The Scenius State of Regulation (Issue #16)
Crypto Policy & Regulation: November 2023
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United States 🇺🇸, Canada 🇨🇦, & Caribbean 🌎
Legal Insights: Uncertainty In Oregon For Crypto Assets Under Commercial Law (November 1)
Oregon’s delay in adopting the Uniform Commercial Code is leading to a lack of clarity on how to treat commercial and secured transactions which use crypto assets.
SafeMoon Executive Team Charged With Multiple Fraud Counts, Arrests Made (November 1)
The United States Securities and Exchange Commission announced on Nov. 1 that it was charging SafeMoon and three of its executives with fraud and unregistered securities sales in connection with its SAFEMOON token.
SEC’s Shadow Trading Case Sparks New ‘Major Questions’ Challenge (November 1)
The crypto industry has made the major questions doctrine a centerpiece of challenges to SEC enforcement actions against crypto defendants.
Ripple’s Legal Chief Questions SEC Case Losses Under Gensler (November 2)
Stuart Alderoty expressed concern about the SEC’s repeated arbitrary and capricious actions in court cases, suggesting a troubling pattern under Gensler’s leadership.
Court Dismisses Coin Center’s Tornado Cash Lawsuit Against US Treasury (November 2)
The virtual currency mixer was sanctioned by the Treasury in 2022 as a widely used money laundering protocol for North Korean interests.
Guilty on All Counts, Bankman-Fried Completes a Fall From Grace (November 3)
The verdict in the FTX founder’s fraud trial leaves the crypto industry’s onetime poster child facing a lifetime behind bars.
Blockchain & Cryptocurrency Regulation 2024: Canada (November 3)
Canadian regulators generally continue to take a receptive and innovative approach to regulation, including, for example, in approving crypto-based exchange-traded funds (“ETFs”) and developing a pragmatic regulatory oversight and compliance framework under provincial securities regulation.
LedgerX Highlights CFTC Regulatory Gap In Customer Asset Rules (November 4)
The new CFTC proposal enhances rules for futures commission merchants and derivative clearing organizations, mandating high liquidity in customer fund investments.
SEC Commissioner Pushes Agency To Impose Stronger Preventative Measures On Crypto Industry (November 6)
SEC Commissioner Mark Uyeda believes the SEC has not moved aggressively enough to prevent crypto fraud and criticized its piecemeal, after-the-fact approach.
The SEC Is Struggling To Hire Crypto Experts—Partly Because The Agency’s Employees Can’t Own Cryptocurrency (November 6)
One of the major federal regulators looking to rein in the crypto industry is having trouble hiring crypto experts, according to a new report from the agency’s inspector general.
Half Of CFTC’s Enforcement Cases In The Last Year Involved Digital Assets (November 7)
The agency reported that 47 of the 96 actions in brought in the last year were crypto-related and focused on both well-known and obscure targets.
OneCoin Compliance Head Pleads Guilty in $4 Billion Crypto Scam (November 9)
The legal and compliance head for phony cryptocurrency OneCoin pleaded guilty to participating in the $4 billion fraud scheme, the latest in a series of convictions in the case.
The CFPB Wants To Regulate Crypto (November 14)
Another authority in the US, the Consumer Financial Protection Bureau, is seeking to oversee crypto businesses, including monitoring crypto-specific transaction and revenue data.
New York Times, Crypto Analyst Beat Dfinity Defamation Claims (November 14)
U.S. District Judge Lewis Kaplan of Manhattan dismissed Dfinity’s case against crypto analyst Arkham Intelligence, which issued a 2021 report on the precipitous price drop for Dfinity’s ICP token, and against the New York Times, which published an article recounting Arkham’s findings.
Texas, Alabama Securities Regulators Allege Fraud Against GS Partners In Multiple Crypto Schemes (November 16)
GS Partners faces a regulatory crackdown over a metaverse skyscraper investment scam and a fraudulent staking scheme.
a16z crypto Policy Team: Spotlight On Crypto Policy (November 16)
a16z sets context for the why, what, and how of web3; shares relevant data; and offers guiding principles to ensure policymakers can meet their goals of protecting consumers, providing a path to compliance, and ensuring innovation.
