Tag: Crypto

IOSCO Releases Landmark Policy Recommendations for Crypto and Digital Asset Markets

by Blockchain News

The International Organization of Securities Commissions (IOSCO), a leading international body of securities regulators, recently published an influential report titled ‘Policy Recommendations for Crypto and Digital Asset Markets Consultation Report.’

This ground-breaking document provides 18 recommendations, each of them structured to offer guidance to regulators worldwide on handling the burgeoning crypto and digital asset markets. The primary objective is to ensure investor protection and market integrity are consistent with those of traditional financial markets.

One of the main points of the report is the suggestion for regulatory frameworks to examine whether crypto-assets can substitute for regulated financial instruments. IOSCO encourages regulators to analyze if investors have replaced other financial investment activities with crypto-asset investments.

Additionally, the report urges Crypto-Asset Service Providers (CASPs) to set effective governance and organizational requirements. This move aims to counteract potential conflicts of interest that may arise due to their multi-faceted roles within the industry.

The document’s recommendations extend to order handling, trade disclosures, and the listing of crypto-assets. The report suggests that CASPs should adopt transparent standards for the listing and delisting of crypto-assets, which would lead to more informed decision-making by investors.

In response to the cross-border character of crypto-asset trading, IOSCO’s report advocates for enhanced international cooperation. This recommendation is aimed at ensuring effective supervision and enforcement, reducing the risk of money laundering, and addressing investor protection and market integrity issues.

Significant attention is also given to the custody of client monies and assets. The report offers guidance to safeguard these resources and mitigate risks related to asset segregation and the re-use of assets.

Another area of focus is the management of operational and technological risks associated with distributed ledger technology (DLT) and smart contracts. In addition, the report includes a dedicated section on retail investors, stressing the need for diligent assessment and onboarding.

Lastly, IOSCO addresses stablecoins, pointing out their unique features and associated risks. It provides further guidance on stablecoin disclosures and the custody of reserve assets.

IOSCO’s report is expected to have a significant impact on the crypto and digital asset markets worldwide. Its comprehensive recommendations should assist regulators in their task of addressing the challenges posed by these rapidly evolving markets.

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President Biden Assets: Debt Deal Will Not Shield Crypto Traders

by Blockchain News

In a significant announcement on the last day of the G7 summit, President Joe Biden took a firm stance against the protection of “wealthy tax cheats and crypto traders” while potentially jeopardizing food assistance programs.

“I’m not going to agree to a deal that protects wealthy tax cheats and crypto traders while putting food assistants at risk,” declared the President, sparking a critical conversation about economic fairness and digital currency regulation in the midst of a challenging economic climate.

At the time of writing, Bitcoin’s price continues to fluctuate at lower levels following President Biden’s remarks on cryptocurrency.

Biden’s remarks underscore a growing concern about the implications of cryptocurrency usage and the potential for tax evasion by high-income individuals. His comments also shed light on the potential risks to the underprivileged, particularly those dependent on federal assistance programs.

The U.S. government is tasked with forging an agreement by the deadline of June 1st

As the June 1st deadline approaches, the U.S. government faces the pressing challenge of reaching a consensus. With the prospect of a shifting financial landscape on the horizon, the global financial community, inclusive of Bitcoin investors and traders, is preparing for potential market shifts.

The pending debt ceiling decision, coupled with Biden’s recent remarks, underscores the extensive influence of U.S. economic policies on worldwide financial systems, including the burgeoning digital currency markets.

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Texas Passes Bipartisan House Bill 1666 Regulating Digital Asset Service Providers

by Blockchain News

Aiming to reinforce regulation in the digital asset industry, the Texas legislature has enacted bipartisan House Bill 1666. Set to take effect on September 1, 2023, the legislation imposes rigorous requirements on digital asset service providers in terms of handling customer funds.

Digital asset service providers, specifically those serving over 500 customers or holding at least $10 million in customer funds within Texas, are prohibited from merging customer funds with their own under the new law. This provision includes the provider’s operating capital, proprietary accounts, digital assets, and fiat currency.

