China Warms To Web3; Crypto Companies Ask for SEC Suit Dismissal

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China warms to Web3

The city of Beijing has apparently announced in a white paper last week that it will support the innovation of Web3. The Block details a few of the specifics, “Dubbed the ‘Web3 Innovation and Development White Paper (2023),’ the document states that web3 technology is an ‘inevitable trend for future Internet industry development…'” The investment is relatively small ($14 million for each of the next 3 years), but it coincides with the opening of crypto markets in Hong Kong this week – so said Binance CEO Changpeng “CZ” Zhao in a tweet.

Depending on your side of the fence, this could be a feint by mainland China or “signal” about the country’s belief in a future with digital assets. Also – it’s this sort of news that will increasingly ring the “national security” bells in Congress if China is perceived to be taking a leadership position on the global Web3 stage.

more tips:

Hong Kong’s new crypto rules covered by China state TV in rare move from Beijing – Yahoo Finance

dismissal wanted

New court filings released Friday (see them (PDF)) reveal crypto companies Genesis Global Capital and Gemini asking the court to dismiss an “unregistered securities” lawsuit by the Securities and Exchange Commission (SEC).  As CoinDesk notes, the SEC’s lawsuit “targeted Gemini’s yield-bearing product Earn, an unregistered offering through which the regulator alleged the two entities ‘raised billions of dollars’ worth of crypto assets from hundreds of thousands of investors.'” Read more.  Crypto lender Genesis Global Capital is currently in bankruptcy.

crypto collision

In Bali, Indonesia, a local politician reportedly facing the end of his term as governor is raising concerns about the use of crypto for payments. Currently, crypto is illegal to use for payments in Indonesia in spite of the fact the country plans a roll-out of its own crypto exchange next month. Read: “Stop paying in crypto, Bali governor warns foreign tourists” in The Straits Times.

Another curious element to this story: only the payers appear to be the subject of the strict regulation, not the sellers. There is also a reference to Russian tourists who are unable to access cash given restrictions/sanctions with Russia today. Perhaps this contradictory spasm from Indonesia is the country feeling the international heat over an inadequate crackdown on certain restricted persons using currency when they are sanctioned or similar?

no approval for months

The Wall Street Journal reports that Temasek Holdings, owned by the city-state of Singapore, has cut executive compensation at the investment company after big losses including those suffered after a $275 million investment in failed cryptocurrency exchange FTX in 2021 and 2022.

Meanwhile, since June of last year, the WSJ points out that the registration of crypto companies has stopped in the country. “Major crypto exchange received in-principle approval from Singapore’s financial regulator last June to offer payment services in the country, but has yet to receive a license, according to the Monetary Authority of Singapore’s database. The regulator hasn’t issued licenses for digital-payment token services for months.” Read more.

Dubai’s global coordination

The Dubai Financial Services Authority is apparently feeling pressure to ramp up global coordination with regulators as an update comes for crypto token regulation in the UAE. Elisabeth Wallace, an associate director at the regulator tells Bloomberg, “[Crypto businesses] are across the whole world and as regulators we need to talk to each other a lot more in this area because there can be quite a few gaps and we have seen a lot of bad actors trying to plug some of those gap.” In the article, she seems to suggest that part of the challenge begins with a conflict of interest presented by crypto company structure and its multiple lines of business. Read it.

more tips:

Two thoughts here…

Here is Dubai taking a lead role on global crypto regulation.

Wallace’s “conflict of interest” concerns are also reflected in the U.S. with directives such as an SEC investor alert (see this one from March) and U.S. legislation – see the CRPTO bill from New York State Attorney General Letitia James. Where there’s smoke, there’s fire – so a resolution to the “conflict of interest” needs to be found. But, is there also an opportunity to efficiently transform the financial system with innovation led by blockchain technology?

see more tips

Opinion: Ron DeSantis Posturing On Bitcoin Is Just Performative Politics – Blockworks

Why the Frog Memecoin Craze Is a Stress Test for Bitcoin – Bloomberg (on WaPo)

JPMorgan Chase enters generative AI race with IndexGPT trademark – Cointelegraph

Why Is The Fed Keeping Banker’s Hours – Cato Institute (April 10)

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