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Regulating Cryptocurrencies Is Not A Priority: Russian PM

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Regulating Cryptocurrencies

Regulating cryptocurrencies is currently not a priority for the Russian Government since cryptocurrencies lost their popularity in the country according to the Russian Prime Minister. Dmitry Medvedev’s comments were reported by a local news outlet and reached our altcoin news today.

According to the reports, Medvedev believes that cryptocurrencies are not interesting for the Russian population and there is no need for mainstream crypto adoption and crypto regulation:

 “The popularity of cryptocurrencies has decreased so far, which likely makes the regulation issue not that relevant already.”

During the annual international judicial forum on May 15, Medvedev pointed out that the problem was previously discussed at the previous forum in 2018. He then urged the government to legislate some of the crypto terms. While Bitcoin was a hot topic in 2018 and later the hype decreased, the prime minister concluded that the time has passed. He also believes there is still no opportunity for the crypto markets to rally.

His stance comes amidst the first major bullish sentiment of crypto markets in 2019. This happened when Bitcoin surged from the average threshold of $4,000 to above $8,000 during the 45 days since April 1 according to the data gathered from CoinMarketCap.

The Russian crypto regulation bill ‘’On Digital Financial Assets’’ was initially passed by the Russian Parliament in May 2018 but it was sent right away to the first reading stage as reported in the latest cryptocurrency news, after reports emerged there is a lack of major key concepts such as crypto mining.

While the parliament of the country has delayed yet again the consideration of the bill, the president of the country Vladimir Putin ordered the government to adopt crypto regulation for the entire crypto industry by July 2019. Last year, for example, Putin made a similar order and tried to create and enforce the regulation by summer 2018.

Russia has minimal progress in regulating cryptocurrencies and crypto related policies. The central bank of the country has refused to get into cryptocurrencies or even recognize them as a mean of payment after the head of bank Elvira Nabiullina had a pretty contradictory stance on ICO fundraising calling it ‘’efficient.’’

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Bitcoin News

WEF2020 Announces Global Consortium For Regulating Bitcoin

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At the WEF2020 in Davos, Switzerland, there was a significant mark on the crypto market and the World Economic Forum announced the first global consortium focusing on creating a regulatory framework for the governance digital currencies including bitcoin and stablecoins. In our latest bitcoin news today, we find out more about their ideas.The World Economic Forum for 2020 happened the past week in Davos and cryptocurrencies were the center of attention. Yesterday during the last day of the consortium, the forum announced the creating of the first Global consortium for Digital Currency Governance. It will mainly consist of financial institutions, government representatives, international organizations, leading companies, academics, NGOs, technical experts and other members of the Forum’s communities.The report showed that if digital currencies receive proper financial inclusion, they will have to get paired with good governance. Therefore at the WEF2020, the forum discussed whether it is needed to establish a framework of regulations by implementing innovative approaches. In order to do that, the participants will have to use ‘’efficiency, speed, inter-operability, inclusivity, and transparency.’’ The Consortium will work with both the private and public sectors to explore the presented opportunities.According to the founder and Executive Chairman of the WEF, Klaus Schwab, ‘’ digital currency, a cross-cutting topic that requires input across sectors, functions, and geographies, is a key area of interest for the Forum.’’ The Governor of the Bank of England also commented:
 “Governance is the core pillar of any form of digital currency. It is critical that any framework on digital currencies ensures security, efficiency, and legitimacy of payments while ensuring fair and open competition. We welcome the WEF’s platform to help develop a robust governance framework for inclusion through digital currencies.”
As per the recent reports, the efforts of creating a regulatory framework on cryptocurrencies are getting more serious. As of this month, the European Union introduced an updated version of the 5th anti-money laundering directive and had increased regulatory focus. All of the crypto-related businesses are operating from Europe and they have to follow the rules which include a more in-depth know your customer process, filling suspicious activity reports and conduct transaction monitoring with law enforcement.  After the WEF2020, the world watchdogs will try to establish a framework of regulations for crypto so it will be extremely interesting to see whether this will be beneficial for the market.
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Regulation

