Schlagwort: crypto regulation

• India was long thought to be planning a complete ban on cryptocurrencies.
• However, in the just concluded G20 Summit, India joined other G20 nations to support IMF-FSB joint recommendations for cryptocurrency guidelines.
• Crypto investors in India can now breathe a sigh of relief as they wait for the crypto framework.

Based on the combined recommendations of the International Monetary Fund (IMF) and the Financial Stability Board (FSB), India is developing a framework for regulating cryptocurrencies that, if approved, could become law in the next five to six months.

According to Siddharth Sogani, CEO of CREBACO, who has collaborated with governmental organizations and departments, the Indian government is developing a five-point crypto legislation with a global perspective.

India just concluded the G20 summit, which the Chinese president declined to attend, on a high note. The summit resulted in several key economic announcements including some that touched on the cryptocurrency industry. For Cryptocurrencies, the most notable decision came in the form of IMF-FSB joint recommendations for cryptocurrency guidelines that India and other G20 nations supported.

The IMF-FSB crypto recommendations

The IMF-FSB crypto proposals advocate for regulating the cryptocurrency market as opposed to a total ban.

The G20 nations can use the regulatory principles and ideas provided by the IMF and FSB to create their own independent yet cooperative crypto legal framework.

India’s 5-point crypto regulatory framework

According to Sogani, the CEO of CREBACO, a blockchain analytics company that provided consultancy services to a number of G20 committees and countries, based on CREBACO’s discussions with government representatives, India is now developing a five-point regulatory framework with an emphasis on international cooperation on specific issues like crypto taxes whose policy took effect in April 2022.

The five-point crypto regulatory framework includes:

1. Establishing an advanced Know Your Customer (KYC) system for cryptocurrency enterprises that complies with FATCA and current anti-money laundering regulations.
2. Crypto platforms would have to provide regulators with Proof-of-reserve audits in real time.
3. A global taxation system that is uniform.
4. Under the rules of the Reserve Bank of India (RBI), cryptocurrency exchanges could acquire the status of authorized dealers (like banks).
5. For crypto platforms, important positions like the Money Laundering Reporting Officer (MLRO) may be required.

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• CFTC announced Jacob Orvidas had conducted a leveraged Bitcoin fraud between October 2017 and July 2020.
• Orvidas was also charged for failing to register as a commodity pool operator.
• The CFTC order imposed a $2 million restitution and $500,000 civil monetary penalty.

In regulation news today, the Commodity Futures Trading Commission (CFTC) has fined Jacob Orvidas from Utah, United States, more than $2.5 million for being behind a leveraged Bitcoin fraud scheme in which at least four pool participants lost money.

CFTC announced the order on Friday, revealing a simultaneous filing and settlement against Orvidas for his soliciting of money from the traders and running an unregistered commodity pool. According to the commodities regulator, Orvidas’ fraudulent dealings also included lies about the losses suffered and availability of the pool participants’ money.

CFTC says people lost over $2 million

Per the CFTC press release, Orvidas carried out his fraudulent activities from around October 2017 to July 2020. He promised to trade leveraged BTC on behalf of the said individuals, allegedly misrepresenting his trading prowess. He also reportedly told pool participants that their money would earn them staggering profits – in one example he lied about a $100,000 deposit that had seen a client cash out $2.7 million.

Pool participants are said to have lost more than $2 million in the process, which Orvidas will pay alongside $500,000 in civil monetary penalty. The regulator also issued a cease and desist order and warned him about future violations of the Commodity Exchange Act.

“While digital-asset cases are often complex, this bitcoin case is a straight-up fraud: simple and old as time. We will continue to deploy every weapon in our arsenal to fight fraud in all our markets,” said Ian McGinley, director of Enforcement at CFTC.

The CFTC charges and settlement with Orvidas come a day after the regulator announced it had simultaneously charged and settled orders against the operators of three decentralised finance (DeFi). In the September 7 order, the Commission said Opyn, Inc., ZeroEx, Inc., and Deridex, Inc had violated the law by offering illegal crypto derivatives trading to customers.

Market experts and crypto industry players have criticised the CFTC’s regulation by enforcement approach. Jake Chervinsky, Chief Policy Officer and crypto advocacy group Blockchain Association, highlighted this on X. 

When executive agencies make up new rules and announce them for the first time in a complaint or settlement, that’s „regulation by enforcement.“

Regulation by enforcement deprives the public of their right to due process under federal law.

Agencies may not care, but courts do.

— Jake Chervinsky (@jchervinsky) September 8, 2023

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• Coinbase targets expansion across the EU, UK, Brazil and Singapore among other jurisdictions with clear regulatory trajectory.
• The exchange also has plans for major partnerships with banking providers and seeks to expand its products and services, including derivatives.

Coinbase, the leading US-based cryptocurrency exchange, has announced plans for its second phase international expansion, with targeted markets including the EU, UK, Australia, Brazil, Canada and Singapore.

The crypto company said in a blog announcement that the near-term priority is to acquire licenses in the highlighted countries and regions, with these jurisdictions said to have shown increased regulatory clarity for the crypto sector.

Coinbase targets countries with a clear regulatory path

According to a senior Coinbase exec, the fresh push for international expansion is part of the exchange’s plans to operationalize a strategy based on regulation, innovation and user trust. The exchange says 83% of G20 members and top tier financial jurisdictions are moving forward with clear rules for crypto, while the US lags behind.

