Four in 10 crypto investors in Britain reported that their banks blocked or slowed payments to digital asset platforms, highlighting growing tension between traditional finance and the country’s crypto sector.

The findings come from an IG Group survey of 500 active crypto users and 2,000 adults across the U.K., according to a CoinTelegraph report.

Crypto access challenges

Among those affected, nearly a third filed complaints, while more than a third switched banks after encountering restrictions.

Public opinion on the issue is split. According to the survey, 42% of adults said they opposed banks stepping in to restrict crypto payments, while about one-third supported the practice.

Although trading digital assets is legal in Britain, investors face regulatory and banking limits when moving money into the sector. Only companies registered with the Financial Conduct Authority (FCA) can offer crypto services in pounds, and rules prohibit retail buyers from using credit cards or other forms of borrowed capital.

Some high-street banks, including Chase UK and NatWest, have introduced additional curbs, citing fraud risks. Those restrictions have left many customers struggling to fund accounts with regulated exchanges.

Broader competition concerns

The survey results add to wider criticism of the U.K.’s cautious approach to digital assets. Former Chancellor of the Exchequer George Osborne, now an adviser to Coinbase, recently argued that Britain is falling behind other financial centers.

He highlighted the near absence of pound-backed stablecoins in a global market worth nearly $300 billion, with sterling-linked tokens making up just a fraction of the total supply.

Even so, regulators have made incremental changes. Beginning Oct. 8, the FCA will allow retail investors to trade crypto exchange-traded notes, reversing a ban imposed during a period of high volatility.

Senate Banking Committee Chairman Tim Scott reportedly predicts that 12 to 18 Democrats will support comprehensive crypto market structure legislation.

According to Aug. 19 reports, Scott is conducting individual meetings with Democratic members, including those outside the Banking Committee, to build bipartisan backing for the anticipated September bill introduction.

The South Carolina Republican’s outreach efforts follow the House passage of the Digital Asset Market Clarity Act on July 17, which received support from 78 Democrats in a 294-134 vote.

The House legislation establishes jurisdictional boundaries between the Securities and Exchange Commission and the Commodity Futures Trading Commission while creating registration pathways for qualifying digital asset platforms.

Scott released a discussion draft of the Responsible Financial Innovation Act of 2025 on July 22 alongside Senators Cynthia Lummis, Bill Hagerty, and Bernie Moreno.

The Senate proposal builds upon the House CLARITY Act by introducing ancillary asset definitions, modernized disclosure requirements, and banking provisions that allow financial holding companies to offer digital asset services.

Regulatory framework development

The CLARITY Act directs SEC and CFTC coordination through joint registration processes for platforms listing tokens that meet functional decentralization tests and public float requirements.

Qualifying networks fall outside the securities law scope once they achieve sufficient decentralization metrics.

The legislation establishes token disclosure requirements scaling with market capitalization tiers while requiring issuers conducting US sales to submit initial information statements.

Banking supervisors receive instruction to recognize qualified custodians managing both stablecoins and digital assets under unified segregation and audit standards.

The framework creates coordinated custody requirements for platforms operating spot and derivatives trading under shared regulatory oversight between the two primary federal agencies.

The Senate discussion draft expands these provisions through ancillary asset classifications covering digital tokens that avoid securities designation.

Regulation DA would exempt certain ancillary asset sales from registration requirements for annual proceeds under $75 million, capped over four-year periods.

The proposal refined investment contract definitions under federal law while establishing pre- and post-launch transparency requirements for digital asset issuers.

Senator Lummis emphasized the urgency of regulatory clarity to prevent American innovation migration overseas, stating the legislation will establish clear distinctions between digital asset securities and commodities while modernizing regulatory frameworks.

Senator Hagerty noted that outdated laws and regulatory uncertainty have hindered innovation and left consumers without adequate protections.

Lastly, the Banking Committee issued a Request for Information covering more than 35 topics to support rulemaking processes, with public comments informing final legislation development.

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The source code for version 3 of the ERMAC Android banking trojan has been leaked online, exposing the internals of the malware-as-a-service platform and the operator’s infrastructure.

The code base was discovered in an open directory by Hunt.io researchers while scanning for exposed resources in March 2024.

