Crypto Firms: EU Clampdown Targets Misleading Regulatory Claims

Economic

Cryptocurrency

Summary:

On July 11, 2025, the European Securities and Markets Authority (ESMA) issued a stern warning to crypto firms, emphasizing that they must not mislead customers about the regulatory status of their products...

EU Raises the Bar on Crypto Investor Protection

In the latest development under the European Union’s Markets in Crypto-Assets (MiCA) framework, ESMA has warned crypto asset service providers (CASPs) against misrepresenting the scope of regulation to customers. Specifically, the agency is concerned about platforms that offer both regulated and unregulated products without clearly distinguishing between them.

ESMA emphasized that such practices pose “investor protection risks,” as customers may mistakenly believe all services fall under MiCA's investor safeguards. These include mandatory asset custody protections and formal complaint-handling processes, intended to create a safer investment environment within the EU crypto space.

Misuse of Regulatory Status as a Marketing Tool

The regulator took particular issue with CASPs using their MiCA-regulated status as a marketing gimmick. According to ESMA, some providers intentionally promote regulated registration to give the illusion that all products offered are covered, even when some services like direct investments in commodities (e.g. gold) or crypto lending remain outside MiCA’s scope.

ESMA stressed that regulatory approval should not be used as a promotional badge, and any insinuation that all products are MiCA-compliant when they are not could mislead consumers and potentially violate EU rules.

The FTX Fallout and Regulatory Vigilance

The warning comes amid lingering regulatory concerns following the 2022 collapse of FTX, which exposed massive gaps in oversight and resulted in billions in investor losses. Regulators worldwide have since tightened scrutiny on crypto firms, with the EU emerging as a global leader in formalized crypto oversight through MiCA.

Under MiCA, CASPs must obtain regulatory approval from a national authority before gaining “passporting” rights to operate across the EU. This cross-border access adds urgency to ensuring that licensing and supervision standards are consistent and robust.

Spotlight on Malta’s Licensing Standards

Coinciding with ESMA’s statement, the agency released a peer review of Malta’s crypto licensing process. The report noted that while Malta’s financial services authority has the expertise and resources to handle crypto licensing, the risk assessment procedures for at least one unnamed firm were only “partially satisfactory.”

Although Malta has often been viewed as a pioneer in digital asset regulation, the review signals that ESMA will continue to evaluate the quality and consistency of member states' regulatory frameworks.

A Clearer, Stricter Future for EU Crypto Markets

With MiCA now in effect, the EU is enforcing a firmer line on how crypto firms operate and market themselves. ESMA’s warning serves as a reminder that regulation is not just a legal formality but a trust-building measure. Firms attempting to blur regulatory boundaries or exploit partial compliance for competitive advantage risk reputational damage and legal consequences.

As the regulatory ecosystem evolves, consistent enforcement across EU nations will be key to maintaining market integrity and investor confidence. Crypto companies hoping to operate across Europe must now align not only with technical compliance but also with a culture of transparency and accountability.

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Risk Warnings and Disclaimers

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Gerik

Economic

A Decade of Infrastructure Focus and Strategic Positioning

Established in response to Western reluctance to grant China greater influence in institutions like the IMF and World Bank, AIIB was born from a desire to address a clear development gap: infrastructure. Unlike traditional development banks prioritizing poverty alleviation, AIIB has concentrated on large-scale projects in transport, energy, water, digital infrastructure, and health delivering over $61 billion in funding across more than 320 projects in 38 economies.

Under the leadership of founding president Jin Liqun, AIIB prioritized cooperation over competition. Despite initial Western skepticism especially from the U.S., which lobbied against the bank’s creation AIIB expanded its membership from 57 to 110 countries, demonstrating widespread support for infrastructure-led growth in developing regions.

Leadership Transition Amid Global Uncertainty

The upcoming appointment of Zou Jiayi, a senior figure from China’s Ministry of Finance, signals continuity but also raises questions about AIIB’s trajectory in a more volatile geopolitical environment. Unlike Jin, who held positions abroad including at the World Bank and ADB, Zou’s career has remained primarily domestic. Nevertheless, her familiarity with multilateral financial cooperation suggests a steady hand.

