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Happy Thursday <<First Name>>!

To start with, we want to express our support for the people of Ukraine.

This terrible war not only affects real life, but also the blockchain and crypto space. There are some rumors about cryptocurrency being used by Russia to evade sanctions. Read all about this and more in this week's newsletter.

Legal

🏦 According to an official statement bitcoin is now legal in Ukraine as its parliament passed the new Law of Ukraine on Virtual Assets. However, the country has not made bitcoin legal tender.

🇨🇳 China's Supreme Court adds fuel to the fire after the crypto market cap had already dropped to 1.5 trillion following the Russian military attacks on Ukraine. The Court declares crypto-fundraising illegal and determines jail time and fines for suspected persons.

👮🏻 The Canadian Prime Minister Trudeau introduced an emergency law to freeze dollars and bitcoin assets during the trucker protests. The Royal Canadian Mounted Police (Canada's federal police force) sent letters to several cryptocurrency exchanges demanding that they "cease facilitating any transactions" with more than 30 specific cryptocurrency wallet addresses linked to the ongoing truck protests in the country.

Ukraine vs. Russia

🇺🇦 Vice Prime Minister of Ukraine, Mykhailo Fedorov, asked major crypto exchanges to freeze Russian accounts. Both Binance and Kraken have refused to do so unless legally required. Binance is blocking the accounts of any Russian clients targeted by sanctions, but will not freeze the accounts of others. Binance did announce a 10$ million donation to Ukraine. Separately, Kraken's CEO Jesse Powell replied that Kraken cannot freeze the accounts of their Russian clients without legal requirement to do so.

🇷🇺 Bitcoin and other currencies are said to help Russia evade sanctions, but is this correct? Jake Chervinsky, executive Vice President and Head of Policy at Blockchain Association, states that Russia can't and won't use cryptocurrency to evade sanctions. Do you want to know more about this topic? Take a look at the podcast section and learn all about it.

NFTs

🦇 The District Court of the Northern Netherlands has granted permission to seize assets of an NFT. This is a first in the Netherlands. It concerns an image of a bat from the "Cryptobatz" collection, with unique and rare features. This NFT is registered on the Ethereum blockchain.

🤑 The FIOD Financial Advanced Cyber Team released its report on NFTs: cryptographically signed title deeds that are stored on a blockchain. What are NFTs, how do they work, and how can they be used for money laundering?

Ukraine
What role do cryptocurrencies play in Ukraine and Russia? Over the past week it became clear that money has been donated to the Ukrainian government in countless ways. Yet Christine Lagarde, top woman at the ECB, sounded the alarm. Bitcoin and other currencies are said to help Russia evade sanctions. What now? And MEPs called for a ban on proof of work. What is correct about this, and is this feasible?

Who will our money belong to?
Our money has been almost entirely in the hands of commercial banks for the past twenty years. Cash is used less and less, and we almost only pay with cashless money. That is a problem, Mahir Alkaya expresses in his new book 'Who will our money belong to?'. Mahir is a member of parliament for the SP and has advocated a public deposit bank in the past. He is also the rapporteur for the upcoming CBDC to the House of Representatives and perhaps the only member of parliament with knowledge of cryptocurrencies.

"[The Ukraine-Russia conflict] underscores the need for Congressional action on digital finance, including cryptocurrencies."

- Fed Chair Jerome Powell

⚖️ MiCA

  • On February 23, the German cryptocurrency outlet BTC Echo published a report stating the European Parliament is on track to ban Bitcoin and other proof of work (PoW) cryptocurrencies. The final draft of the MiCA framework includes a provision forbidding the "environmentally unsustainable" consensus mechanism. This means that bitcoin could become illegal within the EU and businesses would be prohibited from offering any services associated with PoW cryptocurrencies. Stefan Berger, the center-right rapporteur behind the framework, said that the proposal was "very likely" to be greenlit.
  • On February 25, Stefan Berger tweeted that the voting of the EU Parliament on the MiCA proposal had been canceled at his request. He said that the discussion about MiCA indicated that individual passages of the draft report could be misinterpreted and understood as a PoW ban. Therefore, in his opinion it's crucial to resume discussions and negotiations with the political groups on this subject to create clarity about the PoW question.
  • On March 1, BTC Echo announces that the bitcoin ban in Europe is off the table for now. In the new version of MiCA's draft, the responsible committee has completely deleted the controversial paragraph. Berger confirmed the cancellation. He points out that the report is yet to be voted on in committee and that the final decision has not been made.

Postscript

Thank you for reading the latest edition of the Watsonlaw newsletter. If you have any content-related recommendations or news you'd like us to share for next time, please don't hesitate to reach out to info@watsonlaw.nl or even better, directly connect with our team members Willem-Jan Smits and Jorie Corten. To stay up to date with all our updates and connect with our team, follow Watsonlaw on LinkedIn. Did we miss anything? Or perhaps something got you particularly intrigued? Do send us a message and let's talk! Ciao for now and see you again next time!

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Watsonlaw is a 's-Hertogenbosch-based law firm specializing in corporate and civil matters and the legal implications of new technologies in everyday life and business.

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