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The Prudential Regulatory Authority (PRA), Britain’s banking regulator, has proposed a framework for digital assets, officials revealed at a recent speech on Monday.

Vicky Saporta, Bank of England (BoE) executive director of the Prudential Policy Directorate, said in a speech the PRA would outline its advice in line with Basel III rules and legislation from the Financial Services and Markets (FSM).

Currently, Parliament is considering the bill after it faced a second reading in the House of Lords.

In a statement, Saporta said: “PRA rule making can deliver three things: harness the UK’s strengths as a global financial center, maintain trust in the UK as a place to do business and tailor regulations to UK circumstances.”

She added that her organisation would propose rules on “issuing and holding digital assets.”

The news comes as the BoE and PRA work jointly with other agencies to build a “regulatory grid” and succeed a “labyrinth” of rules and restrictions, with many originating in the European Union.

She said at the time,

“We’ve improved the way we communicate. The Bank and PRA now work with six other regulators to produce a regulatory grid setting out our plans in one place. And we are developing a new UK rulebook that will be easier to navigate than the labyrinth of regulations – many of them EU rules – we are replacing.

Explaining further, Saporta said,

“These are changes we could not have made whilst we were in the EU. They are a down-payment on our commitment to use our new powers to tailor rules and to make the UK a better place to operate a financial firm, without compromising on safety.”

Terms and Conditions

According to the document, the PRA will consult on the implementation of Basel 3.1 standards after finalisation. These will urge banks to limit exposure to cryptocurrencies to roughly 1 percent of total capital and a 1,250 percent risk premium.

She added: “I also believe that it is normally easier for internationally active firms to follow one global rulebook instead of having to meet the expense of adapting to a patchwork of local standards.”

The news comes as the United Kingdom aims to position itself as major cryptocurrency and tech hub for global markets.

The measures aim to overhaul current cryptocurrency regulations following the nation’s departure from the European Union in 2020. Lawmakers outlined new measures in a white paper in February on best practices for building its cryptocurrency regulatory framework.

Coinbase announced on Monday it would suspend trading of Binance USD (BUSD) after allegedly failing to meet listing standards.

The US crypto exchange platform’s measures will enter force on 13 March around 12:00 ET, it said.

A spokesperson tweeted at the time: “Trading will be suspended on http://Coinbase.com (Simple and Advanced Trade), Coinbase Pro, Coinbase Exchange, and Coinbase Prime. Your BUSD funds will remain accessible to you, and you will continue to have the ability to withdraw your funds at any time.”

News of the suspension dropped Binance’s native token BNB 1 percent, trading at $302.57 at the time of reporting.

The news comes after regulators from the Securities and Exchange Commission (SEC) targeted Paxos-minted BUSD tokens earlier in February. Binance also halted US banking transfers to its service amid the ongoing row with US regulators.

Authorities have reavealed an official from a town in Massachusetts has been charged with operating an illegal crypto mining scheme in a crawl space at a local school.

The assistant facilities director, Nadeam Nahas, 39, plead not guilty on Friday at his court hearing. Authorities have charged the suspect with fraudulent electricity use and vandalisation.

The incident took place at Cohasset High School near Boston, the state’s capital city. The illegal mining operation consumed massive levels of electricity, triggering a tip-off to police in December 2021.

Police chief William Quigley told the BBC that Cohasset High School’s director of facilities found the operation in the crawl space.

He added: “Detectives interviewed the director, who said that during a routine inspection of the school he noticed electrical wires, temporary ductwork, and numerous computers that seemed out of place.”

According to ongoing investigations, authorities found computers running the mining operation. A three-month launched along with the US Coast Guard and Department of Homeland Securities led to Nahas’ arrest. Electricity costs totalled $17,500 USD, court documents seen by the Boston Globe show.

The International Monetary Fund (IMF) has teamed up with the Bank for International Settlements (BIS) and the Financial Stability Board (FSB) to create a global cryptocurrency regulatory framework.

The three massive financial institutions announced on Friday they aimed to publish papers and recommendations to establish the framework for G20 nations.

Their announcement outlines a recent meeting with officials from central banks and G20 nations. In the document, the FSB plans to release recommendations in July on regulating global stablecoins as well as crypto assets, among others.

The paper read: “We look forward to the IMF-FSB Synthesis Paper which will support a coordinated and comprehensive policy approach to crypto-assets, by considering macroeconomic and regulatory perspectives, including the full range of risks posed by crypto assets.”

Additionally, the BIS will submit its findings on risks associated with digital assets and how to avoid them. Officials from G20 nations will also appoint a task force to evaluate cryptocurrencies further.

The news comes amid a wave of support for central bank digital currencies and crypto alternatives from global powers, including the United Kingdom, European Union, Japan, South Korea, Fiji, Tonga, and El Salvador, among others.

