hacker steals $625 million from Ronin blockchain NFT game Axie Infinity
In taking the actions described above, OFAC officials have acknowledged that the majority of virtual currency transactions are legitimate, while signaling the increased use of sanctions against platforms and tools that engage in facilitation of sanctions evasion or transactions involving the proceeds of malicious cyber attacks and other criminal conduct.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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UK Proposes Regulations That Would Recognize Stablecoins As A Form Of Payment
The Defiant | Aleksandar Gilbert | May 16, 2022
Stablecoins haven’t looked so stable recently. The United Kingdom doesn’t seem to be too worried
Despite the recent collapse of Terra’s UST stablecoin, the U.K. government will move forward with proposed regulations that would facilitate stablecoins’ use “as a recognised form of payment,” according to a report from The Telegraph.
A spokesman for Her Majesty’s Treasury told the U.K.-based newspaper said:
Legislation to regulate stablecoins, where used as a means of payment, will be part of the Financial Services and Markets Bill which was announced in the Queen’s Speech.
Apr 5: UK government: Sets sights on being a global hub for cryptoasset technology with flexible future regulation
The UK government said in a report issued last month after more than 12 months of study:
[Fiat-backed stablecoins] have the capacity to potentially become a widespread means of payment. An amended e-money framework can deliver a consistent framework to regulate stablecoin issuance and the provision of wallets and custody services.
‘Global Hub For Crypto Assets’
Rishi Sunak, the Chancellor of the Exchequer said:
We want to see the businesses of tomorrow – and the jobs they create – here in the UK,” he continued, and by regulating effectively we can give them the confidence they need to think and invest long-term.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Luna Foundation Guard’s Reserves Down to 313 Bitcoins from 80K post-UST Crash | Vitalik and CZ Take to Twitter
CoinDesk | Sam Kessler, Shaurya Malwa | May 16, 2022
The announcement comes after criticism of the Luna Foundation Guard's "lack of transparency."
The Luna Foundation Guard (LFG), official stewards of Terra’s bitcoin (BTC) reserves, released a statement on Monday documenting how it disbursed millions of dollars' worth of crypto in its failed attempt to maintain the peg of stablecoin terraUSD (UST).
In the statement, LFG notes that it has almost entirely depleted its BTC reserves from around 80,000 bitcoins to 313. The remaining assets, which mostly comprise the crashed UST and LUNA tokens, will apparently be used to compensate investors.
In one of the most calamitous events in crypto memory, the $40 billion Terra ecosystem collapsed last week when the UST stablecoin, which is supposed to be worth $1, dropped to below 20 cents. The LUNA token, which is designed to serve as a sort of shock absorber for UST’s “algorithmic” dollar-pegging mechanism, crashed from $80 to below 2 cents.
See: Terra is transitioning from a dollar-pegged stablecoin to a bitcoin-backed stablecoin
In a tweet on Monday, LFG said it sold off most of the BTC in its reserves for UST as Terra’s ecosystem was beginning to collapse early last week.
- May 8: LFG said it transferred more than 50,000 bitcoins “to trade with a counterparty”, as the UST price was originally starting to slump. It said the funds were used for “directly executing on-chain swaps and transferring $BTC to a counterparty to enable them to enter trades with the Foundation in large size and on short notice.”
- On May 12, LFG said another 30,000 BTC from its reserves were sold off by Terraform Labs, the original company behind Terra, “in a last ditch effort to defend the peg.” That, however, failed to restore UST’s peg to the U.S. dollar as traders continued to sell the token for other stablecoins, leading to an exodus of capital away from UST and thus lower prices.
- LFG confirmed the remainder of its reserves, which once totaled over $3 billion, have sunk almost completely as a result of the unsuccessful effort to defend UST. Says these funds will be used “to compensate remaining users of UST, smallest holders first.”
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Decrypt | Sander Lutz | May 15, 2022
Vitalik and CZ took to Twitter this weekend to critique Terra—and the very premise of the UST token itself.
Vitalik Buterin, creator of Ethereum:
“We need to emphasize that the two,” Buterin said, referring to algorithmic stablecoins and asset-backed stablecoins, “are very different. [The entire premise of UST] from inception [was] intentionally misleading and inherently flawed.
See: Yellen Renews Call for Stablecoin Regulation After Terra’s algorithmic stablecoin tumbles
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Yellen Renews Call for Stablecoin Regulation After Terra’s algorithmic stablecoin tumbles
TechCrunch | Jacquelyn Melinek | May 10, 2022
Stablecoins have been a hot topic both on and off Capitol Hill. Earlier today, U.S. Treasury Secretary Janet Yellen pushed for regulation during an annual testimony in front of the Senate Banking Committee, at a time where Terra’s algorithmic stablecoin UST struggles to retain its peg.
US Treasury Secretary, Janet Yellen, said:
New products and technology may present opportunities to promote innovation and increase efficiencies. However, digital assets may present risks to the financial system and increased and coordinated regulatory attention is necessary.
A stablecoin known as TerraUSD experienced a run and declined in value, [which] illustrates that this is a rapidly growing product and there are rapidly growing risks. It would be highly appropriate for stablecoin regulation to occur by the end of 2022 because there are “many risks associated with cryptocurrencies.”
