The Scenius State of Regulation (Issue #14)
Crypto Policy & Regulation: September 2023
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United States 🇺🇸, Canada 🇨🇦, & Caribbean 🌎
Grayscale And Uniswap Rulings Contain Strong Message for US Lawmakers (September 1)
In rulings this week, courts sent a strong message to lawmakers that revamped regulation may be necessary.
BitMart, KuCoin Owners Face Latest Suits Over Platform Patents (September 1)
The owners of BitMart and KuCoin were hit with similar infringement lawsuits in a patent assertion company’s litigation campaign in Texas targeting online trading platforms.
Q&A With Silicon Valley Prosecutor Taking Aim at Crypto ‘Pig-Butchering’ Scams (September 1)
Erin West, a Santa Clara deputy district attorney, is known in crypto law-enforcement circles for raising awareness on the scams and helping victims get their money back.
Ripple Opposes SEC Appeal of Ruling That Crypto Isn’t a Security (September 1)
Ripple Labs objected to the Securities and Exchange Commission’s request to appeal a federal judge’s ruling that cryptocurrency wasn’t a security when sold to the public.
Crypto Regulation Gets Even Messier After SEC Setbacks (September 2)
Securities and Exchange Commission chair Gary Gensler is very clearly anti-crypto — but other parts of the U.S. government aren't necessarily on the same page.
FTX Filing Shows Company Bought Yacht for Former Co-CEO Sam Trabucco (September 2)
A recent filing from FTX’s Debtors shows company funds were used on internal cash payments to executives as well as direct transfers to the American Yacht Group.
Navigating The Significance of Legal Opinions in The Crypto Sphere (September 2)
Legal opinions forge clarity in the crypto landscape, shaping future financers amidst regulatory uncertainties.
JPMorgan Says SEC Would Likely Be Forced to Approve Spot Bitcoin ETFs Following Grayscale's Win (September 3)
The SEC will likely have no choice but to approve spot bitcoin ETFs following Grayscale’s victory in its case against the SEC, according to JPMorgan.
Gala Games CEO Sues Co-Founder Alleging $130 Million Theft, Pattern of Deception (September 3)
The value of Gala Games’ token has dropped 13% following a lawsuit filed by its CEO accusing the company’s co-founder of theft of $130 million in GALA tokens, following an SEC suit against the co-founder earlier this year for allegedly defrauding investors out of $18 million in a separate scheme.
Op-Ed: The SEC Chooses to 'Regulate' Cryptocurrencies Via Lawsuit (September 5)
Over the last two Administrations, successive chairmen of the Securities and Exchange Commission (SEC), from both political parties, have led the agency through an erratic and confusing approach to regulating cryptocurrencies.
CFTC Orders Utah Man to Pay More Than $2.5 Million for Leveraged Bitcoin Fraud and Failure to Register (September 6)
A Utah resident agreed to pay the CFTC more than $2.5 million to settle charges for fraudulently soliciting people to trade leveraged bitcoin in a commodity pool and then lying to pool participants about the availability of their money after losing all of the Fund’s trading, and for failing to register as a commodity pool operator.
Long-Awaited Bitcoin Accounting Rules to Capture Rises, Dips (September 6)
Companies that hold or invest in cryptocurrency will be required to report their holdings at fair value. The rules will go into effect as soon as 2025, but companies will have the option to apply them early.
Commissioner Caroline D. Pham proposed that the CFTC launch the first-ever U.S. pilot program for digital asset markets.
Linus Financial Agrees to Settle SEC Charges of Unregistered Offer and Sale of Securities (September 7)
The SEC settled charges against Linus Financial for failing to register the offers and sales of its retail crypto lending product without imposing civil penalties due to the company’s cooperation and prompt remedial actions.
Former FTX Exec Ryan Salame Forfeits $1.5 Billion in Plea Deal (September 7)
Salame, co-CEO of FTX Digital Markets, pleaded guilty to campaign finance violations and fraud.
