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Dubai Updates Crypto Token Regulatory Framework, Shifts Responsibility to Licensed Firms

According to Cointelegraph, the Dubai Financial Services Authority (DFSA) has implemented significant changes to its Crypto Token Regulatory Framework, transferring the responsibility for assessing crypto token suitability from the regulator to licensed companies within the Dubai International Financial Centre (DIFC). This update, effective from Monday, requires financial service providers dealing with crypto tokens to evaluate whether the tokens they handle meet the DFSA's suitability standards. Consequently, the DFSA will no longer maintain or publish a list of recognized crypto tokens. This regulatory shift follows a consultation process initiated in October 2025 and marks a change in the DFSA's approach since the introduction of its crypto token regime in 2022. The DFSA has been actively monitoring developments and engaging with stakeholders to ensure the framework aligns with global standards. Charlotte Robins, managing director of policy and legal at the DFSA, stated that the changes represent a move towards a more flexible and principles-based model, reflecting the DFSA's progressive stance on innovation and market feedback. The updated framework does not explicitly ban any specific category of digital assets by name. However, it reallocates the responsibility for assessing token suitability to licensed firms within the DIFC. Although there is no explicit ban, privacy-focused tokens such as Monero (XMR) and Zcash (ZEC) may face increased scrutiny under the new framework. Internal compliance teams might consider these tokens higher risk, prompting firms to apply stricter due diligence standards or avoid supporting them altogether. This change underscores a key jurisdictional distinction, as the DFSA regulates financial services within the DIFC, which operates under a common-law framework separate from Dubai's onshore regulatory regime. Other jurisdictions in Dubai and the UAE are governed by different crypto regulators with their own rulebooks. The DFSA's principles-based approach contrasts with the stance taken elsewhere in Dubai. As reported by Cointelegraph in February 2023, the Dubai Virtual Assets Regulatory Authority (VARA) introduced an explicit ban on privacy coins under its Virtual Assets and Related Activities Regulations 2023. VARA's rules prohibit the issuance of "anonymity-enhanced cryptocurrencies" and all related virtual asset activities within its jurisdiction, covering most of Dubai outside the DIFC. Across the wider UAE, crypto regulation remains fragmented. Abu Dhabi's regulator, the Abu Dhabi Global Market (ADGM), adopts a conservative, risk-based approach without an outright ban, while federal regulators emphasize anti-money laundering and counter-terrorism financing compliance. Consequently, privacy-focused crypto assets are not uniformly illegal across the UAE, but their treatment varies significantly by jurisdiction.
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India Tightens Regulations for Crypto Platforms with New Guidelines

According to Cointelegraph, India's Financial Intelligence Unit (FIU) has introduced new guidelines aimed at strengthening the onboarding process for users on cryptocurrency platforms. These regulations require crypto exchanges to implement more stringent verification methods, including live selfie pictures and geographic location checks. The Times of India reports that the selfie verification process involves software that monitors users' eye and head movements to prevent AI deep fakes from circumventing the know-your-customer (KYC) protocols. Additionally, exchanges are mandated to collect geolocation data and IP addresses during account creation, along with a timestamp of the account setup. To comply with anti-money laundering (AML) requirements, exchanges must verify user bank accounts by initiating a small transaction. Users are also required to provide additional government-issued photo identification and verify their email and mobile numbers to establish an account with a registered crypto exchange. These measures reflect India's regulatory approach to cryptocurrencies and digital assets, considering the country's vast market potential with a population exceeding 1.4 billion. The influx of Indian users into the crypto space could potentially lead to increased investment opportunities. In related developments, India's Income Tax Department (ITD) officials met with parliamentary lawmakers to discuss the challenges posed by cryptocurrencies and decentralized finance platforms in tax enforcement. The ITD highlighted that decentralized exchanges, anonymous wallets, and the cross-border nature of crypto transactions complicate taxation efforts. Jurisdictional differences in tax regulations further hinder efficient taxation of cryptocurrencies. Under India's Income Tax Act, gains from cryptocurrency sales are taxed at a rate of 30%, with deductions limited to the cost basis against the gains. Crypto traders in India are unable to offset gains with losses from other transactions, as tax loss harvesting is not permitted. These discussions underscore the ongoing complexities in regulating and taxing the rapidly evolving crypto landscape in India.
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Goldman Sachs: Regulatory Clarity Is Key to Institutional Adoption of Crypto Assets