SEC Sues Kraken Over Unregistered Exchange Operations, Commingling Of Funds (November 20)
The regulator accused Kraken of operating an unregistered securities exchange, broker, dealer, and clearing agency and has brought in hundreds of millions of dollars of revenue since 2018 by illegally facilitating the purchase and sales of securities without registering with the SEC, as is required by law
Binance Penalties Include a Number of Crypto Industry Firsts (November 22)
The Treasury Department’s FinCEN is imposing its first-ever monitorship on the cryptocurrency exchange.
U.S. Case Details Binance’s Knowledge About Criminal Users (November 22)
The crypto exchange treated them as essential customers, the government said. U.S. authorities want the industry to understand how bad that is for business.
CFTC to Ramp up Its War on Crypto, “Access to US Customers Is a Privilege” (November 24)
The US Commodity Futures Trading Commission (CFTC) is set to increase its scrutiny on digital asset firms, stating that access to US customers is a privilege.
Binance and the End of Crypto’s Dream to Escape From Government (November 24)
The platform’s settlement with federal authorities transforms it from a scofflaw into a watcher and enforcer on behalf of the U.S. Treasury.
Crypto Kings Dethroned As Crackdown Sweeps Away Old Guard (November 26)
The US’s successful prosecution of Binance’s Changpeng Zhao this week removed the top executive at the world’s largest cryptocurrency exchange, a key target in its efforts to clean up a market with a Wild West reputation.
FSB Assesses Risks Of Multi-Function Crypto-Asset Intermediaries (November 28)
The Financial Stability Board released a report entitled “The Financial Stability Implications of Multifunction Crypto-asset Intermediaries.”
Leash the Kraken: SEC Sues Kraken (November 28)
T SEC filed a complaint in the United States District Court for the Northern District of California against Payward, Inc. and Payward Ventures, Inc. which, together, do business as Kraken.
Coinbase Subpoenaed by CFTC, Sends Emails to Customers as Concerns Mount (November 28)
America’s largest crypto exchange Coinbase has been subpoenaed in the latest crypto crackdown in the United States.
SEC Advances Decision Process On Franklin Templeton’s Bitcoin ETF Application (November 28)
Market analysts have been left scratching their heads at the SEC's early decision review of Franklin Templeton's incomplete Bitcoin ETF application.
Binance Begins Again With U.S. Oversight. Will It Survive? (November 29)
The global crypto exchange’s new regime will force a significant shift in how the firm operates.
BIS Releases Report On CBDC (November 29)
The Bank for International Settlements released a report entitled “Central bank digital currency (CBDC) information security and operational risks to central banks.”
Jump Crypto Allowed To Submit Certain Info Confidentially In SEC’s Case Against Terraform Labs (November 29)
Though it has not alleged any wrongdoing, the SEC believes that the firm's involvement was instrumental in the collapse of Terra's UST stablecoin in May 2022.
FinCEN to Shed Light on Illicit Use of Virtual Currency Mixing Through Enhanced Record Keeping and Reporting Requirements (November 29)
U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) recently announced a Notice of Proposed Rulemaking (NPRM) that identifies international convertible virtual currency mixing as a class of transactions of primary money laundering concern and seeks to increase transparency around virtual currency mixing to combat its use by illicit actors.
Ripple CTO David Schwartz Calls For Legislative Action To Clarify Crypto Regulations (November 29)
David Schwartz recently shared his thoughts on the changing dynamics of U.S. securities law by addressing its application to digital assets and underscored the necessity for legislative clarity to pave the way for balanced regulation.
U.S. Treasury Sanctions Sinbad Mixer, Citing Money Laundering By North Korea’s Lazarus Group (November 29)
As the Treasury Department delivers on recent promises to aggressively pursue malfeasance in the crypto sphere, the DPRK is emerging as a common culprit.
