Schlagwort: blockchain regulation

Binance, the world’s leading cryptocurrency exchange, has won another battle in its quest for global dominance. 

The cryptocurrency exchange announced via a blog post on Monday, August 15th, that it had s received in-principle approval from the Astana Financial Services Authority (AFSA) to operate a digital asset trading facility and provide custody in the Astana International Financial Center (AIFC). 

This latest development means that Kazakhstan is another country where Binance would be allowed to operate legally. 

In-principle approval from AFSA still requires Binance to complete the full application process. After completing this step, Binance can operate a digital asset trading facility and provide digital asset custody on the AIFC’s platform.

While commenting on this latest development, Changpeng Zhao (CZ), founder and CEO of Binance, said;

“Kazakhstan has shown itself to be a pioneer in Central Asian crypto adoption and regulation. This further signifies Binance’s commitment to being a compliance-first exchange and providing  products and services in a safe and well-regulated environment across the globe.”  

Gleb Kostarev, Regional Head of Asia at Binance, added that: 

“This is a landmark achievement for Binance in Kazakhstan. We are grateful to the Astana International Financial Center for their support and vision in granting Binance Kazakhstan this in-principle license approval.”

AFSA is an independent regulator of the Astana International Financial Center, overseeing a wide spectrum of digital asset-related activities in Kazakhstan. The excellent regulatory framework by the AFSAfor fintech products and services has helped the AIFC to establish itself as the leading regional platform for driving the sector’s development, the Binance team added. 

Nurkhat Kushimov, Chief Executive Officer of AFSA, also commented on this latest development, adding that

“Large investors seeking new markets need clear-cut and well-managed rules, as well as high standards of regulatory practice. When a regulator meets these requirements, it creates collaboration based on trust and an ecosystem where players can work safely and efficiently. We believe that Binance’s work will further develop this vibrant ecosystem of the digital asset industry locally and regionally.”

In recent months, Binance has strengthened its compliance team and gained approvals and provisional approvals from other countries and jurisdictions, including France, Dubai and Spain. The regulatory approvals came after the exchange came under fire in countries such as the U.K. and Japan last year and Uzbekistan and Israel this year.

Binance is the world’s leading blockchain and cryptocurrency infrastructure provider, with a financial product suite that includes the largest digital asset exchange by volume.

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The Financial Conduct Authority (FCA), UK’s financial regulator, has announced a clampdown on the marketing of high-risk investments amid the need to make sure investors are not hoodwinked into high risk products.

The FCA’s tough stance was highlighted in a press release on Monday, in which the regulator said it had finalised its work on stronger rules on marketing and promotions in high-risk investments.

New rules don’t apply to crypto – yet

While FCA’s new regulatory guidelines provide an intervention against misleading financial promotions around high-risk investments, they do not apply to crypto.

That’s what the agency said in its release, explaining that applying these rules across cryptoasset promotions will only be considered “once the Government and Parliament confirms in legislation how crypto marketing will be brought into the FCA’s remit.”

When this happens, the regulator will announce qualifying rules on cryptoasset ads respective of the given type of asset. Generally, however, it is expected the crypto-related rules will not differ markedly from those being introduced for high-risk investments. 

FCA’s fight against misleading adverts

Under its new rules, the FCA wants all companies involved in the approval and issuance of marketing materials to have the appropriate expertise. As well, any firm engaged in the marketing of high-risk investments is obligated to conduct better checks, ensuring that targeted consumers match the intended investments.

The new rules also align with the Consumer Investments Strategy, which is intended to limit potential exposure to high-risk offerings that don’t reflect a consumer’s risk appetite. It’s an objective the regulator wants to achieve and demands that marketers provide clearer risk warnings, and which must be prominent within advert.

Notably, the use of incentives such as ‘refer a friend bonuses’, targeting investors’ connections have been banned. 

‘We want people to be able to invest with confidence, understand the risks involved, and get the investments that are right for them which reflect their appetite for risk,” said Sarah Pritchard, FCA’s Executive Director, Markets. 

According to the FCA, the tough rules intend to tackle “poor financial promotions” that are likely to see investors fail to appreciate the risks of investing and losses that may come with certain investment products.

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Kraken is allegedly being investigated over violation of US sanctions on Iran, sources said in a report published by the New York Times.

