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Regulation

No Bitcoin – No Blockchain, CFTC Chairman Tells US Senate

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The Tuesday’s Senate hearing has had the topic of cryptocurrency regulations. During it, the chairmen of two top US market regulatory agencies has stated the importance of blockchain and its link to Bitcoin.

The hearing was held by the Senate Committee of Banking, Housing and Urban Affairs in the US. Aside from cryptocurrencies, it touched a lot of topics regarding blockchain technology, initial coin offerings (ICOs), trading platforms, exchanges and exchange-traded funds (ETFs). Basically, there was nothing that wasn’t mentioned at the conference.

Right from the start, there was some concern about the fact that crypto exchanges are currently regulated at state level rather than the federal. Clayton and Giancarlo expressed concerns about that and said that this may change in the future.

According to Jay Clayton who is the chairman of the Securities and Exchange Commission (SEC), ICOs were more important topic of discussion. He said that ICOs should not be classified as a security under federal regulations.

The chairman Christopher Giancarlo, on the other hand, has won the hearts of all the Bitcoin enthusiasts out there with a couple of comments directed to the community. In the beginning, he made it certain that Bitcoin is linked to blockchain and told the committee that “it is important to remember that if there is no Bitcoin, there would be no blockchain”.

 


After hearing him out, the Chairman Clayton stated:

“We may be back with our friends from the U.S. Treasury and the Fed to ask for additional legislation.”

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Regulation

Goldman Sachs Is Exploring Crypto Derivatives, According To Its COO

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One of the leading investment banking groups in the US and the world, Goldman Sachs, is apparently exploring cryptocurrency trading derivatives. The news comes from the Chief Operating Officer (COO) at Goldman Sachs, who revealed that the company is already assisting clients in publicly-traded derivatives including Bitcoin (BTC) futures.

The COO David Solomon also added that the company is “very cautiously” considering “some other activities” in the field. According to him, the purpose of the company is to “evolve its business and adapt to the fast-paced environment” with special respect to cryptocurrencies.

As Solomon said in an interview with Bloomberg:

“We are clearing some futures around Bitcoin, talking about doing some other activities there, but it’s going very cautiously. We’re listening to our clients and trying to help our clients as they’re exploring those things too.”

Yesterday, the Goldman Sachs CEO Lloyd Blankfein confirmed his positive stance on cryptocurrencies, adding that the adoption of digital coins like Bitcoin could happen in a similar way as the adoption of paper fiat money, which have quickly replaced gold and silver coins.

Meanwhile, Goldman Sachs’ stance towards cryptocurrencies has changed as the digital assets have grown more popular. In 2014, Goldman Sachs argued that Bitcoin does not qualify as a currency. Three years later (2017), the firm said that it “has become more difficult for institutional investors to ignore Bitcoin and other cryptocurrencies”. In December 2017, Goldman Sachs was even rumored to be opening its very own crypto trading desk.

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Regulation

Nasdaq CEO: ICOs Are ‘Taking Advantage’ Of Retail Investors

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As we all know, initial coin offerings (ICOs) are a great way to raise capital for many early-stage startups and build a dedicated base of followers. However, the head of one of the world’s largest stock exchanges believes that they are harmful to retail investors.

According to Adena Friedman, who is the CEO of Nasdaq, investors like “Auntie Mae in Iowa” are being taken by the hype that surrounds these projects. During a speech at the Future of Fintech conference in New York, Friedman said:

“To make it no rules at all, when companies can just willy-nilly take people’s money and offer no information at all, with no governance, that sounds to me like you’re taking advantage of people.”

Despite this talk, Friedman also expressed her sympathy towards ICOs, saying that they are really securities offerings.

“I sympathize with SEC saying these are really securities offerings,” she added, according to a report on the conference. “I support the SEC on that.”

As we reported earlier, the SEC stated that select cryptocurrencies among which Bitcoin and Ethereum – do not fall under the agency’s purview and should be treated as commodities instead. Still, officials have said that most of the ICOs and many other crypto assets need to be treated as unregistered securities.

Friedman said that she is right now concerned about the lack of transparency in the ICO industry – mostly because the startups rarely submit to the same times of disclosure requirements that are placed on companies raising their capital through ICOs.

As she said:

“In ICO space none of that is available, and it’s all being bought by retail. I have real concern on lack of transparency, oversight, and accountability that these companies have as they’re going out to raise capital through an ICO.”

Even though Friedman was critical on ICO’s, her comments on cryptocurrencies have been much more optimistic. She said that in the development of currency, Nasdaq is not adverse to becoming a cryptocurrency exchange at some time in the future.

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Regulation

ICO Market Will Face A ‘Regulatory Reckoning’ According To CBOE Global Market’s President

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The president of CBOE Global Markets, Chris Concannon, recently stated that the Initial Coin Offering (ICO) market could face a two-fold regulatory “reckoning”, according to a report on Business Insider this June 19th.

As Concannon predicts, the reckoning will come in two waves. The first one will be the one from the US Securities and Exchange Commission (SEC) which will classify ICOs as unregistered securities and the holdings of investors would be “rendered valueless” in cases like these. This would cause the second wave as a slew of class-action lawsuits are currently filed against the companies and the ICO projects by them.

“The reckoning will come in two waves. First, the SEC will go after ICO market participants. Then, class-action lawsuits against the teams behind ICO projects will surge.” Concannon stated.

On top of this, the Global Markets’ President also said that ICO investors should “should lay awake at night” worrying about the potential uncertainty in the ICO market. As he told BI, ICO investors should “lay awake at night” worrying about the uncertainty in the ICO market. He also explained that if someone offers an unregistered coin, they would technically have issued an unregistered security which will be seen as “an unregistered underwriter” in the eyes of the law. Concannon stated:

“If you sold someone an unregistered security you are liable to them if they decide to take them to court.”

Meanwhile, financial regulators have urged the public to comply with the existing laws, taking action against those who failed to do so.

 

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Regulation

Italian Court Seizes Crypto Exchange BitGrail’s Bitcoin Wallets

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One court in Italy has seized the Bitcoin wallets that belonged to the shuttered crypto exchange named BitGrail – as part in the latest company’s bankruptcy proceedings.

BitGrail has wrote a statement yesterday (June 15th) explaining that it had to turn over the Bitcoin wallets on June 5th to the authorities in response to an order from the Tribunal of Florence.

As the statement reads:

“On June 5, 2018, pursuant to the Tribunal of Florence orders, the Bitcoins contained in the company’s wallets were seized and brought under control of the judicial authorities pending further Court decisions in the prebankruptcy proceeding.”

According to some news publications and rumors, BitGrail has been shut down since February. It all happened when its founder Francisco “The Bomber” Firano revealed that nearly all of the platform Nano (XRB) reserves which were around 17 million (worth $170 million at the time) had gone missing.

Over the next months, there was much controversy over who was responsible for the missing XRB. The NAno developers argued that a bug in the exchange’s software led to the loss or theft of the funds and accused Firano of ‘stealing’ BitGrail’s insolvency for a long period of time.

“To date, all reliable evidence we have reviewed continues to point to a bug in BitGrail’s exchange software as the reason for the loss of funds,” the Nano Foundation wrote in an April update.

Meanwhile, Firano blamed the development team alleging that the fault was entirely in the Nano protocol and not BitGrail’s software. Even though there were attempts to re-open the BitGrail exchange, the court has seized all of its wallets right now and the exchange is currently moving through preliminary bankruptcy proceedings.

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