In the latest cryptocurrency news, we have the Japanese Financial Services Agency (FSA) and a number of even 190 cryptocurrency exchange license applications that this regulator has received. According to an unnamed FSA staff member, the FSA has given the local crypto industry a self-regulatory status and with that certified the Japanese Virtual Currency Exchange Association (JVCEA) to oversee the place.
The JVCEA is currently expected to develop some anti money laundering (AML) standards providing guidelines to the crypto exchanges. From what we know so far, such a license was recently granted to the cryptocurrency exchange Coincheck, after which it was hacked and received two business improvement orders from the FSA, which were focused on setting higher standards for customer protection and AML measures.
According to the commissioner of Japan’s FSA and his statement in August this year, the agency wished the crypto industry could “grow under appropriate regulation” but the also has “no intention to curb the crypto industry excessively.”
As the crypto and blockchain industries are growing in Japan, so is the FSA which recently went a major overhaul in order to deal with the fintech-related fields – including cryptocurrencies – in a better way.
Right now, the Strategy Development and Management Bureau is looking to develop a financial strategy policy and handle issues that address the digital currency market, fintech, as well as the money laundering space.
Bitcoin ETF: SEC Receives 84% Negative Feedback On Application
“It is in my opinion that Bitcoin to date has no solid ground on which to base a serious product such as an ETF on. It is volatile, manipulated by the very few and has no real use case.” “I can see a lot of people getting hurt both financially and in other ways by you accepting this proposal. It is in my humble opinion that this proposal be rejected.”Another commenter named D. Darnwell sent a letter in which he wrote:
“I would like to voice my disapproval of this Bitcoin ETP and would ask the SEC to take a much longer time horizon to take a ‘watch and wait approach’ to see if Bitcoin is worthy of becoming a financial product with all the positives and draw-downs it entails.” “Decline this ETP without hesitation.”However, one Bitcoin ETF proponent named Sami Santos was confident, stating:
“Regarding the argument of the SEC that has not yet approved an ETF because of manipulation and mainly appreciates the protection of investors is contradictory, because without an investment fund, the investor is susceptible to buy bitcoins in deregulated exchanges and lose their investments (bitcoins). VanEck already offers insurance to cover possible losses and as such, the investor will show interest in investing in an ETF fund. So I see no reason not to approve VanEck ETF and Bitwise.”To remind you, the September (2018) Bitcoin ETF application for VanEck SolidX Bitcoin Trust received more than 1,400 comment letters - of which 99% were positive. However, because of the crypto winter, this enthusiasm has dwindled. Currently, no one knows if this Bitcoin ETF will be withdrawn. If that's the case, the 240-day deadline clock will reset itself and be set once a new filing is submitted.
Israeli Court Rules In Favor Of BTC Mining Company Against Igud Bank
“I believe that the sweeping policy, which does not distinguish between different types of activity, the scope of activity and different types of customers — in the field of digital currencies — is unreasonable.’’At the same time, Bibi explained that the banks have a right to refuse deposits that originate from cryptocurrency trades. However, the process continued and the regulatory attitude towards crypto trading showed the impacts on the legacy banking system. As previously reported, multiple banks claimed that they have issues with servicing private investors or small business who trade cryptocurrency. Banks usually have a hostile stance on cryptocurrency but their actions are quite contradictive. For example, The United Kingdom Barclays bank also shut down multiple accounts after developing a relationship with a few crypto exchange giants including Coinbase in order to speed up deposits and withdrawals. The Union Bank, on the other hand, appears that senior executives have benefited a lot from education in the blockchain sector when the local Bit2c startup held a seminar on its projects and developments in November 2018. At the start of March, a committee from Israel’s securities regulator officially issued a paper on recommendations for governing the economy around cryptocurrency which can help the bank to improve their treatment on crypto investments more uniformly in the future. The report noted:
“The committee recommends considering adjustment of the existing regulation to create more suitable regulatory infrastructure for this trading activity in order to better cope with the risks incurred in this activity.’’
Companies Dealing With Crypto Need Rules, Not Crypto Itself: Winklevoss
“QuadrigaCX was editing its own internal ledger to move customer funds into special accounts controlled by insiders, who were allowed to trade using those funds and even transfer cryptocurrency out to external wallets.’’Companies that offer custodial services by holding the bitcoins of their customers should be regulated in order to prevent another QuadrigaCX scandal happening. He added:
‘’Every incident in crypto to date has been/would have been PREVENTABLE w/ proper rules and thoughtful regulation.’’Describing the failure of Mt.Gox and Quadriga, Cameron addressed the problems that still hover around in the crypto industry and he told while speaking at the Southwest Conference in Texas by saying:
‘’There are a lot of carcasses on the road of crypto that we’ve seen and learned from. At the end of the day it’s really a trust problem. You need some kind of regulation to promote positive outcomes.’’The twins experience growth over the past few years and said that as long as crypto is growing, Gemini will continue to grow as well. They pointed out that the company had only 20 employees at the beginning and that they reached up to 200 nowadays. Their growth means that the stakes are becoming much higher today. Cameron wrote in a blog post:
“As crypto has grown up a lot so has Gemini. We’ve grown from 25 to 200 employees…In 2016 crypto was niche — today it is something — tomorrow it will be everything.’’According to him, it is time to regulate the industry because even the ‘’trustless’’ cryptocurrencies will require a trusted third-party.
Stablecoins Could Have Issues Under The Current Securities Laws: SEC’s Valerie Szczepanik
“I’ve seen stablecoins that purport to control price through some kind of pricing mechanism, whether it’s tied to the issuance, creation or redemption of another type of digital asset tied to it, or whether it is controlled through supply and demand in some way to keep the price within a certain band.”Valerie also noted that when a third central party controls how the prices move over time, the last type of stablecoins ‘’might be getting into the land of securities.’’ Also, she believes that if the buyers are promised that someone else will guarantee a profit or that is able to control the price, that token could be considered as security. Finally, she explained that when an asset is labeled as a stablecoin, the SEC will always have their eye on such projects with a high level of scrutiny. She noted:
“Not to sound cliche, but we’d much rather people come to us and ask for [permission], or come talk to us before they do something, rather than doing something and then coming in and asking for forgiveness.”For example, the United States-based stablecoin project Basis, stated last December that they will close all operations and all of the investors will get their money back since they weren’t able to avoid a security classification for their secondary token. In the meantime, Jay Clayton, SEC’s chairman, confirmed that Ethereum and other similar cryptocurrencies are not classified as securities under the US law.
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