See: Terra Networks’ Stablecoin Loses Dollar Peg (again) Dives 45% (Update: to near zero) Adding More Pressure on Bitcoin
Stablecoins by definition are supposed to be stable and hold their value through a 1:1 ratio that is fixed to an external peg like the U.S. dollar or it can be tied to other assets like UST, which is backed by dollars, but also cryptocurrencies like bitcoin and Avalanche.
“The stablecoin sector continued to grow rapidly and remains exposed to liquidity risks,” the U.S. Federal Reserve said in a report on May 9.
The U.S. Treasury plans to release a report on cryptocurrencies and stablecoins “shortly” and plans to create “highly appropriate” legislation for the pegged asset by the end of 2022, Yellen said.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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IMF: Capital Flow Management Measures in the Digital Age: Challenges of Crypto Assets
IMF | LinkedIn John Ho | May 11, 2022
The IMF has today published a report on how crypto assets might be used to circumvent capital flow management measures, undermining the stability of domestic economies and the global system
Highlights:
Capital flows can bring substantial benefits for countries but also carry risks. Capital flow management measures (CFMs) can be part of the broader policy toolkit to help countries reap the benefits of capital flows while managing the associated risks.
Implementation of CFMs typically requires that financial intermediaries verify the nature of transactions & the identities of transacting parties, but it is facing the rising challenge of crypto assets.
See: IMF asks Financial Stability Board to develop a global framework for standards for regulation of crypto assets
Crypto assets have become a significant instrument for payments and speculative investments in some countries, driven by a host of macroeconomic, institutional, & demographic factors.
Crypto assets can be traded pseudonymously and held without identification of the residency of the asset holder. Many crypto service providers operate across borders, making supervision & enforcement by national authorities more difficult.
The challenges posed by the attributes of crypto assets are compounded by gaps in the legal & regulatory frameworks, as the legal status of crypto assets is often not clear and CFM laws and regulations may not cover cryptoassets.
This IMF paper aims to discuss how crypto assets could impact the effectiveness of CFMs from a structural and longer-term perspective and does not analyze how crypto assets may have been used to evade country-specific sanctions or CFMs.
See:
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Updated Report: Regulation of Cryptocurrency Around the World (Nov 2021)
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BIS Update: 2021 Survey Results on Central Bank Digital Currencies, ‘Gaining Momentum’
To preserve CFMs’ effectiveness in an environment of growing crypto-asset use, policymakers need a multifaceted strategy. Essential elements of such a strategy include:
* Clarifying the legal status of crypto assets and ensuring that CFM laws and regulations cover them.
* Developing for persons and entities engaged in crypto activities and services a comprehensive, consistent, and coordinated regulatory framework and applying it effectively to CFMs
* Establishing international collaborative arrangements for supervision of crypto assets.
* Addressing data gaps and leveraging technology (regtech and suptech) to create anomaly detection models and red-flag indicators that will allow for timely risk monitoring and CFM implementation.
See:
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Crypto Payments Report 2022: How digital currencies are revolutionizing commerce, corporates and culture
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Ottawa to review Crypto, Stablecoins and CBDCs; Budget promises more financial cops
IMF believes that a new public infrastructure of digital payment platforms could enable countries to implement these and other measures more efficiently. From the outset, these platforms can be calibrated to country-specific needs and policy objectives—and they must include appropriate risk mitigation measures.
A comprehensive legal and regulatory framework as well as its consistent implementation will likely be conducive to the emergence of law-abiding and regulatory-compliant innovations —while providing the basis and mechanisms to deal with a minority of bad-faith actors and criminals.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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California governor Newsom embraces blockchain and issues executive order on crypto
CNBC | Yasmin Khorram | May 4, 2022
Tech investors and businesses in California have been betting on crypto for well over a decade. Now, the governor of the U.S. state with the largest economy is joining the party. If you are unaware of how to start an llc in california, then consider checking out startmyllc website.
California Gov. Gavin Newsom issued an executive order Wednesday on cryptocurrencies, laying out a road map for regulatory and consumer protections and examining ways the state can take advantage of blockchain technologies and digital assets.
Dee Dee Myers, senior advisor to Newsom and director of the Governor’s Office of Business and Economic Development:
Of the 800 blockchain businesses in North America, about a quarter of them are in California, dramatically more than any other state. We’ve heard from so many that they want to be here, and we want to help them do that responsibly.
See: Can Silicon Valley still dominate or are global innovators redrawing the map?
The order is designed to “create a transparent and consistent business environment for companies operating in blockchain, including crypto assets and related financial technologies, that harmonizes federal and California laws, balances the benefits and risks to consumers, and incorporates California values, such as equity, inclusivity, and environmental protection.”
The opportunities are almost endless. We can do things like remove middlemen from transactions involving real estate or even automobiles. We can use it to protect people’s identity and provide benefits to people through government services. If we’re selling carbon offsets, we can make sure the same forest isn’t being sold twice and that there’s some record that’s transparent.
Under California’s plan, the order would align with the Biden administration’s proposal in March to examine the risks and benefits of cryptocurrencies.
Read: Crypto’s use case during times of conflict
Some 37 states have pending legislation on cryptocurrencies and other digital assets, according to the National Conference of State Legislatures. In February, New Hampshire issued an executive order to propose new bitcoin laws.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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