This leadership shift comes as U.S. President Donald Trump initiates a sweeping audit of global institutions, potentially applying indirect pressure on multilateral banks. While AIIB has remained relatively untouched by U.S. criticisms unlike the BRICS New Development Bank maintaining neutrality will become increasingly challenging.

Avoiding Politics, Delivering Impact

One of AIIB’s defining strengths has been its commitment to political neutrality. As Jin noted in a 2016 Financial Times interview, AIIB “will not do anything politically motivated.” This apolitical stance has helped the bank gain legitimacy and work alongside legacy institutions like the World Bank and Asian Development Bank to co-finance impactful projects.

Notably, AIIB claims to have helped construct or upgrade 51,000 km of roads and rail, improve irrigation systems for 22 million people, develop over 21 GW of renewable energy, and cut 28.5 million tons of CO₂ emissions. These achievements reinforce its capacity to act as a reliable, efficient development partner.

The Road Ahead: ESG, Green Finance, and Private Sector Engagement

As Asia faces the dual pressures of climate change and supply chain realignment, the demand for sustainable infrastructure financing is intensifying. Urbanization, smart logistics, renewable energy, and climate-resilient agriculture are all capital-intensive sectors that require long-term, strategic investment exactly where AIIB can add value.

Future success will hinge on President Zou’s ability to balance large-scale infrastructure ambitions with rigorous environmental, social, and governance (ESG) standards. Moreover, AIIB’s flexible approach allows it to collaborate with private partners on complex, high-impact projects, a key differentiator from older, more bureaucratic institutions.

AIIB has proven itself over the past decade as a pragmatic, responsive, and collaborative institution. If it can preserve its multilateral orientation and avoid political entanglements, it is well-positioned to become one of Asia’s most influential financial engines. With leadership transition on the horizon and infrastructure needs growing more urgent, the bank’s next chapter will be critical for shaping the region’s sustainable development landscape.

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Owen Li

Economic

US manufacturers secured the business tax provisions they’d hoped for in Donald Trump’s budget megabill, but the president’s erratic trade policy risks tempering any pronounced pickup in capital investment.

Many producers this year had put spending plans on hold due to uncertainty surrounding the tax and spending legislation as well as Trump’s vacillating tariff announcements.

Manufacturers can now breathe a little easier after Trump’s signature $3.4 trillion budget package reinstated a 100% first-year bonus depreciation for investment in equipment and factories. The legislation also allows for an immediate deduction for research and development costs and more generous interest deductibility.

Making the tax provisions permanent will cause some companies to make capital investments, even if it’s difficult to predict how much, said Charles Crain, managing vice president of policy at the National Association of Manufacturers, which made extending the provisions a priority.

“There are certainly still impediments to capex on the table, but tax was a huge one and it is now off the table,” Crain said.

Still, some expect any notable upturn in capital expenditures to take longer to evolve because of the administration’s frenetic tariff announcements as well as the levies themselves. Higher duties on sectors, such as metals, risk driving up costs of production.

“If companies can’t price their product accurately because the input costs keep changing due to an ever-changing tariff environment, then I think their decisions will stay largely frozen,” said Susan Spence, chair of the Institute for Supply Management’s Manufacturing Business Survey Committee.

Trump this week sent letters to US trading partners threatening high tariff rates, though he left the door open for negotiating trade deals. He also extended a Wednesday deadline to impose higher punitive measures until Aug. 1.

The president said his administration will impose a 50% duty on imported copper. Having already placed levies on steel and aluminum, there is notable concern from US buyers that the metals tariffs risk undermining Trump’s goal of reviving manufacturing.

Business surveys have consistently showed waning capital-spending intentions following the November election. But the Association of Equipment Manufacturers is optimistic that the new legislation will provide the certainty needed to bolster investment in domestic manufacturing, especially by small and mid-size companies, said Kip Eideberg, senior vice president of government and industry relations.

Optimism over the passage of the president’s One Big Beautiful Bill Act has helped drive up stock prices.

“When I go around the country or CEOs come into Treasury to see me, they’ve all been held captive by a lack of certainty on this tax bill,” Treasury Secretary Scott Bessent said on CNBC last week. “And now that they know that they can have a hundred percent full expensing on equipment and for factories, I think we are going to see things take off between now and Labor Day.”

Leigh Lytle, chief executive officer of the Equipment Leasing and Finance Association, said she also expects the tax provisions will encourage companies to buy sooner, rather than later, and boost hiring. While tariffs have been a concern, the provisions “provide long-term certainty that these businesses need,” Lytle said.

