Schlagwort: crypto news

• The Crypto Council for Innovation says the new AML bill provides no workable framework for illicit finance in DeFi.
• According to the crypto alliance, the bill’s proposals go “in the opposite direction” to what the proper approach should be.
• The CCI says legal obligations highlighted in the bill are “arbitrarily placed on persons”.

A bill introduced in the US Senate on anti-money laundering and other illicit finance activities in the decentralised finance (DeFi) space “fails to provide a workable framework”, the Crypto Council for Innovation has said.

The bill was introduced by Senators Jack Reed (Rhode Island) Mike Rounds (South Dakota), Mark Warner (Virginia) and Mitt Romney (Utah). Its proposals include the application of AML obligations to DeFi protocols and crypto ATMs.  

CoinJournal reported on the new DeFi bill’s proposals earlier today.

Legal obligations are arbitrarily placed on persons

The CCI, which represents a group of industry leaders and players committed to advancing the crypto industry, has released a statement noting that the bills’ proposals, including the proposed requirements aimed at backers and facilitators of DeFi fall short of a “workable framework.”

2/ TL;DR: the proposal fails to provide a workable framework to actually address illicit finance in these sectors. https://t.co/CIbbbYuIkk

— Crypto Council for Innovation (@crypto_council) July 19, 2023

Although it notes that illicit finance is a legitimate national security concern, the council faults the bill’s framers for going “in the opposite direction” with regard to the DeFi sector.

“Illicit finance is a legitimate national security concern, and while its volume is tiny in crypto compared to TradFi, leveraging the transparency & programmability inherent in blockchain systems to derive appropriate compliance measures unique to crypto is a good idea. Unfortunately, this bill goes the opposite direction. It places legal obligations arbitrarily on persons who have no actual way to influence protocols once they are deployed, and completely fails to account for the unique attributes of blockchain-backed systems,” the Council said.

One of the issues the CCI points out from the bill is the obligation put on supposed “Digital Asset Protocol Backers.” Per the bill, this would be any person holding more than $25 million worth of a DeFi protocol’s governance token or has invested $25 million or more into the protocol’s development. 

It also places obligations on so-called “Digital Asset Transaction Facilitators”, who would be any person deemed to have control over the protocol or offers access to an application that facilitates transactions on the said crypto protocol.

The Council says these proposals are not only “weird”, but advance vagueness with regard to the definition of “facilitators.” More than that, the group says the bill contains “unworkable obligations” and offers “no actual guidance.”

 “The proposal offers no actual guidance on technical ways for decentralised protocols to comply with BSA reporting requirements. It is not feasible to collect personal identification information from such protocols, and the bill neither tackles this technical complexity nor provides solutions on how to address this limitation.” the Crypto Council noted.

As part of its input on the issue of DeFi regulation, the CCI says it’s collaborating with industry experts, regulators both in the US and from elsewhere to draft a framework for the appropriate regulation of the sector.

“We are consulting with industry experts and regulators in the U.S. and other leading jurisdictions to develop a technologically sound approach to mitigating illicit finance in DeFi,” the statement reads in part.

While its strong-worded statement highlighted what’s not right with the bill, the CCI acknowledges that it is still in the early stages and that its authors are open to dialogue on best way forward. The expectation is that the bill will see “plenty of edits” going forward.

22/ CCI will continue to work tirelessly to ensure policymakers have accurate info about the operations of DeFi protocols and crypto ATMs. It is critical that regulation strike the careful balance between establishing safeguards and fostering innovation in the U.S.

— Crypto Council for Innovation (@crypto_council) July 19, 2023

The post US Senate’s new bill proposes “unworkable obligations for DeFi”, Crypto Council says appeared first on CoinJournal.

Key takeaways

• Coinbase CEO will meet with House Democrats to discuss crypto regulation.

• Armstrong wants clearer rules on crypto from Washington.

Coinbase CEO wants clearer crypto regulation in the US

Coinbase Inc. Chief Executive Officer Brian Armstrong is set to meet with House Democrats behind closed doors Wednesday morning. This is according to a Bloomberg report on Monday, citing sources familiar with the plans. 

According to the report, Armstrong will speak privately with lawmakers from the New Democrat Coalition about cryptocurrency legislation and related issues, including tax, national security, privacy and climate. 

