Schlagwort: blockchain regulation

We want the market to make its own choice between blockchain accounting and depositary accounting: Chairman

The Moscow Stock Exchange (MOEX) has decided to introduce a bill that will allow depositaries to issue receipts for trade in digital financial assets (DFAs), Russian newspaper Vedomosti reported earlier this week.

The bill is currently under consideration by the Russian Central Bank, which independently cannot introduce legislation.  

MOEX supervisory board chair Sergei Shvetsov told reporters at a banking forum, “Banks of Russia – XXI century,” that the bill will allow trading both in DFAs and securities based on them.

This will allow investors to choose between directly investing in DFAs or shifting the custodial risks of opening accounts in distributed registries to the accounting infrastructure via securities.

“The exchange and its subsidiaries will turn to the regulator, and I hope that they will receive the status of an exchange operator,” the chairman explained, referring to how the direct release of DFAs will work.

Shvetsov clarified that the exchange wants to let the market to make its own choice between blockchain accounting and depositary accounting. If the bill receives approval, Russian depositories will be able to hold DFAs in their accounts on the blockchain and redeem the certificate to withdraw the underlying asset whenever the client requests the same.

The behavioural habits of Russian business and the population are “dragged” into centralized structures, the chairman stated, adding that the lack of familiarity with distributed ledger technology becomes a barrier:

“When you don’t know who to call and who to sue, many people don’t want to participate. [but,] It’s a blank sheet that we can draw whatever we want on, according to the needs of the economy and investors.”

In July, State Duma finance committee chair and head of the Russian Banking Association Anatoly Aksakov called for MOEX to follow in the footsteps of the Toronto Stock Exchange and the Deutsche Boerse to become a cryptocurrency exchange.

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• CFTC’s penalty against bZeroX, its founders and successor firm Ooki DAO relate to illegal offering of off-exchange crypto trading and for breaching the Bank Secrecy Act.
• Ooki DAO operated renamed bZeroX protocol.
• Regulator says actions are aimed at protecting US retail investors amid crypto’s rapidly growing market.

The Commodity Futures Trading Commission (CFTC) imposed a $250,000 fine on crypto lending platform bZeroX and issued it a cease-and-desist order against it for illegal operations that violated the Commodity Exchange Act, CFTC regulations and the Bank Secrecy Act.

The penalty and orders were also filed and settled against bZeroX founders Tom Bean and Kyle Kistner, the agency said in a press release.

“These actions are part of the CFTC’s broader efforts to protect US customers in a rapidly evolving decentralised finance environment,” Gretchen Lowe, the acting Director of Enforcement at CFTC said.

bZeroX violated registration rules 

According to the regulator, the crypto firm operated without the requisite registrations and illegally offered digital assets-related leveraged and margined commodity transactions. As such, the platform had offered services that can only be undertaken by a properly registered futures commission merchant (FCM).

“Margined, leveraged, or financed digital asset trading offered to retail U.S. customers must occur on properly registered and regulated exchanges in accordance with all applicable laws and regulations.  These requirements apply equally to entities with more traditional business structures as well as to DAOs,” Lowe added.

CFTC also accused bZeroX of violating the Bank Secrecy Act by not adopting and implementing a KYC programme as required of FCMs.

The complaints were also levelled against Ooki DAO, the decentralised autonomous organisation that succeeded bZeroX.

ICYMI: The CFTC imposed a $250,000 penalty against bZeroX, LLC and its founders and charged its successor Ooki DAO for offering illegal, off-exchange digital-asset trading, registration violations, and failing to comply with the Bank Secrecy Act. https://t.co/dG7IeKKJtn

— CFTC (@CFTC) September 23, 2022

According to CFTC, the orders related to the development, deployment and marketing of the blockchain-based software bZx Protocol – from around 1 June, 2019 to 23 August, 2021 and when it changed to Ooki DAO.

The regulator thus said it had filed a civil enforcement action against Ooki DAO, seeking a trading ban, disgorgement, monetary penalties and injunctions against it.

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The United States Securities and Exchange Commission (SEC) announced two new offices in addition to the seven present to facilitate exclusive support in reviewing issuer filings. Aimed purely at dealing with crypto assets, one of the two new offices is meant to be the regulatory body’s solution to the increasing influx of crypto issuers in the country.

