Tag: cryptocurrency

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citizen crypto

TRON blockchain founder Justin Sun says KYC and AML solutions will be a “must” in the future so his company has been creating a blockchain-based solution represented in the recently-launched Dominica Metaverse Bound Token (DMBT).

“Minted on the Tron blockchain, DMBT gives holders ‘citizenship’ to the Dominica Metaverse which, per marketing materials, also serves as a government-issued ID for the Commonwealth of Dominica,” reports Decrypt. Read more.

This is similar to a “universal cookie” in digital advertising – but here it’s called a soulbound token or decentralized ID.

more tips:

KYC vs AML: What is the difference? – Dow Jones

you’re talented

Electric Coin’s head of regulatory relations, Gary Weinstein, looks at the growing global battle for blockchain talent and finds Switzerland a worth competitor to the United States. In Forbes, Weinstein explains, “What truly sets Switzerland apart is its vibrant support ecosystem for blockchain companies. This is not limited to financial incentives but extends to an expansive network of reliable partners possessing in-depth know-how of the subject matter. Universities, venture capital firms, solution providers, and law firms have all leaned into blockchain, offering specialized support to startups and established businesses alike.” Read more. Continue reading “Blockchain Touts Digital Passport; Singapore Licenses Crypto.com”

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Senate Banking – Warren

A Senate Banking hearing yesterday titled, “Countering China: Advancing U.S. National Security, Economic Security, and Foreign Policy,” brought to light a report last week by blockchain analytics firm Elliptic that found “…more than 90 China-based companies [willing] to supply fentanyl precursors, 90% of which accepted cryptocurrency payments. ” The precursors equated to a street value of $54 billion of fentanyl according to the company. See the report.

During the hearing, committee member Senator Elizabeth Warren (D, MA) tied the finding to her Digital Asset Money Laundering Act from the 117th Congress and co-sponsored by Senator Roger Marshall (R, KS). Warren began by confirming with U.S. Treasury’s Assistant Secretary for Terrorist Financing and Financial Crimes, Elizabeth Rosenberg, that crypto was being used for purchases of fentanyl precursors. Rosenberg added that the perceived “pseudonymity” and “anonymity” of digital assets was attractive to fentanyl precursor sellers.

When Senator Warren pressed on how crypto was “their payment of choice” for fentanyl dealers, Rosenberg gently corrected her, “It is one. Unfortunately, there are others. But, it is certainly one.” After repeating insights from the Elliptic report and a quick outline on the re-introduction of the bill with Senator Marshall, the Massachusetts Senator concluded, “Crypto is helping fund the fentanyl trade, and we have the power to shut that down. It’s time.” See video of Senator Warren’s questioning beginning at 01:35:35.

Senate Banking – Lummis

Largely taking the other side of Senator Warren’s questions, fellow Banking committee member Senator Cynthia Lummis (R, WY) noted in her questioning of witnesses that the Responsible Financial Innovation Act (RFIA) – which “will be re-introduced soon”- will include “an entirely new title on combatting illicit finance.”

Sen. Lummis asked Assistant Secretary Rosenberg, if she agreed “that digital assets today are subject to the U.S.’s comprehensive laws on money laundering and sanction?” She did saying, “It’s certainly true that financial institutions that offer services in the digital asset domain are covered by AML/CFT obligations.” See video beginning 02:14:43. Continue reading “Warren And Lummis Defend Turf At Senate Hearing; House Adds Two Digital Assets Hearings”

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CFTC advisory

In a “staff advisory” to Derivatives Clearing Organization (DCO) registrants and applicants, the Commodity Futures Trading Commission (CFTC) issued a reminder of the risks it said were inherent with digital assets derivatives including cyber, conflict of interest and physical delivery. Read the advisory (PDF). And, see the abbreviated press release.

This advisory rings as similar in tone to the advisory to banks in January by the Federal Reserve, Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC): beware of the unregulated that lurks beneath. CoinDesk’s Jesse Hamilton suggests “sanctions” may be ahead for some companies if history is any indication. Read that one.

CFTC advisory – rulemaking

CFTC Commissioner Kristin Johnson will not be denied. In a follow up to the CFTC digital assets advisory to DCOs yesterday, she issued a lengthy statement of her own saying that it was finally time for rulemaking (adding that she has tried in the past, but to no avail.)  Read the statement.

Johnson says that rules should address 4 areas: “(1) Conflicts of interest arising from vertical integration of activities and functions; (2) Custody and client asset protection; (3) Operational and technological risk, specifically cyber-risks; and (4) Market manipulation and fraud.”

This would also appear to be the domain of Congressional legislation. But, the Commissioner is feeling urgency here – as outlined in her statement– and the CFTC’s mission is clear: “… promote the integrity, resilience, and vibrancy of the U.S. derivatives markets through sound regulation.”

“Now is the time..” concludes Johnson. Rulemaking proposal with comment period to come? Continue reading “CFTC Issues Digital Assets Derivatives Advisory; Treasury Researchers On Digital Assets”

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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.

