The Financial Action Task Force (FATF) has lowered Russia’s rating owing to insufficient oversight of cryptocurrencies, as indicated by regional coverage. According to RBC, this downgrade highlights escalating worries about the country’s capacity to oversee and mitigate dubious transactions within the rapidly expanding realm of digital finance. Russia’s Financial Strategy Challenged by FATF Downgrade The […]
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Report: Election Concerns Halt South Korea’s Crypto and ETF Regulation Ease
South Korea has delayed its efforts to relax its crypto regulations and the prohibition on spot bitcoin exchange-traded funds (ETFs). This development follows closely behind the People Power Party’s contemplation of removing certain regulations and the ETF ban before the commencement of South Korea’s general election. South Korea Holds Back on Crypto Regulation and Reported […]
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Expert Calls for Full Cryptocurrency Regulation in Nigeria to Mitigate Digital Asset-Related Financial Crimes
Nigeria must fully regulate crypto activities if it wants to curb financial crimes associated with digital assets, a forensic expert has said. The co-founder of A&D Forensics also called on Nigeria to enact laws that would mandate banks to vet service providers before granting them account access. Curbing Crypto-Related Financial Crimes According to a blockchain […]
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Janet Yellen Calls for Crypto Regulation in Congressional Testimony, Citing Financial System Risks
Treasury Secretary Janet Yellen, in her forthcoming appearance before the House Financial Services Committee, is set to emphasize the potential dangers the cryptocurrency industry presents to financial stability, advocating for legislative action to regulate digital assets effectively.
Treasury Secretary Janet Yellen Urges Congress to Act on Crypto Regulation Amid Financial System Concerns
U.S. Treasury Secretary Janet Yellen is set to speak on the potential risks posed by the crypto industry to the financial system, including the instability of stablecoins, the danger of runs on crypto platforms, and the volatility of crypto-asset prices in her testimony before the House Financial Services Committee on Tuesday. Yellen’s prepared remarks, which were shared ahead of the session, spotlight the government’s increasing focus on digital assets as a significant area of concern.
Leading the Financial Stability Oversight Council (FSOC), a coalition of federal financial regulators tasked with ensuring the stability of the country’s financial system, Yellen will present the council’s latest annual report and express the need for legislative action to regulate the crypto sector.
Yellen remarks in her prepared statement:
The council is focused on digital assets and related risks such as from runs on crypto-asset platforms and stablecoins, potential vulnerabilities from crypto-asset price volatility, and the proliferation of platforms acting outside of or out of compliance with applicable laws and regulations.
This appearance comes at a time when the crypto industry continues to recover from high-profile setbacks, including the collapse of the FTX exchange, which Yellen had previously likened to the “Lehman moment” for crypto, referencing the 2008 financial crisis-triggering fall of Lehman Brothers.
Yellen’s statement emphasizes the need for Congress to pass legislation to address these concerns, particularly the regulation of stablecoins and the spot market for crypto-assets that are not classified as securities. She states, “Applicable rules and regulations should be enforced, and Congress should pass legislation to provide for the regulation of stablecoins and of the spot market for crypto-assets that are not securities.”
The FSOC’s 2023 annual report, released in December, had already pointed out the price volatility and interconnectedness within the crypto industry as key concerns. With Yellen’s testimony, the council’s stance on the urgent need for regulatory measures becomes clearer, signaling a concerted effort to mitigate the systemic risks associated with digital assets.
Lawmakers are working on several pieces of legislation, focusing not only on stablecoins but also on broader market structure issues and anti-money laundering measures.
Do you think Yellen is in favor of crypto regulation that will give regulatory clarity, but not stifle growth and innovation? Share your thoughts and opinions about this subject in the comments section below.
Hong Kong to Strenghten OTC Crypto Market Regulation
Hong Kong will now focus on regulating over-the-counter (OTC) cryptocurrency trading, according to local sources. Under Secretary for Financial Services and the Treasury Joseph Chan Ho-lim stated that the government will aim to mitigate the risks of virtual assets amidst the rising interest of mainland investors using the city as a bridge to invest in crypto assets.
Hong Kong to Push Stronger Regulation for Crypto OTC Desks
Hong Kong is preparing to strengthen its regulatory framework for over-the-counter (OTC) cryptocurrency operations. According to local reports, the decision has been influenced by the influx of Chinese mainland investors to the Hong Kong market who use the city as a bridge for these investments.
