April 24, 2023

  • 3 MIN READ

Timeline: The rise and fall of crypto in 2022. From major scandals to landmark legislation, what does 2023 hold for crypto?

Atulli Papuashvili

Legal, Risk & Compliance

LUNA, Tornado Cash and the Crypto Winter

  • January 2022, NFT prices reached an all time high but soon started to plummet.
  • Apr 5, 2022 LUNA token’s price reached an all time high at $119.2 per token.
  • May 13, 2022 Binance and OKX stopped trading Terra tokens as UST (the algorithmic “stablecoin”) lost its dollar peg. Consequently, LUNA slumped by 99%.
  • September 2022, NFT sales volume dropped significantly.
  • November 2022, US treasury adds Tornado Cash to its sanctions list, alleging North Korea uses it to support its weapons of mass destruction program.

Markets in Crypto-Assets Regulation (MiCA)

  • June 30th, 2022, EU reaches a provisional agreement on Markets in Crypto-Assets Regulation (MiCA):
  • EU harmonization aims to introduce proper consumer protection mechanisms, enhance the competitiveness of the EU's financial sector, and prevent market abuse.
  • MiCA determines how crypto assets and crypto asset service providers activity will be regulated in the EU member states.
  • MiCA is expected to come into effect around Q3 2024. Until then, we expect a lot of discussion and activity around the Guidelines to be published. There is a lot of attention paid to MiCA from outside the EU - as it might end up influencing the (global) industry standards.                                                         

Transfer of Funds Regulation

  • 29th of June 2022, EU reaches a provisional agreement on the proposal on Transfer of Funds Regulation (TFR).
  • The objective is to ensure that basic information on the originator and the beneficiary of wire transfers is included and information can be used by the law enforcement agencies.
  • TFR does not apply to private wallets and person to person transfers conducted without a provider, or among providers acting on their behalf.
  • TFR is expected to come into effect in Q3 2024. Similarly to MiCA, 2023 should fill in the gaps before the “go-live”.

FTX, Binance, Final Provisions of MiCA, TFR

  • July 6th, 2022, Sam Bankman-Fried (FTX’s founder) states that his company has “few billions” to aid struggling firms that could otherwise destabilise the digital asset industry (Reuters).
  • October 2022, EU finalizez the text for Landmark Crypto regulations under MiCA.
  • NFTs are out of scope. “Non-fungible tokens (NFTs), i. e. digital assets representing real objects like art, music and videos, will be excluded from the scope of the upcoming regulation, except if they fall under existing crypto-asset categories.”. But what is an NFT?
  • October 2022, EU votes on the final provisional agreement on TFR.
  • The EUR 1,000 threshold applies for CASPs to non-hosted wallet transactions, verification requirements apply for transactions over the threshold.

Fall of  FTX, Binance under investigation

  • 11th of November: After the scandal on misappropriation of clients funds was released, FTX world’s one of the largest exchanges filed for bankruptcy.
  • December 12th,  “Fall of the FTX King of Crypto’, Bahamas financial crime investigation unit arrests Sam Bankman-Fried at his apartment.
  • The FTX founder, Sam Bankman-Fried was charged with multiple counts of fraud and conspiracy by the US justice department. He is accused of defrauding customers, lenders and investors.
  • December 12th, some department of justice prosecutors believe that gathered evidence on Binance, justifies the charges against executives including its CEO, Zhao (Reuters).

Fung Payments  wishes you a risk-free, financially healthy 202Web3!

💬 What topic or question would you like to see us address in this series? Do you have a burning question on MiCA, TFR or any other regulatory topic? Let us know in the comments and our team of payment experts will provide answers.

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