Today, 83% of G20 members and major financial hubs have made progress toward regulatory clarity for crypto. But the US is an outlier.

A picture paints a thousand words. https://t.co/DpxoKFr4yV pic.twitter.com/KvQ4q0zlsn

— Coinbase 🛡️ (@coinbase) September 7, 2023

“We see the enactment of clear rules; innovation of more efficient, more accessible products and services; and user trust created through these products and services as our formula for long-term growth,” said Nana Murugesan, VP of International and Business Development at Coinbase.

The steps make up “Phase II” of the Nasdaq-listed company’s “Go Broad, Go Deep” strategy that seeks to diversify business even as the exchange keeps pace with developments in the regulatory landscape. This builds on the success seen in the past six months, a timeline that had the EU, UK and the others show remarkable pace in enacting clear crypto rules. Coinbase is indeed finalizing its selection of where to locate its MiCA hub within the EU.

“We will start keeping a scorecard on the regulatory progress with crypto in each of these countries and jurisdictions. Brazil taking the G20 chair in December 2023 presents a significant opportunity to maintain and help direct this momentum,” the crypto exchange behemoth noted.

As well as seeking regulatory approval and instituting compliance with the Travel Rule (where applicable), the exchange will expand its products and services, including derivatives. Other developments include striking of new partnerships with banks and payment providers to help expand access to on- and off-ramps.

The US Securities and Exchange Commission (SEC) sued Coinbase in June, alleging that the company was operating an unregistered broker. The company has vowed to aggressively defend itself against the SEC.

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• The most recent payment license that X obtained was from Rhodes Island.
• Some of the US states that X has received clearance for payment processing include Arizona, Maryland, and Georgia.
• Elon Musk has previously hinted that X would support crypto payments in addition to fiat currency transactions.

The social media site X, owned by Elon Musk and formerly known as Twitter, has been granted payment licenses by a number of American states, including a currency transmitter license in Rhode Island which the company received earlier this week.

Elon Musk has hinted at supporting crypto on X, even briefly replacing the old Twitter bird logo with dogecoin’s dog before its rebranding to X last month. It is however not clear if the obtained licenses allow for crypto payments despite the fact that the licenses allow for broader payment services to be offered on the platform.

Plans to support payments processing on X

So far, the money transmitter licenses obtained are from Arizona, Maryland, Georgia, Michigan, Missouri, and New Hampshire. The move indicates the tech billionaire may have plans to support nationwide payment processing similar to Venmo or PayPal, a company he co-founded.

Musk has stated that he plans for X to expand beyond social media posts and become an “everything app.”

The most recent Payment processing license that X obtained was from Rhodes Island. The Department of Business Regulation (DBR) of Rhode Island stated in a frequently asked questions document that businesses needing clearance “include those transmitting money for its customers, including traditional wire transfers (like Western Union) and electronic transfers (like PayPal)” needed to obtain the currency transmission license.

The state’s currency transmission license is also necessary for businesses looking to conduct cryptocurrency exchange and custody business. Fintechs are only exempt in “very rare cases” where the company “is registered as a true ‘agent’ of the Rhode Island licensed currency transmitter… and money transmission is not the core profit-making business of the fintech.”

In New Hampshire, “money transmission’ means engaging in the business of selling or issuing payment instruments or stored value, or receiving currency or monetary value for transmission to another location.” The state’s laws also say “an administrator or exchanger that accepts and transmits a convertible virtual currency or buys or sells convertible virtual currency for any reason is a money transmitter under federal regulations”

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Key takeaways

• Binance is considering exiting the Russian market as it continues to face regulatory challenges in other parts of the world. 

• The crypto exchange recently revealed that its users in Belgium will access its services via its Poland unit.

Binance to exit the Russian market

Binance, the world’s leading cryptocurrency exchange by market cap, is reportedly considering exiting the Russian market. This is according to a recent report by the Wall Street Journal. 

This latest cryptocurrency news comes as the crypto exchange continues to face regulatory challenges in Europe and the United States. 

The report pointed out that Binance is currently tackling multiple lawsuits with US regulators and is currently considering numerous options, including a full exit from the Russian market.

Binance is working to align itself with international sanctions

Binance said it is working to align itself with international sanctions following allegations that it is helping nationals move funds outside the United States earlier this year. 

The cryptocurrency exchange is working to block accounts belonging to Russian nationals with connection to the Kremlin. 

In 2022, the crypto exchange took steps to block accounts belonging to Elizaveta Peskova, the daughter of Dmitry Peskov, spokesperson for Russian leader Vladimir Putin. 

Binance also said it shuttered accounts from others connected to family members of top Russian officials. The moves came following sanctions against Peskova by the US Treasury. 

The cryptocurrency exchange has been facing regulatory challenges in the United States and other parts of the world.

Earlier this month, Binance informed its users in Belgium that they could now access its services via Binance Poland, the crypto exchange’s Polish-regulated arm. The move was to ensure that Binance complies with regulatory requirements in the country.

The cryptocurrency exchange also discontinued support for its crypto-backed debit card for customers in Latin America and the Middle East earlier this month. However, Binance didn’t specify the reasons behind its decision. 

The US and EU have imposed sanctions on Russia after it invaded Ukraine last year. They have imposed bans on the acquisition, import, or transfer of coal and other solid fossil fuels.

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