CFTC Issues Orders Against Operators of Three DeFi Protocols for Offering Illegal Digital Asset Derivatives Trading (September 7)
In its first enforcement action against DeFi platforms, the Commodity Futures Trading Commission (CFTC) settled charges against three entities for offering illegal digital asset derivatives trading and, in the case of two of the companies, for failing to register with the CFTC and failing to adopt a customer identification program.
CFTC Fines Mirror Trading $1.7B For Bitcoin-Related Forex Fraud (September 8)
The CFTC has brought or resolved 10 fraud cases involving digital assets or foreign exchange since June 2023, Commissioner Kristin Johnson said.
The Federal Reserve’s Role in Supporting Responsible Innovation (September 8)
Vice Chair Michael S. Barr said that the Federal Reserve would not issue a CBDC without “clear support” from the executive branch and Congress, and that he remains “deeply concerned” about stablecoin issuance without strong federal oversight.
SEC Snaps Back Against Ripple in Push for An Interlocutory Appeal (September 8)
The SEC accused Ripple of trying to delay a resolution “so that they may continue freely selling XRP into public markets without the disclosures that come with registration,” the agency said on Friday.
CFTC Director of Enforcement Ian McGinley said that he intends for “DeFi to be a significant and continuing focus” for the agency’s Division of Enforcement.
Co-Founder of Multibillion-Dollar Cryptocurrency Scheme “OneCoin” Sentenced To 20 Years in Prison (September 12)
A New York federal judge sentenced a co-founder of the multibillion-dollar cryptocurrency fraud scheme “OneCoin” to 20 years in prison.
US Regulator Fines Stoner Cats Creator for Offering NFTs (September 12)
In its second enforcement action relating to non-fungible tokens (NFTs), the SEC charged Stoner Cats 2 LLC (SC2) with conducting an unregistered offering of crypto asset securities in the form of NFTs that raised approximately $8 million.
House Republicans Reintroduce Bill to Outlaw Digital Dollar CBDC (September 12)
House Majority Whip Tom Emmer (R-Minn.) reintroduced the CBDC Anti-Surveillance State Act, which would prohibit the Federal Reserve from issuing a central bank digital currency directly to individuals.
Mountain Protocol Launches Yield-Bearing Stablecoin in Bermudas (September 12)
In a Sept. 11 post on X, Mountain Protocol announced the launch of USDM, an ERC-20 yield-bearing stablecoin.
FTX Approved to Sell More Than $3 Billion of Users’ Crypto (September 13)
FTX is selling assets to repay part of its debts to customers as it moves toward a restart of its crypto exchange.
SEC Sues Stoner Cats in Second Major NFT Enforcement Case; Project Settles For $1M (September 13)
The Mila Kunis-backed project NFT collection, which granted holders access to exclusive content, was deemed to be an unregistered security contract as the SEC adds another win to its record.
Crypto Licensing Bill Sent to California Governor, Veto Possible (September 14)
The California State Assembly passed the Digital Financial Assets Law, which would create a regulatory licensing framework for the state’s crypto industry. If Governor Gavin Newsom signs the bill, it will go into effect in July 2025.
NY AG Targets Cryptocurrency Market with Roll Out of New Bill (September 14)
A new bill attempting to clear the waters on crypto regulation has been announced by the attorney general of New York.
Bitcoin Miner Core Scientific Settles with Celsius Over Fees (September 15)
Though subject to court approval, the two firms have agreed on a settlement in which Celsius will purchase a $45-million mining data center from Core Scientific for $14 million.
LBRY Will Appeal 'Unjust and Incorrect' SEC Lawsuit Ruling, Says CEO (September 18)
The company had previously said it plans to wind down operations and the SEC dropped its financial penalty from $44 million to around $111,000.
9 US Senators Publicly Back Elizabeth Warren’s Crypto Bill (September 18)
Senator Elizabeth Warren announces the expansion of her coalition to crack down on “crypto’s use in money laundering, drug trafficking, sanctions evasion.”
