Month: September 2023

“The Monetary Authority of Singapore (MAS) announced no businesses qualified as cryptocurrency payment providers under the FinTech Regulatory Sandbox. MAS is cautious about adopting payment innovations and emphasizes a need for crypto businesses to demonstrate robust Anti-Money Laundering controls.”

The joint synthesis paper from the International Monetary Fund and the Financial Stability Board discusses the challenges of implementing a total ban on crypto activities. Instead, it recommends targeted limitations and emphasizes the need for robust regulatory scrutiny. The paper also advises caution against granting crypto legal tender status, calls attention to potential risks associated with stablecoins and DeFi, and highlights possible macro-financial risks in emerging markets.

The United States’ unclear crypto regulations are driving companies to seek more crypto-friendly countries. Tennessee Senator, Bill Hagerty, supports comprehensive cryptocurrency legislation in the US, replacing the current ‘regulation by enforcement’. He also highlights risks in the unrestricted adoption of Central Bank Digital Currencies (CBDCs).

“Thodex founder, Faruk Fatih Özer received an 11,200-year prison sentence and fine, for abrupt closure of the exchange, causing 400,000 customers to lose access to around $2 billion in assets. This case raises a broader dialogue about crypto industry protection, investor security, regulatory importance, and the need for transparency in this evolving market.”

The SEC recently settled with Linus Financial over their unregistered cryptocurrency lending product. While no penalties were levied due to Linus’ cooperative actions, this incident underscores the importance of clear categorization in line with regulations. The SEC’s stringent stance continues to create uncertainties in crypto markets, sparking a potential battle between cryptos and regulatory authorities.

Chinese social media giant, Weibo, deleted 80 prominent crypto-related accounts and removed 17,000 posts related to illegal profit-making despite China’s de facto ban on crypto trading. This impacted crypto-market dynamics, as Weibo’s active user base is around 258 million.

“Australian fintech Block Earner plans to introduce a new Bitcoin-secured loan service, despite possible regulatory issues. The product, expected by end-September, aligns with licensing structures and adheres to Australian credit license rules, according to the company’s co-founder and Head of Business.”

“U.S. regulatory body, CFTC, has charged DeFi protocols Opyn, 0x, and Deridex for conducting illegal derivatives trading via blockchain protocols and smart contracts. The protocols have accepted the penalties, implying cooperation for a swift resolution. The response raises questions about the future handling of similar DeFi controversies.”

LBRY blockchain firm, initially ceding to the SEC’s ruling that it operated unregistered crypto asset securities, has filed an appeal. This verdict and ongoing regulatory friction highlight challenges in balancing innovation encouragement with investor protection in the emerging blockchain field.

Coinbase, a top crypto exchange, aims to expand to non-U.S. markets, prioritizing countries with clearer crypto regulations. The company’s strategy includes acquiring licenses, setting operations, and registering in these markets. It points to a lack of crypto-forward regulation in the U.S., potentially impacting its influence in the crypto field.

China is looking to showcase the capabilities of its Central Bank Digital Currency, the digital yuan, to ASEAN nations, potentially indicating a cross-regional usage. Political diversity among ASEAN members and their affiliations could, however, influence this dynamic. Amid de-dollarization efforts in the region, Beijing’s digital yuan could find an increasing role. Opportunities may also arise from Bank of Indonesia’s interest in cross-border CBDC usage.

The recent DeFi regulation by the U.S. Commodity Futures Trading Commission (CFTC) has stirred concerns in the crypto community. The fines and cease orders, for alleged non-compliance with registration requirements, could potentially undermine blockchain’s decentralization and autonomy, deterring innovation. Balanced regulation is necessary for investor protection and blockchain development.

“The Commodity Futures Trading Commission (CFTC) has charged DeFi players Opyn, Inc., ZeroEx (0x), Inc., and Deridex, Inc. with illegal derivatives trading via blockchain-based protocols and smart contracts. The shift indicates that regulations are catching up in the crypto industry, particularly for DeFi platforms.”

U.S. Commodity Futures Trading Commission’s Commissioner, Caroline Pham, calls for a limited pilot program to help the U.S. catch up with crypto-friendly regulatory frameworks. Pham’s proposed program would foster open, transparent, competitive crypto markets while ensuring retail investor protection. The balance between innovation and regulations is crucial for a sustainable crypto future.

“Ryan Salame, ex-co-CEO of FTX Digital Markets, pleaded guilty to fraud charges, triggering discussions on the need for tighter crypto regulations. As crypto markets’ impact on traditional finance grows, a regulatory framework to mitigate risks and protect investors becomes imperative. This case highlights the role of individual accountability and ethical conduct in maintaining the industry’s credibility.”

The House Financial Services Committee is preparing to discuss the implications and regulation of a digital dollar or Central Bank Digital Currencies (CBDCs), along with private sector alternatives. This conversation, following various states erecting legislative boundaries for CBDCs and $41 million hacking of a crypto site, underlines the need for balance between innovation and robust regulatory frameworks.

“The recent court ruling overruling the SEC’s decision to deny Grayscale’s Bitcoin trust to become a spot ETF could potentially bring crypto into line. Approval of spot Bitcoin ETFs could introduce consistent regulatory standards, promote market equilibrium and offer investor protections, without undermining securities law enforcement.”

“Central bank digital currencies (CBDCs) offer governments easy access to data collection, surveillance, and asset seizure. Although promoted for benefits such as tax collection and combating financial crime, these programmable money forms may lead to increased transaction censorship and misuse from state control. Counteracting this potential erosion of liberty, cryptocurrencies offer a means to safeguard transactional rights.”