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Japan’s JCBA Submits Initial Proposal for IEO Regulatory Reform to JVCEA

by Blockchain NewsSeptember 26, 2023

Key Takeaways

JCBA (Japan Cryptocurrency Business Association) submits initial proposal for IEO (Initial Exchange Offering) regulatory reform to JVCEA (Japan Virtual Currency Exchange Association).

The proposal outlines four key agendas aimed at stabilizing the IEO market.

The reform aims to enhance user protection and promote domestic IEOs over foreign exchanges.

Introduction

The Japan Cryptocurrency Business Association (JCBA), headquartered in Chiyoda, Tokyo and led by President Hiroshi Hirosue, announced the submission of an initial proposal for the reform of the IEO (Initial Exchange Offering) system. The proposal was developed by the ICO & IEO Subcommittee, chaired by Seihiro Yoshida, and submitted to the Japan Virtual Currency Exchange Association (JVCEA), led by President Genki Oda.

Background and Current Issues

Since May of this year, the ICO & IEO Subcommittee has been actively discussing the future of the IEO system, leveraging insights from various businesses involved in cryptocurrency and Web3. The proposal consolidates these discussions and has been submitted to JVCEA, a self-regulatory body for cryptocurrency exchanges and related derivative trading.

Four Agendas for IEO Reform

The proposal outlines four key agendas for reform:

Price Determination: Diversification of pricing methods and explicit warnings about pricing.

Liquidity: Setting liquidity targets at the time of listing and ensuring a conducive environment for liquidity.

Price Stability: Establishing rules for price stabilization measures at the time of listing.

Sale Restrictions: Formalizing and tightening lock-up regulations for issuers and underwriting exchanges.

Future Directions

The proposal is an initial draft discussed solely within the JCBA. Future discussions will involve various stakeholders and focus on the feasibility of implementing these reforms within the scope of self-regulatory rules.

The reform aims to encourage users to manage their assets under Japanese regulations rather than using foreign exchanges, thereby enhancing user protection.

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R3 Highlights the Transformative Potential of Tokenization in Finance

by Blockchain NewsSeptember 26, 2023

The Promise and Challenges of Tokenization

Tokenization, the process of converting real-world assets into digital tokens on a blockchain, is poised to revolutionize the financial industry, according to R3. It promises benefits such as access to new markets, product innovation, and better liquidity management. However, the technology faces hurdles like regulatory compliance and the lack of industry standards.

Regulatory Hurdles

The banking industry faces challenges in dealing with tokenized deposits and public chains. Basel rules impose exposure limits on crypto assets, requiring strict adherence to compliance guidelines. Regulatory sandboxes like the EU’s DLT Pilot Regime and the UK’s FMI Sandbox offer some relief by providing a controlled environment for experimentation.

The Need for Collaboration

For tokenization to succeed, there must be close collaboration among government agencies, financial institutions, and technology providers. R3 and Adhara have launched the Hyperledger Lab, Harmonia, to facilitate open conversations around enterprise blockchain interoperability and industry standards.

Implementing the Right Protocols

The financial world is on the brink of a digital transformation, with $5 trillion in assets potentially being tokenized in the next five years. Implementing the correct tokenization solutions and frameworks, such as control location services and custody frameworks, is crucial for this transition.

A Digital Future for Finance

Tokenization is not merely a trend but a transformative force that will continue to shape the future of finance. It has the potential to democratize investment opportunities, improve cost efficiency, and enhance collateral management. However, overcoming challenges like distribution complexity and regulatory compliance is essential for its widespread adoption.

The Importance of Standardization

While tokenization offers a plethora of opportunities, the absence of standardized protocols and frameworks remains a significant barrier. Industry players like R3 are actively working to shape these standards from the inside by openly collaborating. For example, the launch of Hyperledger Lab, Harmonia, aims to enable open conversations towards building industry standards around enterprise blockchain interoperability.

