Schlagwort: blockchain regulation

• China was at the forefront of a crackdown on Bitcoin mining and crypto trading
• Sheila Warren predicts that the US will take the lead in crypto matters in 2022, pointing to this year’s Capitol Hill hearings involving lawmakers and crypto executives as the harbinger of what’s to come.

The head of data, blockchain and digital assets at the World Economic Forum (WEF) Sheila Warren says 2022 could be the year that the US becomes the “big elephant in the room,” with regard to crypto regulation.

In 2021, China has enforced a serious crackdown on Bitcoin mining and crypto trading, forcing thousands of miners and multiple crypto providers to seek friendlier destinations for their operations. The US emerged as one of those places, with miners drawn to locations such as Texas for the cheap and abundant renewable power.

While the US Federal Reserve chair has previously said that the US will not ban cryptocurrencies, a call also made by US Securities and Exchanges Commission (SEC) chief Gary Gensler, Warren believes recent events on Capitol Hill could just be the beginning of even more hearings and tougher regulatory approaches.

Giving her market prediction for 2022, the Money Reimagined podcast co-host said in a recent interview that she foresees the US making big moves in policymaking.

“If I predicted last year that China was going to be the big elephant in the room making some big moves, I think this year, it’s actually going to be the US,” she noted.

She acknowledges that actual policymaking is a process that can take a very long time, which means one cannot just say with certainty that a lot of policies will be enacted in 2022. However, she believes that the year could see a surge in hearings and other regulatory activity, with the government and regulators taking a closer look at the crypto industry.

CBDCs, NFTs, and overall crypto adoption

Warren also talked about central bank digital currencies (CBDCs) in the EU and the US, noting that the world will likely keenly watch China’s focus on expanding use of the digital yuan. In terms of issuing digital coins, she thinks the EU might just beat the United States to the finish line.

During the interview, the WEF exec member was also positive about non-fungible tokens (NFTs) and believes the crypto and blockchain space as a whole is set for further institutional adoption. 

According to her, adoption across companies could positively impact the job market, with crypto’s valuation likely to spike as the labour market moves into the industry.

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Binance’s Turkey unit was recently slapped with a fine for not abiding by financial surveillance reports requirements

Binance, the world’s largest crypto exchange by daily trading volume, has received the regulator’s green light in Bahrain and Canada. The exchange secured in-principle approval in Bahrain and also earned an MSB license to offer more than crypto services in Canada. Both authorisations were received today from the Central Bank of Bahrain (CBB) and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), respectively.

Changpeng Zhao, Binance’s founder and chief executive, celebrated the achievement, posting on Twitter, “Tide is turning.”

The filing for regulatory approval in Canada outlined that Binance’s Canadian subsidiary will run as Binance Canada Capital Markets. In addition to facilitating the trading of digital assets, the platform will also be involved in foreign exchange and money transfer activities. The unit became authorized to operate as a domestic entity at the start of the month, with the current licence set to expire at the end of 2024.

Binance intends to cement its place in the Middle East market

Bahrain is the smallest country in the Gulf region but has proven to be a trailblazer in the cryptocurrency sector in recent years. The in-principle authorisation of Binance in Bahrain makes the CBB the first financial authority to give approval to a subsidiary of the exchange in the Middle East North Africa (MENA) region.

Following the regulatory nod, Binance posted an announcement detailing that it was now approved to offer cryptocurrency services in the country.

“The Central Bank of Bahrain has demonstrated leadership and forethought in addressing crypto as a future asset class. The approval recognizes Binance’s commitment to comply fully with regulatory requirements and our broader commitment to anchor operations and activities in Bahrain,” Changpeng Zhao said in a press release. “

Binance also noted that it was working on completing the application process and obtaining full approval in due time. Abdulla Haji, director for licensing at Bahrain’s central bank, seemed to imply that full approval wouldn’t take long. He stated that the final nod was only “a matter of formalities” upon completion of the required checks. He further described Bahrain as the ideal location for Binance to set up regional headquarters. 