Indeed, some small manufacturers are taking the plunge. Courtney Silver’s plans to spend more than $1 million on equipment for her Concord, North Carolina machine shop were put on hold until it was clear whether Congress would allow businesses to fully expense most equipment purchases. Now she’s ready to move forward.

“It give us the confidence to take that step,” said Silver, president of Ketchie Inc. “It’s the right move to support our team, grow smarter, and stay competitive.”

In northern Maryland, Giuseppe Riva expects to sell more steel fabrication machines with the new bonus depreciation rules, at least judging from what he saw in Trump’s first term.

At the time, Riva was leading the North American unit of Italian woodworking machine maker SCM Group. Many of his clients were furniture makers, who spent tens of thousands of dollars for SCM’s computer-guided wood-cutting machines.

After Congress passed the 2017 tax cut bill, enacting an earlier round of bonus depreciation, Riva said his clients opportunistically ordered new woodworking machines worth roughly equal to their tax savings.

“Instead of paying taxes, the thought was, ‘Send me a new machine,’” Riva said.

Riva has since moved into a new role leading the North American unit of Italy-based Ficep S.p.A., which makes machines that cut and drill steel. Riva said his products now cost more, averaging over $1 million. He expects customers to be more measured with their purchases.

However, Riva anticipates a pickup in sales because the new tax rules open the door to bigger, longer-term purchases, he said.

US capital expenditures rose after the introduction of 100% bonus depreciation in the 2017 tax act, but it was not the key driver because other factors encouraged firms to invest, including slashing the corporate tax rate, Pantheon Macroeconomics economists Samuel Tombs and Oliver Allen said in a note.

While the tax provisions likely will lift business investment in the medium term, “we expect firms to hold back from deploying their capital until the tariff outlook has clarified,” the Pantheon economists said.

There’s little to suggest the tax provisions alone will spur a large burst of capital investment, said Michael Hicks, an economics professor at Ball State University in Indiana and director of its Center for Business and Economic Research.

Most manufacturing-intensive states accommodate new capital investment with large subsidies, and there’s already been a burst of manufacturing capital investment — including record factory construction — spurred in part by federal incentives under former President Joe Biden, Hicks said. And Trump’s tariffs continue to beleaguer manufacturers, he added.

“In the end, the ‘best case’ likely tariff scenario adds far more costs to most capital investment than this legislation could possibly offset,” Hicks said.

Source: Bloomberg Europe

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Gerik

Economic

China–U.S. Trade War

Sharp Turn in U.S. Trade Policy

President Donald Trump has reasserted his aggressive trade stance by unilaterally announcing a 30% tariff on all goods imported from the EU and Mexico. The move, revealed through separate open letters posted on Truth Social, marks a return to the combative trade strategy that characterized earlier phases of his administration.

These announcements surprised markets, as investors had anticipated more moderate measures. According to Axios, the tariff rate imposed this week exceeds market expectations and introduces fresh volatility into global trade relations.

Implications for EU and Mexico Negotiations

The letters delivered a clear ultimatum to European leaders: eliminate tariffs and allow U.S. companies full, unrestricted access to EU markets, or face significant penalties. These demands have likely disrupted negotiations aimed at reaching a U.S.-EU trade agreement later this month.

As for Mexico, Trump’s new 30% tariff comes amid mounting regional tensions. It follows a previous announcement imposing a 35% tariff on Canadian goods now the highest among North American trading partners. Trump explicitly tied these actions to drug trafficking concerns, referencing U.S. Customs data showing May fentanyl seizures at the Mexican border were 20 times higher than at the Canadian border.

Broader Escalation and Strategic Intent

The latest moves are part of a broader tariff escalation strategy. On July 10, Trump told NBC News he was preparing to apply a “comprehensive” 20% tariff on all other foreign imports double the 10% global base tariff announced back in April.

Additionally, Trump this week announced a staggering 50% tariff on copper, which could send shockwaves through supply chains in construction, electronics, and renewable energy. Copper’s centrality to the global economy makes this particular move especially consequential for inflation-sensitive sectors.