This latest cryptocurrency news comes as Coinbase faces a lawsuit by the Securities and Exchange Commission.

Recently, lawmakers from the House and Senate have introduced bills that would bring clarity to the cryptocurrency industry in the United States. However, the divided nature of Congress makes it unclear whether the bills would be adopted soon. 

Coinbase continues to battle SEC in court

On June 6, the US SEC charged Coinbase with violating federal securities law, adding that the cryptocurrency exchange was operating as an unlicenced broker, national securities exchange and clearing agency.

The cryptocurrency exchange responded, saying that the SEC’s action violates due process and constitutes an abuse of discretion. 

On June 29th, Coinbase submitted a motion to the United States District Court for the Southern District of New York, asking that the SEC complaint charges be dismissed for lack of merit.

Coinbase’s stock price has grown by nearly 200% since the start of the year, thanks to Bitcoin’s price rallying by nearly 50% during that period. At the start of the year, COIN was trading at $40 per share but currently stands at $105.55. 

The post Brian Armstrong to meet House Democrats about crypto legislation appeared first on CoinJournal.

• US Judge Analisa Torres referred Ripple vs. SEC case to Magistrate Judge Sarah Netburn.
• Last week’s ruling was that XRP was not a security.
• The Ripple vs. SEC case continues but Judge Netburn has suggested both Ripple and SEC can agree to possible settlement conference dates if they believe it to be “productive” at this stage.

The latest Ripple news is that US Magistrate Judge Sarah Netburn has ordered both Ripple and the US Securities and Exchange Commission (SEC) to agree on possible dates for a settlement conference.

The order came not long after Judge Analisa Torres of the US District Court for the Southern District of New York referred the next phase of the Ripple vs. SEC court battle to Judge Netburn.

According to a court document filed on July 17, Judge Netburn, who will now preside over the General Pretrial, has recommended that the parties come to this agreement 6-8 weeks beforehand, referencing the court’s busy schedule.  As noted in the judge’s order, the parties should agree to three mutually convenient dates. 

Will SEC and Ripple want to settle?

The pretrial phase includes aspects of the case around “scheduling, discovery and non-dispositive pretrial motions.” It is also likely the stage where the parties would want to settle. While the anticipation is that the SEC might want Ripple to settle, the coming days could make it clear whether any of the two sides view this as a route to take.

Fox Business journalist Eleanor Terrett shared the outlook on Twitter:

🚨To be clear: Judge Netburn is suggesting that both sides agree on some possible dates for a settlement meeting, *IF* „they believe it to be productive at this time.“

This doesn’t mean we’ll see a settlement in 6-8 weeks. It means that if they do decide on a date, it will have… https://t.co/3bxqCGLyPr

— Eleanor Terrett (@EleanorTerrett) July 17, 2023

Last week, Judge Torres effectively declared XRP not a security and sparked a massive rally for the token and the broader crypto market. 

Even though the outcome of the rest of the case is anybody’s guess, the crypto industry believes Ripple’s partial victory provided a watershed moment that could translate into the much needed regulatory clarity.

The post Judge orders Ripple, SEC to agree to possible settlement dates appeared first on CoinJournal.

• The FSB recommends that authorities ensure adequate disclosures from crypto asset issuers and providers.
• Segregation of funds to protect clients and measures to ensure no conflict of interest are also highlighted.
• The watchdog also recommends global rules for stablecoins be adopted.

The Financial Stability Board (FSB) said in its latest crypto asset report that the sector needs to see more disclosures on the part of providers and broader cooperation from regulators across the globe.

FSB, tasked by the G20 to come up with a comprehensive framework for crypto regulation, has published two sets of recommendations. The first set relates to the global approach to crypto regulation, including the supervision and oversight of digital asset activities and markets. 

Meanwhile, the second set of recommendations focuses on global stablecoin regulation.

“Our global regulatory framework for crypto-asset activities seeks to ensure that crypto assets and global stablecoins are subject to robust regulation and supervision and do not pose risks to financial stability,” the organisation said.

FSB recommendations include disclosures, segregation of funds

A press release the organisation published on Monday, July 17, highlighted the two documents, noting that “the final recommendations draw on the implementation experiences of jurisdictions and build on the principles – ‘same activity, same risk, same regulation’; high-level and flexible; and technology neutral – that informed the consultative framework.”

