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The Scenius State of Regulation (Issue #15)
Crypto Policy & Regulation: October 2023
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Welcome to The Scenius State of Regulation — a monthly publication dedicated to providing a snapshot of evolving regulation affecting digital assets globally.
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United States 🇺🇸, Canada 🇨🇦, & Caribbean 🌎
The CFTC chair issued some of his firmest statements to date on the need for new crypto regulation in stark contrast to his SEC counterpart.
Tuesday's filing showed that the SEC is seizing on the Terraform Labs ruling to raise questions about the ruling in the Ripple case, which the crypto industry had hailed as a victory.
A federal judge has rejected the U.S. Securities and Exchange Commission’s bid to appeal its ground-shaking loss against Ripple, the crypto company associated with the XRP token.
Prosecutors said the FTX founder had lied to customers. Defense lawyers said he had just been trying to prevent his cryptocurrency exchange from melting down.
The umbrella organization for Canada’s securities regulators has set conditions for trading and issuing stablecoins.
The move aims to bolster consumer protections in a market plagued by recent significant hacks on platforms like Axie Infinity, Crypto.com, and FTX.
While Congress stares down the barrel of a Nov. 17 government shutdown, the rudderless House remains the focus of the crypto industry’s hopes for regulatory progress.
Attracting compliance workers is harder than ever for crypto firms—just when the industry needs them the most.
Regulations aren’t happening as digital currencies have endangered individual investors—not the whole financial system.
The North American Securities Administrators Association (NASAA) filed a brief supporting the SEC’s lawsuit against Coinbase.
Prospects for a more permanent U.S. House speaker are not looking up, which could kick cryptocurrency legislation further down the road.
A recent surge in Chinese Bitcoin mines across the US have signaled national security concerns among US government officials.
In a joint letter addressed to the two regulators, the senators raised concerns over a two-year delay in enforcing the rules, which is expected to cost the federal government billions in tax revenue.
The U.S. Federal Trade Commission (FTC) announced on Oct. 12 that it has settled with the failed crypto lending company Voyager Digital.
The former CEO of Systematic Alpha Management faces up to five years in prison for his role in a fraudulent scheme tied to crypto futures contracts.
Assessing counterparty risk and compliance in crypto staking: questions to guide your due diligence.
The legislation — known as the Digital Financial Assets Law — will mandate individuals and businesses engaged in digital asset activities to obtain a regulatory license, similar to banks and money transmitters.
Written and published by the SEC's Division of Examinations, the standards are meant to prioritize risk areas that pose emerging threats to investors or market integrity.
Bowman warned that the potential benefits of a US central bank digital currency (CBDC) remain unclear, and that the introduction of a US CBDC could pose significant risks and tradeoffs for the financial system.
The SEC voted to dismiss charges with prejudice against Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen - a stunning capitulation by the government.
Letitia James has accused Gemini Trust, Genesis Global Capital and Digital Currency Group of misleading investors in a program promising low risk and high returns.
The U.S. Securities and Exchange Commission (SEC) has slapped Thor Technologies and its CEO, David Chin, with a $1.05m fine for promoting securities without the required license.
Crypto investment firm Paradigm has filed an amicus brief urging the reversal of a district court’s decision in the James Harper lawsuit against the U.S. Internal Revenue Service (IRS).
From Hong Kong to Europe and the United States, regulators are pushing for more oversight and control over digital assets.
Crypto lender Genesis Global said a New York civil fraud lawsuit could lead to a bankruptcy liquidation that does not resolve its claims against parent company Digital Currency Group (DCG).
BlackRock's proposed bitcoin exchange-traded fund (ETF) was added to a clearing-house eligibility file in August, but the move is not indicative of any regulatory approval, clearing house DTCC said.
The Digital Asset Subcommittee broadens its focus to include fintech and AI, driven by the SEC's increased oversight under Chairman Gensler.
The SEC’s charges for the world’s largest asset manager came on the same day as a DTCC listing of its spot Bitcoin ETF was spotted; however, a spokesperson from DTCC confirmed that the listing has been there since August.
BlockFi wind down operations and begin returning crypto assets to customers 11 months after it was swept away by the turbulence in the cryptocurrency industry following FTX's collapse.
Coinbase Makes Final Stand Against SEC Lawsuit (October 25)
The SEC’s classification of Coinbase-listed cryptocurrencies as securities is an overreach, argues Coinbase in its final attempt to dismiss the lawsuit.
Gensler revealed that the SEC took 780 enforcement actions, including 500 standalone cases, and distributed $930 million to harmed investors.
U.S. Senator Cynthia Lummis and Representative French Hill urged the Justice Department to take “swift action” against Binance and Tether over facilitating funds for Hamas.
The SEC called off a looming trial against Ripple executives earlier this month after counsel at Cleary and Paul Weiss made clear their clients were eager for their day in court.
U.S. Deputy Treasury Secretary Wally Adeyemo, speaking at an event in London, said the "there are those, especially (in) the digital asset space, who wish to innovate without regards to its consequences, including protecting against illicit finance."
The SEC and its allies in the Biden administration have been fighting to halt bipartisan cryptocurrency regulation, arguing that the SEC is “the cop on the beat” and already has full authority over digital assets.
The commissioner said the case "illustrates the arbitrariness and real-life consequences" of what she held was disproportionately severe penalization.
