Tag: CRYPTO REGULATION

Biden’s Communications Director Restricted From Handling Crypto Firms

by Blockchain News

US President Joe Biden’s communications director, Ben LaBolt, will reportedly be restricted from handling matters related to any cryptocurrency or technology firms he previously represented, according to an April 22 Bloomberg Law report. However, he will be allowed to advise on the president’s approach to regulating cryptocurrency and social media companies.

LaBolt was previously a partner at Bully Pulpit Interactive (BPI), a communications firm that had 23 clients paying fees exceeding $5,000 in a year. These clients included decentralized exchange UniSwap, venture capital firm Andressen Horowitz, and companies such as Meta Platforms, Shopify, and West Street.

In a public financial disclosure report published on April 21, LaBolt disclosed owning $50,001-$100,000 in Bitcoin and $15,001-$50,000 in Ethereum 2. However, he will be barred from “participating in legal matters, investigations, or contracts involving cryptocurrency or technology firms he previously represented.”

These restrictions are in line with the ethics rules followed by senior White House staff. Despite the restrictions, LaBolt will be allowed to advise on crypto regulation.

This move comes after Biden signed an executive order (EO) on digital assets on March 9. The EO outlined an interagency process that will involve 16 high officials, initially starting with the task of producing an elaborate series of reports. These reports are due at intervals ranging from 90 days to over a year from the publication of the EO.

While the EO did not specify any regulatory actions, it attracted attention from government officials and industry leaders alike. Republican “Crypto Senator” Cynthia Loomis of Wyoming praised the administration’s growing interest in digital assets.

Ari Redborn, head of legal and government affairs for blockchain-based intelligence firm TRM Labs, said that he was “expecting certain things and the positive tone was not necessarily one of them.”

The move to restrict LaBolt’s handling of matters related to crypto firms may be seen as a way to ensure ethical behavior in the White House. This move is in line with the Biden administration’s focus on transparency and ethical governance.

It is worth noting that this move may also affect LaBolt’s former clients, such as UniSwap and Andressen Horowitz. It remains to be seen how this move will affect their business dealings with the White House.

Overall, this move highlights the growing interest in crypto regulation by the Biden administration. With the interagency process set in motion by the EO, it is likely that the US government will take a more active role in regulating the crypto industry.

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Binance CEO Emphasizes Importance of Understanding Crypto for Proper Regulation

by Blockchain News

During a fireside chat at the Hong Kong Web3 Festival, Binance CEO Changpeng Zhao (CZ) shared his views on the importance of regulators having a deep understanding of the crypto industry to properly regulate it. According to CZ, applying traditional financial industry regulations to crypto is not ideal since crypto is different from banks and traditional financial industries.

One of the challenges of regulating the crypto industry is deciding on how to classify different assets. CZ explained that there are many types of crypto assets, and some may look like securities, others like commodities, or utility tokens, and some may even have a combination of those characteristics. Therefore, it is important for regulators to know how to classify these assets to decide on appropriate regulations.

CZ also stressed the importance of having regulatory clarity. He stated that unclear regulations are “the worst,” and having clear regulations is better. However, he also suggested that it is best to let the industry develop fully before introducing regulations, as it is difficult to predict what exactly will be popular in the industry.

In terms of engaging with regulators, CZ advised crypto industry players to be actively engaged with them. While many crypto regulators around the world are receptive, some are still skeptical. However, CZ believes that skepticism should not deter industry players from engaging in conversations with regulators.

When asked about what could trigger mass adoption of crypto, CZ pointed out that government efforts to restrict traditional financial markets may push more people towards crypto, ultimately leading to mass adoption. He explained that the more governments try to come for crypto, the more it will grow.

Finally, CZ stressed the need for patience among crypto industry players. He believes that the first draft of regulations is often overly restrictive, but a balance is usually found in due time. Therefore, it is important for industry players to be patient and understand that regulations will continue to evolve over time.

Overall, CZ’s fireside chat highlighted the importance of understanding the crypto industry for proper regulation. As the industry continues to grow and evolve, it is crucial for regulators to keep up and engage with industry players to ensure effective regulation.

