Mercurial memecoin Shiba Inu (SHIB) shot up 31.4 percent in a day after this week’s listing by crypto exchange Kraken to reach its highest mark since November 19.
New Listing on Kraken: @Shibtoken đ¶$SHIB deposits begin NOW! Trading is live November 30.
After launching on Coinbase in mid-September, Brazilian exchange NovaDAX listed SHIB a month later with Gemini, Binance and Indian exchange CoinDCX following suit in November. SHIB has also been integrated by crypto payments service CoinGate, allowing users, merchants, traders and gift card shoppers to accept, buy, trade or spend the token.
Another positive sign for SHIB is its adoption by major tech e-retailer Newegg as a means of payment on its platform.
Whale Grabs Another 24.8 Billion Tokens, Now Holds $59m in SHIB
Soon after the announcement of SHIB’s Kraken listing, an anonymous crypto whale using the alias Gimli increased his holdings by 24.8 billion tokens, worth over US$1 million at the time of the purchase, to a total of US$59 million in SHIB.
#ShibainuCoin soars more than 20% after Krakenâs listing, while a whale scoops up $1 million in tokensđ
Next Robinhood, then we may see new price recordsâ€ïžâ»ïž
Kraken has also clarified that SHIB will be tradeable against the euro and the US dollar with a minimum of 50,000 SHIB (US$2.48) required to open an order.
Kraken Defies Competitors’ Regulatory Concerns
Kraken’s decision to list SHIB stands in stark contrast to other digital asset exchanges, such as Robinhood, that have avoided listing altcoins like SHIB over regulatory concerns.
With 93 assets in total, Kraken is considered one of the least conservative exchanges. (Coinbase supports 51 assets and Robinhood only supports seven.) Other exchanges have been hesitant to list the so-called Dogecoin-killer over regulatory concerns, despite increasing pressure from their users.
On November 26 SHIB surpassed 1 million holders, despite trading 50 percent below its all-time high. Hedge fund manager Michael Burry has publicly questioned the token’s worth. Burry, founder of private investment firm Scion Asset Management and famous for forecasting the 2008 Global Financial Crisis, described the SHIB token as âpointlessâ in an October 9 tweet.
US investment platform eToro has this week delisted Cardano and Tron from its trading pairs, citing regulatory issues. According to an official announcement from eToro, US users will no longer be able to open new positions or receive staking rewards for Cardano (ADA) and Tron (TRX) due to regulatory issues.
Regulatory Uncertainty Affects Exchanges
The investment platform only cited “business-related considerations in the evolving regulatory environment” as the reason for delisting the digital assets. The new update will take effect on December 26 and staking for the assets will end on December 31.
In recent months, regulators in the US and UK have placed more focus on exchanges as part of regulating the crypto sector. However, at the same time, eToro Australia has introduced crypto staking and 15 new digital assets.
And we didn't even get delisted. Ada is still on etoro and non-US customers can freely trade https://t.co/FAcUgv9ERj
Due to the lack of regulatory clarity, exchanges have different limiting factors for their own policies, so if a currency – ADA, for example – doesn’t meet some or other requirements, an exchange can delist it if it sees fit. In the current state of crypto, one can see liquidity come and go based on various countries and their rules regarding the asset class, and since crypto is a global product but regulations vary between countries, complications can arise.
What Will Happen to Assets on eToro?
According to eToro’s post, positions can be closed at any time – meaning users can still sell their ADA and TRX on eToro and receive USD, adding that it has no plans to force selling. Users will still be able to securely hold existing positions of Cardano and Tron. While staking rewards will no longer be offered to US users for either asset, the final reward payout will go to users on January 15, 2022.
We are only limiting users from opening new positions. We are not forcing users to sell any existing positions.
eToro announcement
eToro plans to roll out its Money crypto wallet in 2022, compatible with the assets so that users can move their holdings there if they don’t wish to sell now. The limiting of sales wonât happen for at least 30 days after offering support for redeeming ADA and TRX to the wallet, which will continue to support the assets even after US users can no longer sell their holdings for USD.