The two new offices – an Office of Crypto Assets and an Office of Industrial Applications and Services will function under the Division of Corporation Finance’s Disclosure Review Program (DRP) and specialize in “providing a focused review of issuer filings,” the SEC stated.

The authority also confirmed that the Office of Crypto Assets would continue the work performed across the DRP to review filings involving crypto assets.

Assigning companies and filings to one office will enable the DRP to focus its resources and expertise better to address the unique and evolving filing review issues related to crypto assets, it added.

Renee Jones, director of the Division of Corporation Finance SEC, explained that the rate of growth of cryptocurrencies had shown the need to provide greater and more specialized support in the DRP’s Office of Finance. She elaborated: 

“The creation of these new offices will enable the DRP to enhance its focus in the areas of crypto assets, financial institutions, life sciences, and industrial applications and services and facilitate our ability to meet our mission.

Last week SEC Chairman Gary Gensler said that he had instructed the SEC staff to work directly with entrepreneurs to get their tokens registered and regulated, where appropriate, as securities.

The other new office- the Office of Industrial Applications and Services,  will focus on non-pharma, non-biotech, and non-medicinal products from the Office of Life Sciences.

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SEC enforcement unit director Gurbir Grewal non-enforcement would be “betrayal of trust.”

The US Securities and Exchange Commission (SEC) is not about to get off track with regard to taking legal action against crypto companies that break the securities laws, the agency’s enforcement chief warned on Friday. 

Gurbir Grewal, the Enforcement Director at the SEC was speaking at a conference in Washington D.C.

SEC to continue crack down – Grewal

The crypto industry has over the past few years been unhappy with the US securities watchdog, particularly around what’s seen as the regulator’s pivot to regulation by enforcement. It’s an outlook many say stifles innovation.

But that isn’t going to stop the SEC from taking an aggressive approach towards enforcing rules it says apply to crypto companies, Grewal said at the event organised by the Practising Law Institute. 

He warned that the agency will not give “crypto a pass,” adding that the regulator will pursue action against those who break the law irrespective of the technology used. According to the SEC enforcement boss, taking a different approach – in this case non-enforcement of rules underpinning the regulatory ecosystem – would be akin to “betrayal of trust.”

The SEC is determined to take the enforcement route despite misgivings within the crypto space, with the unit eyeing 125 new staff to boost its efficiency.

Grewal’s comments come a day after SEC Chair Gary Gensler noted that the agency was keen on more crypto companies, particularly crypto brokers and exchanges, getting registered. Gensler has reiterated this before, saying the SEC has the regulatory authority to take enforcement actions against securities.

In December 2020, the SEC brought a lawsuit against Ripple Labs for what it maintains is the crypto company’s sale of unregistered securities.

There are multiple other crypto-related cases the agency has filed. Recently, the regulator charged a former Coinbase staff with insider trading and listed nine tokens it said were securities (seven of these were on Coinbase).

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The SEC chair wants to see cryptocurrency exchanges and brokers register with the agency.

Gary Gensler, the Chair of the US Securities and Exchange Commission (SEC) has once again reaffirmed the agency’s desire to see more crypto companies – exchanges, brokers and so forth – embrace regulation as a step towards consumer protection.

SEC has authority to regulate crypto securities

In a Thursday commentary that Bloomberg reported on, the SEC boss noted that even as they pursue greater involvement and hence accountability from those within the crypto industry, the securities watchdog is already in a position to regulate the space.

According to the regulator, most cryptocurrencies fall under the agency’s regulatory purview by dint of a security’s legal definition. As such, it calls for crypto exchanges, brokers and other providers to embrace compliance.

He said the public within the crypto space deserve to have and enjoy the same protections from crypto issuers as do consumers investing in traditional securities. The comments are not new, with Gensler outlining this same sentiment following the Terra collapse and Three Arrows Capital demise.

He reiterated this perspective in comments that highlighted Bitcoin as a commodity. He repeated the message today as noted by MicroStrategy’s Michael Saylor in a comment shared on Twitter.

The SEC chair also commented on non-compliance and what looks like a reluctance by many to pursue the regulatory goal.

“Not liking the message isn’t the same thing as not receiving it,” the SEC chair said in remarks delivered at a regulatory event in Washington.

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