Under Secretary for Financial Services and the Treasury Joseph Chan Ho-lim stated that with these actions, Hong Kong authorities will aim to mitigate the potential risks of virtual assets while providing transparency for the users investing in these assets.
Earlier reports explained that Chinese investors were investing in cryptocurrency assets to escape the sluggish performance of the mainland national stock market. Reuters stressed these investors were using Hong Kong-based platforms to get around the ban that the mainland declared on the trading of crypto assets in 2021, using their ,000 foreign currency quota for this objective.
Local sources did not specify if these new determinations for OTC markets were already prepared or still a work in progress.
In contrast to mainland China, Hong Kong has been open to cryptocurrency, with the Hong Kong Securities and Futures Commission (SFC) having recently published the norms that will regulate the future issuance of spot Bitcoin exchange-traded funds (ETF) in the country. The SFC recognized the popularity of virtual assets in the city and reported a high demand for instruments leveraging these virtual assets.
What do you think about the decision to regulate crypto OTC markets in Hong Kong? Tell us in the comments section below.
‘Blockchain Basics Act’ Introduced in Missouri Takes the Bitcoin Regulation Battle to State Level
The Blockchain Basics Act, introduced recently into the Missouri State House, seeks to guarantee crypto-related rights, including self-custody, transacting, mining, and staking, to the state’s people. Proposed by Rep. Phil Christofanelli, the bill aims to take the crypto legislation fight to the state level, according to Dennis Porter, CEO and co-founder of the Satoshi Action Fund.
‘Blockchain Basics Act’ Proposes to Guarantee Crypto Rights at a State Level in Missouri
The fight for crypto legislation clarity is changing. A new bill, the “Blockchain Basics Act” (HB2107), introduced in Missouri’s State House, seeks to guarantee a series of cryptocurrency rights to the people of Missouri.
Introduced by Rep. Phil Christofanelli on December 27, the bill protects the right of Missouri’s citizens to the custody of their cryptocurrency assets, the right to exert cryptocurrency mining activities without restrictions, the right to transact and make payments with crypto, and eliminates state capital gains taxes for transactions under 0.
The act, currently in its second reading by the House, is part of a new strategy to focus crypto regulation efforts in a different state-level direction. According to Dennis Porter, co-founder and CEO of the Satoshi Action Fund, a non-profit that works with lawmakers to issue crypto-friendly regulations, this might be the way of winning “the battle for bitcoin adoption.”
Porter, who supports this act, stated that the federal road might not be the best option for establishing a legal basis for Bitcoin adoption, comparing this situation with what has happened in the cannabis regulation field. He explained :
Consider how cannabis won the public and legal debate… The cannabis industry didn’t win over the Feds. They fought in the states and cannabis is now legal in 75% of the USA! You and I can win the battle for Bitcoin adoption by following the same strategy!
Although Porter recognized that passing this bill in Missouri would be an “uphill battle,” he stressed this was just the beginning and that many similar bills might be introduced in other states in the coming days.
What do you think about the “Blockchain Basics Act” introduced in Missouri? Tell us in the comments section below.
Billionaire Mark Cuban: SEC Doesn’t Protect Anyone, Current Crypto Regulation Inadequate
Mark Cuban, a Shark Tank star and the billionaire owner of the NBA team Dallas Mavericks, says the U.S. Securities and Exchange Commission (SEC) doesn’t protect anyone, calling the regulator “the Quickbooks of financial regulation.” He stressed that the Howey Test isn’t enough to cover every crypto situation.
Mark Cuban Slams SEC: They Don’t Protect Anyone
Shark Tank star and the owner of the NBA team Dallas Mavericks, Mark Cuban, slammed the U.S. Securities and Exchange Commission (SEC) in a post on social media platform X Thursday.
Regarding whether the current securities law is sufficient to regulate crypto, Cuban said: “All you need to know is that Howey was not enough to cover every situation, so Reves came along.” Reves v. Ernst & Young is a Supreme Court case related to the definition of an “investment contract” under the Securities Act of 1933. The billionaire added:
Now there’s a need for a crypto complement to Howey and Reves.
The owner of the Dallas Mavericks opined: “The SEC is the Quickbooks of financial regulation. They don’t protect anyone but they are really good at bookkeeping.”