The decision to obtain approval in Bahrain accentuates the exchange’s interest in the Middle East market. Last week, Binance revealed it would be working together with the Dubai World Trade Centre Authority to establish a virtual assets hub.

A rollercoaster of a year for Binance

2021 has undoubtedly been full of ups and downs for Binance. The exchange got entangled in regulatory issues in different jurisdictions at some point. Despite facing compliance issues, Binance has since managed to get on the right side of several authorities and also expand its reach.

The latest approval news come on the heels of an 8 million Turkish lira (about $750,000) fine that was levied on the exchange’s Turkish unit BN Teknoloji by the Financial Crimes Investigation Board (MASAK) at the end of last week. The exchange was accused of non-compliance with digital currency legislation relating to consumer information.

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The Iranian government is worried some regions in the country may suffer blackouts when energy needs become high during the winter months

Iranian authorities have once again instructed authorised cryptocurrency mining companies to break off mining operations in the country, according to a report by the Islamic Republic of Iran Broadcasting. Energy needs shoot up significantly during the cold months, and the government contends that cutting down on energy consumption is the best approach to avoid deficits.

Iran’s Power Generation, Distribution, and Transmission firm Tavanir fears that, if not halted, the mining operations will lead to blackouts during the winter season. The company has also implemented other measures outside crypto mining.

“The Energy Ministry has been implementing measures since last month to reduce the use of liquid fuels in power plants, including cutting licensed crypto farms’ power supply, turning off lampposts in less risky areas and stringent supervision of consumption,” Mostafa Rajabi Mashhadi, Tavanir’s managing director and chairman of the board said.

The measures are akin to those taken during summer

This is not the first time local energy authorities have resorted to this measure. In May, Tehran officials ordered mining farms in the region to suspend their operations amidst similar concerns –insufficient supply and high demand for electricity. The licensed were allowed to recommence their activities in September when authorities felt that the power grid was stable because of decreased energy consumption.

The Grid Management Company hopes that it will save energy for the coming months characterised by low temperatures. Mashhadi reiterated that it was crucial to curtail energy consumption and appealed to locals to cut on their gas and electric use. The measures will potentially benefit the country as estimates show they will lower energy consumption by over 40%.

Illegal crypto miners are a menace

Iran contributes 4.5% to 7% of the world’s Bitcoin hash rate, making it one of the biggest crypto mining nations. The previous suspension of mining between May and September was met with negative feedback by the crypto mining community. The apple of discord was that authorised miners use up about 300 MW – 10x less the figure (3,000 MW) consumed by illegal miners

The war waged on illegal crypto miners by the Iranian government is far from over as local authorities are still hunting and shutting down these illegal operations. At the end of last month, the authorities confirmed that they had confiscated more than 220,000 mining equipment. Nearly 6,000 illegal crypto farms in the country were also closed down, with their operators subsequently being charged.

The post Iranian authorities ask miners to halt mining activities again – Here’s why appeared first on Coin Journal.

The Wyoming Senator is looking to provide clear guidance on regulations for various asset classes via a proposed crypto bill

Senator Cynthia Lummis is preparing to bring a comprehensive bill into congress, according to a report by Bloomberg. The said bill will enact crypto users‘ protection and provide guidance on assets and their classification. It will also provide guidance on the regulation of stablecoins and also define how the digital assets should be taxed, Bloomberg reported on Thursday.

A Bitcoin proponent, Lummis has been a long-time champion for favourable crypto regulations. Her proposed bill, if approved, would go a long way in clarifying the situation on current laws and the status of digital assets in the US. The proposal will seek to establish an oversight body under the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) joint jurisdiction.

