Schlagwort: blockchain regulation

• The Securities and Exchange Commission (SEC) has sued Bittrex and a former CEO over the exchange’s offering of unregistered securities.
• SEC’s complaint alleges the platform offered securities in tokens such as DASH, OMG and ALGO.
• Bitcoin and crypto dipped on Monday after the news, with BTC price breaking below $30,000.

The Securities and Exchange Commission (SEC) has sued Bittrex, one of the world’s largest and oldest cryptocurrency exchanges. 

In charges announced on Monday, the SEC said it had also sued Bittrex co-founder and ex-CEO William Shihara and highlighted various tokens it claims are securities, including Dash.

SEC filed the complaint in the US District Court for the Western District of Washington.

The cryptocurrency market was trading lower on Monday morning following the Bittrex news, with Bitcoin price dipping below $30,000. Ethereum price was just above $2,080 at the time of writing, with the total crypto market cap down 2.9% to $1.3 trillion. 

SEC charges Bittrex for operating unregistered exchange

The SEC says in its complaint that Bittrex has operated illegally, offering securities to users since 2014 yet it hadn’t properly registered.  Specifically, the US watchdog holds that Bittrex is an unregistered securities exchange, broker, and clearing agency.

The charges are also against Bittrex’s foreign affiliate, Bittrex Global GmbH. The entities failed to register their exchange operation, which shared an order book.

“Bittrex and Bittrex Global should have registered as an exchange because they brought together, using a shared order book, the orders for securities of multiple buyers and sellers using established, non-discretionary methods under which such orders interacted, and the buyers and sellers entering such orders agreed to the terms of a trade,” the regulator said in a press release.

Assets named as securities in the complaint include Dash (DASH), OMG Network (OMG), Algorand (ALGO), TokenCard (TKN). The regulator also highlighted MANA as one of the “securities” listed for trading on the exchange.

News of the SEC’s lawsuit against Bittrex comes days after the agency issued Coinbase with a Wells Notice and is part of a growing list of cases against crypto companies. 

Other platforms that have faced charges or settled with the regulator in 2023 include Kraken, Gemini and CoinEx.

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Key takeaways

• A Hong Kong regulator has revealed that DeFi projects could be subject to regulatory requirements.

• The SFC said DeFi activities fall within the scope of the Securities and Futures Ordinance.

• Hong Kong’s new licensing regime for digital asset trading platforms takes effect in June 2023

DeFi projects could face regulatory requirements in Hong Kong

Keith Choy, interim head of intermediaries at Hong Kong’s Securities and Futures Commission (SFC), revealed on Wednesday, April 12th, that decentralised finance (DeFi) projects could face licencing requirements and regulation in the country. 

According to the SFC, DeFi activities fall within the scope of the Securities and Futures Ordinance and will be subject to the same regulatory requirements as traditional finance (TradFi). 

Choy mentioned this while speaking at the Web3 Festival in Hong Kong. This latest cryptocurrency news comes after the United States and France recently published reports on DeFi regulation. 

Choy’s speech doesn’t come as a surprise, as the SFC has previously pointed out that the DeFi ecosystem is in need of regulation. However, the regulatory agency is yet to lay out its plans on how to properly regulate the ecosystem. Choy said;

“Providing automated trading services is a regulated activity under the SFO. If a decentralized platform allows trading in virtual assets, which constitutes securities or futures as defined under the SFO, the platform and operators are required to have a Type 7 license.”

Collective investment schemes also need authorisation

The SFC pointed out that authorisation requirements are also necessary when companies wish to offer a collective investment scheme to the public in Hong Kong

According to Choy, DeFi presents regulatory agencies with issues, including financial stability and limited transparency, resulting from a lack of data and unregulated firms and activities. 

He also discussed market integrity issues like price oracle manipulation, front-running transactions and investor protection concerns.

Hong Kong is one of the leading crypto hubs in the world. In February, Interactive Brokers launched its crypto trading services in Hong Kong. 

Hong Kong’s new licensing regime for digital asset trading platforms is set to come into effect in June 2023.

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• Singapore authorities are working with banks on new guidance for vetting crypto clients. 

• The guidance will cover stablecoins, nonfungible tokens (NFTs) and firms providing services in payments, trading and transfers of these assets.

• Banks will decide whether they want to take on crypto clients based on their risk appetite.

Singapore working on new guidance for crypto clients

Singapore authorities are currently working with banks and other lenders to set uniform standards for vetting cryptocurrency clients, sources close to the matter told Bloomberg. 

According to the report, the central bank and police have been helping banks to work on their vetting process when opening accounts for service providers in the cryptocurrency and digital asset space. 

Sources told Bloomberg that the project has been ongoing for roughly six months, and the authorities would soon release an industry report outlining best practices in areas like due diligence and risk management. The sources preferred to stay anonymous as the discussion has not yet gone public. 

The initiative is set to cover stablecoin and NFTs as well as transferable gaming or streaming credits. The initiative is set to focus on firms that provide services in payments, trading and transfers of these assets. 

