Category: Regulation

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Crypto News Cryptocurrency Law Institutions Regulation

Coinbase, Square, Paradigm and Fidelity Form “CCI” to Encourage Responsible Crypto Policies

Coinbase, Square, Paradigm, Fidelity Forms "CCI" to Encourage Responsible Crypto Policy

Some leading financial companies are collaborating to encourage a clear regulatory path for the burgeoning digital currency industry.

Known as the Crypto Council for Innovation (CCI), this group currently includes four prominent industry players: Coinbase, Square, Fidelity, and Paradigm. It aims at informing and helping global regulators understand cryptocurrencies while also encouraging responsible crypto-related public policies.

CCI to Unlock The Transformational Promise of Crypto

The companies behind CCI believe that digital currencies are at their critical stage. In recent years, more people have got to learn and invest in cryptocurrencies, including institutions and corporations. As a result, the crypto market has grown significantly, with the market capitalization recently touching $2 trillion. However, the regulatory uncertainties across different countries mean the industry doesn’t hold a clear or settled future. 

Crypto is at a mainstream inflection point. It’s in its very early stages and, much like the internet (once was), it’s very fragile while it’s in that stage.

Fred Ehrsam, co-founder of Paradigm [Wall Street Journal]

Thus, the Crypto Council for Innovation wants to educate the institutions, regulators, and policymakers on the benefits of digital currencies. Part of the approach includes providing analysis and insight about cryptocurrency. The CCI will also focus on correcting some “misperceptions that inevitably accompany a transformative new technology.”

By educating leaders about crypto, we can help empower them to participate in the crypto ecosystem for the benefit of their citizens, communities, and families.

Gus Coldebella, Chief Policy Officer at Paradigm

More Mainstream Crypto Adoption?

The development today could greatly change the shape of the crypto industry from a regulatory aspect. Having clearer regulations for cryptocurrencies would possibly result in encouraging more mainstream crypto adoption.

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Australia Crypto News Regulation

Australia Needs to Regulate its Crypto Market to Compete Globally, Says BTC Markets

Australian digital exchange BTC Markets has recently stated that the cryptocurrency market should be regulated in Australia, amid a surge in interest for currencies such as Bitcoin and other cryptos.

According to its CEO, Caroline Bowler, the crypto market in the country needs “regulatory oversight,” and a more clear infrastructure for crypto-companies.

Australia Needs to Keep Apace With Change

The Australian government has increased its focus on blockchain technology, following the calls from key players in the crypto industry for more government support on the matter.

As part of the Australian Blockchain Roadmap, the government allocated AU$6.9 million to conduct two blockchain pilot programs to demonstrate how to use this technology and expand business adoption.

While this comes in handy for leaders in the crypto-space, Bowler believes that the regulatory weather in Australia remains “unclear.” The fintech space is growing fast, and Australia needs to “keep apace of the change,” she added.

An “Outdated” Regulatory Environment

Bowler thinks that the regulatory infrastructure in Australia is “outdated” and only works for traditional markets. Accordingly, this closes the doors for prospective companies seeking to enter APAC countries.

A clearer regulatory environment could help Australia become a leader in financial technology and compete globally with countries like Singapore —which already made several advances with blockchain technology and regulating crypto-related activities. Besides, this could lay the groundwork for international projects coming into Australia.

“[…] I do think that regulatory clarity will help with other international projects/partners. We are looking forward to seeing what the Senate committee will be putting forward next month on this.”

Caroline Bowler [Twitter]

Not only crypto-exchanges are demanding a better environment and more support. Senator Andrew Bragg recently said the Australian Committee needs to consider the opportunities that digital assets and blockchain presents, which could also turn Australia into a leading country in finance and technology.

I fully expect the Committee to focus on removing more barriers to Australian growth as a technology and finance centre. […] This is a golden opportunity to bolster Australia’s economic growth, and I want to ensure we take full advantage.

Senator Andrew Bragg
Categories
Crypto News Regulation Stablecoins

MIT and Boston Fed Releasing Digital Dollar Prototypes “as soon as July”

Researchers from the Federal Reserve Bank of Boston and MIT are conjuring what might be a major disruption to the financial services industry by creating a digital dollar.

According to James Cunha, head of the digital dollar project at the Boston Fed, there are already at least two prototype platforms that allow users to store and make transactions using the currency.