Even before election to her political seat, Senator Lummis was a Bitcoin advocate having fiercely defended the asset. In fact, she is one of the few politicians to have accepted campaign donations in crypto; her website took contributions in Bitcoin via BitPay. In a recent op-ed, she questioned the nominations of Jerome Powell and Lael Brainard to the Federal Reserve as their political handling of digital assets stood in the way of crypto in Wyoming.

A divided house, literally

Senator Lummis has got her work cut out, and she knows that it won’t be easy to get the house to agree on her proposal. The Republican lawmaker currently sits at the Senate Banking Committee and will be hoping to gain assistance in normalising digital assets in the country through regulations.

On her Twitter platform, the Senator has urged voters to push their Senators towards supporting the bill as she seeks bipartisan cosponsors from a relatively split house as far as digital assets are concerned.

For any regulation to be put to the vote at the floor of the house, a minimum of 60 votes is constitutionally required, with the house currently split 50 – 50, Democrats – Republicans. Vice President Kamala Harris holds the deciding tiebreaker vote if need be.

The Wyoming Senator declared her ownership of Bitcoin in October as required by the Stop Trading on Congressional Knowledge Act. Lummis revealed that she made the purchase in August – a disclosure that crowns her as a Bitcoin evangelist in the political circle of regulations. As per a Wall Street Journal report, the only other member of the Senate Banking Committee with direct crypto exposure is Senator Pat Toomey. 

Elsewhere in the House of Representatives, questions have arisen on crypto ownership and other digital assets. Congressional Representative Alexandria Ocasio-Cortez, who sits on the House of Representatives‘ Financial Services Committee, recently spoke out, saying owning these assets could well cloud the judgement of lawmakers, as they are privy to „sensitive information and upcoming policy.“

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Fan Tokens have been on the rise with the involvement of clubs across the five major European leagues

English Premier League Club Arsenal has been found at fault by UK advertising watchdogs for flouting regulations, as it pushed adverts promoting fan tokens. On Wednesday, the Advertising Standards Authority (ASA) dictated that the English club ceases to show the „irresponsible“ ads as it had failed to highlight the risks that involvement with cryptocurrencies came with.

„The ads must not appear again in the form complained about,“ the ASA ruled.

The Authority specifically cited two ads, one published on the club’s website on August 6th  and the second on the official Facebook account on August 12th, promoting the $AFC fan token.

Arsenal failed to include all the required financial information: ASA

Although the advertisement watchdog recognised that the ads that had been run did not promote the fan tokens as an investment or for financial gain, it noted that the football club failed to detail the possibility of Capital Gains Tax (CGT) required on any gains made from investing in the crypto tokens.

„Therefore, because the ads trivialised investment in crypto assets and took advantage of consumers‘ inexperience or credulity by not making clear that CGT could be payable on profits from investing, we concluded the ads were irresponsible and breached the Code.“

Further, the agency criticised Arsenal’s failure to clearly state the risks of trading the assets and clarify that these assets were not regulated in the UK. Even though the first ad did provide text informing potential consumers that the fan tokens could well easily lose value, leading to the loss of some or all of the investment, the warning was at the bottom of the ad. As such, it ran the risk of not getting seen by those engaging with the ad.

The Gunner’s Response

In response, a spokesperson from the club said that it took with utmost seriousness its marketing to the fans. The club explained that it had given warnings on the financial risks and was keen on the information they gave out to fans. It also noted that it would seek an independent review of the ruling to understand the agency’s stance better.

Fan tokens have attained mainstream popularity, more so in the European football scene. Giant clubs including Italian heavyweights Inter Milan, French Ligue 1 leaders PSG, and Spanish FC Barcelona have recently adapted these fan tokens. The clubs say these tokens provide an avenue to interact with the fans. Through the tokens, fans can participate in decisions such as the songs to play in the stadiums and decorations in the changing rooms.

More specifically, Socios has been at the forefront of promoting these tokens. Arsenal had teamed up with Socios to launch the $AFC token that fans could purchase from the Socio.com app. The transactions were conducted in the Chillz cryptocurrency.

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