Rising Trade Barriers, Global Uncertainty

These escalating tariffs threaten to upend global supply chains, strain alliances, and amplify uncertainty for exporters and manufacturers alike. Businesses in both Europe and North America now face the urgent task of re-evaluating pricing, contracts, and supply routes as the August 1 deadline looms.

With ongoing negotiations between Washington and Brussels hanging in the balance, and North American trade partnerships growing increasingly strained, President Trump’s recent flurry of tariff letters signals a more protectionist phase ahead one where trade diplomacy takes a back seat to unilateral pressure.

Source: Reuters

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Gerik

Economic

China–U.S. Trade War

Pashion’s Dilemma: Tariffs vs. Manufacturing Reality

In May 2025, Haley Pavone, founder of California-based Pashion Footwear, faced an $80,000 import tax bill due to U.S. tariffs on Chinese goods. Rather than halt imports from China, she cut hiring and added a surcharge for customers. Though she had explored alternatives in Brazil, India, and Vietnam, none matched China’s flexibility or expertise. High minimum order quantities, unskilled labor, and persistent dependence on Chinese components in those countries made relocation unviable.

Pavone’s experience illustrates the broader challenge for U.S. firms: even under tariffs as steep as 190%, China’s manufacturing efficiency, technical skills, and flexibility such as accepting small-batch orders for design testing remain unmatched.

China's Inescapable Manufacturing Ecosystem

The global trend of “China+1” sourcing has gained traction since 2017, with efforts to diversify supply chains across industries like textiles, electronics, and automobiles. Yet, according to Rhodium Group, most firms still rely on China for essential components. No other nation offers a production ecosystem with comparable scalability, integration, and logistical infrastructure.

This structural dependence is further supported by trade data. Although China’s direct exports to the U.S. have declined, U.S. imports from Southeast Asia have surged. Since China is the largest exporter to many of these nations, it suggests that Chinese goods are being rerouted through intermediary countries, keeping China embedded in U.S. supply chains.

The Costs and Uncertainty of Diversification

Pavone estimates that moving production to Vietnam would cost at least $50,000 in upfront investment, excluding unpredictable future tariffs. Her factory in Dongguan, China, has optimized every production step from plastics to metals to fabric and supports agile manufacturing, which is crucial for innovative businesses like hers.

With retail prices around $200 per pair, profit margins are clearly being squeezed by the tariffs. Yet Pashion Footwear remains operationally sustainable for now. The recent easing of U.S.-China trade tensions offers a glimmer of hope, but the lack of clarity around future tariff policy leaves business decisions in limbo.

A Global Supply Chain Paradox

Pashion’s situation epitomizes the contradiction at the heart of global trade: while geopolitical pressures and government policies push companies to “de-risk” and move away from China, the practical advantages of Chinese manufacturing remain irreplaceable. For many U.S. businesses, this dependence born of cost efficiency, flexibility, and deep-rooted supply networks is not a matter of choice, but necessity.

Until other countries can match China’s capabilities at scale, the idea of fully decoupling from China may remain more political rhetoric than business reality.

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Devin

Economic

The European Union braced on Friday to receive a letter from U.S. President Donald Trump, outlining planned duties on his largest trade and investment partner after a broadening of his tariff war in recent days.

The EU initially hoped to strike a comprehensive trade agreement, including zero-for-zero tariffs on industrial goods, but months of difficult talks have led to the realisation it will probably have to settle for an interim agreement and hope something better can still be negotiated.

The 27-country bloc is under conflicting pressures as powerhouse Germany urged a quick deal to safeguard its industry, while other EU members such as France have said EU negotiators should not cave into a one-sided deal on U.S. terms.

After keeping much of the world guessing on his intentions, Trump has outlined new tariffs for a number of countries, including allies Japan and South Korea, along with a 50% tariff on copper, and a hike to 35% on Canada.

"We would need a crystal ball to detect what the U.S. intentions are," an EU diplomat said on condition of anonymity.

Another source with knowledge of the U.S.-EU negotiations said an agreement was close, but that it was hard to predict if the EU might still get a letter announcing more tariffs or when any agreement might be finalised.

One European industry lobbyist said it was nearly impossible to anticipate Trump’s thinking. “It’s policy by Truth Social,” the lobbyist said, referring to Trump's social media platform.

European shares dipped on Friday as investors awaited word on tariffs for the EU.

