United States Treasury Secretary Janet Yellen told lawmakers that Congress should address gaps in digital asset regulation, some of which could present risks to investors or the financial system.
In a Feb. 6 hearing on the Financial Stability Oversight Council annual report, House Financial Services Committee Chair, Representative Patrick McHenry, questioned Yellen about her views on pending legislation to address stablecoins and regulatory clarity of the crypto space. The Treasury secretary called the regulation “critical” for certain areas, including protecting wallet holders and overseeing stablecoin issuers.
A day later, Representative Maxine Waters revealed that Democrats and Republicans are now “getting very close” to a joint stablecoin vision. Waters has been negotiating the matter with McHenry for over 20 months. Much debate has revolved around how the Federal Reserve would oversee the stablecoin arena and whether it would write rules regarding the issuance of stablecoins.
Circle CEO Jeremy Allaire recently voiced optimism that the U.S. will pass much-needed stablecoin laws in 2024. Circle, the firm behind stablecoin USD Coin (USDC), has pushed firmly for stablecoin legislation over the last few years. The firm began lobbying with strategic consulting firm Invariant in late 2021 and is estimated to have spent $760,000 on lobbying efforts since.
South Korea threatens large-scale crypto scammers with life imprisonment
The South Korean government has issued a new update to the Virtual Asset Users Protection Act with cryptocurrency-focused regulations that protect investors from market crimes. New crypto law prohibits using “undisclosed important information” about crypto, market manipulation and illegal trading. The legislation imposes major criminal punishment measures and fines for violations, including fixed-term imprisonment of more than one year or an acceptable fine of three to five times the amount of illegal profits. According to the FSC, criminals who make over 5 billion won ($3.8 million) from illegal crypto trading schemes face life sentences.
European Commission suggests guidelines for AI regarding elections
The European Commission will require tech platforms like TikTok, X and Facebook to detect artificial intelligence (AI)-generated content to safeguard upcoming European elections from misinformation. The commission has initiated a public consultation on proposed election security guidelines for very large online platforms and very large online search engines. The recommendations aim to reduce democratic threats posed by generative AI and deepfakes. The draft guidelines offer possible measures to address election-related risks, including specific actions related to generative AI content, planning for risk mitigation before or after an electoral event, and providing clear guidance for European Parliament elections.
Public backlash over new AI bill in Kenya
Kenyan information technology professionals have urged the country’s parliament to reject the 2023 Robotics and Artificial Intelligence Society Bill, citing numerous shortcomings. According to local media, during a session held by the National Assembly’s Communication, Information, and Innovation Committee to observe International Safer Internet Day in 2024, it was reported that the committee was informed by stakeholders in the AI and robotics fields were not involved in any phase of the bill drafting process.
The proposed legislation aims to impose penalties, including fines of up to one million Kenyan shillings ($6,269), a potential two-year prison sentence, or both, on unlicensed entities involved in the operation of robotic and AI businesses if they do not register with the Robotics Society of Kenya.