Compliance Digest—December 2024

Learn about all the latest compliance updates from the past month.

Arina Rumyanceva

Legal Counsel at Sumsub

Every month, Sumsub’s Compliance Team prepares a digest with all the latest updates in the world of AML and beyond. We cover multiple industries from gambling to crypto.

If you want to get the latest news every month in one place, subscribe to our newsletter.

AML

EU 🇪🇺

The European Banking Authority (EBA) amends its supervisory reporting framework for investment firms

What happened? The European Banking Authority (EBA) has amended its supervisory reporting framework specifically for investment firms. This amendment aims to enhance the quality and consistency of reporting requirements for these firms.

Who’s affected? The changes will primarily affect investment firms operating within the European Union, as they will need to adapt their reporting processes to comply with the new framework.

Deadline: January 1, 2025

The European Securities and Markets Authority (ESMA) consults on the Internal Control Framework

What happened? The European Securities and Markets Authority (ESMA) has consulted on an internal control framework for certain supervised entities. This consultation seeks to gather feedback on the proposed framework, which aims to enhance the governance and operational effectiveness of these entities.

Who’s affected? Investment firms, financial market infrastructures, and other financial service providers

Deadline: ESMA will review the stakeholder feedback received to this consultation by March 19, 2025 and expects to publish a final report by Q4 2025.

Crypto

EU 🇪🇺

The European Supervisory Authorities (ESAs) issue guidelines aimed at facilitating consistency in the regulatory classification of crypto assets

What happened? The European Supervisory Authorities (ESAs) have issued guidelines aimed at facilitating consistency in the regulatory classification of crypto assets within the financial industry. These guidelines are intended to provide clarity on how different types of crypto assets should be classified and regulated.

Who’s affected? Various stakeholders in the financial sector, including financial institutions, crypto asset service providers, and regulators who need to ensure compliance with the new classification standards.

Deadline: –

US 🇺🇸

The Internal Revenue Service (IRS) issues rules on digital asset reporting

What happened? The US Department of the Treasury and the Internal Revenue Service (IRS) have released final regulations that establish reporting requirements for decentralized finance (DeFi) brokers involved in digital asset transactions. These rules aim to ensure that DeFi brokers report the gross proceeds of digital asset sales using Form 1099, aligning their reporting obligations with those of traditional securities brokers.

Who’s affected? The regulations primarily affect DeFi brokers who facilitate transactions involving digital assets, as they will now be required to report sales to the IRS. Additionally, digital asset holders will benefit from receiving Form 1099, which reminds them of their tax obligations related to these transactions.

Deadline: In force

Hong Kong 🇭🇰

The Hong Kong government publishes the Stablecoins Bill

What happened? The Hong Kong government has published the Stablecoins Bill, moving towards establishing a regulatory framework for stablecoin issuers. This bill aims to balance financial stability and consumer safety while enhancing the city’s virtual asset agenda.

Who’s affected? The new regulations will impact stablecoin issuers operating in Hong Kong, requiring them to obtain licenses from the Hong Kong Monetary Authority (HKMA). This framework will also affect businesses and consumers engaging with stablecoins, as it sets standards for issuance and marketing.

Deadline: The Bill is scheduled for its first reading in the Legislative Council in the last days of December.
Read more: The Government of the Hong Kong Special Administrative Region Gazette: Stablecoins Bill

Türkiye 🇹🇷

Türkiye introduces stricter AML regulations for cryptocurrency

What happened? Türkiye has introduced new regulations concerning cryptocurrency, focusing on anti-money laundering (AML) measures. These regulations require cryptocurrency exchanges and service providers to implement stricter compliance protocols to prevent money laundering and other illicit activities.

Who’s affected? The new regulations will affect cryptocurrency exchanges, service providers, and users in Türkiye, as they will need to adhere to the updated AML requirements. This includes enhanced reporting obligations and customer verification processes.

Deadline: Not detailed yet

Read more: YÜRÜTME VE İDARE BÖLÜMÜ

Nigeria 🇳🇬

Nigerian SEC proposes amendments to the Digital Assets Rules

What happened? The Securities and Exchange Commission (SEC) of Nigeria has proposed amendments to its rules regarding digital assets issuance, offering platforms, exchanges, and custody. The revised Digital Assets (DA) Rules introduce new requirements that cover various virtual asset activities and business models.

Who’s affected? These amendments will impact stakeholders in the digital assets space, including businesses involved in the issuance and trading of digital assets, as well as custodians and platforms operating within Nigeria’s regulatory framework.

Deadline: Comments and inputs on the proposed amendments must be submitted to the SEC’s Rules Committee no later than two weeks from the publication date, which was on December 16, 2024.

Gambling

Brazil 🇧🇷

Brazil implements advertising restrictions on betting to safeguard minors

What happened? Brazil’s Secretariat of Prizes and Bets (SPA) has enacted Normative Ordinance No 1,902, which implements immediate advertising restrictions for betting operators. This ordinance enforces measures previously outlined in Normative Ordinance No 1,231, particularly focusing on preventing advertisements targeting minors and ensuring compliance with age restrictions.

Who’s affected? The new regulations will impact betting operators in Brazil, particularly those planning to advertise their services. Additionally, the restrictions will affect minors and the general public by limiting exposure to gambling promotions.

Deadline: The immediate measures from Normative Ordinance No 1,902 are now in effect, while additional advertising restrictions will take effect on January 1, 2025, coinciding with the launch of Brazil’s legal betting market.

Paraguay 🇵🇾

Paraguay officially approves legislation that ends the government’s monopoly on gambling

What happened? Paraguay has officially approved legislation that ends the government’s monopoly on gambling. This new law allows private operators to enter the market, creating a regulated environment for various gambling activities, including sports betting and online gaming.

Who’s affected? The changes will affect multiple stakeholders, including private gambling operators looking to enter the Paraguayan market, existing state-run gambling entities, and consumers who will have more options for gambling services.

Deadline: The law is set to take effect immediately upon publication, allowing for the swift implementation of the new regulatory framework.

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