BlackRock Adjusts Proposed Spot Bitcoin ETF Structure To Allay SEC Concerns (November 29)
BlackRock has submitted revisions to its spot Bitcoin ETF application to the SEC in an attempt to allay the regulator’s concerns over market manipulation and broker-dealer registrations, according to meeting minutes between the asset manager and the SEC’s Division of Trading and Markets dated Nov. 28, 2023.
Deputy Secretary of the Treasury Speaks on Digital Assets (November 29)
Deputy Secretary of the Treasury Wally Adeyemo delivered remarks on digital assets at the 2023 Blockchain Association’s Policy Summit in Washington, D.C.
SEC Meets With Hashdex To Discuss Its Bitcoin ETF Proposal (November 30)
Hashdex has proposed a unique ETF model that sources Bitcoin positions from within CME's markets, isolated from unregulated trading.
Republicans' Leadership Squabbles Delayed U.S. Crypto Bills Until 2024, Key Lawmakers Say (November 30)
Republican Rep. French Hill and Democrat Rep. Jim Himes see potential future floor votes for crypto bills being key to convincing the Democrat-controlled Senate to play ball.
Danger for U.S. Crypto Markets Rises As SEC's Credibility Falls (November 30)
Crypto’s story of extremes is reflexive of the federal agency tasked with regulating it and calls into question whether the Securities and Exchange Commission (SEC) can act appropriately and carry out its mission under current leadership.
Middle East & Africa 🌍
Turkey Aims To Shed FATF ‘Grey List’ Status With New Crypto Regulations (November 1)
The Turkish finance minister reportedly stated that crypto assets are the sole outstanding technical compliance matter.
Coinbase Website Blocked in Kazakhstan Amidst Crypto Securities Law Enforcement (November 7)
Coinbase is just one of the exchanges blocked recently as the government of Kazakhstan cites failure to comply with a specific clause in its Digital Assets laws.
Kenyan Blockchain Experts To Formulate Crypto Regulation (November 9)
The Kenyan legislative has directed the Blockchain Association of Kenya to prepare the initial draft of a Virtual Asset Service Provider's Bill to govern cryptocurrencies.
South Africa Adopts the Crypto-Asset Reporting Framework (CARF) Global Standard to Crack Down on Crypto Money Laundering (November 16)
The framework initially received approval in March 2023 with the 48 countries that embraced this standard recently setting a deadline of 2027 for its incorporation into their respective legal frameworks.
Unlicensed Crypto Companies In The UAE – Time To Embrace Regulations (November 21)
A number of regulatory authorities in the UAE have issued guidance intended to shut down unlicensed virtual assets service providers, with strict penalties for the businesses, their owners and managers.
Paxos Poised To Expand Global Stablecoin Operations In Abu Dhabi With Regulatory Green Light (November 29)
Paxos has obtained in-principle approvals from the Financial Services Regulatory Authority (FSRA) in the Abu Dhabi Global Market (ADGM), allowing it to issue US dollars and other currency-backed stablecoins and offer crypto-brokerage and custody services from its regulated ADGM entities.
Europe 🌍
Paypal Registered To Offer Crypto Services In The UK, With Restrictions (November 2)
Payment giant PayPal has successfully registered with the United Kingdom’s Financial Conduct Authority (FCA) to offer crypto services in the country, according to the regulator’s website.
FCA And BOE Set Out Proposed Approach To Regulating Stablecoins (November 6)
The Financial Conduct Authority (FCA) and Bank of England (BoE) published discussion papers on their proposed approach to regulating stablecoins, and the Prudential Regulation Authority (PRA) published a Dear CEO letter on innovative uses of deposits, e-money and stablecoins.
Spanish Regulator Opens First Cryptoasset Advertising Case (November 8)
Spain's stock market supervisor said on Wednesday it had opened its first case relating to a possible infringement of recent rules governing mass advertising campaigns for cryptoassets.
European Parliament Approves Controversial Data Act, Which May Require Kill Switches On Smart Contracts (November 9)
The European Parliament said on Nov. 9 that it has voted in favor of a Data Act that will set out rules in various areas, including smart contract development.
