FTX’s Fall Might Hurt CEO’s Crypto Regulation Lobby

The mid-term election in the US is playing a role in influencing and reshaping the regulatory landscape of the crypto industry amid the turmoil brought about by the collapse of the crypto exchange FTX.

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With a clearer outcome for the result of the midterm election in the U.S., some analysts predict Republicans could reseize the control of Congress. The shift of balance of power and dynamic discourse in power might affect the ongoing regulation of cryptocurrency and virtual assets. 

Throughout the election campaign, many leaders and enterprises in the crypto industry try to expand their influence and abilities to lobby legislators by offering political donations to their candidates in favour.

Per Reuters, citing data from OpenSecrects, the report disclosed that FTX’s CEO Sam Bankman-Fried, also known as SBF, is heavily involved in this mid-term election and has donated far more than others in the crypto industry.

Data shows that Bankman-Fried’s total contribution of approximately $40 million makes him the sixth-largest individual donor in the United States. The vast majority of his donations go to Democrats, while less than 0.6% of the funding is in support of Republicans, according to OpenSecrets.

Meanwhile, SBF’s deputy- Ryan Salame, Co-CEO of FTX Digital Markets, provided over $23.6 million to Republicans, including over $11,000 supporting Rep. Alex Monnet of West Virginia. Salame’s total contribution pushed him to the 14th biggest individual donor on the list.

However, SBF’s commitments have been questioned alongside the latest gridlock of the FTX. 

The mid-term result comes amid the oscillation of the markets after the collapse of the SBF’s crypto exchange FTX, as Changpeng Zhao announced Binance would acquire FTX under a non-binding letter of intent. Despite the terms of the deal were not disclosed or neither was a timeline for when the deal might close, the market has experienced a new wave of turmoil and volatility amid the crypto winter.

Crypto Bill Regulation Remains Unclear

Part of analysts suggests a Republican-dominated Congress would likely put pressure on agencies, such as the Securities and Exchange Commission (SEC), which the industry has charged with regulating through enforcement, to ease their aggressive posture against crypto firms.

In June, a bipartisan pair of U.S. senators unveiled a bill that would establish new legal frameworks for cryptocurrency and hand the bulk of their oversight to the Commodity Futures Trading Commission (CFTC).

The so-called “Crypto Bill” debate is still ongoing in Congress. The bill, if approved, might empower the CFTC, which considers a more crypto-friendly regulator than the SEC, to oversee the crypto market.

Among controversial issues in regulating crypto, one of the struggles would be the definition of “security”, which financial products count as security or commodities. Who has the authority, and how to regulate it? All these questions remain unclear. 

Previously, CFTC Chair suggested that it should let Congress regulate crypto, which is much better than the gridlock remaining between CFTC and SEC.

Meanwhile, serval legal battles between SEC and virtual assets companies, such as Ripple, are still struggling to seek an end game. In December 2020, the SEC sued Ripple Labs, alleging that the crypto firm had raised over $1.3 billion by selling XRP in unregistered securities transactions. But Ripple maintained that XRP sales and trading did not meet the Howey Test, a test created by the Supreme Court to determine whether a transaction qualifies as a security.

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FTX ‘s Collapse Might Fail SBF to Lobby Crypto Regulation

Meanwhile, the mid-term election in the US is also influencing and reshaping the regulatory landscape in terms of cryptocurrency amid the turmoil of the collapse of FTX in the crypto market. 

congress_1200.jpg

With a clearer outcome for the result of the midterm election in the U.S., some analyses predict Republicans could reseize the control of Congress. The shift of balance of power and dynamic discourse power might affect the ongoing regulation of cryptocurrency and virtual assets. 

Throughout the election campaign, many leaders and enterprises in the crypto industry try to expand their influence and abilities to lobby legislators by offering political donations to their candidates in favour.

Per Reuters, citing data from OpenSecrects, the report disclosed that FTX’s CEO Sam Bankman-Fried, known as SBF, has donated far more than others in the crypto industry, who is heavily involved in this mid-term election.  