"The EU has been negotiating with the U.S. about the sector tariffs and also about the reciprocal tariffs...everybody was expecting that there would be a better trade deal coming, but now it looks like it will be a worse outcome," said Jochen Stanzl, chief market analyst at CMC Markets.

Stanzl added a rally on Germany's DAX reflected hopes of a better trade deal with the United States, but that the tariffs on Canada, despite weeks of talks, had cast some doubt on whether it could be achieved.

Elsewhere U.S. Secretary of State Marco Rubio met with Chinese Foreign Minister Wang Yi in Kuala Lumpur on Friday, as the two powers vied to push their agendas in Asia as tension simmers over Trump's tariffs.

Rubio said the meeting was "very constructive," while adding the two sides had issues to resolve.

China this week warned the United States against reinstating hefty levies on its goods next month and Beijing has also threatened to retaliate against nations that strike deals with the United States to cut China out of supply chains.

TRUMP VERSUS THE EU

Trump has periodically railed against the EU, saying in February that it was "formed to screw the United States" and asking why Europe exports so many cars but buys so few from the U.S. in return.

His biggest grievance is the U.S. merchandise trade deficit with the EU, which in 2024 amounted to $235 billion, according to U.S. Census Bureau data. The EU has repeatedly pointed to the U.S. surplus in services that in part redresses the balance.

The potential escalation between the EU and the U.S. is a big deal for financial markets, said Joseph Capurso, head of international economics at the Commonwealth Bank of Australia. "If you get something similar to (the U.S.-China trade war in April), that's going to be very destabilising."

In an interview with NBC News published on Thursday, Trump said other trading partners that had not yet received such letters would likely face blanket tariffs.

"Not everybody has to get a letter. You know that. We’re just setting our tariffs," Trump said in the interview.

“We're just going to say all of the remaining countries are going to pay, whether it’s 20% or 15%. We’ll work that out now,” Trump was quoted as saying by the network.

Source: Reuters

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Gerik

Economic

UK Growth Slows After Strong Start to the Year

According to data released by the Office for National Statistics (ONS) on July 11, the UK’s real GDP grew by a mere 0.1% in May, following increases of 0.3% in April and 0.4% in March. While GDP grew by 0.5% over the three months to May compared to the previous quarter, this momentum is largely attributed to early-year activity in services some of which was front-loaded ahead of U.S. tariff deadlines and UK stamp duty reforms.

In contrast, both manufacturing and construction sectors recorded declines in May, dragging down overall economic performance. The weak data cast doubt over the UK’s ability to sustain growth in the second half of 2025.

Fiscal Room Constrained as Government Faces Budget Gap

The disappointing figures come as Chancellor Rachel Reeves attempts to deliver Labour’s pledge to “reignite growth.” However, her efforts are constrained by high levels of public debt and limited fiscal headroom, making it difficult to fund public services or new infrastructure without increasing borrowing or finding additional revenues.

Economists warn of a fiscal black hole of over £20 billion ($27 billion) that needs to be addressed to meet existing spending commitments. This reality threatens to slow the rollout of Labour’s economic agenda unless growth rebounds or tax receipts rise significantly.

Rate Cut Expectations Intensify as BoE Faces Pressure

The Bank of England is under renewed pressure to ease monetary policy, with the base rate currently at 4.25%. Suren Thiru, Chief Economist at the Institute of Chartered Accountants in England and Wales, noted that the weak data strengthens the case for a 0.25 percentage point rate cut as early as August, with markets now pricing in at least two cuts before the end of 2025.

After the data release, the British pound slipped 0.2% against the U.S. dollar, trading at $1.35. Investor sentiment now hinges on whether the BoE will act decisively to support growth while inflation remains under control.

UK Risks Losing Momentum Amid Fiscal and Global Uncertainty

Although the UK started 2025 as one of the fastest-growing economies in the G7 thanks to a surge in exports and strong service sector performance it now risks losing that momentum as economic headwinds intensify.

The Bank of England has cautioned that early-year growth was boosted by temporary and external factors, including pre-emptive export spikes before U.S. tariffs and tax changes in the property market. Without a new engine of growth, the UK may struggle to maintain economic resilience.

For the Labour government, the challenge is clear: restore growth without widening the deficit, and deliver on campaign promises under tightening fiscal constraints. Much now depends on both effective policy execution and a timely shift in monetary policy to support the recovery.