The Scenius State of Regulation (Issue #13)
Crypto Policy & Regulation: August 2023
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United States 🇺🇸, Canada 🇨🇦, & Caribbean 🌎
IRS Clarifies Rules on Crypto Staking Rewards (August 1)
The Internal Revenue Service issued new guidelines on July 31, outlining its stance on taxing cryptocurrency staking rewards.
The Failure of The Stablecoin Bill Reveals the New Political Divide in Crypto (August 2)
The SEC sued internet marketer Richard Schueler, known online as Richard Heart, and his projects Hex, PulseChain and PulseX, alleging he raised over $1 billion across three different unregistered securities offerings beginning in 2019.
FDIC Demands Unbanked, Inc. Cease Making False or Misleading Representations about Deposit Insurance (August 4)
The FDIC sent a cease-and-desist letter to defunct crypto firm Unbanked, Inc. demanding that it take immediate corrective action with respect to its false and misleading statements relating to deposit insurance.
US Exodus As Revolut Now ‘Suspends’ Crypto Access in Country Amid Regulatory Uncertainty (August 4)
Regulatory cloud in US prompts crypto hiatus for Revolut giving users until October to remove funds.
Chamber of Digital Commerce Applauds Ripple SEC Ruling (August 5)
CDC advocates for legislative clarity and fair crypto regulation in the wake of landmark SEC-Ripple ruling. The CDC welcomes the decision as it aligns with their support for Ripple and emphasizes the need for a fair environment in the digital asset sector.
Congress, Not the SEC, Should Set U.S. Digital Asset Policy (August 7)
The regulator "sees itself as the arbiter of which technologies should exist in the United States," says Castle Island Ventures' Matt Walsh.
FTX Law Firm Fenwick Faces Second Lawsuit by Crypto Customers (August 7)
A group of FTX customers on Monday sued law firm Fenwick & West for allegedly aiding fraud through its legal advice to the now-bankrupt cryptocurrency exchange founded by Sam Bankman-Fried.
The Federal Reserve announced a new program to oversee crypto activities conducted by banks and provided additional information on the process for state banks (supervised by the Federal Reserve) to follow before engaging in certain dollar token or stablecoin activity.
SEC Seeks Permission to Appeal Ripple Decision (August 9)
The SEC sued internet marketer Richard Schueler, known online as Richard Heart, and his projects Hex, PulseChain and PulseX, alleging he raised over $1 billion across three different unregistered securities offerings beginning in 2019.
How The SEC’s Charge That Cryptos Are Securities Could Face an Uphill Battle (August 14)
As the smoke clears from the first exchange of volleys between the Securities and Exchange Commission and the world’s two largest cryptocurrency exchanges, Binance and Coinbase appear to have run out high-caliber legal arguments in their defense.
FDIC Publishes 2023 Risk Review (August 14)
The Federal Deposit Insurance Corporation (FDIC) released its 2023 “Risk Review” report. For the first time, the report dedicated a full section to crypto, including an overview of the FDIC’s approach to understanding and evaluating crypto markets and activities.
A Crypto Mystery: Who Controls This Fast-Growing Stablecoin? (August 14)
The market cap of TrueUSD has more than doubled since March, but some investors are concerned about its opaque ownership structure.
Crypto Custodian Prime Trust Files for Bankruptcy Protection (August 14)
Prime Trust, a firm that bridged the crypto industry’s banking access and stored its assets, filed for bankruptcy protection late Monday, after facing a shortfall in customer funds. The bankruptcy filing comes after a Nevada regulator filed a petition to place the company into receivership in June.
CFTC Greenlights Coinbase as First Spot Crypto Platform to Offer Regulated Futures to U.S. Customers (August 16)
Coinbase Global has won approval to offer cryptocurrency futures in the U.S., a rare regulatory win for the crypto broker that will allow it to tap the largest market in digital assets and more directly compete with Binance.