Despite ongoing sentiment in traditional finance circles that crypto is the “Wild West”, Chainalysis, which recently partnered with Commonwealth Bank of Australia (CBA), has assured Australia’s biggest bank that it truly isn’t so.
Chainalysis, which works extensively with the FBI and IRS in the US, has proprietary on-chain forensic analysis techniques that help identify criminal and money-laundering activities on public blockchains.
Speaking to ongoing discussions with local Australian authorities, Chainalysis’ Australia and New Zealand manager Todd Lenfield noted that a lot of its work centred on education.
We want to have conversations with AUSTRAC about what are they looking to regulate and explain to the tax office the lessons that can be learned from what the IRS is doing. We can take experience we have got in the space, and provide a local flavour.
Todd Lenfield, Chainalysisâ country manager in Australia and NZ
Shift in Sentiment in Australia?
In recent months, there have been positive signs that Australia may be gradually shifting towards a more crypto-friendly environment.
Donât be the person who thought the iPhone would never take off because people would prefer to have their music and telephone on separate devices. Donât be the person who was still doing their financial models by hand in 2001, rather than using Excel. Donât be the person in 1995 who said the internet was just a place for geeks and criminals and would never become mainstream. And donât be the person who argued that email was a passing fad.
Senator Jane Hume
Despite these positive signs, the Reserve Bank of Australia (RBA) remains concerned about the risks of crypto, in particular memecoins. Over the past year, crypto has seemingly crossed the chasm into mainstream consciousness. This in turn appears to have pushed regulators towards embracing innovation and regulating it, rather than trying to undermine or shut it down.
While some regulatory risks remain, the crypto space within Australia is arguably looking brighter than ever.
Short of opening a special branch in Queensland, the Australian Securities and Investments Commission (ASIC) has had an unusually busy month in the Sunshine State.
On November 6, ASIC obtained Federal Court orders to shut down unlicensed Gold Coast financial services business A One Multi for suspected unlawful activity. This came after it imposed a three-year ban on Queensland investment adviser Keith Robert McDermott for similarly failing to provide advice in clientsâ best interests.
In the same week, an A$100 million class-action lawsuit was filed against the Gold Coast-based issuers of controversial token Qoin.
Now ASIC is trying to recover a trove of bitcoin worth up to A$29 million held in an encrypted device belonging to a director of A One Multi who is suspected of large-scale superannuation fraud. The investigation implicates CoinSpot, the crypto exchange used by accused scammer Aryn Hala to invest his allegedly ill-gotten gains.
Almost $30 Million in Bitcoin Unaccounted For
ASIC has co-accused Hala and his partner Heidi Walters along with A One Multi of scamming 92 financially strapped Australians who were looking to gain early access to their super. Bank accounts show the coupleâs company received A$25 million from the investors. No criminal charges have been laid.
Alleged super scammer Aryn Hala. Source: Gold Coast Bulletin
ASIC alleges Hala and Walters used their victims’ money to buy bitcoin, luxury cars and other high-end goods, couture fashion, weight loss surgery, and to make a substantial donation to their church.
The couple has engaged lawyers, indicating they intend to challenge ASICâs allegations. Hala and Waltersâ legal team says they are openly assisting both ASIC and the receivers with their inquiries, including providing all financial records, in the hope the investigation is expedited.
ASIC called in receivers from KPMG to unravel Halaâs business and personal accounts and to trace the trove of bitcoin. It has also won travel bans against Hala and Walters and freezing orders over their assets, which include a Tesla and a Ferrari.
Unpicking Halaâs bitcoin investments has proved problematic for regulators and has raised issues regarding oversight controls at CoinSpot, which bills itself as one of Australiaâs leading cryptocurrency exchanges.
CoinSpot Initially Claimed Hala Was Not a Customer
According to court documents filed by the regulator in support of freezing orders against the couple and A One Multi, CoinSpot initially told ASIC investigators that no records were held for crypto accounts in the name of Hala, Walters, or their company.