On Friday, global leaders held an event in Bengaluru, India to discuss global regulations for digital assets. United States treasury secretary Janet Yellen said in a statement to Reuters that it was “critical” to deploy strong regulatory frameworks.

Despite this, Yellen did not advocate bans on cryptocurrencies, adding: “We haven’t suggested outright banning of crypto activities, but it is critical to put in place a strong regulatory framework. We’re working with other governments.”

The New York State Department of Financial Services (NYDFS) has upgraded its illegal activity detection capabilities.

Its enhancements come amid major efforts to monitor and regulate activities in the cryptocurrency industry.

According to a statement from the organisation, it said that it had upgraded its “new insider trading and market manipulation risk monitoring tools.”

NYDFS superintendent Adrienne Harris explained further,

“This is a significant step in our supervision of the virtual currency industry as it continues to quickly transform and mature. These tools will help us combat financial crime and fraud, hold regulated entities accountable, and further strengthen our national leadership in virtual currency supervision.”  

She added the tools would help the regulator “combat financial crime and fraud, hold regulated entities accountable, and further strengthen our national leadership invirtual currency supervision.”

The news comes after the agency stated it had “expedited procurement of additional blockchain analytics technology” to enforce Russian sanctions.

The NYDFS also enforced measures on Paxos Trust, forcing the cryptocurrency firm to stop minting Binance USD stablecoins following investigations.

The developments come after the NYDFS slapped a $100 million USD settlement on Coinbase after it accused the crypto firm of backlogging 100,000 alerts detailing suspicious transactions.

Currently, the organisation is investigating crypto platform Gemini’s Earn lending programme, which it suspected of selling securities.

Coinbase Global posted losses in its fourth quarter (Q4) reports due to mounting pressure from an industry downturn triggered by cryptocurrency platform collapses, it reported on Tuesday.

Coinbase shares nosedived around 86 percent in value last year, and slumped a further 2 percent following the report.

The news comes as numerous cryptocurrency platforms, including FTX, Three Arrows Capital, and Voyager filed for bankruptcy in 2022, sparking a wave of negative investor sentiment on digital assets.

Further issues surrounding cryptocurrencies led to the fall of crypto lending exchange Genesis in January. This continued a mixed trend of market sentiment and a further tightening of cryptocurrency restrictions.

Sam Bankman Fried, the disgraced former chief executive and founder of FTX, currently faces eight counts of financial malfeasance. Charges include wire fraud, conspiracy to commit wire fraud, and many others.

In a letter to shareholders, Coinbase wrote: “As macroeconomic indicators like inflation remained high and interest rates rose throughout the year, crypto market cap declined along with broader equity markets.”

It explained further:

“These weakening market conditions became exacerbated by two idiosyncratic events. The first was the depegging of $LUNA in Q2’22 which contributed to a ~60% crypto market cap decline in that quarter and exposed poor risk management practices in crypto, which ultimately helped drive the credit related bankruptcies of Three Arrows Capital, Voyager, and Celsius.”

It also cited the collapse of FTX in Q4 2022, resulting from fraud, which “helped drive additional credit related bankruptcies.”

The Hong Kong Securities and Futures Commission (SFC) published on Monday its virtual asset trading rules. The government body is seeking comment from public experts on the findings.

According to the document, regulators will offer licencing for cryptocurrency firms and will determine if those receiving them can serve retail investors. It will also outline investor protection measures.

The notice said: “Operators of virtual asset trading platforms which plan to apply for a licence, including pre-existing platforms […], should begin to review and revise their systems and controls to prepare for the new regime. Those which do not plan to apply for a licence should start preparing for an orderly closure of their business in Hong Kong.”

Additional measures will require operators to perform due diligence on cryptocurrencies by monitoring and assessing liquidity over time. It will also determine who owns holdings on the platforms and how the wealth is concentrated.

Crypto operators can only trade tokens for the SFC’s requirements, meeting “eligible large-cap virtual asset posted on designated indices. It also requires smart contracts to ensure security checks.

Comments and Plans for Hong Kong Crypto

Julia Leung, SFC chief executive, said in a statement,

“As has been our philosophy since 2018, our proposed requirements for virtual asset trading platforms include robust measures to protect investors, following the ‘same business, same risks, same rules’ principle. In light of the recent turmoil and the collapse of some leading crypto trading platforms around the world, there is clear consensus among regulators globally for regulation in the virtual asset space to ensure investors are adequately protected and key risks are effectively managed.”

The report concluded that some platforms aimed to offer derivatives, leading to probes on sufficient business models and market demand. This comes after the SFC opened regulated crypto-based derivatives to some investors in January last year.

The organisation also aims to hold further reviews to outline related policies. Consultations will close on 31 March and licencing protocols will enter on 1 June, the report concluded..

The report comes after Hong Kong announced it would introduce further regulations and the development of a potential stablecoin for future use. Hong Kong will also receive Samsung Asset Managment’s Bitcoin-based futures exchange-traded funds (ETF) in the Chinese finance hub.