Genesis wants to use the shares’ initial value in claims and is not releasing additional collateral transferred by DCG, the suit claims.
Bittrex's US Wind-Down Approved In Bankruptcy Court (October 30)
Bittrex received bankruptcy court approval on Monday to shut down its U.S. operations, clearing the company to emerge from bankruptcy with a wind-down plan that would pay remaining creditors in full.
During a panel at the 2019 MIT Bitcoin Expo, Gensler called out the securities regulator for its “inconsistent” approach to spot Bitcoin ETF approvals.
Kraken Will Share Data Of 42,000 Users With IRS (October 30)
United States-based cryptocurrency exchange Kraken said it will share the data of 42,000 users with the U.S. Internal Revenue Service (IRS) in compliance with a court order.
Do Kwon, the co-founder of the now-collapsed Terra ecosystem, maintains he and his firm did not skirt U.S. securities laws.
The founder of the FTX crypto exchange was grilled by a federal prosecutor for a second day, just before both sides rested their case in the criminal fraud trial.
Middle East & Africa 🌍
The Committee’s recommendations included having the Kenyan government consider implementing a comprehensive framework for digital assets and virtual asset service providers.
Eight major cryptocurrency mining operators signed an open letter to the President of Kazakhstan, Kassym-Jomart Tokayev.
As the conflict between Israel and Hamas escalates, the former CEO of Paxful calls on users to stay away from centralized crypto platforms.
Turkey sets its sights on implementing cryptocurrency taxation and other regulatory measures as part of its 2024 Presidential Annual Program.
Mário Centeno praised the European Union’s first comprehensive crypto framework, MiCA, but insisted on further international consolidation of regulatory efforts.
A global central bank test lab has designed a prototype bitcoin monitoring system aimed at giving authorities a clearer picture on how, when and where the cryptocurrency is used.
The regulator stated that all financial firms serving UK customers must be authorized or registered with it.
Cyprus wants to align with international standards set by the Financial Action Task Force.
Britain's financial regulator on Tuesday said it was stopping peer-to-peer platform rebuildingsociety.com from approving financial promotions for Binance and other crypto asset firms.
A cross-party committee of the UK Parliament has called on the government to protect the rights of artists and consumers in the NFT market.
Russia’s second-largest bourse is ready to be the first in the country to add support for cryptocurrencies.
Garantex’s international pipeline helps defy Treasury sanctions by channeling rubles to crypto to dollars. Customers line up with bags of cash.
The Autorité de contrôle prudentiel et de résolution (ACPR) published some guidelines on DeFi regulatory framework based on a public consultation.
G20 finance ministers say the document is necessary to achieve macroeconomic and financial stability goals.
Crypto exchange makes move after watchdog blocked company’s plan to market itself to British consumers.
Basel Committee on Banking Supervision consultation paper on disclosure of cryptoassets exposures, which proposes a standardized disclosure table and set of templates for banks' cryptoasset exposures.
A milestone move by the European Central Bank toward launching a digital euro within a few years means the time has come for the newest incarnation of money to prove its worth.
The UK’s increasingly tough regulatory regime for cryptocurrencies has sparked a cottage industry in advice and compliance for the handful of companies that have successfully navigated the system.
Marinade Finance holds over $265 million in total value locked, accounting for 70% of all funds locked on the Solana blockchain.
Britain To Push Ahead With Rules For Cryptoassets (October 30)
Britain said on Monday it would legislate to implement its first set of rules to regulate the crypto sector, requiring market participants to be authorized before they can offer services to consumers.
The FCA has listed the exchange as a noncompliant entity and warned the investing public that it will have no recourse in the event of losses.
The new MPI license comes one year after Coinbase’s initial in-principle approval in Singapore, enabling it to expand digital payment token services.
Crypto activity in East Asia fell from its perch after China began its crusade against crypto in 2019. Recent moves by Hong Kong could help reverse that trend, said the blockchain analytics firm.
Sygnum Singapore plans to expand its regulated offering to Asia-Pacific (APAC) markets, such as Hong Kong, a spokesperson told Cointelegraph.
Taiwan To Propose Crypto Regulation In November (October 6)
Taiwan is moving forward with plans to regulate the crypto industry by proposing a draft special law for first reading by the end of November, according to a lawmaker.
Hong Kong official reinforces that retail investors cannot trade stablecoins until they are regulated, likely in 2024.
The Vice-President of HKUST criticizes Hong Kong’s current virtual asset licensing system as “Licensed to Be Killed,” advocating for a new public blockchain for real-world assets.
Singapore’s Attorney General’s Office has officially established two forces dealing with crypto, including assisting police in tracking and confiscating cryptocurrencies.
The bill's primary goal is to establish rules for virtual asset service providers to protect investors and maintain financial stability.
The authorities are developing a Project Guardian initiative, focusing on asset tokenization of financial products.
Australia 🇦🇺 & Oceania
Crypto exchanges holding more than $5 million in aggregate or exceeding $1,500 for any individual user will be mandated to obtain an Australian Financial Services License.
Australia’s Central Bank Seeks To Explore CBDC Use (October 17)
The Reserve Bank of Australia (RBA) has expressed its openness to explore the potential role of a central bank digital currency (CBDC).
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