On closer inspection of Halaâs bank statements, ASIC located his CoinSpot account number and found he had a balance of just $1.96. A full CoinSpot audit showed Halaâs bitcoin wallet had received 375.99 BTC (worth almost A$30 million at time of writing) and executed total sell orders of A$979,843 â indicating that some $29 million worth of coins were located elsewhere. ASIC investigators believe Hala had transferred the coins to a cold wallet.
CoinSpot defended its early claim that Hala was not an account holder.
CoinSpot has a cooperative relationship with all relevant regulatory bodies including ASIC. Any lawful requests for information by regulators are treated seriously and with priority … [although that] information may need to be verified before any information can be shared.
CoinSpot statement
Hala is expected to share instructions with receivers KPMG on how to access his cold wallet in coming weeks.
Dr Tony Richards, the soon-to-retire head of payments policy at the Reserve Bank of Australia (RBA), has warned local investors they should be wary of speculating on digital currencies as regulation and CBDC development could threaten the crypto market.
Richards stated in his November 18 speech to the Australian Corporate Treasury Association that one of the topics that “generated the most discussion, conversation and debate in the nearly 10 years” of his time at the RBA was “the emergence of distributed ledger technology, cryptocurrencies and stablecoins, and the prospective emergence of central bank digital currencies”.
Dr Tony Richards, RBA’s outgoing head of payments policy.
The Same Ol’ Strawmen
Richards warned of excessive hype around crypto, citing instances like Dogecoin “that was started as a joke in late 2013 [and] had an implied market capitalisation as high as US$88 billion in June this year”, fuelled mainly by “influencers and celebrity tweets”. The RBA has previously also discussed the risk of meme coins and DeFi in monetary policy meetings.
The RBA has signalled that if a regulatory crackdown should occur, thousands of private currencies that have emerged on the back of the soaring bitcoin price would become unnecessary. It has also targeted Proof-of-Work’s energy consumption and how crypto facilitates financial crimes and illegal activities such as ransom demands.
Additionally, after COP26, Richards warned: “The very high use of energy involved in mining proof-of-work cryptocurrencies could attract greater attention from governments and policymakers.” The combined energy use for the Bitcoin and Ethereum networks was estimated to be similar to that of the worldâs 13th-largest economy, he said.
However, Jon Deane, chief executive officer of Trovio, a digital asset infrastructure adviser and asset manager, disputed Richards’ comments on crypto’s environmental impact, saying that 57 percent of bitcoin mining uses renewable energy sources.
Regulation Could Reduce Crypto to “Only Niche Use Cases”
âIf there were to be global policy action to deal with some particular concerns about the use of cryptocurrencies, plus the arrival of new stablecoins and CBDCs, that could safely meet the needs of a wide range of users, existing cryptocurrencies might then have only niche use cases, at best,â Richards said, adding that “much of the official sector globally remains sceptical of developments in the cryptocurrency market”.
Reaction from the crypto community was swift and predictable:
A disappointing view in the face of a global opportunity to lead for Australia.
Steve Vallas, chief executive of Blockchain Australia, retorted that “it continues to be our experience that hawkish views about cryptocurrency are driven by entrenched narratives around bad actors and financial crime, narratives that are not supported by the data”.
Could CBDCs Undermine the Use of Crypto?
Richards is of the opinion that the rise of crypto is not yet an issue threatening financial stability, but the RBA expects global central banks to move to assert control over digital finance and respond to the growth of bitcoin and other coins by issuing CBDCs.
He believes CBDCs “would be denominated in fiat currencies, be safer than existing stablecoins, and would likely have faster, safer and more efficient transaction verification mechanisms than most cryptocurrencies”, and would likely be “viewed as superior instruments for the settlement of transactions in tokenised assets on distributed ledgers”.
