SEC Chairman Jay Clayton stated prior to the Bakkt launch that he is worried about the crypto custody and price manipulation and that there is still work to be done. Let’s find out more about it in the latest cryptocurrency news below.
While he was speaking to the CNBC’s Exchange yesterday, the SEC Chairman Jay Clayton was asked whether the industry has come closer to satisfying the concerns he has and those of the regulatory body. He also replied that he is positive but he still believes that there is work to be done for the futures markets. The first concern is regarding the custody of the crypto assets. According to Clayton, the regulators should be satisfied that the trading products offer products to the institutional investors but also have the means to safely store the assets for the clients. The second concern is that the crypto assets trade on largely unregulated exchanges but there still needs some more assurance to be added because the prices are not a subject to manipulation. He added that the progress was being made but those questions are lacking some clear answers before the SEC can start approving crypto-related products.
Bakkt has already answered the first question with the launch of the Bakkt Warehous which was announced just a day ago. According to the press release by the New York State Department of Financial Services, the regulated product provides the customers with a qualified custodian of bitcoin. The Intercontinental exchange subsidiary added that they will also create a fully regulated Bitcoin futures contracts platform on September 23rd so this is a part of the solution for one of the major concerns for the US regulators.
The crypto price manipulation is also a huge problem and as with any asset, the supply and demand are the ones dictating the price movements so bitcoin is no different. In the past few weeks, there have been huge premiums on prices in countries such as China where the demand increased dramatically because of the tensions which are weakening the local currency. To avoid this, the institutional products will have to derive the prices from a regulated exchange within the country so in a case of a new ETF, this will probably use Gemini or Coinbase as per the reports in the altcoin news reports.
US SEC Wants To Close The Blockvest Case For Good
‘’Based on the evidence … there can be no genuine issue of material fact that defendants violated the federal securities laws through their fraudulent unregistered offer and sale of ‘BLV’ tokens.’’The initial enforcement action from October 2018, showed that Blockvest had managed to raise up to $2.5 million in the pre-ICO sale and it was discovered that Blockvest had advertised the investors about the token sale being registered with the SEC which was of course, false. Not only did Blockvest did that but the founder also deceived the investors claiming that it was under the eyes of the US CFTC and NFA. The project also claimed that it was audited by Deloitte which also was not true.The SEC claims that there was no company listed as a partner to Blockvest and after hearing the accusations, Ringgold admitted that his company made mistakes but he also claimed that none of the misrepresentations involved securities.
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“All these changes will make anonymity more difficult for the average consumer, as more exchanges comply and implement KYC. Those exchanges who don't will be forced to jump from jurisdiction to jurisdiction, which will impose extra costs that only those committed to anonymity will be willing to pay. For criminals, this will change nothing because they are in that group, among many others who are not criminals, who are willing to pay more.”Regulation can affect crypto in many different ways and regulators are already preparing new laws now. It is certain that if this happens, an intense debate will also occur among investors, industry leaders and regulatory bodies.
WEF2020 Announces Global Consortium For Regulating Bitcoin
“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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