The framework comes after a tumultuous year for crypto going back to summer of 2022, and the FSB says it strengthened the recommendations with the events in mind. Among these are the dramatic collapse of TerraUSD and the implosion of cryptocurrency exchange FTX.

As a result, three of the key areas with greater focus are safeguarding of client assets, addressing concerns around conflicts of interest and strengthening of cross-border cooperation among regulators.

In total, the watchdog has outlined nine key recommendations for the global framework for regulation of crypto asset activities and markets and 10 for the regulation and oversight of stablecoins. One of the recommendations on regulation of crypto asset activities focuses on disclosures and FSB stated:

“Authorities should require that crypto-asset issuers and service providers disclose to users and relevant stakeholders comprehensive, clear and transparent information regarding their governance framework, operations, risk profiles and financial conditions, as well as the products they provide and activities they conduct.”

In the press release, FSB noted that the final recommendations in the two documents incorporated the lessons picked from events within the crypto market over the past year. They also include feedback collated during the public consultation.

The European Union and the UK are among jurisdictions to pursue comprehensive regulation for crypto asset activities and stablecoins. The EU’s Markets in Crypto-Assets (MiCA) regulation is expected to take effect in 2024, while UK’s Financial Services and Markets Acts received the royal assent in June following approval by parliament. 

As reported in April, the UK could deploy its crypto laws by early 2024 as it looks to become a crypto hub.

The post FSB publishes recommendations for global crypto framework appeared first on CoinJournal.

• Katie Haun is the founder and CEO of Haun Ventures and also a former US Department of Justice prosecutor.
• In a tweet on Sunday, Haun said the SEC is unlikely to appeal as the agency wouldn’t want to lose on appeal.
• XRP price rose significantly after the judge’s summary ruling.

Katie Haun, the founder and CEO of Haun Ventures and former prosecutor at the US Department of Justice, believes the US Securities and Exchange Commission (SEC) is unlikely to seek an “immediate appeal” of the court ruling that effectively declared XRP not a security.

SEC immediate appeal “unlikely”

Haun, who sees the win for Ripple after its tussle with the agency as a great outcome for crypto, shared her opinion via tweeted remarks on Sunday. The comments follow last week’s summary court ruling that was largely welcome across the industry.

“I’ve spoken with trusted legal colleagues (including @HaunVenturesv advisors Steve Engel and James Burnham) and the consensus is that the court drew a reasonable line—distinguishing between XRP itself (not an investment contract and thus not a security) and certain XRP transactions in which institutional investors paid money to Ripple directly and Ripple made contractual commitments in exchange, creating an investment contract under Howey,” Haun tweeted.

According to her, the distinction has offered the crypto industry an avenue to explore in cases the SEC has brought against some of the top exchanges. The argument here is that “tokens are never “investment contracts” on their own.”

“Only binding contracts imposing post-sale obligations on the seller can constitute investment contracts and hence tokens traded on exchanges or secondary markets would almost never qualify.”

On whether the SEC will appeal the court’s decision, Haun notes that there’s a possibility it could. However, it’s unlikely to be an immediate appeal. On why this could be the case, the former a16z fund manager explained:

“… an immediate appeal seems unlikely both because the agency would have to ask the court to split this decision from the portion going to trial and because I’m skeptical the SEC actually wants legal clarity. The Commission benefits from the current confusion and losing these issues on appeal would jeopardize its entire enforcement agenda. So I’d be surprised if the SEC tried to appeal now.”

Congress needs to step in

XRP price skyrocketed more than 100% as a result, hitting highs of $0.94. However, the coin’s value is hovering near $0.75.  The partial win for Ripple could be key in pushing XRP above the $1 supply wall.

Some observers have opined that the court’s decision could be reversed on appeal, while some say Ripple faces a significant penalty in case of settlement. The overall sentiment though is that while the ruling delivered a blow to the SEC, what remains to be seen is what it does for the broader question of regulation. 

Can Congress step in? Haun says it’s imperative they do so.

“Even if the outcome here was positive overall, the complexity of the court’s reasoning suggests that existing laws and jurisprudence may be ill-equipped to contend with all the important policy concerns at play. The major questions doctrine seems built for crypto at this moment: major decisions on policy like this are for Congress, not unelected agencies,” she noted.

The post Katie Haun: SEC “unlikely” to appeal XRP decision appeared first on CoinJournal.