New York Regulator to Require Higher Standards for Coin Listings and Delistings (September 18)
New expectations and procedures are spelled out for crypto firms in evaluating a crypto coin before adoption and removal.
SEC’s Crypto Enforcement Chief Warns More Charges Coming to Exchanges, DeFi (September 19)
David Hirsch, who runs the agency’s office that handles crypto enforcement, says that apart from Coinbase and Binance, there are other exchanges and DeFi straying from the law.
Not So NFTy: What the Impact Theory and Stoner Cats Enforcement Actions Could Mean for NFTs (September 20)
The SEC’s actions strongly suggest that there could be additional SEC scrutiny of NFTs, and also that issuers selling these assets should consider whether their design, marketing, tradability, and other features might create an “investment contract” regulated under the federal securities laws.
U.S. CBDC Efforts Opposed in Legislation Advanced by House Republicans (September 20)
The House Financial Services Committee approved a bill meant to prevent a U.S. central bank digital currency.
Tension Rises Between Coinbase and SEC Over Celsius Bankruptcy Plan (September 25)
The SEC said Coinbase’s involvement in Celsius bankruptcy plans implicates concerns it raised in its lawsuit against the exchange.
Bitwise Pushes Back Against SEC Rationale for Rejecting Bitcoin Spot ETFs (September 25)
Bitwise argued that CME Bitcoin Futures are responsible for most of Bitcoin's price discovery, and thus are adequate for a surveillance sharing agreement.
SEC Objects to Coinbase's Role in Celsius Bankruptcy Distribution Plan (September 25)
The SEC has said it isn't happy with the role crypto exchange Coinbase would play to make former Celsius clients whole.
FTX Chief Once Met with Powell. Now D.C. Crypto Lobbyists Are Struggling (September 27)
FTX’s demise and its leader’s upcoming trial haven’t stopped a major lobbying push by the industry this week, but the events have changed its tone.
Op-Ed: The SEC Is Not the King (September 28)
Frank Francone, a Policy Fellow at the Centennial Institute and a California attorney, citing recent SEC lawsuits of crypto companies, argues for amending the FTCA because the immunity granted to federal agencies is too broad, and allows abuse by the SEC.
Coinbase Approved to Offer Perpetual Futures Trading to Non-U.S. Residents by Bermuda Monetary Authority (September 28)
Derivatives trading accounts for roughly 75% of the total crypto trading volume.
Terra’s Do Kwon and Daniel Shin Conspired to Falsify Transactions, Chat Logs Show (September 29)
The SEC has submitted evidence that the co-founders planned to create fake Terra transactions for a partner platform in order to generate early fees.
SEC Sues CoinDeal Promoters for Defrauding Hundreds of Investors (September 29)
Two promoters associated with CoinDeal are facing civil securities charges for their involvement in an alleged fraud scheme that raised more than $45 million from the sales of unregistered securities.
SEC Launches Proceedings to Determine Fate of Spot Bitcoin ETFs, Invites Public Comment (September 29)
The U.S. Securities and Exchange Commission (SEC) submitted several filings on Sept. 28 that concern pending spot Bitcoin exchange-traded funds (ETFs).
SEC Initiates Legal Action Against FTX's Auditor (September 30)
The SEC alleges that Prager Metis, an accounting firm engaged by bankrupt crypto exchange FTX in 2021, committed hundreds of violations related to auditor independence.
SEC continues filing frenzy, delaying bitcoin ETFs from Fidelity, VanEck and WisdomTree (September 30)
The SEC continued with a filing frenzy ahead of a possible government shutdown, this time delaying decisions on proposed spot bitcoin ETFs from WisdomTree, VanEck and Fidelity.
Latin America 🌍
El Salvador's Bitcoin Curriculum Will Teach Students the 'Dark Side of Fiat' (September 8)
Students learn about currency debasement, a nod to Saifedean Ammous's "The Bitcoin Standard" book. But he didn't help write the curriculum.
