The Scenius State of Regulation (Issue #18)
Crypto Policy & Regulation: January 2024
Scenius: The intelligence and the intuition of a whole cultural scene. The communal form of the concept of genius.
Welcome to The Scenius State of Regulation — a monthly publication dedicated to providing a snapshot of evolving regulation affecting digital assets globally.
If you find this newsletter valuable, please subscribe and share The Scenius State of Regulation with your network 💪
United States 🇺🇸, Canada 🇨🇦, & Caribbean 🌎
Crypto Regulation In 2024: Forecasts And Perspectives (January 4)
The crypto.news regulatory team looks at the current state of cryptocurrency regulations and talks to experts on what to expect in 2024.
XRP Lawyer John Deaton Takes Center Stage In Congressional Crypto Discussion (January 4)
John Deaton, amicus counsel for over 75,000 XRP holders, has publicly volunteered to testify at an upcoming congressional hearing on digital assets scheduled for January 10.
A New Provision Of An Old Law Is Confusing Crypto Investors (January 4)
Digital assets being considered as cash for Form 8300 reporting requirements is causing confusion for crypto enthusiasts.
Judge Rules That Terraform’s Crypto Assets are Securities (January 5)
Now, the Court has determined in SEC v. Terraform Labs, as a matter of law, that crypto assets are securities.
Mango Markets Allocates $250k To Tackle US Regulatory Inquiries (January 6)
Decentralized exchange Mango Markets is responding to scrutiny from U.S. regulatory bodies by allocating $250,000 worth of USD Coin (USDC) to its course.
HyperVerse Crypto Promoter ‘Bitcoin Rodney’ Arrested And Charged In US (January 8)
Rodney Burton, also known as “Bitcoin Rodney,” was arrested in Florida and charged with allegedly promoting the HyperVerse crypto investment scheme and defrauding individuals who wished to invest in the scheme of more than $7 million.
SEC Charges DAO For Unregistered Sale Of Crypto Smart Yield Bonds (January 8)
The SEC today announced that BarnBridge DAO and its two founders, Tyler Ward and Troy Murray, will pay more than $1.7 million to settle charges that they failed to register BarnBridge’s offer and sale of structured crypto asset securities known as SMART Yield bonds.
Setting The Record Straight And Debunking Unworkable Illicit Finance Proposals (January 8)
House Representative Warren Davidson (R-Ohio) published an article in The Hill discussing recent illicit finance legislative proposals that target crypto.
NY Comptroller Criticizes State Financial Regulator’s Crypto Oversight Prowess (January 8)
A report released in January by the office of the state’s comptroller, Thomas DiNapoli, questioned the thoroughness and efficacy of New York’s so-called BitLicense program.
Crypto Regulations Tightened In 80% Of Major Jurisdictions In 2023, Analysts Say (January 9)
According to data compiled by TRM Labs, around 80% of 21 major jurisdictions, representing around 70% of global crypto exposure, have strengthened crypto regulations in 2023.
Crypto And Fintech Groups Fined $5.8bn In Global Crackdown On Illicit Money (January 9)
Crypto and fintech groups were for the first time fined more for lax controls than the entire traditional financial system last year.
Will SEC Investigate Itself After Gary Gensler Dealt Embarrassing Blow In Bitcoin ETF Debacle? (January 9)
Lawyers who deal in securities law say the circumstances surrounding the faux posting hack and the wild swings in Bitcoin it caused should spark an investigation into the SEC by the SEC.
Regulators Approve New Type of Bitcoin Fund, in Boon for Crypto Industry (January 10)
The Securities and Exchange Commission authorized financial firms to offer a Bitcoin investment product that some hope will accelerate adoption of the technology.
S.E.C. Social Media Hack That Sent Bitcoin Soaring Prompts Investigation (January 10)
Legal experts said investigators would look into how the security breach occurred and whether anyone tried to profit from it.
