The G20 Summit in Buenos Aires recently concluded and with it came the release of a declaration titled “G20 Leaders’ Declaration: Building Consensus For Fair and Sustainable Development,” which addressed several topics including emerging technologies, such as cryptocurrencies.
While the summit declaration does address cryptocurrencies, it is mainly through the prism of regulating them based on their negative characteristics, stating:
“We look forward to continued progress on achieving resilient non-bank financial intermediation. We will step up efforts to ensure that the potential benefits of technology in the financial sector can be realized while risks are mitigated. We will regulate crypto-assets for anti-money laundering and countering the financing of terrorism in line with FATF standards and we will consider other responses as needed.”
Trending Towards Regulation
The regulatory environment for cryptocurrencies is still highly fragmented across the world. Blockchain safe havens — such as Malta — have emerged while in the U.S., the slow and methodical pace of the SEC has left many industry participants frustrated. The G20 acknowledgment of “crypto-assets” is telling, however. It demonstrates that the technology has broken into the peripheral view of the most powerful political summit in the world, a tangible measure of how far the technology has come.
However, the position stated by the declaration is largely characteristic of a more hesitant view than one of promoting and fostering the growth of the technology. That may eventually change, but the first wave of Anti-Money Laundering (AML) regulations may lean heavily on the presumption that the primary application of crypto-assets is for illicit purposes.
It is unclear whether an AML regulatory approach will resemble a standardized and cohesive effort by G20 members, despite a previous statement eyeing October for an AML standard on cryptocurrencies.
In the U.S., the SEC has made a flurry of moves recently that has begun to reveal their overall position on cryptocurrency regulation more clearly. Last week, the SEC charged the decentralized exchange (DEX) EtherDelta founder with operating an exchange for unregistered securities. Such a move sets a precedent for the agency to go after other DEXs based on the conception of responsibility on the exchange creator.
Additionally, the SEC recently settled with 2 ICO projects in a retroactive evaluation of their token sales as unregistered securities. The retroactive precedent for settlement also puts many other completed ICOs at risk of pursuance by the agency. However, the ICO atmosphere is primarily unique to the U.S. Despite this, the SEC’s position on ICOs and cryptocurrencies, in general, may establish a leading narrative for other governments to follow, especially G20 countries.