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Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
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United States | Publication | June 2022
On Tuesday, June 7, 2022, US Senators Cynthia Lummis and Kirsten Gillibrand introduced a new, wide-reaching, bi-partisan cryptocurrency bill aimed at increasing federal oversight over the budding and increasingly popular cryptocurrency and digital asset industry.
The bill, entitled the “Responsible Financial Innovation Act,” seeks to make digital assets easier for people to use in their everyday lives. For example, it creates a tax exemption for small-scale purchases of goods and services so that people can use digital currency without having to account for and report income.
If passed, the bill would also grant new powers and a more commanding presence to the Commodity Futures Trading Commission (CFTC) instead of the Securities and Exchange Commission (SEC). SEC chairman Gary Gensler has maintained that most crypto and digital assets qualify and should be treated as securities, like stocks in publicly traded companies. Therefore, it is the SEC’s responsibility to regulate these assets. However, the new proposed bill appears to reject this argument and suggests that most digital assets are much more similar to commodities than securities.
While the CFTC already regulates futures contracts for the two most popular currencies—Bitcoin and Ethereum—the proposed bill would broaden and increase the agency’s power over the crypto market generally. For example, the bill would create a process for crypto trading platforms to register with the CFTC. This change is reminiscent of the passing of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which expanded the CFTC’s role in creating additional regulatory balance.
The bill also seeks to create regulatory clarity for agencies charged with supervising digital asset markets, which is sorely needed in this rapidly growing industry. To establish that clarity, it proposes a regulatory framework that, according to Senator Gillibrand, aims to spur innovation, develop clear standards, define appropriate jurisdictional boundaries and protect consumers. To assist with that purpose, the bill also proposes the creation of an advisory committee comprised of various stakeholders, including regulators, industry experts and advocacy groups. The committee would be responsible for making recommendations based on new developments in the industry so that regulations remain relevant and effective.
The bill may be just what the crypto industry has been looking for. The industry cannot seem to move forward without adequate guidance on the regulations that apply to cryptocurrencies and digital assets. The bill appears to try to balance appropriate regulation while not stifling innovation.
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Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
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On February 2, 2024, the Belgian Presidency of the Council of the European Union confirmed that the Committee of Permanent Representatives had signed the Artificial Intelligence (AI) Regulation, referred to as the AI Act. Approval by the EU Parliament followed on 13 March 2024, and the AI Act is likely to appear in the EU’s Official Journal around May 2024. The AI Act aims to establish a stringent legal framework governing the development, marketing, and utilisation of artificial intelligence within the region, thereby marking a significant advancement in the regulation of this burgeoning domain.
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The EU’s Artificial Intelligence Regulation, commonly referred to as the AI Act, is expected to come into force during the summer of 2024 (the AI Act). The AI Act will be the first comprehensive legal framework for the use and development of artificial intelligence (AI), and is intended to ensure that AI systems developed and used in the EU are safe, transparent, traceable, non-discriminatory and environmentally friendly.
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