But according to Deane, “People buy bitcoin to move away from the devaluation of fiat currencies by central banks to a finite resource that acts as both a store of value and ultimate settlement layer”.
Dr Richards concluded that banks would continue to work with the private sector and international counterparts to ensure they stay abreast of innovations in the payments system, with the RBA even hiring CBDC researchers. There is significant work still to be done with the other financial regulators and the parliament to ensure that Australia has a fit-for-purpose regulatory framework for digital assets.
The US Securities and Exchange Commission (SEC) has rejected VanEck’s spot Bitcoin ETF application this week due to “concerns of market manipulation”.
VanEck’s Spot Bitcoin ETF Rejected … For No Good Reason?
In a not-at-all surprising turn of events, the SEC rejected VanEck’s proposal after several days of delay by the agency. SEC chairman Gary Gensler has in the past highlighted his preferences for a BTC futures-linked ETF over a spot ETF.
On October 20, the investment giant announced that the SEC had officially received the green light to launch a BTC futures-linked exchange-traded fund.
However, it seems the BTC spot ETF remains elusive as it didn’t meet certain SEC requirements for investor protection. As per a November 12 letter from the SEC:
The Commission concludes that [the fund] has not met its burden under the Exchange Act and the Commissionâs Rules of Practice to demonstrate that its proposal is consistent with ⊠the requirement that the rules of a national securities exchange be âdesigned to prevent fraudulent and manipulative acts and practicesâ and to âprotect investors and the public interest’.
SEC letter
The crypto community received the news with disappointment, one signalling that the agency doesn’t care about regular investors. Gabor Gurbacs, VanEck’s director of digital assets, expressed his disappointment on Twitter:
There is no good reason why not to approve a physical Bitcoin ETF while allowing Bitcoin futures ETFs at high-roll cost and Bitcoin closed end funds at double-digit premiums + no redemption capability. The physical Bitcoin ETF is arguably the most investor friendly option today.
More Than 30 ETF Applications Still Awaiting Approval
There are more than 30 ETF applications pending approval. The SEC approved only two futures-linked ETFs last October, one of them VanEck’s, which goes live on November 16, ET. The first one recorded over US$1 billion in trading volume, turning it into the second-largest traded fund in the US.
Australian investors also smashed ASX trading records with BetaShares’ crypto ETF last week, reaching volumes exceeding A$40 million on its first day of trading.
In the statement, released on October 29, AUSTRAC said Australian banks needed better systems to deal with assessing risk rather than simply debanking customers. âBusinesses vulnerable to exploitation should not automatically have their accounts closed simply to avoid managing risk,â the financial watchdog stated.
Although the decision to close an account may remain a necessary risk control, AUSTRAC considers that with appropriate systems and processes in place, banks should be able to manage high-risk customers, including those operating remittance services, digital currency exchanges, not-for-profit organisations (NPOs) and financial technology (FinTech) businesses.
The Australian Transaction Reports and Analysis Centre (AUSTRAC) statement
AUSTRAC expects banks to assess risk on a case-by-case basis, rather than just close accounts based on suspicion or caution. âAUSTRAC expects banks and all regulated businesses to adopt a case-by-case approach to managing AML/CTF (anti-money laundering/counter-terrorism financing) risks. This expectation extends to the importance of continuing to assess the particular risks relating to their business customers.â
In AUSTRAC’s view, the effect of debanking of legitimate and lawful financial services businesses can only increase the risks of money laundering and terrorism financing, and will negatively impact Australiaâs economy as a result. Account closures have also created problems for regulators as they no longer have easy access to the debanked’s financial transactions.
In its statement, AUSTRAC addressed the issue of sector-wide debanking and aimed its message at discouraging the indiscriminate and widespread closure of accounts across entire financial services. This comes after many crypto businesses and individuals have been targeted and debanked without notice, under the guise that they posed a risk to the bank’s obligation to comply with AML and CTF laws. The large-scale account closures have damaged Australian-based Bitcoin exchanges and crypto traders’ businesses.