Cuban further shared: “It’s also nice to know that if the SEC had taken the same path as Japan and required collateral for crypto loans, all the bankrupt crypto services would still be alive. Just as FTX Japan is.”
Moreover, the Shark Tank investor questioned: “Has the SEC ever moved in to protect investors before something bad has happened?”
Noting that he has “supported and profited from Sharesleuth, finding obviously fraudulent companies and publishing what we have found,” the billionaire stressed: “The SEC has never stepped in to stop the fraud.” Sharesleuth is an investigative reporting website dedicated to uncovering securities fraud and corporate malfeasance.
“And of course, Pink Sheets / OTC now have registration and are still prone to fraud,” Cuban continued, concluding:
And then there are the protections for the millions and billions of shares traded in bankrupt companies that the SEC does nothing to prevent. Because hey, registration obviously is enough to protect investors.
Do you agree with billionaire Mark Cuban about the SEC? Let us know in the comments section below.
Hong Kong Regulators Unveil Public Consultation Paper on Stablecoin Regulation
Hong Kong Monetary Authority (HKMA) and Financial Services and the Treasury Bureau have released a public consultation paper to gather residents’ opinions on the proposed regulatory regime for stablecoin issuers. The HKMA also announced the introduction of a sandbox arrangement whose purpose will be to convey supervisory expectations and guidance on compliance to prospective stablecoin issuers.
HKMA’s Sandbox Arrangement
On Dec. 27, the Hong Kong Monetary Authority (HKMA) and Financial Services and the Treasury Bureau (FSTB) released a public consultation paper to gather residents’ opinions on the proposed regulatory regime for stablecoin issuers. The consultation period began on the day of the announcement and will end on Feb. 29, 2024, the two bodies said in a joint statement.
In addition to releasing the consultation paper, the HKMA announced that it will introduce a sandbox arrangement whose purpose will be to convey supervisory expectations and guidance on compliance to prospective stablecoin issuers. The sandbox arrangement will also enable the regulator to get prospective stablecoin issuers’ perspectives on the proposed regulatory requirements.
Commenting on the two developments, Christopher Hui, the Secretary for Financial Services and the Treasury, said:
With the implementation of the licensing regime for VA [virtual assets] trading platforms from June this year, the legislative proposal to regulate FRS [fiat-referenced stablecoin] is another important measure facilitating Web3 ecosystem development in Hong Kong.
Hui added that by having the necessary licensing and enforcement parameters, Hong Kong will be able to oversee stablecoin issuers in line with international standards.
Eddie Yue, the CEO of HKMA, while his organization is supportive of innovation, it is still required to put in place “guardrails and standards to enable the long-term, sustainable, and responsible development of the virtual asset ecosystem.”
Yue added that the public consultation process, as well as the sandbox arrangement, show that the HKMA is on course to achieve this goal. The joint statement said the consultation paper can be found on the websites of both the FSTB and the HKMA.
What are your thoughts on this story? Let us know what you think in the comments section below.
Ripple Reveals 2024 Crypto Predictions: SEC Crackdown to Continue, Regulation Will Hinder US Crypto Firms
Ripple has shared several crypto predictions for 2024. The firm’s chief legal officer expects the U.S. Securities and Exchange Commission (SEC) to continue its crackdown on the crypto industry. In addition, he foresees U.S. Congress disagreeing on the best course of action for crypto regulation, “leaving U.S. crypto firms stuck while the rest of the world makes significant positive strides.”
Ripple’s 2024 Crypto Predictions
Ripple Labs shared several crypto predictions for 2024 on social media platform X Friday. “We’ve asked leaders at Ripple to weigh in on what they think 2024 holds,” the company explained.
The firm’s chief legal officer, Stuart Alderoty, made three predictions concerning crypto policy and U.S. crypto regulation. Firstly, he predicted: “In 2024, the last bit of the SEC’s misguided lawsuit against Ripple will finally come to an end.” However, he warned:
The SEC’s campaign of regulation by enforcement will continue against other industry leaders.
Secondly, he predicted: “Judges will continue to be the last line of defense against the SEC’s overreach, and the SEC will continue to lose major issues in the courts — setting the table for a showdown in the Supreme Court.”
