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EU removes this crypto hotspot from tax haven blacklist, clearing path for further adoption



The EU decided to remove Cayman Islands from its blacklist of tax heavens on Tuesday.

The Cayman Islands is a popular jurisdiction for crypto businesses. It was added to the EU’s blacklist in February of this year, so it has spent fewer than six months on the list. In 2019, the six exchanges domiciled there were responsible for over $1.5 billion in international Bitcoin (BTC) transactions.

Though these numbers pale in comparison to the global leader — the Seychelles, whose 12 exchanges were responsible for $36 billion, the Seychelles remain on the blacklist and are categorized as a nation that “does not cooperate with the EU or has not fully implemented its commitments.” One of the major exchanges based on the Seychelles is BitMex, which recently ended up in the hot water with the U.S. government.

According to Allison Nolan, founder of Athena International Management, a company that provides governance solutions to the international investment community, the Cayman Islands provide “robust regulation” with stringent know-your-customer and anti-money laundering controls in place:

Part of the robust framework for the Cayman Islands is the innovative approach to the regulation of virtual assets. So, the Cayman Islands government enacted the Virtual Assets (Service Providers) Law 2020, in May. It provides for the regulation of virtual asset businesses and for the registration and licensing of persons who are providing virtual assets services.

Nolan also emphasized that the local regulators welcome legitimate cryptocurrency business, which she believes helps local businesses:

“The focus here really is very good for the crypto space, because what it’s doing is it’s making sure that there’s an oversight in terms of those providers.”

She also noted that all local regulated businesses are subject to stringent cybersecurity requirements.

The blacklist was created by the European Parliament as a response to the information contained in the Panama and Paradise papers. It is unlikely that the latest FinCen leak has figured into the decision to remove the Cayman Islands from the list (it is mentioned in at least in 652 transactions). The list gets updated semiannually with the next one expected in early 2021.

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London Stock Exchange-listed firm inks FCA’s approval for crypto services




Mode Global Holdings, a London Stock Exchange-listed fintech group, has secured major regulatory approvals for cryptocurrency and fintech operations in the United Kingdom.

The company announced Thursday that Mode has secured its Electronic Money Institution license and AMLD5 registration from the U.K. Financial Conduct Authority.

The AMLD5 registration has been granted to Mode’s crypto arm Fibermode Limited, establishing it as an official crypto asset firm in the United Kingdom, pursuant to the amended regulations on money laundering, terrorist financing and transfer of funds.

The AMLD5 registration is a requirement for crypto-related businesses in the country that fall within the scope of money laundering regulations. According to the announcement, Mode is the fifth company to have received this registration to date since the FCA became the official AML supervisor of the crypto industry in the U.K. in January 2020.

Alongside the AMLD5, Mode’s subsidiary Greyfoxx Limited also acquired the EMI license, which enables Mode to offer a “range of innovative financial services” to both businesses and consumers in the United Kingdom, the announcement notes.

Following the acquisition of new regulatory approvals, Mode is planning to further expand its crypto services, including decommissioning its investment product known as the “Bitcoin Jar.” The product aims to allow Mode customers to use Bitcoin (BTC) to generate BTC interest rather than simply holding it in a wallet or on an exchange.

Mode CEO Ryan Moore noted that the new regulatory developments provide a major step in Mode’s mission to deliver a trusted and regulated environment. “It means we now have the ability to scale our operations and continue delivering innovative payments products for our customers under our own EMI licence. Both the EMI licence and the AMLD5 registration ensure business transparency, strong oversight and give our customers confidence in our offering,” he said.

Related: UK regulator warns against 111 unregistered crypto companies… and FOMO

The latest news comes shortly after a member of the British Parliament pointed out major difficulties in the process of registering crypto firms under the FCA’s AML regulations in late May. Economic secretary John Glen elaborated that FCA was not able to process and register all applications by its previous deadline due to a significant number of firms failing to adopt robust AML control frameworks as well as employ proper staff.