Australian Banks Highly Risk-Averse
Banks’ fear of being fined, coupled with the lack of transparency and clarity around these laws, has caused them to err on the side of caution, which has resulted in the wide-scale debanking of many businesses and individuals just because they deal in cryptocurrency and remittance services.
Yet banks have real reason to be cautious in Australia, because the consequences are harsh. If a bank is found not to be complying with AUSTRAC’s AML and CTF regulations, heavy fines apply, and they can cop a lot of bad press as well – as did Westpac in 2013, where the media were quick to print headlines relating to the bank’s involvement in one of the world’s biggest money-laundering schemes.
In recent years, the Commonwealth was fined A$700 million and Westpac fined A$1.3 billion for AML and CTF breaches. In June, National Australia Bank revealed it had been warned by AUSTRAC of âpotential serious and ongoing non-complianceâ with Know Your Customer (KYC) identification procedures, and last month the ANZ settled a debanking case brought by Canberra bitcoin trader Allan Flynn.
What is AUSTRAC and How Does It Work?
The Australian Transaction Reports and Analysis Centre (AUSTRAC) is the Australian governmentâs anti-money laundering regulator. It literally follows the money in order to protect Australians from criminal activity. How it does this is explained in the below video:
Interim orders and injunctions have been filed by ASIC against the company and its directors, Aryn Hala and Heidi Walters, to protect investors.
Self-Managed Super Funds Misappropriated
It’s alleged that Hala misled investors by convincing them to loan their superannuation funds to A One Multi and receive annual returns of over 20 percent.
Between January 1, 2019, and June 30, 2021, more than 60 self-managed super fund investors deposited approximately A$25 million into A One Multiâs accounts. ASIC alleges Hala used more than A$5.7 million of those funds for his and partner Waltersâ personal benefit, including acquiring real estate and luxury vehicles in their names, and that a further A$2.4 million was transferred from A One Multi to buy crypto-assets.
On October 21, the Federal Court in Queensland made the following orders to protect investors:
that A One Multi be placed in receivership;
that asset preservation orders be issued against Hala, Walters and A One Multi;
that Hala transfer crypto-assets in his name to the receivers;
that orders be issued requiring the disclosure of information to ASIC against Hala, Walters and A One Multi, including in relation to the crypto-asset holdings; and
that travel restraint orders be issued against Hala and Walters.
The first tranche of crypto-assets held in Hala’s name was transferred to the receivers on October 25, and the court has since ordered the defendants to attend an ASIC office to facilitate the transfer of remaining crypto-assets.
In what was clearly a busy week for crypto-related financial activities in Queensland, an A$100 million class-action lawsuit was filed against the Gold Coast-based issuers of controversial token Qoin.
The Australian Securities and Investments Commission (ASIC) has finally given the green light to Bitcoin and Ethereum exchange-traded funds (ETF), allowing investment funds to launch their crypto ETFs by next week.
After a long period of industry consultation, ASIC released a set of guidelines for institutions keen to launch crypto exchange-traded products (ETPs). The paper also published guidelines that allow fund managers to launch ETFs under certain regulatory requirements.
Australian fund manager BetaShares will be the first to list an ETF on the Australian Securities Exchange on November 4. The fund will have the ticker âCRYPâ and will allow investors to access a mixed set of crypto ventures, most of them focused on companies whose revenue is derived mainly from the cryptocurrency market.
We know there are millions of people around the world [invested in crypto], and close to 2 million Australians that have actually invested in cryptocurrency directly.
Alex Vynokur , CEO and co-founder, BetaShares
Among the regulatory requirements are that fund managers must appoint a custodian with expertise on cryptocurrencies and blockchain technology, and hold at least A$10 million in net tangible assets. They are also responsible and must compensate for any custodial assets lost.
As Crypto News Australiareported in August, one of the reasons crypto ETFs in Australia have been delayed so long is that ASIC was trying to solve how arrangements with custodians would work.