Digital Dollar [source: Flickr]

It’s not clear whether the platform uses blockchain as its underlying technology. However, back in August 2020 when the Fed-MIT collaboration was discussed, Federal Reserve Board Governor Lael Brainard said that the code will be open-source, meaning others will be able to see and build on it after it’s completed.

Creating a Central Bank Digital Currency (CBDC) Could Disrupt The Financial Industry

Jerome Powell, chairman of the Federal Reserve, also recently stated that the COVID pandemic had made clear that there are shortcomings with the current “arrangements”. He also said that there is a need to investigate ways in which speed and security in monetary systems around the world can be increased.

Jerome Powel [source: Flickr]

The potential that the central bank could cut banks out of their middleman role in the lucrative U.S. payments system is causing angst among banks.

Senator Sherrod Brown, the new chairman of the Senate Banking Committee, is urging the Fed to move quickly to create digital-currency accounts for Americans who can’t easily access the financial system and have been forced to deal with payday lenders who charge higher fees and interest rates. Those without bank accounts sometimes must pay high fees to cash paychecks or transfer money to relatives. These new systems could benefit disenfranchised citizens in many ways.

Everyone is afraid that you could disrupt all the incumbent players with a whole new form of payment.

Michael Del Grosso, analyst at Compass Point Research & Trading

However, this virtual currency could still be years away since it has not yet been approved by U.S. Treasury Department, Federal bank, or lawmakers. It also has not been decided how it will be incorporated into the current system. Still, the U.S. and other countries seem committed to digitizing their currencies enough to make financial industry executives nervous.

The Move to Digital Currency

A few countries have seen the potential of digital currencies and have started creating pilot projects to determine the range of applications.

We think it’s important that we not wait for the policy debate because then we’ll be a year or so behind. This will take significant outreach to the industry and serious debate.

James Cunha, head of the digital dollar project at the Boston Federal Bank
The Race to a Digital Currency [source: Bloomberg]

It looks like some countries are aiming to make some serious strides towards the adoption of digital currencies or at least to pilot projects to determine the benefits it could hold.

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Bitcoin Crypto News Regulation

Twitter Mistakenly Suspended Accounts Related to Popular Crypto Influencers

Twitter mistakenly suspends accounts related to popular crypto influencers

During the early hours of Wednesday, the popular social media platform Twitter suspended several accounts owned by top influencers in the digital currency space. The development sparked lots of concerns amongst the crypto users on the platform owing to the fact that Twitter is considered a crypto-friendly social platform. Moreover, the chief executive officer, Jack Dorsey, is one of the biggest supporters of cryptocurrency.

Following a response from Twitter, however, it appears the accounts were suspended by mistake?

Major Cryptocurrency Account Suspended

Twitter users noticed that seven accounts, at least, belonging to popular cryptocurrency analysts and traders were suspended on Wednesday. Some of the accounts suspended include @woonomic, @100trillionUSD, @mmcrypto, @wsbchairman, @themooncarl, @TheCryptoDog, and @KoroushAK. At the time, the message on these profiles read that “Twitter suspends accounts which violate the Twitter Rules.” 

After several complaints were raised by crypto users on the platform, some of the suspended accounts were restored, including that of Willy Woo (@woonomic), a prominent Bitcoin and cryptocurrency analyst, and PlanB (@100trillionUSD), who invented the Bitcoin Stock-to-Flow (S2F), model. Other accounts like @KoroushAK and @wsbchairman are yet to be fully restored during the time of writing.

Twitter Mistakenly Flagged Crypto Accounts as Spam

While addressing the situation in a letter to Willy Woo, Twitter noted that the accounts weren’t suspended deliberately. 

“We have systems that find and remove multiple automated spam accounts in bulk, and yours was flagged as spam by mistake. Please note that it may take an hour or so for your follower and following numbers to return to normal,” the message reads. 

Meanwhile, this is not the first time crypto accounts and contents are being suspended or censored by a centralized platform. Over the past months, several crypto channels were suspended on YouTube, and even our account was suspended on Facebook.

Categories
Bitcoin India Regulation

It Seems India is Not Banning Bitcoin Now, But Making Plans To Regulate It Instead

India has reversed its previous position of a total crypto ban, saying that they are developing a regulatory framework instead.