Brazilian Lawmakers Seek to Add Crypto to Debtors’ Protected Assets List (September 20)
Cryptocurrencies may become a part of the personal savings category, protected from seizures on behalf of creditors.
Brazil’s Crypto Surge Prompts Central Bank to Tighten Regulation (September 28)
According to the central bank’s data, from January to August 2023, imports of crypto rose by 44.2% compared with the same period in 2022.
Middle East & Africa 🌍
Turkish Crypto Exchange Thodex CEO Gets 11,000-Year Sentence For $2B Scam (September 8)
The founder of the collapsed Turkish crypto exchange Thodex was sentenced to 11,196 years for defrauding investors of millions of dollars.
Nigeria Crypto Usage Growing Further, Report Says (September 19)
Cryptocurrency usage is growing in Nigeria as Africa's largest economy grapples with a weakening currency, soaring inflation, and its banks and financial institutions barred from dealing in or facilitating crypto transactions.
UAE Government’s Pro-Innovation Stance Spurs Crypto Boom, Report Says (September 26)
A new Chainalysis report ranks the United Arab Emirates (UAE) as one of the most pro-crypto places in the world.
Europe 🌍
The EU's Digital Euro Could Face Challenges in Non-Euro Member States (September 4)
Legal and technical cross-border complications for the EU’s digital euro project have been identified.
LSE Group Looks to Build Blockchain-Powered Trading Venue: Financial Times (September 4)
The London Stock Exchange has been exploring the potential for using blockchain to improve the trading process for traditional assets, an executive said.
Digital Euro Will Make Money Fit for Digital Age, Panetta Says (September 4)
European Central Bank Executive Board member Fabio Panetta signaled support for the introduction of a digital currency, saying that such a move “will make our money fit for the digital age.”
U.K. Crypto Firms Can Apply for 3-Month Reprieve to Comply with Tough New Ad Rules (September 7)
The U.K.’s Financial Conduct Authority announced that it will allow some crypto firms extra time to implement changes to their marketing processes ahead of the U.K.’s new rules on financial promotions, but they must first apply to be eligible for the extension.
Global Stablecoins Need Governing Body, Pose Risk to Financial Stability Says IMF, FSB In New G20 Report (September 7)
The International Monetary Fund and the Financial Stability Board published a joint paper titled “Policies for Crypto Assets,” which provides regulatory and policy recommendations for helping authorities “address the macroeconomic and financial stability risks posed by crypto-asset activities and markets.”
French Influencers Now Must Pass Test to Promote Crypto and Other Financial Products (September 8)
French social media influencers, including those influencing the crypto industry, must obtain certifications in the Responsible Influence in Financial Advertising program before advertising a financial product, according to the Autorité des Marchés Financiers (AMF).
Digital Currency Group Subsidiary Luno to Pause Certain UK Services, Citing Forthcoming Regulations (September 12)
Looming regulations from the Financial Conduct Authority have sparked an industry-wide slowdown of crypto services in the United Kingdom.
New UK Crypto Laws Pose Stiff Challenge for Most Firms, Cautions Delphi Labs Counsel (September 12)
The U.K.'s FCA implemented a revised financial promotions regime set to take effect in October.
EU Parliament Votes Overwhelmingly in Support of DAC8 Crypto Tax Reporting Rule (September 13)
The European Union Parliament voted in support of a cryptocurrency tax reporting rule, called the Directive on Administrative Cooperation (DAC8). The new rule officially goes into effect on January 1, 2026.
Law Firms Push Blockchain Work in Finance Despite ‘Cryptowinter’ (September 22)
Regulatory grey areas around emerging digital technologies mean that lawyers have a growing role in shaping future financial systems.
Bybit Will Suspend Services in UK Following Financial Regulator’s ‘Final Warning’ (September 22)
Headquartered in Dubai, crypto exchange Bybit said it will suspend services to residents of the United Kingdom starting in October due to “regulatory changes.”