Strict Canadian Crypto Exchange Rules Allowed Kraken Clarity to Invest There, Exec Says (August 16)
Kraken’s Canada managing director told Cointelegraph in an interview that attaining restricted dealer status provided a clear regulatory pathway.
Federal Reserve Takes Enforcement Action on Farmington Bank, Citing Stablecoin Venture (August 17)
The bank worked with Fluent Finance on its US+ stablecoin in 2022 but did not seek Fed approval before beginning the project.
Cryptocurrency vs. SEC: The Supreme Court's Role in Deciding the Future (August 21)
In a recent roundtable discussion, the topic of cryptocurrency, regulatory power, and the potential of a looming Supreme Court case was vigorously debated.
SEC Charges Crypto Investment Manager Titan with Misleading Advertising Claims (August 21)
The case against Titan Global Capital Management is the first brought under the U.S. regulator’s 2020 revised marketing rule. It also touches on compliance issues.
SEC Crackdown Spurs Bitstamp to Stop US Crypto Staking Service (August 23)
SEC crypto clampdown views staking as unregistered security as Bitstamp moves to discontinue staking services on Sept. 25.
Treasury And IRS Issue Proposed Rules for Digital Asset Brokers Defining DeFi Platforms as Brokers (August 25)
The U.S. Department of the Treasury and the Internal Revenue Service issued a proposed rule on sales and exchanges of digital assets by brokers. The rules would subject crypto intermediaries — including purportedly decentralized platforms — to the same reporting requirements as traditional brokers and asset managers.
House Republicans Send Letter to Jerome Powell on Payment Stablecoins (August 28)
The Chairman of the House Financial Services Committee Patrick McHenry (NC-10), Vice Chairman of the Financial Services Committee and Chairman of the Digital Assets, Financial Technology and Inclusion Subcommittee French Hill (AR-02) and Chairman of the Oversight and Investigations Subcommittee Bill Huizenga (MI-04) sent a letter to Federal Reserve Board Chairman Jerome Powell on the establishment of a regulatory framework for payment stablecoins.
SEC Charges Impact Theory For ‘Unregistered NFT Offering,’ Expanding Enforcement Actions to NFT Market (August 28)
The Securities and Exchange Commission charged the LA-based media firm with the offering of unregulated securities, a new development in its ongoing crypto crackdown.
Tornado Cash Indictments May Prove to Be Just a Localized Storm After All (August 29)
The Tornado Cash indictments could be another tipping point for crypto. How the case plays out could define how the federal government can deal with decentralized trading platforms if they’re seen as broad precedents. But the case may be much more straightforward than initial reactions suggested.
The Real Reasons the Grayscale Bitcoin ETF Decision Matters (August 29)
The U.S. Court of Appeals, in rebuking the securities watchdog, shows that Gary Gensler won’t get the last word on crypto.
Bitcoin Jumps as Court Ruling Paves Way for Cryptocurrency E.T.F. (August 29)
A federal appeals court ruled that the Securities and Exchange Commission had wrongfully denied Grayscale Investments’ application to create a cryptocurrency fund that sells on stock exchanges.
Elon Musk’s X Moves Closer to Crypto Payments with New State License (August 30)
Regulators from Rhode Island have approved X’s application for a currency transmitter license.
U.S. Court Calls ETH a Commodity While Tossing Investor Suit Against Uniswap (August 31)
A New York judge declined to "stretch the federal securities laws to cover the conduct alleged" in a proposed class action complaint seeking to hold Uniswap accountable for "scam tokens" issued on the protocol.
SEC Defers Decisions on Fidelity, BlackRock Bitcoin ETFs (August 31)
The US Securities and Exchange Commission delayed making a decision again on whether to approve the first US exchange-traded fund that invests directly in Bitcoin, disappointing advocates just days after a court ruling viewed by many as clearing a path for the long-awaited product.
Two Sides of The Same Coin: Analyzing the Recent Ripple and Terraform Decisions (August 31)
Partners from Skadden, Arps, Slate, Meagher & Flom's Web3 and Digital Assets group analyze the two recent federal district court rulings in the Southern District of New York that touched on a crucial question for the digital asset space.