Banks would have the final say in deciding whether to accept cryptocurrency clients based on their risk appetite, the sources added. 

Tighter regulation following the recent turmoil

The guideline to be issued by Singaporean authorities could be considered a way of tightening regulation in the crypto space following the recent high-class collapses.

Last year, numerous crypto companies, including FTX and Terraform Labs, collapsed, resulting in the loss of billions of dollars. 

The recent collapse of Silvergate Bank, Signature Bank, and the Silicon Valley Bank (SVB) has also put resulted in some crypto clients scrambling for new banks.

At the moment, the Singaporean government doesn’t stop banks operating in the country to do business with crypto companies. 

While talking to Bloomberg, the Monetary Authority of Singapore said; 

“As with any other current or prospective customer, banks are required to conduct customer due diligence measures to understand and manage the risk(s) posed by them. Banks make their own determination of whether to start or continue a banking relationship with a customer, balancing between commercial considerations and business risk tolerance.” 

Singapore is not new to cryptocurrency scandals. Some of the recent high-profile companies that collapsed, including Terraform Labs and crypto hedge fund Three Arrows Capital, were headquartered in Singapore. 

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• Belarus will allow crypto businesses, including miners, to operate tax-free until 2025.
• Exempted taxes include value added tax, income tax and personal taxes.
• Belarus is one of the countries looking to incentivize more crypto-related investments.

Belarus is one of the many countries not looking to lock out crypto firms from their jurisdiction with excessive taxation.

As the regulatory environment becomes increasingly hostile to several crypto firms, the latest news from Belarus indicates the country has extended its tax exemptions for crypto related platforms and entities. 

Belarus now joins countries such as Singapore, the UAE, Switzerland and Germany in being crypto tax-free. 

Tired of paying 40% in crypto taxes?

These 15 countries are crypto tax-free:

Belarus
Bermuda
British Virgin Islands
Cayman Islands
El Salvador
Georgia
Germany
Hong Kong
Malaysia
Malta
Puerto Rico
Singapore
Slovenia
Switzerland
U.A.E.

Find out more below 🌎⬇️

— TokenTax (@TokenTax) March 29, 2023

No taxation for crypto firms in Belarus till 2025

According to details in the local news outlet AFN, Belarus president Aleksander Lukashenko only recently signed a decree that allows crypto miners and developers to operate tax-free within the country until 2025. The exempted taxes include personal tax, value-added tax and income tax.

The tax exemptions do not benefit crypto miners and developers only – also set to enjoy the latest outlook are firms and individuals working around the exchange of coins and tokens for the Belarusian ruble and foreign currencies.

AFN reported early Thursday that the new decree replaces the previous one that required crypto businesses and people working in the industry to pay applicable taxes up to the of 2023.

Offering access to tax-free operations to businesses and industry players is the latest move by Belarus suggesting fresh incentives to crypto related projects. 

The country unveiled its High-Tech Park in 2017, targeting a new wave of crypto miners, and moved the efforts a notch higher with incentives for crypto firms, including through making initial coin offerings (ICO) legal.

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Key takeaways;

• The US Government wants to halt the $1 billion deal between Binance.US and Voyager Digital.

• The government said the deal should be on hold while key legal objections are ironed out.

• Binance looks prime to acquire Voyager Digital’s assets after FTX’s collapse in November.

Government seeks to halt the Voyager-Binance.US deal

The United States government revealed in a filing on Tuesday that it wants the $1 billion deal offered by Binance.US to buy assets of bankrupt crypto lender Voyager to be put on hold until key legal objections are ironed out. 

This latest cryptocurrency news comes after an appeal by the U.S. Trustee, a branch of the Department of Justice responsible for bankruptcy cases. The US Trustee has concerns that the deal would ensure that Voyager and its staff would not be held responsible for breaches of tax or securities law.

The filing by U.S. Attorney Damian Williams said;

“The Court cannot tell the Government to speak now or forever hold its peace before Voyager and Binance.US wed. Nothing in the Bankruptcy Code permits courts to exculpate parties from liability to the Government for past and future conduct.”

According to Williams, the approval of the deal should be paused, or at least the parts which limit the US Government’s ability to enforce the law, until appeals are properly addressed in higher courts. 

Binance.US looks set to complete Voyager Digital’s acquisition

The appeal comes a week after New York bankruptcy judge Michael Wiles approved the deal. The judge showed considerable skepticism of arguments from the Securities and Exchange Commission, which argued that Voyager’s VGX token might be an unregistered security.

Last month, Voyager Digital sold some of its assets through the US-based cryptocurrency exchange Coinbase.

The company received roughly $100 million in the USD Coin (USDC) stablecoin for sales of several tokens, including Shiba Inu, Ethereum and the native Voyager Token.

Binance.US took the prime position to acquire Voyager Digital’s assets after the collapse of FTX. FTX previously agreed to acquire Voyager Digital before the collapse of the cryptocurrency exchange.

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