They located an archive named Ermac 3.0.zip, which contained the malware’s code, including backend, frontend (panel), exfiltration server, deployment configurations, and the trojan’s builder and obfuscator.

The researchers analyzed the code, finding that it significantly expanded the targeting capabilities compared to previous versions, with more than 700 banking, shopping, and cryptocurrency apps.

ERMAC was first documented in September 2021  by ThreatFabric – a provider of online payment fraud solutions and intelligence for the financial services sector, as an evolution of the Cerberus banking trojan operated by a threat actor known as ‘BlackRock.’

ERMAC v2.0 was spotted by ESET in May 2022, rented to cybercriminals for a monthly fee of $5,000, and targeting 467 apps, up from 378 in the previous version.

In January 2023, ThreatFabric observed BlackRock promoting a new Android malware tool named Hook, which appeared to be an evolution of ERMAC.

ERMAC v3.0 capabilities

Hunt.io found and analyzed ERMAC’s PHP command-and-control (C2) backend, React front-end panel, Go-based exfiltration server, Kotlin backdoor, and the builder panel for generating custom trojanized APKs.

According to the researchers, ERMAC v3.0 now targets sensitive user information in more than 700 apps.

Additionally, the latest version expands on previously documented form-injection techniques, uses AES-CBC for encrypted communications, features an overhauled operator panel, and enhances data theft and device control.

Specifically, Hunt.io has documented the following capabilities for the latest ERMAC release:

• Theft of SMS, contacts, and registered accounts
• Extraction of Gmail subjects and messages
• File access via ‘list’ and ‘download’ commands
• SMS sending and call forwarding for communication abuse
• Photo capturing via the front camera
• Full app management (launch, uninstall, clear cache)
• Displaying fake push notifications for deception
• Uninstalls remotely (killme) for evasion

Infrastructure exposed

Hunt.io analysts used SQL queries to identify live, exposed infrastructure currently used by the threat actors, identifying C2 endpoints, panels, exfiltration servers, and builder deployments.

Apart from exposing the malware’s source code, the ERMAC operators had several other major opsec failures, including hardcoded JWT tokens, default root credentials, and no registration protections on the admin panel, allowing anyone to access, manipulate, or disrupt ERMAC panels.

Finally, the panel names, headers, package names, and various other operational fingerprints left little doubt about attribution and made discovery and mapping of the infrastructure a lot easier.

The ERMAC V3.0 source code leak weakens the malware operation, first by eroding customer trust in the MaaS in its ability to protect information from law enforcement or allow running campaigns with low detection risk.

Threat detection solutions are also likely to get better at spotting ERMAC. However, if the source code falls into the hands of other threat actors, it is possible to observe in the future modified variants of ERMAC that are more difficult to detect.

The Federal Reserve (Fed) announced it will shut down its program with additional scrutiny over crypto and fintech activities.

On an August 15 statement, the central bank said it will sunset the Novel Activities Supervision Program and return to monitoring banks’ crypto and fintech activities through standard supervisory processes.

The Fed established the specialized program in August 2023 to enhance oversight of banking organizations engaging in crypto activities, distributed ledger technology projects, and complex technology partnerships with non-banks. 

The program targeted activities that regulators deemed novel and potentially risky to financial stability.

The Fed stated:

“Since the Board started its program to supervise certain crypto and fintech activities in banks, the Board has strengthened its understanding of those activities, related risks, and bank risk management practices.”

The regulator will integrate knowledge gained from the program into standard supervisory processes while rescinding the 2023 supervisory letter that created the initiative.

The program’s dissolution follows several pro-cryptocurrency moves by federal regulators this year. 

The Federal Reserve Board removed reputational risk from its bank supervision program on June 23, ordering staff to strike the term from examination manuals and concentrate on measurable financial exposures.

The Fed’s move positions the central bank alongside the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, which made similar changes this year. 

The coordinated revisions eliminate a subjective standard that experts said allowed examiners to block banking services to crypto firms and prevented banks from offering basic crypto-related services.

Furthermore, the Office of the Comptroller of the Currency, the Federal Reserve Board, and the Federal Deposit Insurance Corporation released a joint statement explaining how existing banking rules apply when institutions custody crypto for customers. 

The guidance describes safekeeping as holding digital assets on clients’ behalf while stressing that it does not create new supervisory demands.