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Coinbase warns of losing crypto industry leadership

by Blockchain News

Coinbase, a prominent U.S.-based cryptocurrency exchange, has been issued a Wells notice by the U.S. Securities and Exchange Commission (SEC) over possible securities law violations regarding some of its asset listings, staking services, and Coinbase Wallet. The notice came on March 22, and Coinbase is expected to face legal enforcement action soon. As a result, Coinbase has warned that the U.S. government’s hawkish approach to crypto regulation has created an uncertain and unstable environment for the crypto industry, leading other countries to fill the vacuum.

Daniel Seifert, Coinbase’s vice president and regional managing director in Europe, highlighted the regulatory approach of the U.S. in his March 23 blog post titled, “Europe is winning. Will the US catch up?” According to Seifert, the U.S. has regulated crypto by enforcement, despite industry-wide calls for “comprehensive crypto regulation,” which has resulted in uncertainty and instability in the crypto industry. Seifert also argued that France, the U.K., and the European Union are now building friendlier ecosystems for crypto regulation, causing the U.S. to lose its status as the leading hub of the crypto sector.

Seifert emphasized the significance of Paris Blockchain Week, which was hosted at the Louvre this month, and the European Union’s Markets in Crypto-Assets (MiCA) regulation, expected to come into effect in 2024. MiCA aims to establish a harmonized set of rules for crypto-assets and related activities and services, offering clear rules and guidelines for the European cryptocurrency ecosystem. The MiCA legislation has been in development for two years and is expected to be a positive move for the sector.

Seifert also highlighted the U.K.’s recent push to become a crypto hub, as well as Hong Kong’s efforts to become a digital asset hub, the National Australia Bank’s work with non-U.S. dollar-pegged stablecoins, and the Canadian Securities Administration’s imposition of “enhanced investor protection commitments” on domestic crypto exchanges. Seifert and the Crypto Council for Innovation emphasized that crypto is global, and nobody is waiting for the U.S. to lead the charge.

Seifert’s blog post and the Crypto Council for Innovation’s Twitter thread have brought attention to the need for a comprehensive regulatory framework that will provide clarity and stability for businesses operating in the space. The U.S. government’s regulatory approach may cause it to lose its position as the leading hub of the crypto sector, with other countries offering friendlier crypto regulation ecosystems, such as France, the U.K., and the European Union. The crypto industry is global, and other countries are eager to fill the regulatory vacuum left by the U.S.

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Coinbase CEO Compares SEC to Soccer Refs in Criticism of Lack of Clarity Around Crypto Regulation

by Blockchain News

In a recent development, Coinbase, the popular cryptocurrency exchange, has been issued a Wells notice by the United States Securities and Exchange Commission (SEC), which typically precedes an enforcement action. The news prompted Coinbase CEO, Brian Armstrong, to criticize the SEC for its lack of clarity around crypto regulation. In a series of tweets, Armstrong compared the SEC to “soccer refs” in a game of pickleball, arguing that they could not agree on the rules of the “new game” of crypto regulation.

Armstrong’s criticism comes as the crypto industry faces ongoing debates around who should be the primary body regulating crypto, with the SEC being just one of many potential regulators. There has been concern among crypto companies that regulators lack a clear understanding of the industry and that their regulatory efforts may stifle innovation and drive activity offshore.

The reference to a “call they made back in April 2021” refers to the SEC’s approval of Coinbase’s application to go public. Armstrong argued that the company’s filings “clearly explained” its asset listing process and “included 57 references to staking.” However, the recent Wells notice suggests that the SEC has reversed its earlier position and is now seeking to take enforcement action against Coinbase.

Coinbase’s chief legal officer, Paul Grewal, also criticized the SEC’s lack of clarity around crypto regulation, claiming that the agency had provided “no clear rule book” and that “efforts to engage with the SEC are met with silence or enforcement actions.” Both Armstrong and Grewal appear to welcome the chance to use the “legal process” to provide the crypto industry with regulatory clarity and to defend Coinbase against the SEC’s enforcement action.