To bolster transparency and accountability, the bill mandates that providers offer customers quarterly accountings of outstanding liabilities and assets held in custody. Additionally, an independent auditor must have continuous access to a pseudonymized version of the customer’s information.

The legislation also empowers the Texas Department of Banking to suspend or revoke the provider’s money transmission license if found in violation of the new requirements, thereby implementing a regulatory oversight mechanism.

The enactment of House Bill 1666 showcases Texas’s efforts to balance the growth of the digital asset market with consumer protection, setting a precedent that other states may follow.

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UK Legislators Advocate for Treating Crypto Trading Similar to Gambling Regulations

by Blockchain News

In a recent report, a UK legislative committee has acknowledged the potential of cryptoassets and their underlying technologies to revolutionize financial services, particularly in streamlining payments and reducing associated costs. They specifically point to the potential benefits for cross-border transactions and economies with underdeveloped financial sectors.

However, the committee raised concerns about the current regulatory challenges faced by the Financial Conduct Authority (FCA) in managing the burgeoning cryptoasset industry, emphasizing the need for the Government and regulators to keep pace with these rapidly evolving technologies.

While the committee supports innovation in the financial sector, they caution that the true extent and impact of cryptoasset technologies remain uncertain, with significant risks to both consumers and the environment.

The legislators recommend a balanced approach, urging the Government to avoid investing public resources in cryptoasset activities without a clear, beneficial use case. They cite the recent failed attempt to produce a Royal Mint non-fungible token (NFT) as an example of misdirected efforts.

The report also calls for a shift in the regulatory approach towards unbacked cryptoassets, such as Bitcoin and Ether. Due to their volatility and lack of intrinsic value, the committee argues that these assets pose substantial risks to consumers, likening speculation in these assets to gambling.

Therefore, they strongly recommend that retail trading and investment in unbacked cryptoassets be regulated as gambling rather than as a financial service, to prevent consumers from misinterpreting the risks involved.

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Symmetry Launches Revolutionary Platform for Decentralized Crypto Indices and Actively Managed Funds on Solana

by Blockchain News

Paris, France, May 3rd, 2023, Chainwire

Today marks a groundbreaking step for decentralized finance (DeFi) on the Solana blockchain as Symmetry launches its highly anticipated User Interface at https://app.symmetry.fi/.

The platform aims to revolutionize the way users manage their portfolios through crypto indices and actively managed funds by providing an all-in-one solution for creating, managing, buying, and selling funds.

Symmetry is a decentralized Crypto Indices and Actively Managed Funds infrastructure layer built on Solana, powered by the Symmetry Engine. This innovative on-chain asset management infrastructure covers everything from on-chain funds, indices, and multi-token liquidity pools, to liquidity routing between indices and decentralized exchange (DEX) aggregators, and public APIs for other DeFi projects to integrate Symmetry products seamlessly.

The platform offers a wide range of opportunities for both fund managers and users. Managers can create and manage funds with multiple tokens that reweigh, rebalance, and refilter according to custom rules defined by the manager, or create a trustless Crypto Index with predefined rules. Users can create their own actively managed funds or indices and buy and sell funds created by other users or protocols.

Symmetry’s liquidity provision feature allows indices and actively managed funds to act as liquidity providers on DeFi aggregators such as PRISM and Jupiter when their token weights deviate from the target weights. This groundbreaking feature not only enables funds to rebalance at zero cost but also generates fees from aggregator users for fund managers and holders, a significant departure from traditional approaches where indices and funds typically pay fees on exchanges to rebalance.

The Symmetry Engine relies on Pyth, a reliable price oracle, to determine true prices for each asset utilized in Symmetry products. This is crucial for funds to accurately determine fund values, rebalancing triggers, and buy/sell values for users.