Regulatory Frameworks as Catalysts

Regulatory frameworks such as the EU’s DLT Pilot Regime or the UK’s FMI Sandbox can act as catalysts for innovation. These frameworks provide the much-needed regulatory certainty and encourage experimentation, enabling market participants to implement new technologies that support the tokenization of financial and digital assets.

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Tagged : Blockchain / COLLATERAL MANAGEMENT / DIGITAL ASSETS / DLT PILOT REGIME / FINANCIAL INDUSTRY / FMI SANDBOX / HARMONIA / HYPERLEDGER LAB / INDUSTRY STANDARDS / News / R3 / REGULATORY COMPLIANCE / REGULATORY FRAMEWORKS / STANDARDIZATION / Tokenization

Citcon Partners with Cash App Pay and Afterpay to Enhance E-commerce Payment Solutions

by Blockchain NewsSeptember 26, 2023

Key Takeaways

Citcon announces a strategic partnership with Cash App Pay and Afterpay.

The collaboration aims to provide e-commerce businesses with a range of payment options.

Merchants can integrate these payment methods with minimal effort and benefit from a centralized dispute center.

Streamlining E-commerce Payments

Citcon, a global leader in digital payments, has entered into a strategic partnership with Cash App Pay and Afterpay, according to a Business Wire release dated September 26, 2023. The alliance aims to equip e-commerce platforms with a comprehensive suite of payment solutions, thereby enhancing the consumer experience.

One-Stop Service for Merchants

The partnership allows merchants to offer customers the option to pay via Cash App Pay or Afterpay’s “Buy Now, Pay Later” plans through Citcon’s Payment Platform. This platform already supports over 150 payment methods. Merchants can access these new payment options with a single onboarding process, settlement, and reconciliation. Citcon’s Centralized Dispute Center will handle all payment disputes, streamlining the management process for merchants.

Easy Integration

Citcon’s robust integration capabilities are designed to cater to businesses of all sizes. Merchants who are already using Citcon’s Universal Payment Interface, WebSDK, or various commerce platform plugins like Magento, Shopify, and SAP Hybris can effortlessly add Cash App Pay and Afterpay to their existing setups.

Targeting Younger Demographics

The integration of Cash App into Citcon’s Payment Gateway offers an opportunity for merchants to attract and retain Millennial and Gen Z consumers. By providing flexible and convenient payment options, merchants can potentially increase sales and build long-term customer loyalty.

Wei Jiang, co-founder and President of Citcon, stated, “This partnership empowers merchants with a powerful payment tool, allowing merchants to reach Cash App’s large consumer base and opening new doors of opportunity for merchants.”

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Tagged : Afterpay / CASH APP PAY / Citcon / E-Commerce / GEN Z / Millennial / News / WEI JIANG

Kraken Secures E-Money License in EU, Expands Virtual Asset Services in Spain

by Blockchain NewsSeptember 26, 2023

Key Takeaways

Kraken receives E-Money Institution (EMI) license from the Central Bank of Ireland.

The company also registers as a Virtual Asset Service Provider (VASP) in Spain.

These authorizations are part of Kraken’s European expansion strategy.

Regulatory Milestones in European Expansion

San Francisco-based cryptocurrency platform Kraken has obtained an E-Money Institution (EMI) license from the Central Bank of Ireland, according to a Business Wire release dated September 26, 2023. Concurrently, Kraken has also secured registration with the Bank of Spain as a Virtual Asset Service Provider (VASP). These developments underscore Kraken’s commitment to regulatory compliance and its focus on European markets.

Enhanced Services in the EU and Spain

The EMI license, granted to Kraken’s Irish subsidiary, allows the firm to broaden its EUR fiat services in collaboration with European banks. This will benefit clients in the 27 European Union (EU) member states and European Economic Area (EEA) countries. In Spain, the new VASP registration enables Kraken to offer cryptocurrency exchange and custodial wallet services to Spanish residents.

Strategic Importance

Curtis Ting, Kraken’s Vice President of Global Operations, stated, “Today’s announcement marks another important milestone in our European expansion strategy.” He emphasized the company’s confidence in the European regulatory landscape and expressed gratitude towards the Central Bank of Ireland and the Bank of Spain for their “constructive approach to regulating industry growth.”

