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Happy Thursday <<First Name>>!

Another week, another Watson newsletter! With this week as the main highlight: crypto bank Celsius being in trouble which caused bitcoin to fall more than 10%. On top of that, we have regulatory updates of no less than five different countries. And of course, make sure to check out this week's Podcast section.

Enjoy!

Bitcoin

😵 [Dutch] The company with the most bitcoins in the world, US crypto bank Celsius, is in trouble. Celsius has frozen all assets worth about $12 billion, in order to 'stabilise liquidity'. Bitcoin is down more than 10% and 1.7 million people are at risk of losing their crypto tokens, as they cannot rely on the deposit guarantee scheme of regular banks.

Binance, the world's largest crypto exchange by trading volume, resumed withdrawals of bitcoin (BTC) after a pause, the company said. It was originally expected to be fixed in about 30 minutes, according to a tweet from CEO Changpeng Zao. Minutes later, however, he tweets that the issue was going to take a bit longer to resolve.

Legal

🤩 Holland & Knight, an American multinational law firm, is the first in the industry to serve a defendant via a Non-Fungible Token (NFT). Technology attorney Andrew Balthazor used a digital token to verify that claimants were the owners of blockchain addresses. Mr. Balthazor suggested notifying the defendant by embedding a hyperlink to the notice that would be sent to the defendant's blockchain address. Take a look at this week's quote to find out Balthazor's reaction.

Regulatory

🇭🇰 The Hong Kong Monetary Authority (HKMA), together with the Bank of Israel (BOI) and the Bank for International Settlements Innovation Hub (BISIH) Hong Kong Centre, announced on 17 June a joint research on retail Central Bank Digital Currency (CBDC).

🇳🇱 [Dutch] According to the Dutch Council of State, the current approach to money laundering by banks, supervisors and investigative authorities is undesirable. A higher chance of catching fraudsters, criminals and terrorists does not outweigh the violation of everyone's privacy.

🇩🇪 Philipp Sadner and Agata Ferreira published an article in which they describe the current discussion around self-hosted wallets (also known as: "unhosted wallets"). Germany maintains its pro crypto attitude and opposes the EU proposal on revealing and verifying identities for self-hosted wallets.

🇬🇧 A document published by thee Treasury said that the UK government will not implement its proposed version of a controversial rule requiring all senders of funds to private crypto wallets to collect identification details of recipients. The UK's stance differs from the EU, which decided in March to outlaw transfers to anonymous wallets.

🇸🇬 Singapore has awarded 3 in-principle approvals for its much-coveted digital payment token (DPT) licence, which allows companies to offer crypto services. The applicants were not named by the Monetary Authority of Singapore (MAS), though prominent crypto exchange Crypto.com later said in a statement that it was one of the awardees.

Other

🔥 Jump Crypto published a brief report on the stable coin terraUSD's (UST) deviation. Jump Crypto is a major market maker, meaning its business is taking the other side of as many trades as it possibly can. Its research team sat down to look at why the stable coin UST fell apart in early May.

😱 According to a tweet from Dylan LeClair, head of market research at Bitcoin Magazine, Solend Protocol (a supposed "decentralised" lending protocol built on Solana) has "voted" to take over a whale account with emergency powers to eliminate the chance of forced liquidation.

🏦 [Dutch] Foreign crypto exchanges recruit Dutch customers without registering with De Nederlandsche Bank (DNB). The exchanges have much bigger plans in the Netherlands, according to vacancies. They might be able to price smaller Dutch brokers out of the market.

The future monetary system (English)
What will the future of the monetary system look like? In this episode of the BIS podcast, Hyun Song Shin, BIS Economic Advisor and Head of Research, presents a blueprint for the future monetary system as the fusion of enhanced technical capabilities around the core of the trust embodied in central bank money, as outlined in a special chapter of the BIS 2022 Annual Economic Report. Take a look at the 'advanced info' section below to read more about this.

The usefulness of Airdrops, the wave of layoffs in the sector and new crypto legislation (Dutch)
This week in Satoshi Radio, another market update from Bert Slagter, where he elaborates on the inflation figures: when is inflation "sticky"? In addition, the following news is discussed: a wave of layoffs in the sector, new crypto legislation from Cynthia Lumis, PayPal is expanding bitcoin services and a big discussion about airdrops at the last minute: are they a simple cash grab or an indispensable part to decentralised governance?

A retrospective on two years of DNB supervision (Dutch)
Dutch crypto companies have now been under the supervision of DNB for two years. It was a turbulent time. In this week's episode of the Cryptocast Simon Lelieveldt, expert in the field of financial regulation, will look back and forward. What about the international companies that operate in the Netherlands, but not all of them have registered? The co-host in this episode is Paul Buitink.

" [Having] a judge in this case recognise that a fair method of delivering information to a defendant is through a blockchain address when that's the only trace they've left is just a leap forwards, really in allowing us to bring an appropriate remedy in the right cases for the right clients."

- Andrew Balthazor

🫣 The Bank of International Settlements (BIS) has released its new report on the future monetary system. In this report the BIS promotes what they call "a brighter vision of the future monetary system" through central bank digital currencies (CBDCs). Check out the Podcast section to find out more about this interesting report.

✅ The European Banking Authority (EBA) published its Guidelines specifying the role and responsibilities of the anti-money laundering and countering the financing of terrorism (AML/CFT) compliance officer and of the management body of credit or financial institutions. These Guidelines aim to ensure a common interpretation and adequate implementation of AML/CFT internal governance arrangements across the EU in line with the requirements of the EU Directive on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.

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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