Data shows that Bankman-Fried’s total contribution of approximately $40 million makes him the sixth-largest individual donor in the States. The vast majority of his donations go to Democrats, while merely less than 0.6% of the funding is in support of Republicans, according to OpenSecrets.

Meanwhile, SBF’s deputy- Ryan Salame, Co-CEO of FTX Digital Markets, provided over $23.6 million to Republicans, including over $11,000 supporting Rep. Alex Monnet of West Virginia. Salame’s total contribution pushed him to the 14th biggest individual donor on the list.

However, SBF’s commitments have been questioned alongside the latest gridlock of the FTX. 

The mid-term result comes amid the oscillation of the markets after the collapse of the SBF’s crypto exchange FTX, as Changpeng Zhao announced Binance would acquire FTX under a non-binding letter of intent. Despite the terms of the deal were not disclosed or neither was a timeline for when the deal might close, the market has experienced a new wave of turmoil and volatility amid the crypto winter.

Crypto Bill Regulation Remains Unclear

Part of analysts suggests a Republican-dominated Congress would likely put pressure on agencies, such as the Securities and Exchange Commission (SEC), which the industry has charged with regulating through enforcement, to ease their aggressive posture against crypto firms.

In June, a bipartisan pair of U.S. senators unveiled a bill that would establish new legal frameworks for cryptocurrency and hand the bulk of their oversight to the Commodity Futures Trading Commission (CFTC).

The so-called “Crypto Bill” debate is still ongoing in Congress. The bill, if approved, might empower the CFTC, which considers a more crypto-friendly regulator than the SEC, to oversee the crypto market.

Among controversial issues in regulating crypto, one of the struggles would be the definition of “security”, which financial products count as security or commodities. Who has the authority, and how to regulate it? All these questions remain unclear. 

Previously, CFTC Chair suggested that should let Congress regulate crypto, which is much better than the gridlock remaining between CFTC and SEC.

Meanwhile, serval legal battles between SEC and virtual assets companies, such as Ripple, are still struggling to seek an end game. In December 2020, the SEC sued Ripple Labs, alleging that the crypto firm had raised over $1.3 billion by selling XRP in unregistered securities transactions. But Ripple maintained that XRP sales and trading did not meet the Howey Test, a test created by the Supreme Court to determine whether a transaction qualifies as a security.

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UK Could Be The Next Crypto-Friendly Nation As Rishi Sunak Becomes Next PM

The United Kingdom has appointed Rishi Sunak as its newest Prime Minister after much confusion in the ministerial office over the past months.

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As reported, Rishi Sunak made it the third prime minister in the UK for this year, following the resignation of Liz Truss from the office last week. The newly appointed prime minister has brought a lot of excitement to many crypto enthusiasts as they hope this would mean the UK crypto market could advance more under Sunak’s regime.

 

Rishi Sunak is a former Goldman Sachs analyst who has also served as a chancellor between February 2020 and July 2022. In April this year, Sunak released a proposal aiming to make the U.K a crypto-friendly tech hub. In the proposal, Sunak encouraged the UK’s Royal Mint, the official maker of UK coins, to launch an official NFT collection of the nation – an idea some have criticized as a “poorly judged gimmick.”

 

He also helped the U.K make plans on how the U.K government should regulate stablecoins so as to make them recognized as a legal means of payment in the country.

 

“We want to see the businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively, we can give them the confidence they need to think and invest long-term,” said Rishi Sunak.

 

Prior to Sunak’s leadership victory, Liz Truss, who is now the former Prime Minister of the United Kingdom, announced her resignation44 days after assuming office on September 6. 

 

As reported by Blockchain.News, Truss’s resignation was fueled by the errors in her proclaimed mini-budget and tax cuts that were announced by the former Finance Minister Kwasi Kwarteng.

 

The policy, at the time, riled the markets, with the stock market recording unprecedented slumps, a trend that also affected the British Pound.

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What the UK Prime Minister’s Resignation Means for the Crypto Industry

Liz Truss, the Prime Minister of the United Kingdom announced her resignation just 44 days after assuming office on September 6. Representing an event that is not uncommon in modern democracies, the announced departure of Truss has left many wondering what the fate of some key industries will be in the near future.