Example use-cases for Symmetry include decentralized index fund apps, decentralized fund management apps, treasury management tools, retail onboarding apps, copy-trading apps, and investing apps. The platform envisions a future where anyone can create an index fund, manage on-chain funds and portfolio strategies, convert wallet portfolios to funds, and integrate index or actively managed fund tokens for trading.

With the launch of the Symmetry User Interface, the world of decentralized finance on the Solana blockchain is poised to experience a paradigm shift in how users interact with and manage their crypto portfolios. As the platform continues to roll out its full suite of features to all users, the future of Solana DeFi looks brighter than ever.

Contact

PR
S. Martin
Symmetry
operations@symmetry.fi
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Crypto Hacks and Scams on the Rise

by Blockchain News

Crypto security and auditing company CertiK reported a total loss of $103.7 million due to vulnerabilities, frauds, and hacks in the month of April. Because of this, the overall loss for the year amounts to 429.7 million dollars. The month was particularly marked by major hacks, including the theft of $22 million from a hot wallet exploit at the Bitrue exchange, which resulted in a loss of $22 million; the hack of South Korea’s GDAC exchange, which resulted in a loss of $13 million; and the theft of $25.4 million due to an exploit of several MEV trading bots on April 3.

According to reports from CertiK, the overall losses incurred by crypto and DeFi exploits throughout the month amounted to $74.5 million. This is about half of the total $145 million that was exploited during the first four months of the year. assaults against flash loans were also common, resulting in losses of around $20 million. Yearn Finance was the primary victim of these assaults, which occurred when a hacker exploited an outdated smart contract on April 13.

In April, exit scams were another factor that contributed to the large amount of money lost, which was $9.4 million. The most successful exit scam for the month was perpetrated by Merlin DEX, which resulted in a loss of $2.7 million. Considering that the protocol had been audited by CertiK, which had previously warned about centralization problems, this was an especially worrying development. After the attack, Certik implemented a compensation plan, in which they demanded that the malicious developer pay back 80% of the stolen funds and offered a white hat bounty of 20% of the total amount.

In the month of April, the Rekt Database maintained by De.Fi documented over fifty crypto-related scams, hacks, and rug pulls. These Memecoin rug pulls made up a significant chunk of the total. The flash loan assault against the Polygon-based Ovix protocol, which occurred on April 28 and resulted in a loss of $2 million, was the most recent incident.

Hacks and frauds using cryptocurrencies are becoming more common, highlighting the need for stronger security measures inside the cryptocurrency ecosystem. Before putting money into any cryptocurrency project, it is essential for users and investors to do extensive research and due diligence on the project. Auditing companies such as CertiK play an essential part in determining the nature of any possible security threats that may exist and in elevating the level of industry-wide security.

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UK Considers New DeFi Tax Regime

by Blockchain News

The UK government is seeking to make changes to the tax treatment of lending and borrowing on decentralized finance (DeFi) protocols. HM Revenue and Customs has launched a consultation that will run until June 22, 2023, asking for input from investors, professionals, and firms engaged in DeFi activities, as well as representative bodies and think tanks, on a proposed new DeFi tax regime.

Under the proposed changes, crypto used in DeFi transactions would not be treated as a disposal for tax purposes. This means that Capital Gains Tax (CGT), which is typically triggered when an asset is disposed of, would not apply. Instead, a taxable event would occur when cryptocurrencies are disposed of in a non-DeFi transaction.

The consultation states that a transaction must meet certain criteria to be considered a DeFi transaction. Specifically, it should involve the initial transfer of crypto assets from a lender to a borrower, or through a smart contract, with the borrower being obligated to return the tokens. Additionally, the lender should have the right to withdraw the same amount of tokens that were initially lent or staked.

The proposed changes could have a significant impact on the DeFi ecosystem in the UK. As it stands, many DeFi protocols require users to pay transaction fees, which can be subject to taxes. However, if the proposed changes are implemented, these fees could potentially be exempt from taxation, creating a more favorable environment for DeFi activities in the UK.

