SEC Commissioner Hester Peirce disagrees with the agency’s decision to deny a petition to amend its “gag rule” that prohibits defendants from publicly criticizing a settlement with the SEC. Peirce argues that this policy is unnecessary, undermines regulatory integrity, and raises First Amendment concerns. She believes that if the SEC is confident in its investigative work, it shouldn’t demand silence from settling defendants.
Members of the U.S. Congress are seeking to repeal the SEC’s Staff Accounting Bulletin 121 (SAB 121), which imposes limitations on banks that hold their clients’ cryptocurrency assets. They argue that this bulletin discourages regulated banks from acting as crypto custodians and treats crypto holdings differently than other assets. Representatives Mike Flood, Wiley Nickel, and Senator Cynthia Lummis have introduced a resolution to formally disapprove SAB 121.
Leaders of the U.S. House Financial Services Committee and Subcommittee on Digital Assets, Financial Technology, and Inclusion are calling for a longer comment period on a proposed rule from the Consumer Financial Protection Bureau (CFPB). They believe that the impact of the rule on the digital asset space is unclear and question how it would apply to specific entities within the ecosystem. The CFPB rule suggests extending its supervisory authority over depository institutions and including digital assets in its definition of “funds,” allowing it to target wallets.
China is planning to amend its Anti-Money Laundering (AML) regulations to include cryptocurrency-related transactions. Policymakers are calling for greater scrutiny of the country’s crypto industry. The revised draft of China’s AML regulations, which includes provisions for preventing digital asset money laundering, is expected to be signed into law by 2025. Wang Xin, a professor at Peking University Law School, stressed the urgent need for resolving issues around crypto money laundering and the lack of operational guidance on the seizure, freezing, deduction, and confiscation of assets.
Hong Kong’s Office of the Privacy Commissioner for Personal Data (PCPD) has launched an investigation into Worldcoin’s local operations, citing concerns about personal data privacy. The PCPD executed warrants and entered six premises controlled by Worldcoin as part of the investigation. Residents are warned to consider the potential use of their biometric data as Worldcoin employs iris-scanning orbs for identity verification. The PCPD emphasizes that any personal data collected by Worldcoin must be for a lawful purpose related to the project’s function or activity.
The European Union has made progress in its regulatory framework for artificial intelligence (AI) with member states voting to approve the final text of the EU’s AI Act. The Act is a risk-based strategy for regulating AI applications and covers topics such as the use of AI in biometric surveillance, regulation of AI systems, and transparency rules before market entry. Commissioner Thierry Breton views this endorsement as a historical achievement and a world first.
In other news, a fraud victim in the UK claims that the police may be ill-equipped to handle crypto crimes. The US government is surveying the impact of crypto mining on electricity use. South Korea is proposing screening of crypto executives by the Financial Services Commission before employment. The Irish Council for Civil Liberties is calling for an investigation into the Microsoft-OpenAI partnership, considering it a potential merger.