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In her announcement at Downing Street on Thursday, Truss said she will no longer be able to deliver on the mandate for which she had been appointed as the Prime Minister. Over the course of the next week, an election to choose the new leader will be conducted and many things will change in terms of direction for the UK.

 

The resignation of Liz Truss was fueled by the errors in her so-called mini-budget and tax cuts that were announced by the now-fired Finance Minister Kwasi Kwarteng. The policy riled the markets with the stock market recording unprecedented slumps which also affected the British Pound.

 

Surprisingly, the market has started showing signs of recovery across the board, as many are now looking forward to the ascension of a more economically versatile Prime Minister, with Truss’s contender, Rishi Sunak among the favorite candidates. 

 

Where is Crypto in all of This?

 

While it is well understood that Liz Truss does not have anything against the digital currency ecosystem and was set to continue on the positive path set by the Boris Johnson administration, her short reign as Prime Minister had not done much to make a sizable impact in the industry.

 

Her departure only leaves room for speculation as no one can tell who the next leader is, and whether he or she will be a positive fit to help drive the growth of the ecosystem. The uncertainty in the UK at this time might be a factor in the marginally lower growth the crypto ecosystem has experienced over the past 24 hours.


At the time of writing, Bitcoin (BTC) was changing hands at $19,046.10, down 0.8% while Ethereum (ETH) has dropped by the same percentage to $1,285.22 per data from CoinMarketCap.

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Dapper Labs Restricts Russian-based NFT Accounts, Abides by EU Sanctions

Dapper Labs – a company behind NFTs like CryptoKitties, NBA Top Shot, NFL All Day, UFC Strike, and the Flow blockchain – has confirmed it is cutting off payment services for non-fungible owners with links to Russia – said the move is due to new EU sanctions on Russia.

The NFT company said it is blocking Russian accounts from being able to purchase, sell or gift NFTs, as well as make other NFT purchases or withdrawals from the platform. Dapper stated: “It is now prohibited to provide crypto-asset wallet, account or custody services of any value to accounts with connections to Russia.”

Dapper explained that the sanctions prohibit companies from providing crypto wallet and custody services to accounts associated with Russian users. The company said its business service offering is based in the EU, which has ordered it to comply with the sanctions.

The Vancouver-based firm said while affected users cannot move funds, gift tokens, sell NFTs or purchase new ones, they still own their assets on the platform and can continue viewing them.

The announcement comes after several crypto users raised complaints that they could not access their accounts and even showed email communication from Dapper Labs about the restrictions.

Last Thursday, the European Union introduced another wave of sanctions against Russia due to the prolonged invasion of Ukraine. The new sanctions enforced a complete ban on cross-border crypto payments between Russians and the EU. The ban prohibits all crypto-asset wallets, accounts, or custody services, regardless of the amount of funds in the wallet.

The EU introduced the new sanctions in response to Russia’s continued escalation of conflicts in Ukraine. Following Russia’s invasion of Ukraine on February 24, the EU has continued evolving packages of sanctions on Russia in a bid to close potential loopholes which could allow Russians to move funds abroad.

The latest sanctions come shortly after Russian officials approved cryptocurrency usage for cross-border payments. Late month, Russia’s Central Bank of Russia and the Ministry of Finance approved crypto payments for cross-border use. This way will help the country evade the multiple financial sanctions that have been levied against it.

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Dapper Labs Restricts NFT Accounts Associated with Russian Users

Dapper Labs – a company behind NFTs like CryptoKitties, NBA Top Shot, NFL All Day, UFC Strike, and the Flow blockchain – has confirmed it is cutting off payment services for non-fungible owners with links to Russia – said the move is due to new EU sanctions on Russia.

The NFT company said it is blocking Russian accounts from being able to purchase, sell or gift NFTs, as well as make other NFT purchases or withdrawals from the platform. Dapper stated: “It is now prohibited to provide crypto-asset wallet, account or custody services of any value to accounts with connections to Russia.”

Dapper explained that the sanctions prohibit companies from providing crypto wallet and custody services to accounts associated with Russian users. The company said its business service offering is based in the EU, which has ordered it to comply with the sanctions.

