Previously suspicious of cryptocurrencies, Morocco is embarking on a regulatory project focused on security, balance and vigilance, as announced by Adil Zbir, head of monitoring of financial market infrastructures and systems. of payment to Bank Al-Maghrib, during the Africa-US Business Summit held in Marrakech from July 19 to 22, 2022.
What is the regulatory system that best suits Moroccan law? What considerations should be taken into account in the context of this draft regulation? What can we learn from foreign experiences in this area? Here is the lighting Me Ilias Segamelawyer at the Casablanca Bar and expert in digital law.
Foreign regulations: between crypto hub and vigilance
Although there is no consensus around a single or official definition of cryptocurrency, it can be defined as “a non-governmental digital asset based on a combination of cryptographic algorithms, the existence of which and the transfer are confirmed and recorded on a register distributed on a network of independent computers”.
According to Me Segame, “countries are constantly evaluating the best possible legal framework in order to resolve the specific, and often new, issues posed by cryptocurrencies whose technological particularities, uses and applications put the use of existing legal frameworks and definitions to the test. “.
“In order to benefit from the advantages of this technology in a safe and legal manner, certain countries, with the ambition of attracting cryptocurrency and blockchain players and becoming an essential industry hub, have distinguished themselves by putting puts in place a favorable legal framework for the development of the cryptocurrency ecosystem in terms of cryptoasset regulation, political orientation and tax treatment,” he continues.
For example, the legislator Swiss actively supports the establishment of an attractive legal framework for the use of cryptocurrencies, further encouraging the status of CryptoHub from the country.
Thus, in Switzerland, considered a “crypto valley”, “the payment of taxes in cryptocurrencies in certain regions is completely legal”, indicates Me Segame. Parliament passed legislation relating to Distributed Ledger Technology (DLT), known as the DLT Act. This is one of the most notable regulatory developments, since “one of the main contributions of this law, which came into force on August 1, 2021, is the establishment of a license for financial market infrastructures for DLT securities which may admit other companies and persons to trading in addition to financial intermediaries. Legal certainty has also been strengthened in insolvency law by explicitly regulating the segregation of crypto assets in bankruptcy.”
With regard to anti-money laundering regulations, Me Segame indicates that the Financial Markets Supervisory Authority (FINMA) considers that the issuance of cryptocurrencies constitutes “financial intermediation”. Consequently, “it is subject to the applicable anti-money laundering regulations (AMLA). On the other hand, the simple fact of selling cryptocurrencies to another party, or using these cryptocurrencies as a means of payment for the sale or purchase of goods and services, does not constitute financial intermediation”, explains Me Segame.
More vigilant, Singapore adopts a “supportive but cautious approach”. And “regulates all cryptographic activities depending on their purpose rather than technology. It remains a very attractive destination for start-ups and crypto-investments due to its regulations and the favorable tax treatment of capital gains,” explains this digital law expert.
“The Monetary Authority of Singapore (MAS) classifies cryptocurrency as property and not legal tender. The MAS regulates and licenses digital exchanges and does not appear to be moving towards a ban on cryptocurrency trading activities. »
In the fight against money laundering, Singapore applies cryptocurrency regulations that vary depending on the type of license required. Thus, “if an entity is governed by the Securities and Futures Act (SFA), opinion SFA04-N02 ‘Prevention of Money Laundering and Countering the Financing Terrorism – Capital Markets Intermediaries’ could apply. For the Payment Services Act (PSA), notice PSN01 ‘Prevention of Money Laundering and Countering the Financing Terrorism – Holders of payment services license (specific payment services)’ and/or PSN02 Holders of Payment Licensing Services (Digital Payment Token Service) issued by the MAS is applicable”, specifies Me Segame.
Other countries are considered “pioneers of digital exchanges”, like australia which stands out “as a relatively progressive and stable destination for blockchain and crypto-asset operations”.
“Digital exchanges have been around since 2017, making Australia a leader in the industry. The country classifies cryptocurrencies as legal property, not as a currency. To this end, Australia allows crypto-asset service providers to operate under license, and considers cryptocurrencies to be financial assets under its securities law.
“Since 2018, Digital Currency Exchange (DCE) providers are required to register and register with the Australian Transaction Reports and Analysis (AUSTRAC) as a reporting entity under the Australian AML regulatory framework. /CTF. Otherwise, these entities risk a sentence of up to two years in prison or a fine of up to 110,000 Australian dollars or both.
While Australia is considered a leader in the sector, other countries are emerging with new regulations. This is the case of United Arab Emirates where a favorable legal framework for cryptocurrency was recently adopted, “to attract significant investment in the industry and become an essential global hub in this area”.
“In 2020, the global market of Abu Dhabi ADGM (the international financial center of the emirate) has put in place a complete framework to regulate the activities of virtual assets in particular through a guide. The regulatory framework of the Financial Services Regulatory Authority (FSRA) focuses on consumer protection, technology governance, disclosure/transparency and market abuse,” says Segame.
He also discusses the regulations, put in place in Dubai, favorable to virtual asset services provided in the emirate, as well as the creation of the Dubai Virtual Assets Regulatory Authority (VARA), through the adoption of Law No. (4) of 2022.
“This authority is notably responsible at the emirate level only, and with the exception of the Dubai International Financial Center (DIFC), for regulating and supervising the relevant issuance, offering and disclosure processes of virtual assets and NFTs. »
“VARA is also the competent authority to grant licenses to entities offering services in relation to virtual assets, and intervenes to monitor the activities of virtual asset exchanges in order to prevent price manipulation and to establish high standards of personal data protection,” he adds.
Which direction for Morocco?
For Me Segame, the comparison between these foreign regulations, with different approaches, makes it possible to identify two clear trends:
– Licensing or approval regime to which the platforms and providers of cryptoassets, decentralized or not, necessarily submit.
– Compliance with local AML/CFT laws : which subjects said platforms to the obligation to comply with local regulations relating to the fight against money laundering and the financing of terrorism.
“For Morocco, it is appropriate, from the outset, to integrate these two considerations within the regulatory project to allow more confidence, credibility and security in the exchange of crypto-assets on decentralized platforms. It is also strongly recommended to put in place measures and mechanisms to consumer protection to prevent unfair, deceptive or abusive practices. »
“The different ways in which consumers can hold cryptoassets are also a cause for concern, especially when it comes to self-hosted wallets (self custody wallets) that are distinct from custodial-based services (custody-based services). In this regard, self-hosted wallets are generated by computer protocols and are accessible to the public directly via the Internet,” he continues.
“Therefore, the onus is on the consumer to understand the interface, the security mechanisms, the management and storage of private keys, and the fact that no centralized company is involved and there may be no structure to resort to in the event of loss of access to the portfolio constitutes a significant risk. »
Thus, Mr. Segame considers that it is “essential toeducate the Moroccan consumer in order to allow him to make a free and informed choice and to consider the consecration of rules capable of guaranteeing that adequate information is provided in relation to these very specific financial products”.