The news of the Wells notice has been widely condemned by the crypto community, with many agreeing that the SEC has reversed its earlier position regarding Coinbase. The community also seems to be throwing their support behind Coinbase, believing that the company will be fighting on behalf of the entire U.S. crypto industry as an unclear regulatory environment drives activity offshore.

In conclusion, the recent Wells notice issued to Coinbase by the SEC has sparked a debate around the lack of clarity and understanding among regulators when it comes to crypto regulation. Coinbase’s CEO and chief legal officer have criticized the SEC’s lack of clarity and seem to be welcoming the chance to use the legal process to provide the industry with regulatory clarity. The crypto community has widely condemned the notice, with many agreeing that the SEC has reversed its earlier position regarding Coinbase.

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G20 Announces Standards for Global Crypto Regulation

by Blockchain News

The Financial Stability Board (FSB), the International Monetary Fund (IMF), and the Bank for International Settlements (BIS) have been tasked with establishing standards for a global cryptocurrency regulatory framework, according to an announcement by the Group of 20 (G20) on February 25th, 2023. The G20, comprised of the world’s 20 largest economies, has recognized the need for a coordinated international effort to address the risks associated with cryptocurrencies and establish clear regulatory guidelines for their use.

The announcement comes in response to the rapid growth of cryptocurrencies and their increasing use in global financial transactions. The FSB, IMF, and BIS will deliver papers and recommendations on the regulation, supervision, and oversight of stablecoins, crypto asset activities, and markets by July of this year. The recommendations are expected to establish clear guidelines for the use of cryptocurrencies and help prevent their misuse for criminal activities, such as money laundering and terrorist financing.

The G20 has also recognized the potential benefits of cryptocurrencies and the underlying blockchain technology. The use of cryptocurrencies could offer advantages such as increased efficiency, faster and cheaper transactions, and greater financial inclusion, particularly for the unbanked population. However, the G20 also acknowledges the risks associated with cryptocurrencies, including volatility, market manipulation, and cyber threats.

The regulatory framework is expected to strike a balance between the risks and benefits of cryptocurrencies, ensuring their safe and responsible use. The recommendations are likely to address issues such as licensing requirements, anti-money laundering and counter-terrorism financing (AML/CFT) measures, consumer protection, and market integrity. The G20 recognizes the need for a coordinated international effort to establish these standards and promote global financial stability.

In conclusion, the G20’s announcement marks a significant step towards establishing a global regulatory framework for cryptocurrencies. The recommendations from the FSB, IMF, and BIS will provide clear guidelines for the use of cryptocurrencies, ensuring their safe and responsible use while promoting financial stability. As cryptocurrencies continue to gain in popularity, it is essential to establish clear regulatory guidelines to prevent their misuse and ensure their potential benefits are fully realized.

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Morocco Completed Crypto Regulation

by Blockchain News

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It’s possible that Morocco will introduce its first crypto law sometime in the next few days The paper was initially produced by the Central Bank, and it is currently being reviewed by the industry stakeholders that have an interest in the topic.

Towards the end of the month, during the course of the press conference, the Governor of Morocco’s Central Bank, Bank Al-Maghrib (BAM), Abdellatif Jouahiri, announced that there would be a series of meetings that would take place between the BAM and the market actors.

In addition, regulatory authorities from Morocco, such as the Moroccan Capital Markets Authority (AMMC), the Insurance Supervisory Authority, and the Social Security Authority, will be among the participants (ACAPS).

It is going to take place before any crypto-related law is ever put into effect.

The BAM collaborated with the International Monetary Fund and the World Bank during the process of putting up the document. This was done in coordination with the World Bank.

Moroccan authorities are said to have also contacted the central banks of France, Sweden, and Switzerland in order to investigate their level of competence in regulatory matters pertaining to digital assets. This was done in an effort to learn more about the regulatory capabilities of these three countries.

The definition of crypto that will be provided by the proposal will be one that is specific to the circumstances in Morocco. The definition will make an effort to protect individuals without restricting innovation in any way.