Alderoty’s third prediction concerns U.S. crypto regulations. The Ripple chief legal officer shared his expectations:
Congress will agree in principle on crypto regulation but will disagree on the best course of action, leaving U.S. crypto firms stuck while the rest of the world makes significant positive strides.
Adrien Treccani, Ripple’s senior vice president of Product, also shared his predictions on Friday. “As the industry looks to leave behind the problems it experienced during 2023, a new paradigm is emerging. The crypto industry isn’t courting financial institutions as it once was. It doesn’t need to,” he detailed. Secondly, he explained: “Global banks and industry giants are actively seeking digital assets solutions to satiate client demand for efficient, transparent and on-demand financial services.”
He also predicted: “In the last year, we’ve announced partnerships with several global banks, and in 2024 we expect adoption rates to continue to soar.” Moreover, he said: “Banks are experimenting with tokenized assets, and need to be able to do so with confidence, inside the framework of strict compliance and security protocols, as well as smooth integrations.”
Several other firms have shared their 2024 crypto predictions, including asset management firms Vaneck and Bitwise.
What do you think about the 2024 crypto predictions shared by Ripple? Let us know in the comments section below.
US Lawmakers Slam SEC and Chair Gensler for Refusing to Provide Clear Regulation for Crypto Industry
U.S. lawmakers have slammed the Securities and Exchange Commission (SEC) and its chairman Gary Gensler for refusing to provide clear crypto regulation. “SEC Chair Gary Gensler’s continued refusal to provide clarity for the digital asset ecosystem is shameful,” one congressman said. “The SEC’s policy to provide less clarity to the marketplace instead of more is designed to create chaos and it will corrupt our great capital markets,” another opined.
Lawmakers Concerned About SEC’s Refusal to Provide Clarity for Crypto Ecosystem
U.S. Representatives Patrick McHenry (R-NC) and Tom Emmer criticized the U.S. Securities and Exchange Commission (SEC) and its Chairman Gary Gensler on Friday after the SEC denied Coinbase’s petition for clear crypto regulation.
Following Gensler’s statement in support of the SEC’s decision, Congressman McHenry commented on social media platform X:
SEC Chair Gary Gensler’s continued refusal to provide clarity for the digital asset ecosystem is shameful. If ‘the law is clear’ in support of his position, why does the SEC keep losing in court?
The lawmaker from North Carolina added in a follow-up post on X that one of the bills in Congress that addresses crypto regulation, the Financial Innovation and Technology for the 21st Century Act (Fit21), requires both the SEC and the Commodity Futures Trading Commission (CFTC) “to conduct rulemakings with clear marching order.” He emphasized: “This will result in more robust consumer protection and clarity for market participants.” McHenry, who has been pushing for clear crypto regulation, is retiring from Congress at the end of his current term in January next year.
Another U.S. lawmaker, Congressman Tom Emmer (R-MN), also slammed the SEC’s denial of Coinbase’s petition. He wrote on X:
The SEC’s policy to provide less clarity to the marketplace instead of more is designed to create chaos and it will corrupt our great capital markets. It is wrong and a clear violation of the SEC’s mandate.
Gensler has insisted that the law is clear on digital assets. He claims all crypto tokens, except bitcoin, are securities. The SEC chairman also recently revealed that the regulator is taking a litigation-heavy strategy to regulate the crypto industry because “the field is so rife with hucksters and fraudsters and non-compliant parties.” He further noted: “This is a field where the American public is at risk and being harmed every day on these platforms that are commingling and often trading against their customers.”
While Gensler supports the SEC’s decision to deny Coinbase’s petition, two SEC commissioners, Hester Peirce and Mark Uyeda, disagreed. They issued a joint statement Friday, stating:
In our view, the petition raises issues presented by new technologies and other innovations, and addressing these important issues is a core part of being a responsible regulator.
“Any exploration of these issues should include public roundtables, concept releases, and requests for comment, which would afford us the opportunity to hear from a wide range of market participants and other interested parties. Then, using what has been learned, the Commission could issue guidance or engage in rulemaking as needed,” the commissioners added.
The SEC recently lost several legal battles against crypto firms, including Ripple Labs and Grayscale Investments. Referencing the Grayscale case, Gensler said this week that the SEC is acting according to its authorities and how the courts interpret them.
What do you think about the SEC refusing to provide regulatory clarity for the crypto industry? Let us know in the comments section below.