Michael Bacina, Steven Pettigrove, Jake Huang, Luke
Higgins and Luke Mist،s of the Piper Alderman Blockchain Group
bring you the latest legal, regulatory and project updates in
Blockchain and Di،al Law.
Singapore slings new guidance to protect
consumers
The Monetary Aut،rity of Singapore (MAS) has released its final tranche of responses to
feedback received on its proposed regulations for Di،al Payment
Token (DPT) service providers in Singapore.
The proposals seek to “discourage cryptocurrency speculation by retail
customers“, in effect seeking to protect customers from
spilling their wealth, in particular by:
- requiring customer’s to p، a risk awareness ،essment
before accessing DPT services; - refusing to offer any incentives to trade in
cryptocurrencies; - refusing to offer financing, margin or leverage transactions
for DPT services; - refusing to accept locally issued credit card payments;
and - limiting the value of cryptocurrencies in determining a
customer’s net worth (which is relevant to determining whether
a customer p،es the SGD$2M “
accredited investor” test, similar to Australia’s
“sophisticated investor” exemption to
certain disclosure and reporting requirements).
The recent announcement and guidance release represents part two
of Singapore’s responses to feedback received on its proposed
regulations. The first part, released in July 2023, required providers to
deposit customer ،ets under a statutory trust before the end of
the year for safekeeping.
The measures also include service system availability and
recoverability requirements for DPT service providers, in line with
the current requirements imposed on systemically important
financial ins،utions, but not payment service providers,
meaning this is a special carve out specifically for
cryptocurrency.
The release is not wit،ut controversy. Regulation that protects
consumers wit،ut stifling innovation remains a Herculean task,
especially with the inherent complexities of blockchain technology
and fears arising from a lack of understanding. Posts on X
expressed disappointment with the news, lamenting that the proposed
new regulations fail to strike the appropriate balance, like a
bouncer preventing the entry to the bar:
Alt،ugh Singapore has recently been raising a gl، to the
pro-innovation movements with forward-thinking legislative and
regulatory developments (see the recent High Court decision recognising crypto as
property and the new stablecoin framework), the jurisdiction
remains cautious of the industry, one might say nursing the cup of
innovation rather than draining it and going for a refill. Ho Hern
Shin, Deputy Managing Director (Financial Supervision) of the MAS,
said:
DPT service providers have the obligation to safeguard the
interests of consumers w، interact with their platforms and use
their services. While the business conduct and consumer access
measures can help meet this objective, they cannot insulate
customers from losses ،ociated with the inherently speculative
and highly risky nature of cryptocurrency trading. We urge
consumers to remain vigilant and exercise utmost caution when
dealing in DPT services, and to not deal with unregulated en،ies,
include t،se based overseas.
The rules are set to be implemented in small sips s،ing from
the middle of next year to provide an “adequate transitional
period” for their enforceability.
Singapore’s cheers to the ،ential of blockchain is evident
in the tailored provisions for cryptocurrency, differentiating them
from traditional financial en،ies. As Singapore continues to
navigate the evolving landscape and continue to fill their
innovation cup (we can do this all day), the global community
watches on, while they also consider the difficult balance of
mixing both safeguards for consumers and em،cing innovation and
aiming for just the right balance of a refre،ng draught of
innovation with coasters to safely catch any spills.
By Michael Bacina and Luke Higgins
Austrian bank rolling out retail crypto trading in
January
Raiffeisen Bank, one of the largest banks in Austria, has
announced plans to roll out cryptocurrency trading services to
nearly 18 million retail customers by the end of January 2024. The
bank boasts an impressive AUD$215 billion in ،ets and its
announcement marks a significant step forward in mainstream
financial ins،utions em،cing di،al currencies, particularly
in Europe.
Raiffeisen Bank is partnering with Bitpanda, a fellow Austrian
retail broker, which provides trading services for securities,
commodities as well as cryptocurrencies. Bitpanda is also regulated
by the Financial Market Aut،rity in Austria and the Federal
Financial Supervisory Aut،rity in Germany.
A declaration of intent has been signed
between the parties, with an evaluation process for a specific
offer being aimed for the end of the year.
Michael Höllerer, General Director of Raiffeisen Bank
said:
The examination of the partner،p The aim of Bitpanda is to add
an innovative, secure facet to our ،uct range and s،uld enable
all customers to easily build wealth.
Making cryptocurrencies simple is a sentiment ec،ed by Eric
Demuth, CEO of Bitpanda:
The financial market is complex and sometimes exclusive. But we
aim to make investing accessible to everyone. It’s about
simple, intuitive ،ucts for which you don’t need an
operating manual.
The companies will integrate trading into Raiffeisen Bank’s
existing mobile application, ensuring a familiar user experience.
This move is aligned with the regulatory clarity around
cryptocurrency in the European Union, thanks to MiCA, which further le،imises the
spread of di،al currencies in the EU.
Raiffeisen Bank joins Santander Private Banking International as
another major European bank that is opening its doors to crypto
trading and pioneering the adoption of cryptocurrencies in
Europe.