Company Overview

Founded in 2011, Kraken has a longstanding reputation for robust security and client service. Over the past year, the company has diversified its offerings, launching an NFT marketplace, the Kraken Pro advanced trading interface, and a revamped consumer web experience. Kraken serves more than 10 million clients globally, offering trading in over 200 digital assets and six national currencies.

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Tagged : BANK OF SPAIN / CENTRAL BANK OF IRELAND / EMI LICENSE / EUROPEAN EXPANSION / Kraken / News / VIRTUAL ASSET SERVICE PROVIDER

MicroStrategy Acquires Additional 5,445 Bitcoins, Total Holdings Reach 158,245 BTC

by Blockchain NewsSeptember 26, 2023

Key Takeaways

MicroStrategy purchases 5,445 more Bitcoins for approximately $147.3 million.

The company now holds a total of 158,245 Bitcoins, acquired at an average price of $29,582 per Bitcoin.

The acquisition comes amid a period of relative price stability for Bitcoin, which is currently trading around $26,000.

Strategic Investment

MicroStrategy, a leading business intelligence firm, has further solidified its position as a significant Bitcoin investor by acquiring an additional 5,445 BTC. The announcement was made by Michael Saylor, the company’s co-founder and executive chairman, on X (formerly known as Twitter) on September 25, 2023. The acquisition was completed for a total cash payment of $147.3 million, averaging $27,053 per Bitcoin.

Regulatory Filing Details

According to a Form 8-K filing submitted to the United States Securities and Exchange Commission (SEC), the latest acquisition took place between August 1 and September 24, 2023. As of the latter date, MicroStrategy and its subsidiaries control approximately 158,245 Bitcoins. These assets were acquired at an average price of $29,582 per Bitcoin, inclusive of all fees and expenditures. The aggregate purchase price for all Bitcoin assets held by the company stands at around $4.68 billion.

Market Context

The acquisition comes at a time when Bitcoin prices have shown relative stability, hovering around the $26,000 mark for several weeks. After peaking close to $28,000 on August 29, the cryptocurrency hit a low of $25,000 on September 11. According to data from CoinGecko, the current market price of Bitcoin is $26,081, representing a 1.9% decrease over the last 24 hours and a 4% decrease over the past week.

Company’s Bitcoin Strategy

This latest acquisition reinforces MicroStrategy’s bullish stance on Bitcoin. Earlier in June 2023, the company purchased 12,333 Bitcoins for a total of $347 million, at an average price of $29,668 per coin. Notably, MicroStrategy reported its first profitable quarter since 2020 in Q1 2023, thanks in part to a one-time income tax gain.

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Tagged : #BTC / Acquisition / Bitcoin / Cryptocurrency / FORM 8-K / Investment / Michael Saylor / Microstrategy / News / SEC

Laser Digital Secures In-Principal Approval from Abu Dhabi Global Market

by Blockchain NewsSeptember 26, 2023

Key Takeaways

Laser Digital, a subsidiary of Nomura, receives In-Principal Approval from Abu Dhabi Global Market’s Financial Services Regulatory Authority.

The approval paves the way for Laser Digital to offer broker-dealer and asset management services in the UAE, subject to certain conditions.

Abu Dhabi was chosen for its progressive regulatory environment, particularly in the digital asset sector.

Regulatory Milestone

Laser Digital, the digital asset subsidiary of Nomura, announced on September 26, 2023, that it has obtained In-Principal Approval (IPA) from the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM). The IPA is a significant step toward formal regulatory licensing, which will be granted once Laser Digital meets specific conditions. Upon fulfilling these conditions, the company will be authorized to provide broker-dealer services and asset/fund management services related to both virtual and traditional assets in the United Arab Emirates (UAE).

Strategic Choice of Location

The decision to establish operations in Abu Dhabi was influenced by ADGM’s forward-thinking and transparent regulatory framework. ADGM has been proactive in fostering cross-industry dialogue and collaboration, making it an attractive destination for companies in the digital asset sector, such as Laser Digital.