Even though the details of the bill have not been made public, it is reasonable to expect that it will contain restrictions that are significantly more stringent than those that are already mandated by law, which makes it unlawful to engage in cryptocurrency trading.

The proportion of Moroccans who claimed to own digital assets went from 2.4% in 2021 to 3.1% in 2022, making Morocco the country in Northern Africa with the industry that was expanding at the fastest rate in 2022.

To the findings of a study that was just made public by Chainalysis, the sector of the cryptocurrency industry that is active in the Middle East and North Africa (MENA) region is the one that is expanding at the rate that is the most rapid across the entire world. The number of transactions that took place in the MENA region between July 2021 and June 2022, it is clear that consumers obtained a total of 566 billion dollars’ worth of bitcoin during that time period.

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UK Seeks to Recognize Bitcoin and Crypto as Regulated Financial Instruments

by Blockchain News

The United Kingdom has drawn a step closer to becoming one of the most recognized crypto hubs in the world as the House of Commons, the Parliament, passed the amendment to the Financial Services and Markets Bill which seeks to regulate Bitcoin (BTC) and the cryptocurrency industry.

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The Bill was initially proposed when Prime Minister Rishi Sunak was the Chancellor of the Exchequer, and it seeks to regulate stablecoins. During the Parliamentary meeting, Andrew Griffith, Conservative MP for Arundel and South Downs made a proposal to expand the scope of the Bill by including other crypto assets in the scope of regulated financial services in the UK.

 

“The substance here is to treat them crypto like other forms of financial assets and not to prefer them, but also to bring them within the scope of regulation for the first time,” Griffith said, adding that the new clause 14 in the bill, “clarifies that crypto assets could be brought within the scope of the existing provisions” of the Financial Services Act 2000.

 

The MPs voted in favor of the amendments and it is now set to be presented at the House of Lords. Should the bill pass there, it will then be required to be signed by King Charles III so as to enshrine it into law.

 

The excitement that the UK is on track to regulate Bitcoin as a financial instrument has sent shivers down the digital currency ecosystem as evident in the price of some of the biggest cryptocurrencies, Bitcoin is up 5.97% at the time of writing to $20,561.77 per data from CoinMarketCap, while Ethereum is changing hands at $20,561.77, up 11.21%.


Many market observers are already seeing signs that the Rishi Sunak government will be bullish on crypto, riding on his positive stance on the industry while serving in Boris Johnson’s government. The timeline, however, is what remains unknown.

Image source: Shutterstock

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Gibraltar Introduces New Legislation to Combat Insider Trading and Market Manipulation

by Blockchain News

The Gibraltar Financial Services Commission (GFSC) has updated its regulatory guidelines for the digital currency ecosystem to include a 10th clause that addresses insider trading and market manipulation amongst crypto virtual asset service providers operating in the country.

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Despite the requirements to adhere to the provisions of the 10th clause to help shore up the market integrity in Gibraltar, concerned startups will also be obligated to comply strictly with the requirements of the other nine regulatory guidelines first floated in 2018. The GFSC said that the introduction of the 10th regulatory clause is representative of all the stakeholders in the space, cutting across government representatives to crypto industry leaders.

“Since the introduction of the DLT regulatory framework in 2018, we have worked with government, specialist advisors, and industry to refine our guidance and ensure it is suited to this rapidly developing sector, providing both regulatory certainty to DLT Providers and robust protection to their growing consumer base,” said Kerry Blight, CEO of the Gibraltar Financial Services Commission.

“The Market Integrity Principle and Guidance Note further strengthen the framework. They introduce a number of key responsibilities, designed to enable firms to root out insider trading and other forms of market abuse, improve standards around disclosure and transparency, and ultimately safeguard the rights and interests of consumers.”

As the country figured out its regulatory approach to the highly despised industry earl, Gibraltar’s doors are always wide open to cryptocurrency startups. While it first introduced its crypto regulations in 2018, the GFSC made a number of comprehensive updates to the guidelines back in September 2020, as reported by Blockchain.News at the time.

