AI Act and stablecoin regulations in the EU, 30% crypto mining tax in the US: Law Decoded
(Coin Telegraph)-20/03/2024
The European Parliament has granted final approval to the European Union’s artificial intelligence (AI) law — the EU AI Act — which marks one of the world’s first set of comprehensive AI regulations.
The bill will go to a second vote in April and be published in the Official Journal of the European Union, likely in May. The EU AI Act places machine learning models into four categories based on the risk they pose to society, with high-risk models subject to the most restrictive rules.
“High-risk” applications include critical infrastructures, educational or vocational training, safety components of products, essential private and public services, law enforcement that may interfere with people’s fundamental rights, migration and border control management and administration of justice and democratic processes.
EU financial regulators also want to add more stablecoin regulation guidelines under the Markets in Crypto-Assets Regulation (MiCA) framework by publishing draft regulatory standards for issuers of stablecoins when dealing with complaints.
On March 13, the European Banking Authority published the Regulatory Technical Standards (RTS) for efficiently and equitably resolving complaints by asset reference token (ART) holders. These guidelines detail the procedures and standards for stablecoin issuers to manage complaints effectively.
Meanwhile, United States President Joe Biden has revived the idea of a 30% tax on electricity used by crypto miners in his administration’s budget proposal for 2025. If implemented, crypto mining companies must report the amount and type of electricity they use.
In addition, firms must report the value of the electricity used if they purchase it externally. Meanwhile, miners who lease computational capacity would be mandated to report the value of the electricity of the company that leased them the capacity.
The value would then serve as the tax base. This proposal would be effective for taxable years after Dec. 31, 2024. The government will introduce the tax in three phases: 10% in the first year, 20% in the second year and 30% in the third year.
Nigeria pushes Binance into revealing the top 100 local users’ data
The government of Nigeria is reportedly pressing Binance to provide information on its top 100 users in the country amid an ongoing crackdown on the exchange. In addition to data on Binance’s top 100 users, Nigerian authorities have requested that Binance hand over its transaction history for the past six months.
In response to Binance’s effort to find a dialogue with Nigerian authorities, the local prosecutors detained two senior Binance executives, Tigran Gambaryan and Nadeem Anjarwalla.
The execs remain detained even after Binance delisted all naira transactions and stopped peer-to-peer naira transactions in late February.
Opinions in the local crypto community vary; some support the government’s actions, while others disagree. In an interview with Cointelegraph, local crypto analyst Rume Ophi said that the government was well within its rights, as requests like this are always made when trying to investigate national security matters.
However, Ophi’s opinion doesn’t sit well with that of other local crypto enthusiasts who took to X to express their disagreement. Chukwumaeze Dike, a crypto enthusiast and cybersecurity specialist, said he finds the request for the top 100 users surprising and doubts Binance will comply.
Dubai International Financial Centre adopts comprehensive digital asset law
The Dubai International Financial Centre (DIFC), a special economic zone with over 5,000 residents, has announced the passage of a new digital assets law and security law and amendments to existing law. The center has its own legal system based on English law.
The Digital Assets Law contains seven pages of text plus appendices. A law amending at least six previous laws to update them for digital assets has been passed but is not available online at the time of writing. The DIFC noted in its statement that the changes to the Law of Obligations made electronic records functionally equivalent to paper records.
Democrats don’t want SEC’s Gensler to approve any more crypto ETFs
Democratic Party Senators Jack Reed and Laphonza Butler claimed that allowing any further approvals of crypto exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) would see investors exposed to “thinly traded” markets rife with fraud and manipulation.
Eight proposed spot Ether ETF applications are awaiting the SEC’s approval, and there are hopes that other altcoins could follow.
Reed and Butler also urged the SEC not to allow the recent approval of spot Bitcoin ETFs to become a precedent for further approvals. They claimed that while the market for Bitcoin had displayed “serious weakness,” it was more established and well-scrutinized than the market for any other smaller cryptocurrencies.