ASIC Recognises Institutional Interest in Australia But Leaves Altcoins Out
ASIC has signalled its intention to ârecognise the interest in, and demand for, ETPs and other investment products that hold crypto-assets in Australiaâ. The new fund is expected to give the Australian crypto space a big boost as institutional adoption expands rapidly across the globe. The first US Bitcoin ETF debuted in mid-October, breaking record trading volumes of US$1 billion in just 24 hours, turning it into the country’s second-largest traded ETF fund.
However, altcoins were left out, with only Bitcoin and Ethereum ETFs permitted. These funds will allow investors to purchase contracts that track the price of both currencies without having direct exposure to either asset.
Talking about the benefits and risks of cryptocurrencies, ASIC commissioner Cathie Armour said:
Crypto-assets have unique characteristics and risks that must be considered by product issuers and market operators in meeting their existing regulatory obligations. The good practices we published provide practical examples of how these obligations may be met, in a way that maintains investor protections and Australiaâs fair, orderly and transparent markets.
The Australian Federal Police (AFP), in collaboration with the US Federal Bureau of Investigation (FBI), has uncovered cryptos and cash to the value of A$1.66 million during an investigation of a convicted Sydney-based hacker. The man was arrested and subsequently ordered by the Supreme Court of New South Wales to forfeit the ill-gotten gains to the Commonwealth, according to the AFP.
Largest Commonwealth Forfeiture of Cryptocurrencies
Evan McMahon, 23, who was convicted earlier this year of selling stolen Netflix and Spotify subscriptions, has been ordered to hand over proceeds in the form of cryptocurrencies and cash to the value of A$1.66 million, of which A$1.2 million are cryptos â the largest forfeiture of cryptos to date in Australia.
A convicted hacker who sold stolen Netflix and Spotify subscriptions has been ordered to forfeit more than $1.66 million in cryptocurrency and cash to the Commonwealth after an Australian Federal Police investigation.https://t.co/XX97jy1pdC
The court was told McMahon conspired with US accomplice Samuel Joyner to steal the log-in details and passwords of streaming service customers, subsequently selling them online at a cheaper rate. McMahon pleaded guilty to various offences in October 2020 and was sentenced to two years and two monthsâ imprisonment in April 2021.
The investigation began in 2018 when the FBI passed on information to the AFP about an account generator website called WickedGen that sold stolen account details for online subscription services such as Netflix, Hulu and Spotify.
Following sentencing, the AFP-led Criminal Assets Confiscation Taskforce (CACT) obtained restraining orders over cryptos, PayPal and bank accounts held in false names, which were suspected to be controlled by McMahon.
Australia’s Home Affairs Minister Karen Andrews says the funds will be redistributed to support crime prevention, community safety-related initiatives, and law enforcement. Andrews added:
Good work by the AFP has seen a criminal stripped of their ill-gotten gains, and this money redirected to enhancing the safety and security of communities right around Australia.
Karen Andrews, Minister for Home Affairs
AFP Clamps Down on Cryptos
Many criminal organisations have turned to cryptos in an effort to hide their profits, but authorities are now moving to seize cryptos linked to illegal activities.
In the UK, police recently seized 48 bitcoin from a 16-year-old who ran an operation that scammed thousands of victims after extracting their personal details via a copycat website of gift voucher platform Love2Shop.
In Australia, the AFP has executed a series of an initiatives designed to decentralise organised criminal syndicates away from illegally obtained profits by confiscating cryptocurrencies, designer items, homes and luxury vehicles.
The government recently passed amendments to the Surveillance Legislation Bill, granting the AFP and Australian Criminal Intelligence Commission (ACIC) new powers to surveil, intercept data, and also alter data online.
The Australian government has also mapped out plans to permit the seizure of cryptos amid a 15 percent increase in ransomware attacks. The âRansomware Action Planâ, released last month by the Department of Home Affairs, outlines several measures in an effort to deter and punish cybercriminals. Part of the plan includes confiscating illicit cryptos.