SEC Wants Ripple To Share Financial Statements And Contracts To Determine Remedies (January 11)
Ripple may have to pay penalties related to its institutional sales of XRP.
Senator Elizabeth Warren: SEC Was Wrong In Its Spot Bitcoin ETF Decision (January 12)
Senator Elizabeth Warren calls for stringent anti-money laundering rules in response to SEC's Bitcoin ETF decision.
Crypto Firm Genesis Global Trading to Pay $8 Million for Compliance Failings (January 12)
New York state’s financial watchdog said the brokerage firm—currently in the process of winding down—had gaps in its anti-money-laundering and cybersecurity programs.
Are Crypto Tokens Securities? Terraform Court Says ‘Yes’ in Extensive Decision (January 15)
In SEC v. Terraform, the court has granted summary judgment for the SEC on its claim that the defendants offered and sold unregistered securities in the form of “crypto assets.”
SEC Agrees To Delay Terra Trial So That Do Kwon Can Attend Proceedings (January 15)
Despite the regulator's consent, the judge has not agreed to postpone the trial.
IRS Says Businesses Can Hold Off On Reporting Crypto, For Now (January 16)
There are fresh reporting requirements for crypto, but the Treasury says businesses get a pass until they can finalize the new rules.
US Judge Questions SEC Limits During Coinbase Hearing (January 17)
A federal judge heard oral arguments from the SEC and Coinbase Wednesday in the exchange’s move to dismiss the case against it.
FINRA Publishes 2024 Annual Regulatory Oversight Report (January 18)
The Financial Industry Regulatory Authority, Inc. (“FINRA”) published the 2024 FINRA Annual Regulatory Oversight Report with increased focus on Crypto Assets.
Court Decisions Could Rein In SEC Authority Over Crypto Industry (January 18)
The SEC wants some tokens offered by crypto exchange Coinbase classified as securities, making it easier to regulate the industry.
US Treasury Official Calls For Immediate Crypto Regulation (January 18)
Graham Steele, U.S. Treasury Assistant Secretary for Financial Institutions, speaking at a George Washington University Law School event, called for establishing crypto regulation standards to preempt potential crises.
Gary Gensler Approved The ETFs — But Now He’s Striking Back (January 18)
The Securities and Exchange Commission — forced by courts to permit Bitcoin ETFs — is abusing recent regulatory rules to discourage Bitcoin ETF investments.
Coinbase vs. SEC Case Will Determine Crypto Tokens Fate (January 19)
The legal battle between the SEC and Coinbase is set to determine the fate of a number of crypto tokens in the United States.
FTX-Tied Alameda Research Drops Lawsuit Against Grayscale (January 22)
Bankrupt cryptocurrency exchange FTX's affiliate Alameda Research has dropped a lawsuit against Grayscale Investments that had accused the digital asset manager of "enriching itself at shareholders' expense."
Crypto Startup Figure Seeks SEC Approval to Issue Interest-Bearing Stablecoin (January 22)
The move is a novel attempt at creating a new class of stablecoins with federal legitimacy, and if successful, Figure will be offering the first stablecoin regulated as a security in the US.
Binance, SEC Face Off Over Regulator's Crypto Oversight (January 22)
The SEC on Monday defended its authority to oversee certain cryptocurrency assets in court, as Binance urged a federal judge to dismiss the regulator's case against the world's largest crypto exchange.
Canadian Court Rules 2022 Crypto Freeze On Protesting Truckers Unconstitutional (January 24)
The Federal Court of Canada particularly deemed the freezing of bank accounts and crypto for individuals associated with the protest “unreasonable.”
Ripple, SEC Argue To The Very End Of Years-Long Legal Battle (January 25)
The court has handed down its summary judgment and dropped the remaining charges in the case between the Securities and Exchange Commission and Ripple Labs, but the years-long legal battle is far from over.