The Vancouver-based firm said while affected users cannot move funds, gift tokens, sell NFTs or purchase new ones, they still own their assets on the platform and can continue viewing them.

The announcement comes after several crypto users raised complaints that they could not access their accounts and even showed email communication from Dapper Labs about the restrictions.

Last Thursday, the European Union introduced another wave of sanctions against Russia due to the prolonged invasion of Ukraine. The new sanctions enforced a complete ban on cross-border crypto payments between Russians and the EU. The ban prohibits all crypto-asset wallets, accounts, or custody services, regardless of the amount of funds in the wallet.

The EU introduced the new sanctions in response to Russia’s continued escalation of conflicts in Ukraine. Following Russia’s invasion of Ukraine on February 24, the EU has continued evolving packages of sanctions on Russia in a bid to close potential loopholes which could allow Russians to move funds abroad.

The latest sanctions come shortly after Russian officials approved cryptocurrency usage for cross-border payments. Late month, Russia’s Central Bank of Russia and the Ministry of Finance approved crypto payments for cross-border use. This way will help the country evade the multiple financial sanctions that have been levied against it.

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Pro-Russian Group Raises $400K in Crypto to Support Russian Military Actions

Pro-Russian groups are raising funds through cryptocurrencies to support Russian military operations as Russia’s invasion of Ukraine continues, CNBC reported on Oct. 3.

Since the war started on Feb. 24, the groups have raised $400,000 in cryptocurrency as of Sept. 22, according to a research report published Monday by digital asset compliance and risk management firm TRM Labs.

Cryptocurrency risk watchdog TRM Labs said it found that the pro-Russian group used the encrypted messaging app Telegram to deliver messages and provide people with a way to raise funds to help Russian-affiliated militias fund and support operations close to the Ukrainian border train. ,

Ari Redbord, head of legal and government affairs at TRM Labs, said the exchange the group uses could be one that doesn’t comply with anti-money laundering and other regulations.

He added that:

“They’re probably using non-compliant exchanges to off-ramp those funds [into fiat currency].”

One group TRM Labs identified as raising funds is the Russian Task Force, raising money on Telegram channels for projects such as thermal imaging equipment and radios.

The U.S. Treasury described the Russian task force as a “neo-Nazi paramilitary group that has participated in combat alongside Russia’s military in Ukraine.”

The cryptocurrency market was full of bearish sentiment right after Russia launched the latest military operations against Ukraine earlier this year.

U.S. President Joe Biden has announced new sanctions on the crypto assets of sanctioned Russians as additional punishment for Russia’s invasion of Ukraine.

There are concerns that Russia could use cryptocurrencies to evade those penalties. But experts say there is insufficient liquidity in cryptosystems to move money on the scale Russia needs.

TRM Labs identifies Russia-linked groups by publicly available wallet addresses and cross-checking other websites and online activity. However, there is no way to know whether these groups work with the Russian government or receive support from government agencies.

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Crypto Advocate Pierre Poilievre Elected as Leader of Canada’s Conservative Party

Bitcoin-friendly Pierre Poilievre was elected leader of the Conservative Party of Canada on September 11.

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Pierre Marcel Poilievre is a Canadian politician who has served as the leader of the Conservative Party of Canada and the leader of the Official Opposition since 2022. Poilievre has served as a member of Parliament (MP) since 2004.

The House of Representatives of Canada’s parliament is scheduled to resume on September 20, when Poliyev will lead the Conservative Party in his new capacity to challenge the Trudeau government on a number of issues.

He is a staunch cryptocurrency advocate and has publicly supported allowing Canadians to use bitcoin as legal currency in the country.

He touted cryptocurrencies as a solution to putting people back in control of their currencies and saw them as a way to escape inflation in the country.

Pierre Poilievre has previously promised that if he becomes Prime Minister of Canada, he will “unlock” the potential of cryptocurrencies by consulting with provincial authorities, helping to unravel the regulatory web that currently governs cryptocurrencies, and making Canada “the world’s blockchain leader.” 

