Google Tightens Regulations on Cryptocurrency Apps in Play Store
Google has updated its Play Store rules for cryptocurrency apps, introducing stricter license requirements that may make it difficult for many developers to remain available. According to experts, this move grants more control to large tech platforms, raising concerns about accountability and gatekeeping in the distribution of crypto apps.
The updated guidelines, which appeared on Google’s developer pages in early August, affect crypto wallet and exchange apps in over a dozen jurisdictions, including the United States, the European Union, Japan, and South Korea. Google states that the change aims to “ensure a safe and compliant ecosystem for users,” although it may reduce an entire category of software.
Wallet apps in the USA must now either register as a financial service business with the Financial Crimes Enforcement Network (FinCEN) or obtain a transmission license in at least one state or a state-licensed bank. In the EU, developers need approval as a crypto-asset service provider under the new Markets in Crypto-Assets (MiCA) framework.
Regulatory Burden on Custodial Crypto Wallets
The new requirements have sparked a strong reaction from the crypto community, with some experts warning that the rules favor large depot platforms while canceling out light wallets. Seal 911, a group focused on crypto and cybersecurity issues, described the new requirements as “crazy” and expressed concerns that users may turn to untrustworthy APKs instead.
Bill Hughes, a lawyer at Consensys, which develops the non-custodial crypto wallet MetaMask, expressed skepticism about the accountability obligation and noted that it would be difficult to identify the Google lawyer who wrote or approved the updated crypto guidelines. He described the situation as “a little chaotic” and emphasized that big tech platforms now control the main distribution channels for apps, without being required to be fair, consistent, or transparent.
After the news broke, Google clarified that non-custodial wallets are not within the scope of Google Play and Software Wallets guidelines in Google Play. However, the updated guidelines have raised questions about the growing regulatory burden on custodial crypto wallets and the potential impact on the crypto industry as a whole.
Commercial Implications
The move appears to be largely in line with the 2021 guidelines of the Financial Action Task Force (FATF) to regulate virtual asset service providers. Although FATF recommendations are not binding, many member countries implement them to avoid being listed on global black or gray lists.
The guidelines expanded the rules to include some non-custodial wallets, especially if someone helps centrally with the administration of the interface or exceeds updates. The company says that apps can continue to be published in countries that are not on the license list if they comply with local laws. However, given the importance of most major crypto markets, there may be limited room for global sales without meeting the new requirements.
For more information on Google’s new rules and their impact on the crypto industry, visit https://crypto.news/google-plays-new-rules-now-put-more-regulatory-burden-on-custodial-crypto-wallets/