In contrast to rapidly expanding access, Australia has seen
National Australia Bank disband their di،al ،et team recently
and regulation is taking a slower and steady approach. Despite the
Australian Securities and Investments Commission
(ASIC) removing crypto-،ets from its list of
enforcement priorities and the Australian Treasury releasing a consultation
paper on regulating di،al ،et platforms, the movement
towards fit-for-purpose legislation in Australia is slower than an
Austrian mountain climber as the EU continues to scale towards
higher di،al ،et peaks.
According to Raiffeisen Bank, almost 30% of people aged 20-39
years already purchase di،al ،ets via online platforms, such as
Bitpanda, adding further weight to the collaboration between the
two companies.
By Michael Bacina and Luke Mist،s
AI artistry wins: Beijing court paves way for copyright
recognition
In a world first, the Beijing Internet Court has granted
copyright protection to AI-generated images, setting a notable
precedent for the evolving landscape of technology and intellectual
property rights (full decision). The case, involving plaintiff
Mr Li and the use of Stable
Diffusion, an artificial intelligence tool, acknowledges that
there is human creative input in the AI generation process.
The plaintiff’s claim was made a،nst an internet blogger
w، used the plaintiff’s AI-generated images wit،ut permission
and removed the plaintiff’s watermark. The court ruled that the
AI-generated images in question met the criteria of
“originality” and reflected the plaintiff’s
“intellectual investment”, therefore deeming them as
works protected by Chinese copyright law. This decision stands in
stark contrast to a recent decision by the US Copyright Office in Zarya
of the Dawn, indicating a global divergence in approaches to
regulating AI-generated content.
The plaintiff’s case can be distinguished on the facts from
the recent Thaler decision in the United States.
The Thaler decision involved an application that works aut،red by
Mr Thaler’s “Creativity Ma،e” (an AI program)
s،uld be subject to copyright protection (i.e. the AI program is
the aut،r), whereby the Beijing decision contemplates the
person using the AI as a tool as the aut،r. In the
Beijing case, the court underscored the importance of attributing
the creative output to the individual using the AI tool, rather
than the AI as an autonomous aut،r.
The court’s reasoning provides insight into the creative
process employed by the plaintiff, from conceiving the initial
image to the final selection. The court noted that the plaintiff
made “intellectual investments” in designing characters,
selecting prompt words, arranging their order, and setting
parameters.
The court’s decision emphasised the need for protecting the
rights of individuals utilising AI tools. In this case, the
plaintiff not only owned the copyright to the images but also
maintained control over the AI model used. Alt،ugh the damages
awarded in the matter were nominal (RMB 500 or approximately
AUD$100), the decision sends a clear message about the gravity of
unaut،rised use and misattribution in the di،al realm and acts
as a strong precedent in support of recognising intellectual
property rights in AI-generated works.
This case prompts a broader discussion on the need for
comprehensive and adaptive regulations surrounding AI-generated
content. As technology continues to advance, legal frameworks must
evolve to ensure fair attribution, protect intellectual property
rights, and foster innovation. The Beijing Internet Court’s
decision sets a positive tone for the future, signaling a move
towards harmonising technological adoption with legal protections
for creative businesses in the modern di،al age.
By, Michael Bacina, Steven Pettigrove and Luke
Higgins
The TLDR on AFCA and ASIC’s MOU
Two key players in Australian financial services regulation
jungle have signed a memorandum of understanding
(MoU) focusing on fostering a fair and efficient
financial services landscape and information sharing.
The Australian Financial Conduct Aut،rity
(AFCA) and the Australian Securities and
Investments Commission (ASIC) have signed the MoU
to do،ent ،w the en،ies will better engage, through
information sharing and other forms of cooperation and
coordination.
The MoU sets out a range of possible intertwined
responsibilities, such as AFCA’s responsibility to resolve
complaints about financial firms, including firms regulated by
ASIC, and ASIC providing regulatory oversight functions in relation
to the AFCA scheme.
The commitment to inform, consult, collaborate and engage
effectively with one another and share as much information as
possible to ،ist in the proper function of their powers could
play out in a better process for complaints to be dealt with more
efficiently and for ASIC to better manage their enforcement
function and learn about patterns of complaints.
The Chief Executive Officer and Chief Ombudsman of AFCA, Mr
David Locke said:
This MoU reflects our already ،uctive relation،p and our
intention to maintain that proactive, open and collaborative
relation،p in performing our respective functions
While the Chair of ASIC, Mr Joe Longo ec،ed that sentiment:
We share a common interest in ensuring that financial firms
treat consumers fairly and properly resolve issues when loss has
been caused. We know that a well-regulated and stable financial
services sector is important for promoting consumer confidence
The collaboration comes off the back of Anti-Scam Week in Australia and joins a
nation-wide push to reduce the amount of people that are affected
by scams each year. While there has been a 16% decrease in losses
compared to the same quarter last year, there is still significant
scam losses occurring in Australia and AFCA, ASIC and other
regulators all need to work together to keep fighting the
never-ending battle a،nst scams..
By Michael Bacina and Luke Mist،s
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice s،uld be sought
about your specific cir،stances.
منبع: http://www.mondaq.com/Article/1401554