Regulators instructed boards and executives to view crypto custody as a service that relies on exclusive control of private keys and other sensitive data, requiring banks to prove no other party can unilaterally move assets once they enter custody.

Fed Chair Jerome Powell laid the groundwork for the regulatory shift in an April 16 speech. In it, he urged Congress to establish a stablecoin framework and stated that the Fed does not intend to limit lawful relationships between banks and crypto firms. 

Powell acknowledged that regulators adopted a conservative stance after the 2022 market failures but indicated that some guidance may be relaxed to accommodate responsible innovation.

The program’s end represents a broader normalization of crypto banking supervision as regulators gain confidence in their understanding of digital asset risks and develop clearer frameworks for institutional participation in crypto markets.

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Bitcoin Price maintained its position above $115,000 on Friday as Binance, the world’s largest Bitcoin and crypto exchange, partners with Spain’s BBVA Bank to provide third-party custody services and explores key steps towards institutional grade security.

The partnership allows Binance customers to store assets in US Treasury securities held by BBVA, Spain’s third largest bank, and the exchange accepts them as a margin of trading. This arrangement effectively separates trading activities from assets custody and provides an additional layer of security for investors involved in exchange risk.

The move comes as a $4.3 billion settlement with US regulators in 2023 continues to restructure the trust following the $4.3 billion settlement over money laundering violations. The exchange implements more stringent controls and clearer disclosures about fund management, such as allowing clients to use third-party custodians such as Sygnum and Flowbank.

BBVA is increasingly active in the Bitcoin and crypto sectors, launching crypto trading and custody services through this year’s mobile app. The bank also takes a bold attitude by advising private clients to allocate up to 7% of their portfolio to Bitcoin and Cryptocurrency, reflecting the growing institutional trust in crypto.

The custody arrangement addresses one of the main concerns that emerged following the collapse of FTX in 2022. Under the new structure, if Binance faces operational or regulatory challenges, Treasury securities under the control of the BBVA will safely insure customer funds.

This partnership represents a new standard for Bitcoin and crypto exchange security. The integration of traditional banking infrastructure with Bitcoin and crypto trading platforms could accelerate institutional adoption by providing a familiar, regulated framework.

The development is amid accelerating adoption of Bitcoin by companies, with the number of public companies holding Bitcoin on their balance sheets rising to over 200.

Market analysts suggest that the Binance and BBVA partnership can set precedents for similar arrangements between Bitcoin and Crypro exchanges and traditional banks. The move could effectively bridge the gap between traditional finance and Bitcoin and attract more institutional investors who are hesitant to enter the Bitcoin market due to custody concerns.

The volume of major Bitcoin and crypto exchanges remains stable following the news, with Bitcoin prices continuing to trade between $115,000 and $116,000. A calm response in the market suggests that as the Bitcoin and the crypto industry matures, the development of the institutions is increasingly normalised.

President Donald Trump signed an executive order on Aug. 7 to halt what his administration called discriminatory banking practices against the crypto industry.

The order bars federal regulators from using “reputational risk” as justification to influence banks’ decisions about working with legal businesses.

According to the administration, the digital asset sector has been disproportionately affected by behind-the-scenes pressure from regulatory agencies, leading to abrupt account closures, payroll disruptions, and loss of financial access for law-abiding firms.

The move directly targets what critics have dubbed “Operation Choke Point 2.0,” a term used by the crypto industry to describe a coordinated campaign of informal regulatory pressure.

While not an official program, the term refers to a pattern of supervisory actions that allegedly discourage banks from servicing digital asset companies, even when those firms comply with existing laws.

The modern-day chokepoint mirrors tactics once used in a 2010s-era Department of Justice initiative, which sought to cut off banking access for industries labeled high-risk for fraud, including firearms and payday lending.

However, unlike its predecessor, the newer iteration has focused largely on crypto. Since early 2023, multiple firms have reported unexplained debanking, often following vague concerns about risk rather than concrete compliance violations.

Industry advocates and pro-crypto lawmakers have stated that the unfriendly environment created uncertainty for startups and institutional players alike, limiting growth and undermining regulatory credibility in the US.

Trump’s order codifies recent moves by the Federal Reserve, FDIC, and Office of the Comptroller of the Currency, all of which have pledged to stop evaluating banks based on reputational factors.