Regulatory improvements will be critical to unlocking broader institutional adoption of crypto assets, according to analysts at Goldman Sachs, who pointed to U.S. market structure legislation as a central catalyst.In a report cited by Odaily, a Goldman Sachs research team led by James Yaro said clearer regulation would benefit both buy-side and sell-side financial institutions, while also enabling new use cases for crypto assets beyond speculative trading.Clarity Act seen as pivotal catalystThe analysts highlighted the U.S. Digital Asset Market Clarity Act, commonly referred to as the Clarity Act, which is currently advancing through Congress.According to the report, the legislation is expected to:Establish a clear regulatory framework for tokenized assets and decentralized finance (DeFi)Define the respective jurisdictions of the U.S. Securities and Exchange Commission and the Commodity Futures Trading CommissionReduce regulatory ambiguity that has constrained institutional participationSuch clarity, Goldman Sachs said, is essential for unlocking institutional capital and allowing compliant engagement by banks, asset managers, and market infrastructure providers.Timing risks tied to U.S. midterm electionsGoldman Sachs cautioned that timing is critical, noting that the Clarity Act would ideally need to be passed by the first half of 2026.Failure to do so could introduce delays linked to the U.S. midterm elections in November, which may complicate legislative momentum and increase political uncertainty around crypto regulation.Senate Banking Committee signals progressEarlier, Tim Scott, the Republican chairman of the Senate Banking Committee, said the committee plans to revise the Clarity Act and move it toward a formal vote in the near term.That signal has been viewed by market participants as an important step toward advancing comprehensive crypto market structure legislation.Short-term headwinds, long-term accelerationIndustry experts cited in the report noted that market adjustments toward the end of 2025 may temper short-term adoption, as institutions remain cautious amid volatility and policy uncertainty.However, they argued that successful passage and implementation of the Clarity Act could significantly accelerate genuine institutional entry, shifting crypto adoption from tactical exposure toward deeper integration across payments, settlement, and financial infrastructure.
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CLARITY Crypto Market Structure Bill Hinges on Bipartisan Senate Support, Galaxy Says

The future of the Digital Asset Market Clarity Act of 2025, commonly known as the CLARITY market structure bill, depends on securing bipartisan backing within the United States Senate Banking Committee, according to Alex Thorn, head of research at Galaxy.Speaking to Cointelegraph, Thorn said the legislation will require at least 60 votes in the U.S. Senate to advance, meaning Republicans must secure the support of seven to ten Democratic senators.Democratic support seen as decisiveThorn noted that if Republicans can win over four Democratic members of the Senate Banking Committee, it would significantly improve the bill’s chances.In that scenario, Thorn expects that all 17 Democratic senators who previously supported the GENIUS Act — a stablecoin-focused regulatory framework — would likely align with Republicans to move the CLARITY bill forward.“Without strong bipartisan backing at the committee level, the probability of passage in 2026 drops sharply,” Thorn said.Why market structure legislation mattersA comprehensive crypto market structure framework could provide long-awaited regulatory clarity in the U.S., particularly around:Jurisdictional boundaries between regulatorsToken classificationExchange and custody requirementsSuch clarity could accelerate institutional adoption, as many large investors remain cautious due to regulatory uncertainty and the risk of sudden policy reversals.Limited long-term downside if bill stallsThorn also addressed the potential consequences if the CLARITY Act fails to advance in the Senate. He argued that the structural impact on the crypto industry would be limited, as several major policy goals have already been achieved amid a broader pro-crypto shift in U.S. regulatory posture.However, he cautioned that short-term investor sentiment could suffer, particularly if the bill stalls ahead of a key procedural window.Failure to advance the bill by Jan. 15 could complicate prospects for another vote in 2026, given the uncertainty surrounding the U.S. midterm elections.Midterm elections loom over timingPolicy analysts warn that political dynamics could significantly delay crypto legislation.Investment bank TD Cowen recently cautioned that crypto market structure legislation may not pass until 2027, and could take effect as late as 2029, if Democratic lawmakers succeed in pushing the vote beyond the midterms and regain control of at least one chamber of Congress.Meanwhile, billionaire hedge fund manager Ray Dalio has warned that Trump-era regulatory policies benefiting crypto, artificial intelligence, and the broader technology sector could be reversed if Republicans lose control of either chamber in the 2026 midterm elections.OutlookTaken together, the analysis underscores that the CLARITY Act’s fate is less about technical consensus and more about political alignment. While failure would not derail the crypto industry structurally, passage could meaningfully accelerate institutional participation — making the coming weeks a critical test for U.S. crypto regulation.
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