The Indian finance minister Nirmala Sitharaman said in a CNBC-TV interview that they “the government’s position on crypto will be calibrated and it wants to make sure there is a window available for all types of experiments in the crypto world.”.

India Are Creating A Central Bank Digital Currency (CBDC) Called “Digital Rupee”

In January, the Indian Parliament tabled the Bill “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.” suggested a ban on cryptocurrencies in India. Additionally, the same committee has pitched for the introduction of an official digital currency that will be appropriately regulated by the Reserve Bank of India.

The “Digital Rupee” has been defined as “currency issued digitally by the Reserve Bank and approved by the Central Government to be legal tender”, an official currency of India.

Categories
Crypto Exchange Regulation Ripple

XRP to be Delisted from Major Exchange Crypto.com, Down 27% in 24 Hours

Ripple’s XRP token has been announced for delisting from major cryptocurrency exchange, Crypto.com, following prior delistings from several other exchanges this week.

“Effective January 19, 2021, at 10 am UTC, XRP will be delisted and trading suspended from the Crypto.com App in the US. Customers based in the US won’t be able to deposit XRP into the Crypto.com App as of January 19th, 10am UTC,” the announcement states.

Following the recent US Securities and Exchange Commission (SEC) lawsuit against the blockchain-based international remittance company Ripple, XRP has been crashing in value. It has lost 27% of its value in just the past 24 hours and over 50% in the past seven days. Some crypto market analysis sites like OnChainFX have even moved XRP out of the top five coins, listing it below Litecoin (LTC) and Chainlink (LINK).  

Although the SEC ruling only applies to US-based investors, which make up a small percentage of XRP’s user base, the effects have been devastating. This is most likely due to Ripple being based in the US and foreign investors fearing that regulators in other countries may impose similar rulings. Following the ruling, Ripple CEO Brad Garlinghouse criticized the SEC for stifling crypto innovation in the US and pouring favor on Bitcoin (BTC) and Ethereum (ETH). 

Why the SEC views XRP as a security

Since 2013, Ripple has raised over $1.38 billion in sales of XRP tokens that were never registered with the SEC. The SEC alleges that this amounts to the illegal sale of unregistered, non-exempt securities under Section 5 of the Securities Act of 1933. Ripple, however, claims XRP is not a security and should therefore be exempt from the rules. 

In a new lawsuit filed by the Southern District of New York on December 22, 2020, the SEC specifically names Ripple CEOs Chris Larsen and Garlinghouse for aiding and abetting the sales of XRP tokens. Due to their highly decentralized nature, other cryptocurrencies like Bitcoin and Ethereum are not viewed as securities by the SEC.

“The network on which Bitcoin functions is operational and appears to have been decentralized for some time, perhaps from inception. Applying the disclosure regime of the federal securities laws to the offer and resale of Bitcoin would seem to add little value,” said SEC Corporate Finance Director Bill Hinman in 2018.

The ruling doesn’t necessarily mean the end of Ripple, as the company has recently been moving away from XPR as a means of liquidity for their operations. Many of Ripple’s most widely used products, like xCurrent, no longer require the use of XRP to facilitate cross-border payments. Whether or not XRP can survive the blow remains to be seen, as the token may become largely unusable if unlisted from all major exchanges.

Categories
Crypto News Regulation Stablecoins Tether

Is the New STABLE Act Really a Threat to Crypto?

US Congress

On December 2, 2020, three members of the US House of Representatives, Michigan Democrat Rashida Tlaib along with Congressmen Jesus García and Stephen Lynch, introduced a new stablecoin regulation bill dubbed the Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act. 

The rather conveniently titled STABLE act proposes some strict restrictions on the issuance of digital versions of the US dollar. Essentially, it requires that any US-based company like Facebook that wishes to issue a stablecoin backed by the US dollar must become a bank. Should the act be passed into law, private US-backed stablecoin operators like Tether (USDT), USD Coin (USDC), and Paxos Standard (PAX) will be required by law to obtain not only a banking charter but also approval from the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and financial regulators.

Now, all this makes some sense – the US can’t have every Tom, Dick, and Harry handing out digital tokens like sweets and claiming they’re backed by “safe and reliable” dollar bills. Tether has been doing this for quite a while now and has racked up a rather sizable amount of supposedly government-backed USDT tokens to the tune of almost $20 billion. Even though that number is equivalent to only 0.08%  0.07%  0.06% of the total US national debt, it’s still a fairly large sum. 