Europe 🌍
Webinar - Understanding the Regulatory Framework of the Future: Crypto Regulation in the EU and UK (August 1)
Paysafe and the international law firm Clifford Chance team up for a deep dive into the crypto regulatory developments to discuss specific practical implications arising from the MiCA regulation, regulatory efforts in the UK, compliance challenges, and strategies for businesses to navigate the evolving regulatory landscape.
Crypto Custodian Hex Trust Expands European Foray with Registration in France (August 2)
Crypto custodian Hex Trust registered in France to offer digital asset custody, buying, selling, and trading.
UK's Central Bank Forges Ahead with Plans for a Systemic Stablecoin Regime (August 8)
The U.K. recently passed the Financial Services and Markets Act 2023 into law, which gave the BoE powers to set up a systemic stablecoin regime.
Russian Central Bank to Launch Digital Ruble Pilot Aug. 15 (August 10)
The Bank of Russia said it is launching its central bank digital currency pilot today (August 15), after digital ruble legislation passed by the State Duma came into effect on August 1.
The Autorité des Marchés Financiers announced amendments to local crypto regulations in anticipation of the European Union’s implementation of the Markets in Crypto-Assets (MiCA) regime.
Paypal To Halt UK Crypto Sales Until 2024 (August 16)
Payments giant PayPal will stop allowing UK customers to buy cryptocurrencies through its platform from October as it works to comply with new rules on crypto promotions.
The U.K.'S FCA Sets Out Expectations for UK Cryptoasset Businesses Complying with The Travel Rule (August 17)
The U.K.’s Financial Conduct Authority (FCA) published new guidance that will require “cryptoasset businesses” to comply with the “Travel Rule,” a rule that obligates certain businesses to collect and share customer information when making certain transfers of funds.
Binance, the Biggest Player in Crypto, Is Facing Legal Risks Over Russia (August 22)
Binance says it follows global sanctions rules and has no banking relationships anywhere for its peer-to-peer service.
Binance Drops Sanctioned Russian Banks from Peer-to-Peer Service (August 25)
Controversy around those Russian banks emerged earlier in the week, when WSJ claimed that the company continued to allow peer-to-peer trading involving the Russian banks in question.
Binance’s Belgian Customers to Use Polish Entity in Bid to Escape Regulators’ Ban (August 28)
Financial authority FSMA told the company in June to cease serving Belgian customers from outside the European bloc.
Asia 🌏
Asia’s Crypto Regulatory Clarity Contrasts with Disarray in US (August 3)
Asian regulators in Hong Kong, Japan, and South Korea have stolen a march on the US by clarifying crypto rules, exemplified by Hong Kong’s first licenses for trading platforms under the city’s new digital-asset framework.
Crypto Is Illegal in China. Binance Does $90 Billion of Business There Anyway. (August 2)
Retaining its Chinese footprint will be crucial for Binance as it navigates a global regulatory crackdown that executives worry threatens its future.
Hong Kong's SFC Warning: Virtual Asset Trading Platforms Engaging in Improper Practices (August 7)
The Hong Kong Securities and Futures Commission warned virtual asset service providers of the potential legal and regulatory consequences of “improper practices” and reminded investors to be “wary” of the risks of trading virtual assets on unregulated exchanges.
Singapore Monetary Authority Releases Regulatory Framework for G10-Pegged Stablecoins (August 15)
Stablecoins must hold minimum base capital 1 million Singapore dollars ($740,000) and provide redemption within no more than five business days of a request.
Axie Infinity’s Play-To-Earn ‘Scheme’ Alarms Philippine National Police (August 17)
Playing crypto games can be riskier than investing in cryptocurrencies, according to the Filipino ACG, considering the ease with which gamers can lose their digital tokens and NFTs.
Hong Kong’s Crypto Stance: Execs Weigh in On Web3 in The Region (August 17)
Animoca Brands co-founder Yat Siu anticipates that there will be an increase in Web3 events activities and companies choosing Hong Kong as their Web3 headquarters.