Lawyer Sentenced To 10 Years In $400 Mln Crypto Money Laundering Scheme (January 25)
Mark Scott of Coral Gables, Florida, a former partner at U.S. law firm Locke Lord, was sentenced to 10 years in prison for his role in a nearly $400 million fraudulent cryptocurrency scheme.
US Files Notice To Sell $130M In Bitcoin Linked To Silk Road Agent (January 25)
The US filed a notice to sell over 2,900 bitcoin, some of which is linked to a former Secret Service agent.
Texas Resolves Securities Fraud Case With Decentralized Finance Lending Platform (January 26)
A decentralized finance crypto lending platform and its owners entered into a settlement agreement with a Texas regulatory agency, resolving an emergency cease-and-desist action brought in June 2023.
Is Cryptocurrency Like Stocks and Bonds? Courts Move Closer to an Answer. (January 26)
Federal judges are weighing whether digital currencies should be subject to the same rules as stocks and bonds. The outcome could shape crypto’s future in the U.S.
SEC Settles With ‘Bitcoin Beautee’ Over $1.7B HyperFund Scheme (January 29)
The SEC and US Attorney’s Office of Maryland announced charges against Sam Lee and Brenda Chunga, aka “Bitcoin Beautee.”
You’ve Got A Friend In Me: How Amicus Briefs Are Helping The Crypto Industry Win Over The Courts (January 30)
The crypto industry’s recent momentum has been driven by thousands of conversations around the core tenets of its legal rights.
Terraform Labs Says Bankruptcy Will Enable Appeal Of SEC Lawsuit (January 30)
Terraform Labs said that its recent bankruptcy filing will enable it to pursue a "do-or-die" appeal in a securities fraud case brought by the U.S. Securities & Exchange Commission.
NYC Bar Association Pushes For Crypto Law Reforms To Halt Firm Exits (January 30)
The association seeks to maintain New York’s preeminence in digital asset transactions, not just paper-based financial transactions.
FINRA Finds Potential Rule Violations in Crypto Asset Sweep (January 30)
In its review, FINRA found various violations of its Rule 2210, which requires fair and balanced communications from broker-dealers to the public, including “potential substantive violations” in about 70% of the communications.
Polygon Labs Proposes Defi Protocols As Critical Infrastructure In New Regulatory Framework (January 30)
Polygon Labs, in collaboration with Arktouros law firm, has put forward a new regulatory framework that proposes designating certain decentralized finance (defi) protocols as critical infrastructure crucial to the national and economic security of the US.
US Energy Data Agency To Track Crypto Mining Power Use (January 31)
The U.S. Energy Information Administration (EIA) said it plans to launch a survey next week of select bitcoin miners, which will be required to respond with their energy use details, as part of an emergency data collection request authorized by the Office of Management and Budget on Jan. 26.
Coinbase CLO Slams SEC’s Barebones Response In Rulemaking Petition Case (January 31)
Coinbase continues to demand clearer regulations for the crypto industry.
US Lawmakers Push Back On Proposed CFPB Rule, Citing Potential Impact On Crypto (January 31)
Representatives Patrick McHenry, Mike Flood and French Hill called for an additional 60 days for a CFPB proposal to consider the impact on digital assets.
Crypto Heads Toward 2024 Election With $85 Million War Chest (January 31)
The industry is making a play for legitimacy, with billions of dollars flowing into newly approved bitcoin ETFs and now — millions into political action committees.
Middle East & Africa 🌍
Nigeria Slaps Strict Rules on Banks After Lifting Crypto Ban (January 3)
Nigeria’s central bank has released inaugural guidelines for banks opening cryptocurrency accounts, while retaining its ban on them holding or trading in virtual assets on their own behalf.
Turkey's Draft Rules For Crypto Assets At Final Stage, Minister Says (January 10)
Turkey's crypto asset regulations, expected to bring licensing and operating standards to trading platforms as well as helping the country to be taken off an international financial crime watchdog "grey list", are at the final stage.