US Congress is understandably concerned that should such a large company default on its liabilities, there would be more than a few extremely unhappy customers. So, to avoid a crypto version of the 2008 financial crisis, regulations like the STABLE Act are allegedly here to ensure that the ever trustworthy Federal Reserve keeps a close eye on your money. 

So how is this a threat to crypto?

The proposal of the act has sent ripples through the crypto community, some of whom fear the stifling regulations could limit market activity or even turn node operators into criminals. Others feel it would hinder the development of blockchain and cryptocurrency technology just at a time when it’s getting started. Jeremy Allaire, CEO of Circle, the company that issues USDC, had this to say:

“The STABLE Act would represent a huge step backwards for digital currency innovation in the United States, limiting the accelerating progress of both the blockchain and fintech industry.”

While their concerns are valid and the regulations could be disruptive, some form of insurance for crypto consumers does seem pertinent. Regulations in the form of STABLE may be overbearing but there are areas of the crypto sector that could do with better oversight. One can’t help but question why Tether remains resistant to an audit that would confirm the dollar-backed status of its reserves. It doesn’t help that its parent company, iFinex Inc, is embroiled in an ongoing lawsuit with the New York Justice Department regarding the cover-up of $850 million in lost co-mingled client funds.

Amy Castor suggests Bitcoin’s rise is akin to magic. Source: amycastor.com

If you believe, as some do, that USDT tokens are not fully backed by anything tangible, then the implications of the STABLE act could be far-reaching. If for whatever reason, Tether was unable to keep operating and was not able to honour all the USDT tokens in circulation, the crypto market would certainly take a knock. With Tether headquartered in Hong Kong, it’s uncertain how the regulations may affect the company.

At the end of the day, whether the STABLE Act truly poses a threat or not, it further highlights a pressing need for greater decentralization in the crypto community. Ideally, an ecosystem that doesn’t rely on favourable government regulations and outdated fiat on-ramps but rather an evenly distributed, community-led system secured by code.

Categories
Gambling Regulation

Where Gambling and Cryptocurrency Meet: How Regulations Differ Internationally

Throughout the world, traditional forms of gambling are enjoyed by the masses in a variety of ways. From local fights and races to casino-style establishments, finding opportunities to make a wager is fairly easy if you know where to look.

For many today, and even if traditional gambling options aren’t around, they need look no further than the internet. Online casinos can be found that serve virtually every country on the planet. In order to maximise the potential for profitability, many casinos allow players to pay via cryptocurrency.

But how do online gambling and cryptocurrency interact with one another in countries across the world? Let’s look at some of the regulations and how they differ.

Australia

Australia has had a varied history with the concept of cryptocurrency gambling. Originally outlawed in 2018, there have since been a variety of pokies that allow Australians to play online games and use cryptocurrency as payment. While not all online casinos in Australia allow the use of cryptocurrency, many of the best ones do. To learn more about these casinos, visit our website here.

United Kingdom

The laws regarding the use of cryptocurrency for online gambling in the United Kingdom are a bit more lax than other Commonwealth countries. A variety of online casinos and gambling platforms allow players to deposit cryptocurrencies and even be paid out in them. 

The UK Gambling Commission has made it clear that cryptocurrency in gambling is legal, but has warned players about the dangers of using less than reputable casino websites. 

United States

The United States has virtually no rules or regulations governing online casino use by its citizens, instead placing the regulatory burden on the casinos themselves. For the past several years, cryptocurrency has been regulated as a commodity by the Securities and Exchange Commission, which means it is legal to use in any gambling situation (however, profits earned from the use of cryptocurrency will be subject to taxation like any other form of income).

China

In the world’s largest country, gambling of any kind is considered an illegal activity. This includes domestic gambling operations as well as citizens playing via international casinos. However, there are many examples of these laws being ignored in China. 

While cryptocurrency is legal, its use in online gambling is non-existent under legal definitions. However, this doesn’t stop hundreds of billions of dollars from being funnelled out of the country in order to be used for international gambling purposes.

Japan

Japan has incredibly strict regulations governing the act of gambling at-large. Physical casinos weren’t allowed in the country until a 2018 law changed that (it can be argued that pachinko is a form of gambling that has existed for many years, but not strictly defined as such in Japan). Domestic online casinos are non-existent, meaning any gambling by Japanese citizens must occur via international platforms. 