Germany Increases Costs For (Some) Crypto Firms By $250k

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Germany, a country known for its leading economy in Europe has recently updated its cryptocurrency laws and made it illegal for new firms to launch crypto trading, custody services and issuance of tokens. From January 1, Germany increases the costs for some crypto firms and the German Banking Act stated that crypto assets now qualify as financial instruments.In that manner, crypto exchanges and custodians now require a license from the German Federal Financial Supervisory Authority (BaFin). However, the cryptocurrency news reports did not note that if a company is founded in Germany after January 1, it is now illegal for them to issue tokens or offer custody/trading services.
"They have to now set up a new legal entity since January 1 has passed," explains Philipp Sandner, who is a professor at the Frankfurt School Blockchain Center. "But this new legal entity would be illegal for custody, trading and issuing."
The new laws show that Germany increases costs and that all companies founded after January 1 will need a BaFin license to offer these services. Meanwhile, the companies founded before January 1, 2020 will benefit from 'grandfathering' until November 2020.The cost of acquiring a BaFin license could be prohibitive for new startups, both Sandner and one lawyer explained.
"For companies (be it startups or larger companies such as banks), the license induces costs of approx. USD 250,000," they say. "Not every startup will be able to bear these costs. The small startups might be driven out of the market; the larger ones and the incumbents will probably apply for the license."
As Germany increases costs for crypto firms, many wonder why is this the case. The truth is, the government is sought to introduce a law which might end up driving startups "out of the market" as experts noted.Both experts noted that the government had the opposite intention in mind and wants to encourage mainstream adoption of cryptocurrency and blockchain technology, rather than leaving these sectors open for unregulated firms. However, the costs at this point are big for many crypto firms which is why the crypto climate in Germany is not that good.Meanwhile, the latest Bitcoin price news show that the cryptocurrency has fallen by 6% due to the situation in China.
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Regulation

SEC Went Head To Head With Telegram, Reviewing TON Again

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The United States Securities and Exchange Commission (SEC) is in the crypto news today for going ahead and filing a brief for the ongoing court hearing which is taking place between Telegram (one of the widely used encrypted messenger services) and the Commission itself. Basically, SEC went head to head with Telegram and issued a brief which was authored on behalf of the CDC by Lilya Tessler, a partner, as well as the New York head of Sidley Austin LLP.Another brief which was filed by the Blockchain Association on January 21 appears to be in clear support of Telegram. This brief opposes the SEC's move to block Telegram from delivering its native crypto tokens, known as Grams, to early investors who were participating in the ICO.The central argument that SEC went with shows that the independent body sees the purchase agreements offered by Telegram which were designed to fully comply with the SEC's existing securities rules.As part of the filing, the arguments as to how the US District Court for Southern New York should view the digital assets. Currently, there is no clarity in regard to the following subjects:
  • Whether or not an investment contract is being offered in a securities transaction
  • Whether an investment contract is a commodity which can be sold in a traditional commercial transaction
As the SEC went forward with the Telegram case, they have been attempting to define the term "securities" just like many other bodies. Gregory Klumo who is the founder and CEO of the euro-backed stablecoin Stasis, was in the Bitcoin and altcoin news recently, referring to this subject in detail:
“If a developer team retains certain assets and sells it to investors, it falls into the definition of security. I think that the U.S. legislation must be shaped to take into regard emerging technologies and new business models that hadn’t been present not only in the days of SEC creation but also during the judicial battles on security definitions.”
The crypto industry has been witnessing an enormous amount of interest around stablecoins, a digital offering which presents users with all of the various advantages of cryptocurrencies all while having their values pegged to a stable fiat asset such as the US dollar, the Euro and others.
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Regulation

Hawaii State Senate Authorizes Banks To Offer Crypto Custody

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The Hawaii State Senate is in the latest cryptocurrencies news now for passing the first reading of a bill that authorizes banks to hold digital assets in their custody. This bill was introduced on January 17 and was designed five state senators, including the Republican member of the Senate, Kurt Fevella. The bill passed the first reading on January 21 and was then referred to the committees of the Judiciary and Commerce, as well as Consumer Protection and Health on January 23.Basically, the bill specifies the set of provisions which a bank must adhere to and provide custodial services for digital assets. As you may not know, the custodial services cover “the safekeeping and management of customer currency and digital assets through the exercise of fiduciary and trust powers under this section as a custodian and includes fund administration and the execution of customer instructions.”Now, in order from a bank from Hawaii to qualify as a crypto custodian, it must adhere to certain standards in regards to accounting and internal controls. It also needs to maintain IT best practices and comply with the federal Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements.Aside from opening up bank regulations to include cryptocurrencies, this proposed law would also classify cryptocurrencies under the Uniform Commercial Code - which is a set of federal laws in the US that wants to provide uniformity in legislation surrounding sales and commercial transactions in the country.The bill also specifies the manner of perfecting a security interest in digital assets. It discusses various methods such as smart contracts and multi-signature arrangements. The proposed legislation also authorizes the courts to hear claims which are related to digital assets.Previously in our altcoin news section, we reported about Hawaii imposing strict requirements on firms dealing with cryptocurrency. This caused the Coinbase exchange to cease its operations in the state almost three years ago.If passed in law, the latest bill by the Hawaii State Senate would not only give clarity to classification of cryptocurrencies - it will also bring them in line with several other states and set out a framework by which any compliant bank can act as a crypto custodian.
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