China cracks down on Tether, Hong Kong to introduce licenses for stablecoins: Law Decoded
More than two years after enforcing a significant crypto ban, Chinese authorities are moving to crack down on using cryptocurrencies like Tether (USDT) in foreign exchange trading. China’s Supreme People’s Procuratorate (SPP) — the highest national agency responsible for legal prosecution in mainland China — has warned the public against using USDT as an intermediary to trade the Chinese yuan with other fiat currencies. The agency issued a joint statement with the State Administration of Foreign Exchange (SAFE), urging local officials to implement stricter measures against the stablecoin in cross-border foreign exchange transactions.
In the statement, the SPP and the SAFE declared that using USDT as a medium of exchange between local and foreign currencies is illegal. The authorities said their local branches should improve coordination to “punish fraudulent foreign exchange purchases, illegal foreign exchange transactions and other foreign exchange-related illegal and criminal activities” in accordance with the law.
Meanwhile, Hong Kong has proposed accepting and regulating “fiat-referenced stablecoins” (FRS), with issuers required to obtain a specific local license. A joint consultation paper from the Financial Services and the Treasury Bureau and the Hong Kong Monetary Authority (HKMA) spells out the definition of fiat-referenced stablecoins and requires any companies that “actively market their issuance of FRS to the public of Hong Kong” to be licensed by the HKMA.
The criteria for obtaining an HKMA license will include full backing of all circulating stablecoins with reserves “at least equal to the par value,” segregation and safekeeping of reserve assets, disclosure and regular reporting. The document states that algorithmic stablecoins won’t qualify for a license.
South Korea makes officials’ crypto holdings transparent
Starting in 2024, almost 6,000 South Korean officials will be obliged to publicly disclose their crypto holdings. The country’s Ministry of Personnel Management said that information about government officials’ private holdings of crypto assets will be included in the Public Official Ethics System. A recent probe found that 18 out of 298 Korean lawmakers have held digital assets during the last three years, while 11 lawmakers traded almost $100 million in cryptocurrencies. Starting June 2024, five major South Korean crypto exchanges — Upbit, Bithumb, Coinone, Korbit and Gopax — will launch separate “information provision systems,” simplifying the registration of information about crypto holdings.
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The New York Times files lawsuit against OpenAI
Another copyright infringement lawsuit has hit the artificial intelligence (AI) industry, with legacy media outlet The New York Times suing ChatGPT creator OpenAI. The NYT alleges that OpenAI has unlawfully used its content to train its AI chatbots, thereby hindering the NYT from doing its work. The lawsuit pulls from both the United States Constitution and the Copyright Act to defend the original journalism of the NYT. It also points to Microsoft’s Bing AI, alleging that it creates verbatim excerpts from its content. The New York Times is not the first media company to raise concerns over AI chatbots. In October, the News Media Alliance made similar claims that AI chatbots illegally rip copyrighted news while their developers take revenue, data and users from news publications.
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Council of Europe adopts new guidelines for AI in journalism
The Council of Europe’s Intergovernmental Steering Committee on Media and the Information Society has adopted new guidelines for the “responsible implementation” of AI in journalistic practices. The guidelines cover AI systems in various stages of journalistic production, such as the initial decision to use AI and media organizations acquiring AI tools and incorporating them into the newsroom. The technology’s effect on audiences and society is a significant aspect of the guidelines, which also propose responsibilities to be taken on by technology providers, platforms and member states.
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