Along with the growth in the crypto sector, Canada has also been keeping an eye on security-related issues.

According to September 24, 2021, a report by Blockchain.News, Canadian market regulators have issued warnings to cryptocurrency service providers who mislead investors through their gambling-style advertisements.

The report added that the market regulators said a detailed guideline has been released to help all concerned stakeholders market to sell their products and services under the Canadian securities allowance.

Alberta, Canada’s most oil-rich province is actively looking to build the region’s tech industry, including mining digital tokens, building data centers, and attracting high-tech workforces.

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What Would the Future of Crypto Be as Liz Truss Becomes Next UK PM

Interesting times are ahead for the United Kingdom as Mary Elizabeth Truss (Liz Truss) is set to take the country’s top administrative position of Prime Minister.

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Liz Truss won the election to become the Conservative Party Leader, beating Rishi Sunak, who was also a contender for the post.

With her victory, Liz Truss is set to get hands-on and build on the legacy of Boris Johnson as well as the other recent PMs from the Conservative Party in the past few years. While Liz has her own leadership visions, there has been a general silence on what is in it for the cryptocurrency ecosystem in the UK.

With the next general elections one of her major focuses, other industries are bound to feel a change one way or the other.

Liz Truss and the Crypto Agenda

Compared to what is known about the fellow contender Rishi Sunak who up to this election process was the Chancellor of the Exchequer, many may say Liz has no known agenda for crypto.

Despite this, it will be out of place to say Liz Truss is not friendly to the cryptocurrency ecosystem. She made a very promising tweet about crypto back in 2018, and her statement at the time can be attributed to someone who will welcome innovative crypto regulations.

At the time, she said the United Kingdom should “welcome cryptocurrencies in a way that doesn’t constrain their potential. Liberate free enterprise areas by removing regulations that restrict prosperity.”

There are indications that Kwasi Kwarteng, a British politician serving as Secretary of State for Business, Energy, and Industrial Strategy since 2021, will be tapped to be the next Chancellor of the Exchequer. While little is also known about Kwasi’s disposition to crypto, he is credited for fast-tracking the laws that prevent “dirty money” from being siphoned away by foreign High Networth Individuals (HNIs).

With the UK moving to recognize stablecoins as a viable means of payment, the Royal Mint is positioned to issue its first Non-Fungible Token (NFT) collections, the industry is eagerly awaiting how the milestones will unfold under Liz Truss.

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BBC Chair Linked to Russian-sanctioned Subsidiary Blockchain Platform

Chairman of the British Broadcasting Corporation (BBC), Richard Sharp, has been shown to have ties with Vladimir Potanin, one of Russia’s richest men. 

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While there has been no direct indictment for the business relationship between Sharp and Potanin, the link has stimulated media, considering the fact that Potanin has now been placed under various sanctions for supporting the Russian regime.

Potanin is not just an ally of Russian President Vladimir Putin but also one of those men in his inner circle. Potanin has even been seen playing hockey with Putin before, showing the close bond between the two.

With the invasion of Ukraine, many Russian oligarchs were sanctioned by the United Kingdom, the European Union, and the United States of America. Despite the media fuss about Sharp’s investment in Atomyze, there is vital evidence that suggests the investment had been made prior to the time the sanctions were imposed.

A spokesperson for Chairman Sharp noted that the billionaire’s investment portfolio is managed by a Blind Trust that helped handle the investments with Atomyze.

“The arrangement was maintained after Sharp became chairman of the BBC. This blind trust has professionally managed the ABCP GP Ltd and Atomyze Switzerland interests with complete independence from Mr. Sharp and at the trust’s sole discretion since its establishment,” the spokesperson said, adding that “At the current time, the blind trust, and therefore Mr. Sharp, have no financial or directorial interests in any businesses owned and controlled by Mr. Potanin.”

Atomyze is a Russian regulated blockchain-based trading platform that plays home to a wide range of commodities, including Nickel, the metal that helped Potanin earn his wealth. 

In the aftermath of the sanctions imposed on Russia, crypto-related entities were some of the most sanctioned businesses, as regulators fear they can serve as a conduit for bypassing the established sanctions.

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