It also aligns with legislation under discussion in Congress, where lawmakers have pushed for stricter limits on how regulators supervise politically sensitive or emerging industries.

The order is part of a broader effort by the Trump administration to establish clearer protections for crypto companies operating within the US financial system.

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The European Banking Authority (EBA) has finalized rules requiring banks to hold significantly more capital against so-called “unbacked” cryptocurrencies like Bitcoin and Ether.

In its final draft of regulatory technical standards released on Tuesday, the EBA said the rules aim to “address implementation aspects and will ensure harmonisation of the capital requirements on crypto-asset exposures by institutions across the EU.” The framework applies to European Union-based banks holding crypto assets on their balance sheets.

According to the accompanying documentation, digital assets in group 2 (a and b) are subject to “a general 1,250%” risk weight. Group 2b refers to “other” crypto assets, including unbacked ones such as Bitcoin (BTC). Group 2a refers to a subcategory of the same assets that meet the Bank for International Settlements’ hedging and netting criteria.

Group 1 b refers to so-called asset-referenced tokens tied to traditional financial instruments. This group is subject to a 250% risk weight.

Those risk weights were introduced as part of the Capital Requirements Regulation (CRR III) and took effect in July 2024.

The latest EBA draft adds the technical elements needed to calculate and aggregate crypto exposures, such as credit-risk, market-risk and counterparty-risk modeling. It also introduces strict separation between assets, meaning Bitcoin and Ether (ETH) cannot be offset against each other.

Once the final draft goes to the European Commission, Brussels will have up to three months to decide whether to endorse it as is or with amendments, or send it back for redrafting. After endorsement, the bill would become a delegated regulation and be forwarded to the European Parliament and the Council, with a three-month objection window extendable to six.

If neither the European Parliament nor the Council objects, the draft will come into effect within 20 days of its publication in the Official Journal of the EU.

Related: US bank lobby challenges crypto firms’ bids for bank licences

EBA finalizes strict crypto rules

The rules are expected to directly affect European banks already holding crypto on their balance sheets. Italian bank Intesa Sanpaolo, which bought 1 million euros worth of Bitcoin in January, would need to hold 12.5 million euros in capital against that position under the new framework.

Fintech firm Revolut is unlikely to be affected by the change. The bank’s crypto services are off-balance-sheet and managed by its non-banking arm, Revolut Digital Assets Europe Ltd.

Related: Germany’s top banks managing $4.5 trillion+ in assets are going crypto—Here’s what to watch

Europe swims against the tide

The EBA’s stance contrasts sharply with the broader direction of global regulators moving toward embracing crypto within existing financial frameworks.

In late March, the Federal Deposit Insurance Corporation (FDIC) stated in a letter that institutions under its oversight, including banks, can now engage in crypto-related activities without prior approval.

In April, Switzerland passed amendments ot its DLT Act enabling banks to custody tokenized securities and offer guarantees for stablecoin issuers under a clear legal framework.

Recent reports also suggest US President Donald Trump is planning to sign an executive order directing banking regulators to investigate claims of debanking made by the cryptocurrency sector and conservatives.

The US banking sector is already taking notice, with JPMorgan Chase reportedly exploring crypto-backed loans, signaling a potential shift in how US banks view crypto assets.

The new EU capital rules could limit bank participation in the growing digital asset market, especially as decentralized finance and tokenization continue to expand into mainstream financial services.

Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight

]]> https://earlybirdsinvest.com/eu-banking-regulator-finalizes-capital-rules-for-banks-holding-bitcoin-ether/feed/ 0 51965 https://earlybirdsinvest.com/european-banking-authority-announces-new-risk-guidelines-for-crypto-assets/ https://earlybirdsinvest.com/european-banking-authority-announces-new-risk-guidelines-for-crypto-assets/#respond Wed, 06 Aug 2025 19:17:32 +0000 https://earlybirdsinvest.com/european-banking-authority-announces-new-risk-guidelines-for-crypto-assets/

The European Union has taken yet another step towards a fully regulated crypto landscape. The European Banking Authority (EBA), the EU’s top banking regulator, has released a pivotal news draft framework that outlines how banks manage their exposure to crypto assets.

This also sets stricter capital requirements for banks holding digital assets. However, the new draft of the EBA – falls under the Capital Requirements Regulation (CRR) – provides a green light of regulation to banks who have been hesitant to enter the crypto market due to uncertainty.