South Korean City to Seize Crypto from Thousands of Tax Evaders: Report (August 22)
City authorities of Cheongju are looking to seize cryptocurrency from anyone who owes at least $750 in crypto taxes to the government.
Indian Crypto Exchange CoinSwitch Cuts Support Team, Citing Market Doldrums (August 29)
Indian crypto exchanges CoinSwitch and CoinDCX have been struggling to maintain headcount amid bear market and TDS.
Crypto Bank Seba Wins In-Principle Approval to Operate in Hong Kong (August 30)
Approval is the first step in acquiring a full license for Seba Hong Kong to deal in crypto or virtual assets-related products and traditional securities.
EOS Network's Token Receives Trading Approval in Japan, EOS Surges Nearly 10% (August 30)
Under the Payment Services Act, the JVCEA and FSA, two financial bodies, closely monitor and regulate crypto-asset providers, requiring a thorough pre-screening process for new tokens.
HashKey, OSL, first exchanges to offer retail crypto services in Hong Kong (August 30)
HashKey became the first licensed retail cryptocurrency exchange to launch in Hong Kong and anticipates major growth of the Web3 industry in the special administrative region.
Lao People’s Democratic Republic: Technical Assistance Report-Regulation and Supervision of Crypto Assets (August 31)
Laos has recently enacted legislation to pilot the licensing of mining and crypto trading activities. The country has a surplus of electricity generated by hydro power, which the government hopes can generate more income in foreign currencies.
Middle East & Africa 🌍
Laser Digital Receives Virtual Asset Licence in Dubai (August 2)
Laser Digital, the digital asset subsidiary of global financial services group Nomura, announced that it completed the final stage of Dubai’s Virtual Asset Regulatory Authority (VARA) licensing process.
Kenya Suspends Worldcoin's Crypto Project Over Safety Concerns (August 2)
Kenya’s Ministry of the Interior announced that it has suspended the operations of Worldcoin.
Oman Financial Regulator Seeks Feedback on Proposed Virtual Asset Framework (August 4)
Although the proposed virtual asset regulatory framework in Oman covers FATF-defined assets, the issuance of privacy coins might get banned.
VARA Notice of Fines – OPNX Exchange (August 15)
VARA fined OPNX, a bankruptcy claims exchange set up by the founders of collapsed hedge fund Three Arrows Capital, nearly $2.8 million.
Latin America 🌎
Binance Receives License to Offer Bitcoin, Digital Asset Services in El Salvador (August 8)
Binance received a Bitcoin Services Provider license and a Digital Asset Services Provider license from El Salvadoran regulators.
Colombia’s Central Bank Recommends Limiting CBDC Holdings and Spending (August 17)
Setting limits on CBDC transactions could be beneficial to issues related to user privacy and security, according to the central bank of Colombia.
Financial Stability Risks from Cryptoassets in Emerging Market Economies Highlighted by BIS (August 22)
Bank for International Settlements (BIS) paper on financial stability risks from cryptoassets in emerging market economies. The paper studies how vulnerabilities in the nature, structure, composition and function of cryptoasset markets translate into financial stability risks in traditional financial markets.
Binance launches crypto-to-bank account payment product in Latin America (August 30)
Binance’s Send Cash product will facilitate crypto payments from nine countries to bank accounts based in Argentina and Colombia.
Dentons Tech Talks: Cryptocurrency Regulation in Latin America (August 30)
A current overview of regulation of cryptocurrencies in LATAM Partners from Partners at Dentons global law firm.
Australia 🇦🇺 & Oceania
Australia’s Securities and Investments Commission sued social investing platform eToro’s Australian entity for alleged breaches of “design and distribution obligations and of eToro’s licence obligations to act efficiently, honestly and fairly.”
Reserve Bank of Australia Issues Report on CBDC Use Cases (August 24)
The Australian central bank published research on the potential benefits and complex challenges associated with CBDCs.