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Regulation

Coinbase UK CEO Discusses Regulation As A Main Problem For The Future Of Crypto

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The CEO of Coinbase UK, Zeeshan Feroz, recently spoke to a popular crypto news site about the recent developments in the exchange industry and the entire cryptocurrency space as a whole.

Feroz, who has been with Coinbase since February last year, noted that the exchange is in the fastest growing market, especially after their expansion to London and introduction of new initiatives like an e-money license from the FCA as well as the Sterling (GBP) support for UK customers.

As he said:

“We have been working to introduce Faster Payments for as long as we’ve been operating in the UK. Customers not only benefit from increased speed, but reduced cost as well. By no longer having to convert funds from Pound Sterling to Euros and vice versa to add and remove funds, there will be no more exchange rates. This will make crypto easily accessible to most people in the UK.”

Feros also described the company mission as establishing an open financial system that will bring economic freedom, innovation, efficiency and equality of opportunity. According to his statement:

“We believe cryptocurrency will help achieve this. As a business, our priorities are to be the most trusted and easiest to use crypto exchange in the world – and our recent initiatives, especially in Europe, have demonstrated that. Over the coming years, we’ll continue to evangelise about the benefits of crypto and drive greater uptake in the use of crypto among both individuals and institutional investors.”

The Coinbase CEO for UK also touched the point regarding the competition from emerging exchanges such as Robinhood, and said what Coinbase has to offer as its competitive advantage, adding:

“In terms of our UK customers, Coinbase is the first crypto exchange to have a UK bank account. This, coupled with faster payments, has allowed us to become the only exchange currently supporting GBP making payments faster on Coinbase than any other platform. Making crypto easier to use, trade and spend is key for us when it comes to improving the user experience. For instance, the launch of e-gift cards has allowed customers to spend their crypto balances more easily, realising its value to buy tangible things or experiences.

“We are a crypto first business and what sets us apart is our focus on trust and security. The FCA e-money license for our fiat operations demonstrates our commitment to ensuring that customer funds are always secure, and we now have safeguards and operational standards that are on par with those of other regulated financial institutions. This means Coinbase is not only the easiest crypto exchange to use – but the safest too.”

Feroz concluded with a word on regulation and the effort by Coinbase to list the tokens that are classed as securities, adding:

“Some tokens maybe considered securities and classifying them as such brings them within scope of regulation. This is the best way to provide individuals and institutions a safe environment to invest in them. The main challenge facing the crypto space at the moment in the lack of regulation, which leads to risk. We see the value in having some form of regulation for crypto exchanges as a means of ensuring due diligence and transparency in the crypto space.”

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Regulation

Leader Suspect In Billion Dollar Laundering Via Crypto Is Seeking Extradition To Russia

Alexander Vinnik, the lead suspect as one of the operators of BTC-e crypto exchange who is allegedly responsible for money laundering, is now seeking extradition to Russia from Greece. As previously reported in our crypto news website, the health of Vinnik is getting worse as we speak. The Greek publication Kathimerini issued a report saying that Vinnik initially filed an appeal with a court in the city of Piraeus asking to be extradited to his home country or to be released. He has been on a hunger strike for about three months now and people are getting worried about his current health state. Vinnik’s lawyers claim that his life is in danger. The charges he is facing are reportedly not accurate or even worse-unfounded so the lawyers argue that their client is being held for no reason for a much longer time than the law allows. Vinnik was arrested two years ago while he was on a vacation in Greece. The US law enforcement agency issued a report:
‘’FinCEN acted in coordination with law enforcement’s seizure of BTC-e and Vinnik’s arrest.  The Internal Revenue Service-Criminal Investigation Division, Federal Bureau of Investigation, United States Secret Service, and Homeland Security Investigations conducted the criminal investigation.’’
Since he was arrested, Vinnik pleaded innocence and said that his biggest mistake was working for the BTC exchange platform. He is also believed to be involved in the Mt.Gox stolen funds scheme. The FinCEN report shows that via the BTC-e platform, more than $120 million were laundered and were connected with the now defunct platform. Vinnik is asking to be extradited to Russia after the Commissioner for Human Rights, Tatyana Nikolayevna Moskalkova asked for help from the United Nations High Commissioner for Human Rights Michelle Bachelet with the goal to take him to Russia. Tatyana claimed that Vinnik lost nearly 30% of his weight and that he needs to be with his wife who is suffering from brain cancer. In the U.S Vinnik was indicted on 21 counts and in Russia, he is only accused of smaller fraud charges that can be paid for about 10.000 Euros. The Greek court in 2017 approved Vinnik’s extradition to Russia but later another court decided to give him extradition to the United States. Later, the Greek Supreme Court ruled that Vinnik should be extradited to France so a clear decision has not been delivered yet.
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Regulation