Crypto Regulation Outlook: Why Have New EU Rules Not Brought Us Closer To Mass Adoption? (November 19)
2023 has seen a sharp rise in focus on digital asset regulation. Numerous legal frameworks have been put forward for consideration across the globe to boost the safety and integrity of this industry. The EU’s adoption of MiCA is arguably the most prominent case.
Montenegro Court Clears Crypto Chief Do Kwon For Extradition (November 24)
Do Kwon, the entrepreneur behind the $40bn collapse of crypto token TerraUSD, can be extradited to either the US or South Korea to answer fraud charges following a court ruling in Montenegro.
UK Asset Managers Given Go-Ahead To Launch ‘Tokenised’ Funds (November 24)
UK asset managers will be able to develop tokenised versions of their funds, after winning government backing for their push to experiment with blockchain technology.
Financial Conduct Authority Warns UK Investors Not To Engage With Bitfinex (November 31)
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.
Asia 🌏
Taiwan Busts Alleged $320 Million Tether-Based Laundering Ring (November 1)
Taiwan’s Criminal Investigation Bureau arrested four suspects accused of laundering NT$10.5 billion ($320 million) via the digital asset Tether, according to a statement from the authority Tuesday.
Tokenization Top Of Mind For Hong Kong’s Securities Regulator (November 8)
SFC published requirements last week needed to launch such tokenized products that are likely to hit the market as the regulator continues discussions with industry players.
Bitget Subsidiary BitgetX Closes Operations, Opts Out Of Hong Kong Crypto Market (November 13)
Bitget’s Hong Kong division, BitgetX, has decided not to apply for a Virtual Asset Trading Platform (VATP) license in Hong Kong despite operating in the region within the last seven months.
Singapore’s Monetary Authority Launches New Asset Tokenization Pilots With Project Guardian Expansion (November 15)
The Monetary Authority of Singapore (MAS) has escalated its efforts to expand its asset tokenization initiatives under Project Guardian to catalyze the institutional adoption of digital assets, aiming to unleash liquidity, unlock new investment opportunities, and enhance the efficiency of financial markets.
Singapore Plots ‘Live’ Wholesale CBDC Pilot For Next Year (November 16)
The regulator plans to partner with local banks, and the partnership will see a wholesale CBDC used “as a common settlement asset in domestic payments.”
Binance Japan To List 13 Tokens New Tokens In One Of The World’s Strictest Crypto Markets (November 15)
The crypto giant's Japanese division, which has long-term plans to offer 100 or more tokens, will add the new listings on Nov. 27.
Singapore Vies With Asian Peers for Slice of $127 Billion Stablecoin Sector (November 16)
Singapore’s financial regulator has approved blockchain firms for the issuance of stablecoins backed by the Singapore dollar or the currency of any G10 nation.
Singapore Further Tightens Crypto Regulations To Protect Retail Investors From Speculative Risks (November 23)
The financial regulator directed Digital Payment Token (DPT) service providers within its jurisdiction to adopt specific measures to discourage retail customers from engaging in speculative crypto activities.
Philippines Security Regulator Warns Binance Is Operating Without a License (November 29)
The Philippines Securities and Exchange Commission is warning users in the country that it may soon block access to Binance as the exchange is operating without a license in the country.
Hong Kong Regulator Considers Allowing ICOs To Bolster Economic Revival (November 30)
Hong Kong, a city renowned for its dynamic financial landscape, may be toying with groundbreaking changes in its digital asset approach. In a recent letter, Mr. Chen Zhihua, President of the Hong Kong Securities and Futures Association, proposed introducing an “Initial Coin Offering (ICO) mechanism” in Hong Kong.
Latin America 🌍
Bitcoiners Pitch Draft Bill To Preserve Blockchain, Decentralization In Argentina (November 12)
The group, “Bitcoin Argentina,” previously rejected the idea that regulation was needed in the cryptocurrency industry.
Brazil to Impose 15% Tax on Crypto Earnings Held on Offshore Exchanges: Report (November 12)
The Brazilian Senate approved new income-tax regulations that could mean citizens will face paying up to 15% on earnings from cryptocurrencies held on international exchanges.