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Public Warned of Crypto Asset Risks as Governments Ramp Up Communications
A majority of governments have identified the risks associated with buying, holding, trading, and lending crypto assets as a key area of focus in their communications with the public. According to a recent survey, 83% of respondents cited this risk as the main subject matter of communication.
Governments Provide Information on Specific Crypto Asset Service Providers
The survey also found that authorities are providing information on specific crypto asset service providers operating in their jurisdictions, even if they are not registered. This includes:
- Referrals to trusted sources of information
- Flags on specific crypto assets known to be held or traded in their jurisdictions
Government Agencies Take Lead on Crypto Asset Communications
The survey revealed that various government agencies are responsible for communicating with the public on matters related to crypto assets, including:
- Securities commissions (44%)
- Anti-money laundering authorities or financial intelligence units (44%)
- Law enforcement agencies (33%)
Other regulatory bodies, such as central banks and consumer protection agencies, also played a significant role in communicating with the public about crypto assets.
Licensing and Regulation
In many jurisdictions, the issuance of crypto assets requires authorization or registration, while service providers for these assets must obtain a license to operate. According to the survey:
- Half of the respondents reported that crypto assets and service providers are required to be either registered or licensed in their jurisdiction.
- 44% of respondents require a legal entity backing for the purposes of registering or licensing crypto assets traded in the market, while 17% indicated that this is not required.
International Cooperation
In most jurisdictions, crypto asset firms registered or licensed overseas are not allowed to operate without being locally registered or licensed. However, some jurisdictions permit locally registered or licensed crypto firms to engage in business with foreign crypto asset firms that are not registered or licensed in their home jurisdiction.
The survey highlights the importance of international cooperation and coordination in regulating the crypto asset sector.
Information Requirements
During the registration and licensing process, crypto firms are required to provide a range of information, including:
- Details such as the address of the applicant, programme of operations, governance arrangements, policies and procedures, internal control mechanisms and risk management procedures, and more.
The full report on the survey can be accessed here: [insert link].