Crypto Exchange Binance Reopens Exchange Services in Belgium (September 26)
In June, Binance was ordered to halt its services in Belgium “with immediate effect,” leading to the exchange redirecting Belgian users to its Binance Poland entity.
NiceHash Becomes Latest Crypto Firm to Leave U.K. (September 27)
The cloud mining service is discontinuing services in the United Kingdom ahead of new FCA regulations.
Asia 🌏
China’s Digital Yuan Must Be Available in All Retail Scenarios, Says Central Bank Official (September 4)
“Standardizing QR codes” for payment systems dominated by WeChat Pay and Alipay would be an essential step for the e-CNY development, the official said.
South Korea Crafts Bill to Freeze North Korea Crypto Assets (September 5)
The South Korean government plans to submit a bill that will enable it to track and freeze crypto assets used by North Korea for its weapons program.
G20 Leaders Decide on Swift Implementation of Crypto Reporting Framework (September 9)
India and other countries want a Crypto Asset Reporting Framework by 2027.
Singapore’s Central Bank Slugs Three Arrows Founders With 9-Year Ban (September 14)
The Monetary Authority of Singapore (MAS) issued nine-year prohibition orders against the founders of Three Arrows Capital, prohibiting them from operating in Singapore’s regulated financial services industry.
Vitalik Buterin’s Concerns Over Hong Kong’s Crypto Position Explained (September 15)
Vitalik Buterin had raised questions about Hong Kong's relationship with China and skepticism about the region's crypto friendliness.
Hong Kong Regulator: Crypto Firms Cannot Claim to Be 'Banks' (September 17)
The Hong Kong Monetary Authority on Friday warned unlicensed crypto firms against describing their services as banking.
Japanese Crypto Exchange JPEX to Pause Interest Rewards as Partners Freeze Funds (September 18)
JPEX will pause its Earn feature due to fallout from regulatory complaints.
Kazakhstan Establishes Regulatory Agency to Implement CBDC (September 18)
The National Payment Corporation will be responsible for the development of “digital financial infrastructure,” including the implementation of the digital tenge.
Philippines SEC Teams Up with US Counterpart to Combat Crypto Fraud (September 20)
The Philippines SEC is now collaborating with the U.S. SEC and the Asian Development Bank to better combat crypto-related crime.
South Korea to Screen Major Shareholders of Crypto Exchanges Over Eligibility Concerns (September 25)
The move comes amid increasing legal turmoil involving shareholders of prominent domestic exchanges such as Bithumb and Upbit.
Bitcoin Gains Legal Recognition as Digital Currency in Shanghai, China (September 26)
A similar report from another Chinese court in September recognized cryptocurrencies as virtual properties protected by law.
A Founder of the Crypto Hedge Fund Three Arrows Capital Is Arrested (September 29)
Su Zhu, a founder of Three Arrows Capital, a cryptocurrency hedge fund that collapsed last year, was arrested in Singapore.
Hong Kong And Macau Police Seize Over $2.8M Related to JPEX Fraud Case (September 29)
Authorities in Hong Kong and Macau have recently revealed arrests connected to the JPEX crypto exchange fraud case and highlighted that they are currently tracking down several other suspected figures.
Australia 🇦🇺 & Oceania
Australian Legislators Propose Changes to Crypto Bill Following Review (September 4)
Australia’s Senate Committee on Economics Legislation has concluded its review of the “Digital Assets (Market Regulation) Bill 2023,” initially introduced by Senator Andrew Bragg.
Aussie Fintech Prays for Crypto Clarity as It Launches Bitcoin-Backed Loans (September 8)
Block Earner has unveiled a new crypto-backed loan product for the Australian market, amid an ongoing tussle with a federal regulator over its shuttered Earn product.
Australian Regulator Sues Kraken Provider Over Non-Compliance (September 21)
ASIC accuses Bit Trade, Kraken’s Australian arm, of not specifying a target market before offering its margin trading product.