US-based cryptocurrency Kraken is reportedly under federal investigation over what sources say are violations related to Iran, the New York Times reported on Tuesday.

According to the publication, the exchange has been under probe for allowing customers in sanctioned Iran to buy and sell cryptocurrencies, with the US Treasury Department’s Office of Foreign Assets Control  (OFAC) having undertaken the investigations since 2019.

OFAC is reportedly set to impose a fine against Kraken, making this yet another potential penalty against the privately held company in less than a year.

In September 2021, the Commodity Futures Trading Commission (CFTC) slapped the exchange provider with a $1.25 million fine for operating an unregistered off-exchange crypto trading service.

Increased regulatory scrutiny

Reports of an investigation against Kraken comes amid a general understanding that the crypto sector is facing increased regulatory scrutiny in light of recent events.

The collapse of Terra (LUNA) and the stablecoin project TerraUSD (UST), and crypto hedge fund Three Arrows Capital (3AC) appears to have just been the tip of the iceberg. The crypto winter lingers still, and turmoil has already seen crypto lenders Celsius Network and Voyager Digital go bankrupt. 

These events have only added fuel to the tougher regulatory approaches being witnessed from across the globe.

On Tuesday, it also emerged the US Securities and Exchange Commission (SEC) was probing crypto exchange Coinbase over the listing of alleged securities tokens. US-based Coinbase has refuted the SEC’s claim that the platform has listed securities.

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Coinbase Global Inc., a publicly listed crypto company that’s among the largest cryptocurrency exchanges in the crypto industry, is reportedly facing renewed scrutiny from the US Securities and Exchange Commission (SEC) over allegations of listing crypto tokens that fall under securities.

A report by Bloomberg on Tuesday, and which cites sources privy to the developments, says the probe predates recent events around insider trading charges against a former Coinbase employee.

However, while the agency has been monitoring the listing of tokens on the leading crypto exchange, scrutiny has increased ever since the US-based company moved to add more tokens on its trading platform.

Coinbase maintains it doesn’t list securities

The SEC last week noted in its insider trading charge against the former Coinbase manager and two other individuals that nine of the tokens involved were securities.

Coinbase, which offers access to over 150 tokens on its trading platform, responded to the securities regulator’s allegations by noting that although seven of the tokens highlighted in the insider trading case are listed on the platform, none is a security.

The company’s Chief Legal Officer Paul Grewal reiterated this in a statement shared in a blog post on 22 July, saying the exchange disagrees 100% with SEC’s view and allegations. He also repeated the stance on Tuesday as the probe report surfaced.

Grewal says Coinbase is ready to engage the regulator.

I’m happy to say it again and again: we are confident that our rigorous diligence process—a process the SEC has already reviewed—keeps securities off our platform, and we look forward to engaging with the SEC on the matter. A refresher: https://t.co/SaacvrZEiU

— paulgrewal.eth (@iampaulgrewal) July 26, 2022

Coinbase (COIN) shares declined sharply premarket on Tuesday, falling by more than 5% amid similar declines for Bitcoin.

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Crypto exchange Binance has reportedly been fined €3.3 million (£2.8 million) for operating in the Netherlands without the requisite regulatory authorization.

According to a press release published on Monday, the Dutch Central Bank slapped the leading cryptocurrency exchange with the fine in April.

Binance ‘warned’ in 2021

The registration requirements for all crypto asset providers in the Netherlands was introduced in May 2020, with regulators eyeing compliance as part of the push to prevent potential misuse of virtual assets in illicit activities like money laundering and financing of terrorism.

In its statement Monday, the Dutch Central Bank revealed Binance had failed to adhere to these requirements and continued offering its services – until at least 1 December 2021.

The DNB noted that the fine was as high as possible due Binance’s “serious” violations. The exchange had also operated without any levies for the period in question, with Netherlands having a significant number of Binance users as established during the investigation.

Nonetheless, the regulator reduced the fine by 5% in recognition of the crypto company’s application for registration. The bank also noted that the exchange had been “relatively transparent about its business operations throughout the process.”

Binance reportedly objected to the said fine on 2 June, 2022.

However, Changpeng Zhao, co-founder and CEO, has previously noted that the company is looking to comply with regulatory requirements in all jurisdictions and locations that it offers its services.

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