The forward approach of Gibraltar towards digital currencies has moved a number of companies including Huobi Global exchange to change its operating headquarters from Seychelles to the country back in November last year.

Image source: Shutterstock

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SEC to Give “Careful Consideration” to Concern about Spot BTC ETFs: Gensler

by Blockchain News

In a letter sent to members of Congress, Gary Gensler, Chairman of the United States Securities and Exchange Commission (SEC), promised to give “careful consideration” about spot Bitcoin Exchange Traded Products (ETPs). 

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Recalled that two Congressmen, Tom Emmer (MN-06) and Darren Soto (FL-09), sent a letter to Gensler back in November last year requesting to know the reason for the commission’s caution towards a spot BTC ETF product when indeed, it has approved a related product based on the futures price of the premier cryptocurrency. 

“We question why, if you are comfortable allowing trading in an ETF based on derivatives contracts, you are not equally or more comfortable allowing trading to commence in ETFs based on spot Bitcoin,” the letter read at the time following the approval of ProShares futures-based Bitcoin ETF product. “Bitcoin spot ETFs are based directly on the asset, which inherently provides more protection for investors.”

In response to the inquisition, Gensler said the proposals for both a futures-based and a spot ETF are considered separately based on the provisions of the Exchange Act. While Gensler said, the commission would continue to probe whether the proposals for a spot Bitcoin ETF product are capable of preventing fraud and manipulative practices.

The fears of the SEC are compartmentalised mainly to the U.S., and other countries, including Canada, Brazil, and Germany, have fully functional spot Bitcoin ETF products trading on their public bourses. In a bid to prevent the United States from lagging behind in emerging financial innovations, Rep Emmer tweeted saying;

“This issue remains a priority for us and we will continue to oversee the SEC in its mission to maintain fair and orderly markets and facilitate capital formation.”

While the SEC Chairman reassured that the commission would continue to consider new proposals to list a spot BTC ETF, the ecosystem is hardly optimistic about the chances of anyone emerging soon.

Image source: Shutterstock

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Russia to Recognize Crypto Assets as Currencies: Report

by Cryptobriefing

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According to the Russian newspaper Kommersant, Russian authorities are drafting comprehensive legislation on the circulation of digital currencies. The Russian government will recognize cryptocurrencies as analogous to traditional currencies and not as digital financial assets. 

Russia to Rule on Crypto Assets

Russia’s stance on crypto assets is developing quickly. 

Kommersant, one of Russia’s biggest business newspapers, reported Wednesday that Russian authorities are preparing to draft a law on the circulation of digital currencies in the Russian Federation. 



In the new legislation, crypto assets will be recognized as currencies instead of digital financial assets. By regulating cryptocurrencies in the same way as other forms of currency, the Russian government will be able to provide clear regulations for businesses and individuals involved in cryptocurrency-related activities. 

Once the new law comes into effect, circulation of crypto assets will be possible only with full identification and through the Russian banking system or licensed intermediaries. Additionally, transactions equivalent to more than 600,000 rubles ($8,030) must be declared, with undeclared transactions for more than this amount becoming a criminal offense. 

Previously, the Bank of Russia had been skeptical about introducing cryptocurrencies into the Russian economy, calling for an outright ban on the asset class just three weeks prior. Since then, Russian President Vladimir Putin publicly stated that Russia had “certain competitive advantages” for cryptocurrency mining, indicating that the he favored developing the crypto industry in the country rather than banning it. 


Furthermore, at the start of February, Russia’s Ministry of Finance also proposed new regulations to legalize cryptocurrencies. The ministry suggested that banks could be authorized to provide cryptocurrency exchange services to businesses and individuals. 

With today’s report, it appears that Putin and the pro-crypto factions of the Russian government have won out, making a fully-fledged regulatory framework likely in the coming weeks. According to Kommersant, the new legislation recognizing crypto assets as currencies should come into effect in the second half of 2022 or from 2023.

Disclosure: At the time of writing this feature, the author owned ETH and several other cryptocurrencies. 

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