Crypto Exchange OKX Secures Dubai Licence To Target Retail Clients (January 16)
OKX, one of the world's largest cryptocurrency exchanges, has been granted a regulatory licence in Dubai that will allow it to offer crypto services to retail clients.
Nigeria’s Crypto Ban Hindered eNaira Adoption Despite High Global Ranking (January 29)
Nigerian tech and innovation legal expert Chinedu Albert said eNaira adoption will only happen when the government gains the trust of Nigerians, and the naira attains a more trusted status.
Europe 🌍
OKX Will Test UK Users To Comply With FCA Promotional Rules (January 3)
OKX implements rigorous user questionnaires in the UK to align with FCA's stringent crypto promotion rules.
EU Regulators To Investigate Banks’ Crypto Exposure (January 4)
The European Banking Authority will conduct a joint investigation with the European Systemic Risk Board and the Financial Stability Board.
Bank Of Spain Selects Partners For CBDC Testing (January 5)
Cecabank, Abanca and Adhara Blockchain have been chosen from the 24 applications received over the past year.
International Organization of Securities Commissions Publishes Recommendations for Crypto and Digital Assets Markets (January 11)
The 18 recommendations are intended to promote consistency of regulatory frameworks for cryptoasset service providers.
Poland To Present New Crypto-Focused Bill In Q2, Report Says (January 15)
The Polish government is expected to introduce a new crypto-focused bill in Q2, granting the local financial regulator with new power.
EU Comes To Provisional Agreement To Expand AML To Crypto (January 18)
The European Parliament and Council reached a provisional agreement to apply anti-money laundering and counter-terrorist financing laws to crypto entities, which still need to be finalized by lawmakers.
Crypto Lender Nexo Seeks $3 Bln In Damages From Bulgaria Over Aborted Investigation (January 24)
Cryptocurrency lender Nexo is seeking $3 billion in damages from Bulgaria over an aborted criminal investigation that the company alleges scuppered its plans for a U.S. stock market listing and a soccer sponsorship deal.
Bank Of England, Treasury Commit To User Privacy For Potential CBDC (January 25)
While no decision on the digital pound has been made, the government will continue to examine how a digital pound would interact with consumers and how it could be incorporated into the UK economy.
FSB Targets Global Crypto Oversight And AI’s Financial Impact In 2024 (January 25)
The Financial Stability Board (FSB) also plans to complete work on the financial stability implications of tokenization in 2024.
European Securities Regulator Seeks Limits On Non-EU Crypto Firms (January 29)
The European Securities and Markets Authority wants to protect EU crypto firms and customers with the proposed guidelines.
The EU Lays The Techno-Legal Tracks For Its Rising Digital Ecosystem (January 29)
The European Union will soon enact legislation to enable its citizens to interact in the digital world more easily and securely using a digital identity wallet.
Unprecedented $2.1B Bitcoin Seizure In Germany Linked To Online Piracy Group (January 30)
The authorities alleged that the bitcoin is tied to a piracy site that violated the Copyright Act back in 2013.
EU Agency Says Crypto Firms Can Sometimes Serve Non-European Users (January 30)
Foreign clients may be able to initiate services from EU-based companies.
Italian Privacy Watchdog Says OpenAI Breached Data Protection Laws (January 30)
The Italian data protection authority has notified OpenAI that it has found the company in breach of its data protection and privacy laws.
EU: ESMA Consults On ‘Reverse Solicitation’ And Classification Of Cryptoassets Under MiCA (January 30)
The European Securities and Markets Authority (“ESMA”) published two Consultation Papers seeking comments on draft guidelines on the “reverse solicitation exemption”, and one on the classification of crypto-assets as “financial instruments,” two significant areas which will be critical to clarifying the scope of the regulatory framework as set out under MiCA.
Coinbase Taps Former UK Treasurer Who Warned Of ‘Run On Pound’ In 2008 For Advisory Council (January 31)
George Osborne will advise Coinbase going forward and is optimistic about blockchain usage in finance.