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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. Continue reading “China Warms To Web3; Crypto Companies Ask for SEC Suit Dismissal”

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European DeFi

A new 77-page report from the European Systemic Risk Board (ESRB) offers up views and suggestions on decentralized finance (DeFi) and cryptocurrency policy. The ESRB explains it’s still early: “The following analysis of the current state of the crypto-asset world underscores findings by international standard-setters that currently the crypto-asset sector is too small and insufficiently integrated with the traditional financial system to pose any systemic risks.” Download it (PDF). Lots of helpful definitions beginning on page 66.

Ledger Insights notes in relation to the report: “With the EU’s MiCA legislation for crypto-assets now approved and about to come into force, the question has turned to the next iteration, which will likely cover DeFi, although it’s a few years off.” Read more.

more tips:

What is DeFi? – Coinbase Continue reading “DeFi Is Among Next Legislative Targets For EU; Hagerty and Hill Voice SEC Suspicions”

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standardizing regulation

The Board of the International Organization of Securities Commissions (IOSCO) issued a new report on digital assets yesterday as the standards body asks for a final comment from the public by July 31 before it finalizes recommendations for its members. The 68-page “Crypto and Digital Asset (CDA) Recommendations” offers 18 policy recommendations which aspire to create “greater consistency with respect to regulatory frameworks and oversight in its member jurisdictions, to address concerns related to market integrity and investor protection arising from crypto-asset activities.” See the report (PDF).

IOSCO has been busy preparing structure for its digital asset recommendations to global regulators. In July of last year, it released “IOSCO Crypto-Asset Roadmap for 2022-2023.” Get it (PDF). And in March of last year, it released a report on Decentralized Finance (DeFi) intended to educate its members on DeFi. Get that one (PDF). The Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission are members of IOSCO. Read more in Cointelegraph.

Hong Kong crypto

Hong Kong’s Securities and Futures Commission (SFC) is moving quickly to bring crypto under its regulatory umbrella and unlock crypto markets in the region. In a press release yesterday, the SFC’s Chief Executive Officer Julia Leung said, “Hong Kong’s comprehensive virtual assets regulatory framework follows the principle of ‘same business, same risks, same rules’ and aims to provide robust investor protection and manage key risks. This will enable the industry to develop sustainably and support innovation.”

CNBC reports on the news and how it aligns with Hong Kong’s desire to become a “crypto hub.” Read it. Continue reading “International Crypto Asset Standards Floated; Hong Kong Unleashes Crypto June 1”

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Coinbase – stand with crypto

Digital assets platform Coinbase, which is currently embroiled in a dispute (or three) with the Securities and Exchange Commission (SEC), is planning on a national campaign to defend itself. Politico reports, “The push includes: four FTN (Face The Nation) spots featuring Coinbase CEO Brian Armstrong, a blanketing of advertising on Wall Street, a New York ‘State of Crypto’ summit in June and a national ‘Stand with Crypto’ day in Washington July 19.”  Read a bit more.

Coinbase – political impact

The Coinbase blog provides a clip of what’s to come as well as more details on the “Stand with Crypto” day in DC in July. See the post.

If Coinbase is successful with this marketing campaign beyond the beltway and with even a small part of the electorate, this could be of concern to Democrats in the lead-up to the general election in November 2024. Dems have largely embraced an anti-crypto position and seem to see it as a winning view as they seek to return President Biden to the White House for his second term.

Given the recently-developed partisan divide around digital assets, Coinbase’s public relations push in some ways is the equivalent of Republican campaign funding. Coinbase will no doubt try and align with pro-crypto Dems in an effort to diffuse a partisan “look.” Continue reading “Coinbase Begins Marketing Push Aimed At Policy; Apple Pay Integrates NFTs”

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state regulators – Torres

On Friday, Rep. Ritchie Torres (D, NY) reiterated his support of the digital assets regulatory regime in his state and its regulator the New York Department of Financial Services (NYDFS).

Torres tweeted Friday, “The evidence is crystal clear — state regulators like @NYDFS have been far more effective at regulating cryptocurrencies than federal regulators. Watch my questioning during yesterday’s @FSCDems hearing aimed at developing a framework for stablecoin regulation and legislation.” See his Q&A (video) at last week’s stablecoin hearing.

Torres isn’t necessarily aligned with his Democratic caucus, which appears to prefer some form of Federal oversight when it comes to digital assets and stablecoins. Republicans, on the other hand, have embraced the “states rights” view.

state regulators – event

Meanwhile, the battle between NY Attorney General Letitia James’ office, which recently introduced its “CRPTO” legislation, and NYDFS and Superintendent Adrienne Harris who are caretaker’s of the New York BitLicense, may be heating up.

Harris and NY Assistant AG Kenneth Polite could shed more light on the battle, or lack thereof, this Wednesday at the “White Collar Crime Institute” event by the New York City Bar. Commodity Futures Trading Commission (CFTC) Commissioner Christy Goldsmith Romero will appear on Tuesday night. Continue reading “Rep. Torres Wants To Protect State Regulation; President Biden Denounces MAGA Crypto”