Leadership and Operations

Laser Digital was co-founded last autumn by Steve Ashley, former head of Nomura’s wholesale division, and Jez Mohideen, Nomura’s ex-Chief Digital Officer. The company is headquartered in Switzerland and has additional offices in the UAE and the UK. Jez Mohideen leads the UAE entity, with Cameron Dickie serving as Head of Distribution.

Industry Reactions

Arvind Ramamurthy, Chief of Market Development at ADGM, welcomed Laser Digital’s addition to their financial ecosystem. He stated, “Laser is developing investment services in virtual assets that are both dynamic and transparent. Their investment offerings align well with ADGM and the FSRA’s international best practices.”

Jez Mohideen, CEO of Laser Digital, expressed gratitude for the opportunity to operate in ADGM, citing its “comprehensive and clear regulatory framework.”

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Tagged : ABU DHABI GLOBAL MARKET / Asset Management / BROKER-DEALER SERVICES / DIGITAL ASSETS / FINANCIAL SERVICES REGULATORY AUTHORITY / IN-PRINCIPAL APPROVAL / LASER DIGITAL / News / Nomura / Uae

Amazon Invests $4 Billion in AI Startup Anthropic for Advanced Foundation Models

by Blockchain NewsSeptember 26, 2023

Key Takeaways

Amazon to invest up to $4 billion in Anthropic.

Anthropic gains access to AWS Trainium and Inferentia chips.

Amazon acquires a minority stake in Anthropic; governance remains unchanged.

Collaboration aims to advance AI safety and research.

Strategic Investment and Collaboration

Anthropic, an artificial intelligence (AI) startup, announced on September 25, 2023, a significant investment and collaboration agreement with Amazon. Amazon will invest up to $4 billion in Anthropic as part of a broader initiative to develop reliable and high-performing foundation models. The investment will provide Anthropic with access to Amazon Web Services (AWS) Trainium and Inferentia chips, which will be used for model training and deployment.

Technological Synergy

The collaboration will also allow Amazon developers to build on top of Anthropic’s state-of-the-art models via Amazon Bedrock. This platform will enable the integration of generative AI capabilities into existing Amazon applications and the creation of new customer experiences. Anthropic’s founding team includes alumni from OpenAI, which is notably backed by Microsoft and known for developing the widely-used AI chatbot, ChatGPT.

AI Safety and Governance

As part of the investment, Amazon will acquire a minority stake in Anthropic. The startup’s corporate governance structure will remain unchanged, overseen by the Long Term Benefit Trust in accordance with its Responsible Scaling Policy. Both companies are committed to the safe training and deployment of advanced foundation models and are actively engaged in organizations like the Global Partnership on AI (GPAI), the Partnership on AI (PAI), and the National Institute of Standards and Technology (NIST).

Impact on Industries

Enterprises across various sectors are already leveraging Anthropic models on Amazon Bedrock. For instance, LexisNexis Legal & Professional is using a custom Claude 2 model for conversational search and intelligent legal drafting. Asset management firm Bridgewater Associates is developing an investment analyst assistant powered by Claude 2. Travel publisher Lonely Planet has reduced its itinerary generation costs by almost 80% after deploying Claude 2.

Future Prospects

The collaboration aims to responsibly scale the adoption of Claude and advance safe AI in the cloud. The investment will ensure that Anthropic is well-equipped to continue advancing the frontier of AI safety and research, benefiting organizations worldwide.

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Tagged : AI INVESTMENT / AI SAFETY / Amazon / AMAZON BEDROCK / ANTHROPIC / AWS TRAINIUM / CLAUDE 2 / INFERENTIA CHIPS / News

SEC Raises Objections to Celsius Network’s Restructuring Plan Involving Coinbase

by Blockchain NewsSeptember 26, 2023

Key Takeaways

SEC files limited objection against Celsius Network’s restructuring plan.

Concerns raised over the company’s proposed engagement with Coinbase.

SEC’s ongoing lawsuit against Coinbase cited as complicating factor.