Crypto Law Consultation Period Officially Started By The Swiss Federal Council

Switzerland seems to be a hot topic over the past week for our blockchain news since today we are reporting the official start of the consultation period for the new federal law for blockchain development by the Swiss Federal Council according to a press release published today. With the initiation, the Federal Council aims to improve the regulatory framework and to bring legal certainty for blockchain applications in order for further development of the crypto regulatory framework for the entire crypto industry in Switzerland especially in the world of finance. Per the press release, the consultation will end somewhere in the middle of June this year. Back in December 2018, the Swiss Federal Council went over the report on a legal framework for the blockchain industry and the entire financial sector and it concluded that the existing laws in the country are suitable for the blockchain industry with some minor changes. The main issue that needed resolving is bringing legal clarity for right holders on each blockchain network and also to make sure that every trading platform is following the country’s Anti-Money Laundering (AML) act. After the announcement, the Council was quick to release a draft document on the consultation where you can read about all of the proposed adjustments including digital registration of rights in the Obligations code of Switzerland as well as separating the crypto assets if a bankruptcy ever occurs on Debt Collection and Bankruptcy. The council also had an idea to create another category for distributed ledger technology in order to improve the market’s infrastructure and to create a law for the trading facilities that will be able to provide a regulated financial market. The authority also suggested that the Financial Institutions Act should be adapted to the current legal framework in order to set up a license that will allow for crypto trading facility to be opened as securities firms. The Swiss Federal Council stated that all of the AML policies will be added to the amendment of Anti-Money Laundering Ordinance after the current act is revised. At the start of the week, the Federal Assembly of the Swiss Government gave a green light that allows the Federal Court to start with the consultation process on adapting the current legislation for the improved crypto regulation framework.
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Regulation

Mexico: New Crypto Regulations Could Shake The Country’s Exchanges

The latest news on our DC Forecasts crypto news site show that experts in Mexico have recently warned that the central bank and its newly proposed crypto regulations could derail the progress in the country's burgeoning crypto sector. As the reports show, the central bank in Mexico - known as Bexico - is ready to introduce a new series of reforms that will aim at keeping conventional financial operations and crypto-related businesses "at a healthy distance" from each other. However, another report in the Mexican newspaper El Economista shows that Bexico's proposed reforms could end up doing a lot more harm than good for crypto exchanges selling Bitcoin - potentially driving a wedge between them and the traditional financial sector. As one writer named Fernando Gutierrez noted, one of Bexico's proposed reforms would "limit the use of cryptocurrencies to internal use only for banks and regulated fintech companies.”He also said that this measure would likely force the exchanges without minding the new regulations. The same outlet has quoted the managing director at the fintech regulator named the National Banking and Securities Commission named Rocio Robles. As Robles explained, even unregulated trading may become difficult under the new proposals. Peso withdrawals, for examples, could soon become illegal. Robles stated that the proposes measures wouldn't "kill off" the crypto exchanges in Mexico - but also admitted that Bexico's measures would "put a lot of obstacles in their way" and added that “cryptocurrencies can continue to make progress in Mexico, but they will involve a lot more hard work” if Bexico gets its way. Meanwhile, Coin Center, which is a Washington-based crypto-focused center for research and advocacy, stepped in the talks. As they said, these rules would deny Mexicans the benefits of crypto technology while failing to protect them from the risks. The executive director of Coin Center wrote a statement in which he noted:
"If there are no Mexican-based exchanges, Mexicans will inevitably use exchanges based in other jurisdictions. Some of these foreign exchanges may be sensibly regulated by more forward-looking governments, but others may be rogue operations that deliberately evade any regulatory jurisdiction,"
"The average person has no idea how a car works, and yet people are allowed to drive them," the statement said. Bexico's proposals are subject to a 60-day consultation period during which a lot of things may change. Right now, industry officials and public members should outline their opinions on the case.
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Regulation

The Swiss Federal Assembly Approved A Motion For Crypto Regulation

Just a day ago, the Swiss Federal Assembly approved a motion that was directed to the Federal Council in order for it to regulate cryptocurrencies. Switzerland as previously reported in our crypto news is known to be one of the best blockchain hubs in Europe after the development of the popular city of Zug being called the Crypto Valley. The motion was directed by Giovanni Merlini who is the Liberal Assemblyman and instructed the Federal Council on how to adapt the existing legislation for cryptocurrencies and to go over the possible associated risks. The council approved the motion with 99 votes in favor and 10 abstentions. This decision is a first step towards solving issued like money laundering, fraud, and extortion. While problems like these emerge as a problem in the fiat currency system, the fiat currency system has extremely harsh regulations that allow the government to prosecute criminals and to sanction any unfair practices such as price manipulation or fraudulent market activity. On the other hand, on the crypto market, there is no such regulation which allows the market holders to apply illegal price manipulation methods and not to get sanctioned at the end. The volatility of cryptocurrencies in the past was largely attributed to price manipulations as mentioned. While the ‘’whales’’ use these methods and tactics by placing a huge buy order to create a boom on the market, the crypto scams are much more difficult to prosecute because cryptocurrencies are not recognized as legal tender. For example, money laundering is one of the biggest problems for regulators because it is the easiest one to do. The obtained funds can be cashed out of a BTC ATM, exchanged for privacy coins on decentralized exchanges or multiple other tactics. Also, ICOs that are not regulated are another tunnel for money laundering. The decision to regulate the market comes after the idea to better understand the risks that come out by using crypto as well as how entities trade but also to learn more about market supervision and financial intermediaries. The banks are getting worried that the regulators accept crypto with their arms wide open since the Swiss minister of Economy Johann Schneider-Ammann stated that Switzerland aims to become a ‘’Crypto Nation.’’
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