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EU Parliament Passes DAC8 Crypto Reporting Rules Bill, Continuing Path Towards Comprehensive Digital Asset Regulations

October 3, 2023

Samara Asset Group's corporate news image, White logo on black background.Samara Asset Group's corporate news image, White logo on black background.Samara Asset Group's Ad Hoc news image, White logo on black background.Samara Asset Group's Ad Hoc news image, White logo on black background.

Stay up to date with our monthly market commentary:

  • EU Parliament passes detailed digital asset reporting bill.
  • Plug-and-play Lightning Network infrastructure adoption is growing.
  • Bitcoin (BTC) is down 0.8%, while Ether (ETH) is down 2.9% versus last month.*

Market Overview - September

The price of Bitcoin (BTC) dropped slightly in September by 0.8% as investors anticipated more news surrounding the spot Bitcoin ETF applications in the U.S. However, the only noteworthy news they received was the extension of Ark Invest’s application, which was extended into January 2024. 

The biggest news for digital asset investors in Europe, however, was the announcement of the DAC8 law by the European Union parliament. 

The DAC8 law is designed to amend the EU Directive on Administrative Cooperation (DAC), which mandates crypto-asset service providers to report transactions involving EU clients to the bloc’s tax authorities. 535 members voted in favor of the bill, with only 57 votes against and 60 abstentions. EU member states now have until December 31, 2025, to implement the rules, which are set to officially take effect on January 1, 2026.

This announcement comes off the back of Markets in Crypto-Assets Regulation (MiCA), which lays out comprehensive laws for the sector and is due to take effect in 2024. These measures are a clear indication that  Europe is moving ahead and laying the groundwork for comprehensive digital asset regulations.

Crypto Asset Market Performance Review 

The crypto asset markets closed the month a leg lower, with some of the most popular assets dropping by more than 15%. Bitcoin (BTC) largely stood its ground, closing only 0.8% lower month-on-month. 

While Bitcoin (BTC) traded in the $25,600 and $26,600 range for the majority of the month, digital assets as an asset class were under pressure as regulatory uncertainty continued in the U.S.  

The Chairman of the SEC, Gary Gensler, is still campaigning to regulate almost all digital assets as securities. If he’s successful, most digital asset issuers would have to pay substantial fines. Institutional investors would need to coordinate with the SEC as well, and retail investors would face a new landscape in which they would need to wait for further regulation or actions by the SEC to determine what they can do with their assets. 

Gensler was also invited to a hearing in front of Congress to discuss his plans with the SEC and how long investors would have to wait to see a plan of action. During that hearing, many voices from both sides of the aisle spoke out against Gensler’s past decisions and urged him to act quickly. 

In the weeks leading up to the hearing, we saw various delays by the SEC for Bitcoin and Ethereum Spot ETFs, as well as further announcements of investigations into major exchanges such as Binance U.S. Such news put selling pressure on the BNB token and the rest of the crypto asset market. 

Bitcoin Tech Update

September was another exciting month for Bitcoin, with many updates and announcements from the Lightning ecosystem. The focus of the community is shifting to offering simpler plug-and-play solutions, as well as direct access for developers to web portals or API infrastructure hubs.

Alby Launches Developer Portal

Alby started out as a simple Chrome Extension Lightning wallet but quickly turned into a Bitcoin infrastructure company. Both consumers and developers can use Alby to interact with Lightning-enabled apps or to build new products. 

With the launch of its new developer portal, Alby aims to further support the broader Bitcoin, Lightning, and Nostr ecosystem . Instead of having to rely on various providers, developers can now utilize the Alby suite. 

The goal is to examine the available components, discover which components work well together and are essential for their apps, or deploy the Alby libraries to strengthen connections between the current web landscape and the possibilities offered by Bitcoin and Lightning in particular.

Alby Celebrates 1 Million Monthly Bitcoin Payments

In addition to launching the Alby developer portal, the company announced that they had passed 1 million monthly Bitcoin payments. At the beginning of the year, the monthly number of payments was roughly 250,000. 

This marks a milestone for the company but also shows the demand for Lightning payments. 

Alby proves that users are engaging with and using the Lightning Network daily. More and more solutions are being built in response to the current state of the ecosystem and the anticipated increase in number of payments.

River Announces Plug-and-Play Solutions for Developers

River Lightning has emerged as one of the go-to Bitcoin exchanges in the U.S. and a reliable Lightning partner for developers or builders. 

This month, the River team announced an upgrade to their Lightning product. The company will soon offer any developer globally the opportunity to sign up and start programmatically sending and receiving Lightning payments within minutes. 

That will be possible thanks to plug-and-play solutions and support from the River Lightning team. River CEO Alexander Leishman said that more products are in the works and that future updates to them will be announced soon.

Institutional Interest in Bitcoin

September was packed with various announcements by fellow asset managers. While Samara is already heavily invested in the Bitcoin ecosystem, other institutions are following suit and have started offering their digital asset products. There have also been updates to the deadlines for Bitcoin Spot ETFs. 

Deutsche Bank Announces Digital Asset Custody Solutions

Earlier this month, Deutsche Bank announced that they’re looking into a digital asset license to offer crypto custody solutions for institutional clients. The bank has recognized the potential of the digital asset market and expects more interest from fellow institutions and investors alike. 

However, the German bank is eager to offer multiple solutions in the ecosystem and go much further than just offering custody of cryptocurrencies. The idea is to support their clients in the overall digital asset ecosystem. 

This announcement comes at the ideal time, as Europe is gearing up for better regulation, new bills, and overall clarity for institutions and investors in the digital asset market.

Deadline for Ark Invest Spot Bitcoin ETF Extended Into January 2024

Ark Invest is working hard to get a Bitcoin Spot ETF approved by the SEC. In the past, the regulator has denied various applications. However, this time, the situation looks much more promising. 

Ark’s ETF application was in the larger group of Wall Street institutions this past autumn as well. This month, the SEC announced an extension of Ark’s ETF deadline. Instead of December 2023, the next possible date for approval is January 10, 2024. 

With that extension, the SEC leaves itself no choice but to either approve or deny the ETF. They also have a fixed number of days or months to look at the applications. At the time of writing, no further deadlines for other applicants have been announced. However, it appears like January could be a decisive month for Bitcoin Spot ETFs and the ecosystem.

Bitcoin on Balance Sheets

MicroStrategy’s chairman, Michael Saylor, announced an additional purchase of 5,445 BTC, which brings the Bitcoin on their balance sheet to a total of 158,245 BTC. 

MicroStrategy’s continuing buying of Bitcoin as a treasury asset highlights the digital currency’s use case as a cash reserves alternative for corporate treasuries. 

*Closing price data is from September 28, 2023