The consultation is part of the UK government’s wider efforts to regulate the cryptocurrency industry and ensure that it is operating in a safe and secure manner. With the increasing popularity of DeFi protocols, it is crucial that governments and regulators keep pace with these developments to ensure that they can effectively regulate this rapidly evolving sector.

Overall, the proposed changes to the tax treatment of DeFi transactions in the UK could have a significant impact on the industry. If implemented, they could make the country a more attractive destination for DeFi activities and provide a more favorable regulatory environment for individuals and entities engaged in these activities. It remains to be seen how the consultation process will unfold, but it is clear that the UK government is taking steps to ensure that it can effectively regulate the cryptocurrency industry and support the growth of this innovative sector.

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Over 1 in 3 TikTok Influencers Post Misleading Crypto Content

by Blockchain News

A recent study by dappGambl has revealed that TikTok influencers are posting misleading videos about cryptocurrency investments, with over one in three videos found to be deceptive. The social media platform has become an alternative to Google searches for many individuals, particularly younger generations. However, some influencers have been found to share unvetted misinformation on crypto investments, often trying to convince unwary viewers to put their hard-earned money into loss-making cryptocurrencies.

The analysis of over 1,161 TikTok videos with the hashtag “#cryptok” revealed that only 1 in every 10 cryptok accounts or videos contained some form of disclaimer that warned users about the risk of investments. Additionally, out of the lot, 47% of TikTok creators were found trying to push services to make money. This lack of accountability and transparency highlights the need for better regulation in the social media industry.

The potential financial risk for unwary investors remains equally high, despite TikTok influencers having a smaller reach than their mainstream counterparts. The study also discovered that popular crypto-related hashtags such as crypto, cryptok, cryptoadvice, cryptocurrency, cryptotrading, and cryptoinvesting have cumulatively churned over 6 billion views on TikTok. The platform has become a breeding ground for unverified information on crypto investments, causing viewers to overlook the ill-intent of their favorite influencers and trust their content purely based on the high number of views or likes.

The consequences of this trend are severe, with individuals investing their hard-earned money into cryptocurrencies without proper research, often resulting in significant financial losses. The United States Securities and Exchange Commission (SEC) has also cracked down on the promotion of cryptocurrencies by influencers. The SEC forced Kim Kardashian to pay $1.26 million in penalties for the promotion of EthereumMax (EMAX). Other mainstream influencers such as Jake Paul and Soulja Boy have also been accused of promoting cryptocurrencies to their millions of fans without disclosing payments received.

On April 2, a $1 billion lawsuit was filed against crypto exchange Binance, its CEO Changpeng “CZ” Zhao, and three crypto influencers for promoting unregistered securities. The Moscowitz Law Firm and Boies Schiller Flexner, who filed the lawsuit, referred to the case as a “classic example of a centralized exchange, which is promoting the sale of an unregistered security.”

In conclusion, the study by dappGambl highlights the need for stricter regulations and accountability measures for social media platforms. Both new and seasoned investors are advised to do extensive research on crypto projects prior to making any form of investment. With the potential financial risk for unwary investors remaining high, it is crucial that social media platforms such as TikTok take responsibility for the content shared by their influencers, and ensure that users are properly warned about the risks of investing in cryptocurrencies.

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European Union Introduces Comprehensive Crypto Law

by Blockchain News

The European Union (EU) has made history by introducing the world’s first comprehensive crypto law. Lawmakers in the EU voted 517-38 in favor of the Markets in Crypto-Assets (MiCA) licensing regime, with 18 abstentions. The new law requires crypto wallet providers and exchanges to seek a license to operate across the bloc, and issuers of stablecoins tied to the value of other assets to maintain sufficient reserves. The EU also voted in favor of a separate law known as the Transfer of Funds regulation, which requires crypto operators to identify their customers in a bid to halt money laundering.

The new regulations have been introduced to protect consumers and safeguard financial stability and market integrity. They are expected to apply from next year. In a tweet, the European Commission’s Mairead McGuinness hailed the vote as a “world first” for crypto rules.