As such, the use of cryptocurrency for gambling – due to separate regulations governing cryptocurrencies themselves – is generally non-existent in Japan.

With such a wide and varied assortment of national laws regarding cryptocurrency and gambling, it might be difficult to remember all of the exceptions. However, most countries do allow the use of cryptocurrency and also online gambling, which means you’re very likely to find an online casino in your country that takes this form of payment!

Written by Guest Author Dan Cormac

Dan Cormac knows how to make his money go further. A freelance financial journalist, Dan is passionate about personal finance. Whether you hope to escape the chains of debt, to save for a house, or to retire within a decade, Dan explores the most effective ways you can achieve your financial goals.

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Australia Blockchain Cryptocurrencies Regulation

Reserve Bank Rejects Aussie Central Bank Cryptocurrency, Unsure of Facebook Libra Approval

While other countries around the world are flirting with the idea of issuing a central bank backed crypto currency, the Reserve Bank of Australia says no — citing a lack of compelling policy.

Countries such as Sweden, Canada, and China are all actively investigating the potential benefits of a central bank issued digital currency, but the RBA isn’t swayed by the use cases of blockchain technology. In a payments paper issued on Thursday, the RAB expressed doubts regarding the future of stablecoins, along with cryptocurrencies such as Facebook’s Libra project.

The RBA has stated that it remains to be seen whether or not Facebook’s Libra cryptocurrency will gain regulatory approval and be allowed to operate in Australia. Other assessments in the paper highlight the slow rate at which cash payments are declining compared to relatively cashless countries such as Sweden.

RBA Won’t Eliminate Cash — Yet

The widespread adoption of real-time payment solutions such as the New Payments Platform place Australia ahead of the curve with regards to safe, low cost, and convenient payment platforms from traditional banks, according to the RBA.

“The (RBA’s) view is that there is currently no strong public policy case to introduce a CBDC (Central Bank Digital Currency) for retail use,” 

The RBA isn’t planning on ceasing the issuance of banknotes despite the ongoing push to minimize the use of cash in Australia, stating that it will continue to provide “reasonable access” to banknotes “for as long as Australians wish to keep using them.”

While the RBA is opposed to the concept of a central bank issued cryptocurrency, other countries are not so recalcitrant. Sweden’s Riksbank has floated the idea of an e-Krona several times over the last three years, citing the country’s rapid adoption of cashless alternatives.

The Bank of Canada, however, has taken further steps toward a central bank issued crypto, with the Bank of Canada announcing in February that it will develop the capacity to issue a retail central bank digital currency as soon as it becomes desirable.

Categories
Australia Crypto News Regulation

AirTree Explorer Program To Make Life Easier For Budding Crypto Investors

The Australian Fintech sector is constantly growing and is already a world leader when it comes to alternative finance – yet all these new companies need investors.

Angel investors and seed round buyers have become rather scarce in recent years. More precisely, the downward spiral has been worsening for the past three years, with 2019 alone showing a nosedive of 46% in volume terms and 29% in aggregate dollars invested.

According to the Australian government, within 10 years all fintech may be blockchain-based. The interest in blockchain-based companies is definitely there, but more funding is needed to spur Australia’s development in fintech. Which is why AirTree have decided to do something to help

Open Source Investing Program For FinTech Companies

Today, Venture Capital firm Airtree has announced its Explorer Program, a pilot program to help support the next generation of technology investors in Australia and NZ, with a focus on new Australian fintech companies.

The Explorer Program is aimed not only at budding investors who may not have too many assets to invest but also at startup founders themselves!

The pilot phase will onboard 20 explorers from across Australia and New Zealand and will give entrepreneurs everything they need to succeed as investors in cryptocurrency startups.

Following an open-source investor education program and networking with professionals eager to lend them a hand, the selected entrepreneurs will receive a cheque to invest in fintech startups.

“For any Explorer that introduces us to a company that we invest in, we’ll bring you in on the investment alongside AirTree by giving you a small cheque to invest. There are no weird complications — you become like any other shareholder on the cap table, and you maintain your own relationship with the founders. You can start to build your own track record — but without needing piles of your own cash to invest. “

Applications to the AirTree Explorer program are open until the 30th of September – so if you’re looking into becoming an investor, give it a shot!