UK Police Uncovered $1.7 Billion Bitcoin Linked to China Fraud (January 31)
British police uncovered $1.7 billion worth of Bitcoin linked to a woman accused of laundering the proceeds of a $6 billion investment fraud in China.
Latin America 🌍
El Salvador’s Bitcoin Bond Gets Regulatory Approval, Targets Q1 Launch (January 12)
El Salvador’s long-anticipated Bitcoin bonds, also known as “Volcano Bonds,” have reportedly received the regulatory nod for a launch in early 2024.
Argentines Will Be Given A Chance To ‘Regularise’ Undeclared Crypto (January 28)
The newly formed government of Argentina said it would ease the path to legalization of crypto holdings even if they’re overdue on tax declarations.
Asia 🌏
China Cracks Down On Tether, Hong Kong To Introduce Licenses For Stablecoins: Law Decoded (January 1)
While Chinese authorities continue prosecuting stablecoin use, Hong Kong is working on legalizing it.
South Korean Upbit Exchange Secures License In Singapore (January 9)
Upbit Singapore intends to expand its range of services in the country after securing a Major Payment Institution license.
BitGo Gains In-Principle Approval For MPI License In Singapore (January 10)
Upon receiving the full MAS license, BitGo clients will have access to buy and sell digital assets from the safety and security of BitGo's insured cold storage custody solution.
Nearly 10 Hedge Funds Are Set To Launch Spot Crypto ETFs In Hong Kong, HashKey says (January 10)
With Hong Kong on the verge of approving spot crypto ETFs, almost a dozen hedge funds are queuing up to submit applications for the new financial product.
Cryptocurrencies Pose Risks To EMs, India's Stand Remains Unchanged - Cenbank Chief (January 11)
The Reserve Bank of India (RBI) chief stated that cryptocurrencies can pose significant risks to emerging markets, cautioning that the central bank's stand on the issue remains unchanged despite wider acceptance in other countries.
Indians Are Turning To Local Exchanges Amid Clampdown On Foreign Platforms (January 13)
India has now banned foreign exchanges from operating in the country by blocking access to their websites and new application downloads.
South Korea Looks To Crackdown On Crypto Mixers Via New Regulations (January 16)
The Financial Intelligence Unit (FIU) of South Korea's Financial Services Commission is spearheading the examination of potential regulatory frameworks.
Binance Thailand Opens Crypto Exchange For Trading (January 16)
The exchange, Gulf Binance, is a joint venture between Binance and Thailand's Gulf Innova that will serve as an exchange and brokerage platform allowing users to buy and sell digital assets with local currency pairings.
South Korea’s Top Office Urges FSC To Revisit Stance On Spot Bitcoin ETFs (January 19)
The Office of the President of the Republic of Korea urged the Financial Services Commission to reconsider its anti-ETF stance following SEC approval in the United States.
Singapore’s MAS Cautions Investors Against Buying Spot Bitcoin ETFs (January 24)
The Monetary Authority of Singapore has warned retail investors against buying spot Bitcoin ETFs following U.S. approval.
North Korea Is Still A Threat To Crypto: Chainalysis (January 24)
A new Chainalysis report showed that North Korea-linked hacks are on the rise, despite a decrease in the total value stolen compared to the previous year.
Japan To Resolve CBDC Issuance Legalities By Q2 2024 (January 30)
While Japan is preparing to solve the legal issues around issuing a CBDC, it has not revealed plans for an official launch.
Singapore High Court Greenlights Defiance Capital Suit Against 3AC (January 31)
At issue is whether funds held by 3AC were in trust for DeFiance Capital or owned by the bankrupt crypto hedge fund.
Hong Kong Regulator Accepts First Application For A Spot Bitcoin ETF (January 31)
Hong Kong is making strides towards the introduction of a spot bitcoin exchange-traded fund.