According to Stefan Berger, the lawmaker who led negotiations on the law, the EU’s crypto-asset industry now has regulatory clarity that does not exist in countries like the US. “The sector that was damaged by the FTX collapse can regain trust,” Berger said in a statement released by the European Parliament.

The introduction of MiCA puts the EU “at the forefront of the token economy,” said Berger. The EU’s move towards regulating the crypto industry is seen as a positive step in preventing fraudulent activities such as money laundering, which has been a growing concern in the industry. The Transfer of Funds regulation requires crypto operators to identify their customers, which should help to prevent the use of crypto assets for illicit purposes.

However, the European Securities and Markets Authority (ESMA) warned that investing in crypto assets is still a risky endeavor with limited safeguards at this stage. The EU agency added that it would announce its timetable for drafting secondary legislation under MiCA in due time.

The introduction of comprehensive crypto regulations by the EU is likely to have implications beyond Europe. Other major jurisdictions may also follow suit, as governments around the world grapple with the challenge of regulating the fast-evolving crypto industry.

In conclusion, the introduction of the Markets in Crypto-Assets licensing regime and the Transfer of Funds regulation by the European Union represents a significant milestone in the regulation of the crypto industry. The move is expected to provide greater regulatory clarity and protection for consumers, while also safeguarding financial stability and market integrity. The EU’s decision to introduce comprehensive crypto regulations is likely to be closely watched by other major jurisdictions around the world.

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Chinese Banks Embrace Crypto in Hong Kong

by Blockchain News

Hong Kong’s ambitious goal to become a leading crypto hub has opened an opportunity for many state-affiliated banks in China. The Chinese banks, despite a blanket ban on crypto-related activities in mainland China, are showing interest in building partnerships and onboarding regulated crypto companies in Hong Kong.

The Hong Kong arm of the major Chinese state-owned Bank of Communications is collaborating with several cryptocurrency businesses registered in the city. The bank is in talks to open accounts for regulated companies, according to a report published in The Wall Street Journal. This is a significant development in the world of crypto, where banks are traditionally hesitant to partner with companies in this industry.

In addition to the Bank of Communications, ZA Bank – Hong Kong’s largest virtual bank controlled by Chinese internet insurer ZhongAn Online P&C Insurance – will also act as the settlement bank for the crypto companies. These banks will together facilitate the depositing and withdrawal of fiat currencies, providing a vital service to crypto companies looking to operate in Hong Kong.

These banks’ involvement in the crypto industry is an excellent sign for Hong Kong, which has been trying to establish itself as a leading crypto hub for some time. At the start of the year, Hong Kong’s financial secretary, Paul Chan, clarified that the city is pushing to collaborate with more crypto firms in 2023. The government’s progressive crypto approach has attracted nearly 80 cryptocurrency firms interested in opening or expanding their business in the city.

The Chinese banks’ involvement in Hong Kong’s crypto industry is a surprise to many in the crypto ecosystem, considering China’s multiple crackdowns on crypto-related activities in mainland China. However, the Chinese banks’ move towards crypto in Hong Kong signals a new direction for the country’s approach to crypto.

As settlement banks, these Chinese banks will enable token deposits at authorized exchanges to be withdrawn in Hong Kong dollars, Chinese yuan, and U.S. dollars. This development will further strengthen Hong Kong’s position as a leading crypto hub, attracting more companies and investors interested in crypto.

The Chinese banks’ interest in Hong Kong’s crypto industry is a positive development, demonstrating the potential for regulatory clarity in the region. Additionally, this move could encourage other banks in the region to follow suit, strengthening Hong Kong’s position as a leading financial hub in Asia.

In conclusion, the involvement of Chinese banks in Hong Kong’s crypto industry is a significant development, demonstrating the potential for collaboration between traditional financial institutions and the crypto industry. This move could help build greater confidence in the crypto industry and attract more companies and investors to Hong Kong. As the city continues to embrace crypto, we can expect to see more developments in this exciting and rapidly evolving industry.

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