Next bankruptcy court hearing scheduled for October 5, 2023.

Background and Timeline

Celsius Network filed for Chapter 11 bankruptcy after announcing a $14 million agreement with Core Scientific, a mining company. Since filing for bankruptcy in July 2022, Celsius has reportedly failed to meet its payment obligations to Core Scientific. The restructuring plan has undergone several amendments since its initial filing in March 2023, with the fourth iteration submitted in August 2023. The bankruptcy court has yet to approve the plan, and the next hearing is scheduled for October 5, 2023.

SEC’s Concerns

The SEC’s limited objection focuses on Celsius Network’s proposed engagement with Coinbase, which is intended to act as a Distribution Agent for international customers under the restructuring plan. The SEC argues that the role of Coinbase in the arrangement “goes far beyond the services of a distribution agent,” potentially implicating brokerage and master trading services. These services are central to the SEC’s ongoing lawsuit against Coinbase, initiated in June 2023. The SEC has reserved the right to object further based on the outcome of this and other related cases.

Coinbase’s Response

Coinbase CEO Brian Armstrong and Chief Legal Officer Paul Grewal took to social media to express their support for Celsius Network. They questioned why the SEC would object to a “trusted US public company” taking on the role of distributing assets back to Celsius customers. The statement raises questions about the SEC’s motives and adds another dimension to the ongoing legal complexities.

Implications and Next Steps

The SEC’s objection could potentially delay or alter the terms of Celsius Network’s restructuring plan. It also raises questions about the regulatory landscape for crypto companies engaging with traditional financial institutions. The bankruptcy proceeding is set to continue, with the next hearing scheduled for October 5, 2023. The SEC reserves the right to object further based on the outcome of this and other related cases.

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Tagged : BANKRUPTCY COURT / Celsius Network / CHAPTER 11 / Coinbase / Core Scientific / DISTRIBUTION SERVICES / News / OBJECTION / RESTRUCTURING PLAN / SEC

Legal Team Requests Temporary Release of Samuel Bankman-Fried for Upcoming Trial

by Blockchain NewsSeptember 26, 2023

Key Takeaways

Samuel Bankman-Fried’s legal team has submitted a letter to Judge Lewis A. Kaplan, requesting temporary release for their client.

The request is based on the need for adequate preparation for the upcoming trial, citing the case’s complexity.

The letter outlines proposed conditions for Bankman-Fried’s temporary release, including restricted access to electronic devices and a gag order.

Introduction

In a letter dated September 25, 2023, attorneys Mark S. Cohen and Christian R. Everdell of COHEN & GRESSER LLP have submitted a request to Judge Lewis A. Kaplan of the United States District Court, Southern District of New York, for the temporary release of their client, Samuel Bankman-Fried (SBF). The request is made under 18 U.S.C. § 3142(i), stating that the release is “necessary for preparation of [his] defense.”

The Complexity of the Case

The letter emphasizes the complexity of the case, stating that it is “highly technical” and requires Bankman-Fried’s input for adequate preparation. The defense argues that third-party experts cannot replicate Bankman-Fried’s unique knowledge and insight into the facts of the case.

Previous Court Rulings

The letter also references a ruling on September 12, 2023, where the court did not rule out the possibility of a future application for temporary release. Additionally, it mentions that the Second Circuit affirmed the Court’s decision to revoke Bankman-Fried’s bail on September 19, 2023.

Proposed Conditions for Release

The legal team has proposed specific conditions for Bankman-Fried’s temporary release, which include:

Being in the company of his attorneys or a security guard when not in court.

A gag order restricting his communication to only his legal team and immediate family.

No access to electronic devices during the temporary release.

Concerns Over Medication

The letter also notes that Bankman-Fried is currently receiving only half of his prescribed dose of Adderall, despite a court order, and does not have access to his preferred allergy medication, Zyrtec.

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Tagged : JUDGE LEWIS A. KAPLAN / LEGAL TEAM / News / SAMUEL BANKMAN-FRIED / Sbf / TEMPORARY RELEASE