On August 5, 2025, EBA published a Final Regulatory Technical Standard (RTS) that specifies the technical elements needed by agencies to calculate and aggregate exposures of crypto assets in relation to the careful treatment of such exposures.

“RTS addresses implementation aspects and ensures harmonization of capital requirements for the exposure of crypto assets by institutions across the EU,” the EBA said.

The EBA has published new risk guidelines for CryptoAssets. EU authorities have set new rules on how European banks can determine and oversee cryptocurrency accounts based on new capital rules related to Basel and MICA https://t.co/IQ07AeHBIW #FundAdmin #custody pic.twitter.com/vrodt7zryh

– Asset service hours (@astimes_) August 6, 2025

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New guidelines will help you create a single, consistent rule for all financial institutions

“The agency shows an increasing interest in participating in code breaking activities,” the EBA said.

According to the EBA, this interest is driven by the potential for new revenue streams and the need to remain competitive.

“Institutions are exploring a variety of roles, including acting as cryptocurrency managers, issuing cryptocurrency and providing related services such as trading and lending on behalf of clients,” the EBA said.

Banks must implement certain detailed risk models for crypto holdings. The EBA draft calls for a strict model to explain, among other things, credit risk, market risk, and counterparty credit risk.

Discover: Next 1000x ciphers: 10+ crypto tokens that can hit 1000X in 2025

ESMA outlines a framework for assessing the capabilities of employees in crypto companies

The European Securities and Markets Agency (ESMA) has released new guidelines for assessing the competency requirements of employees working in crypto companies. Furthermore, the new guidelines are consistent with the EU market under the Crypto Deduction Regulation (MICA).

In February, European Watchdog published a consultation paper. According to the paper, the key objective of the draft guidelines is to ensure the minimum level of knowledge and ability of staff to provide clients with advice and information about crypto assets or crypto assets services.

Importantly, the step is to “enhance investor protection and promote investors’ trust in the crypto assets market.”

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Gemini co‑founder Tyler Winklevoss said JPMorgan froze the crypto exchange’s effort to regain banking services after he accused “banksters” of trying to strangle fintech and crypto firms.

In a thread on July 25, Winklevoss claimed the bank told Gemini that his earlier tweet had prompted a pause in re‑onboarding, an effort underway since JPMorgan off‑boarded the company during what he calls “Operation Choke Point 2.0.” 

He added:

“They want us to stay silent while they quietly try to take away your right to access your banking data for free […] We will continue to call out this anti‑competitive, rent‑seeking behavior.”

The cause

The July 19 post that he said “struck a nerve” accused large banks of fighting the US Consumer Financial Protection Bureau’s (CFPB) open‑banking rule under Section 1033 of the Consumer Financial Protection Act. 

That rule, still being implemented, would guarantee consumers free third-party access to their account data through aggregators such as Plaid.

Plaid is a conduit many Americans use to connect their checking accounts with crypto platforms, including Gemini, Coinbase, and Kraken.

Winklevoss alleged that JPMorgan and other institutions want to replace free data feeds with “exorbitant fees,” a shift he warned would “bankrupt fintechs” and stifle the on‑ramp that lets retail customers fund crypto purchases with dollars.

Strangling the crypto industry

He framed the banks’ lawsuit against the CFPB as an example of “egregious regulatory capture” and cast the fight as a direct challenge to President Donald Trump’s stated goal of making the US “the crypto capital of the world.”

JPMorgan has not publicly addressed Winklevoss’s allegations.

Several exchanges lost long-standing accounts in 2023 and early 2024 amid heightened regulatory scrutiny, forcing them to seek new partners or international workarounds.

Gemini, which previously used JPMorgan for corporate banking, has been courting new and former providers as it expands its international derivatives venue and bids for broader US offerings.

Some crypto voices, such as CoinMetrics co-founder Nic Carter, link these actions to a series of enforcement actions by banking authorities under the former President Joe Biden administration, known as Operation Chokepoint 2.0.

Federal Deposit Insurance Corporation (FDIC) Acting Chairman Travis Hill acknowledged a targeted effort from the agency towards “debanking” crypto firms. 

During a speech in January, he deemed such actions “unacceptable.”

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