The central bank in Spain has issued a warning to its citizens and customers of the risks of crypto transactions with unregulated cryptocurrencies. According to the issued notice that is analyzing further in today’s blockchain news, the bank outlined their stance on crypto and their legal status in Spain.
Both of the documents show that Spain still hasn’t passed any law regarding cryptocurrency and that all of the exchange platforms are not authorized or supervised by the central bank. All of the crypto trading platforms also don’t have the protections of the national deposit guarantee systems such as the one that the central bank has- Deposit Guarantee Fund of Spain.
The Central Bank also made clear that no state has yet conferred the exact legal status on the crypto assets but the governor Pablo Hernandez de Cos, said that crypto ‘’cannot replace money and is not a means of payment or common exchange.’’
The governor continued to explain saying that the term ‘’cryptocurrency’’ is too ‘’equivocal’’ and should be replaced with the term ‘’virtual currency.’’ The bank quoted a 2015 directive that shows that crypto is perceived as a digital representation of value without an authoritative issuance and also that crypto cannot be exchanged and transacted between legal entities.
Spain’s ruling party, Partido Popular (PP) said that it was working to create a draft bill on crypto regulation aiming to provide some degree of security for the investors and even claimed that the party is considering tax cuts for domestic blockchain innovation.
The regulators in the country still have a cautious stance after 23 unauthorized crypto-related entities joined the National Securities Market Commission List last month.
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‘’Are we trying to reduce costs? Are we trying to cut out the middleman? Are we trying to have inclusive finance at no cost? There is a whole range of objectives that can be pursued.’’Lagarde admitted to the increased demand for stablecoins ignoring Bitcoin and referred to the interest shown by the Canadian and British counterparts as well:
‘’My personal conviction is that given developments we see, not so much in bitcoin but in stablecoins projects… we’d better be ahead of the curve because there is clearly demand out there that we have to respond to.’’Last month, the bank was thinking about launching a digital currency and the proposal was a part of the new draft that seeks to ban the high-risk crypto projects. At that time, a target for ECB was Libra and the global digital currency projects developed by some entities such as Facebook which have been repeatedly criticized by European leaders. With a digital currency that will be parallel to the euro, the consumers will have a cheaper means of payment option and this will also have a huge impact on the bank’s fiscal policy. The Central bank will also be able to inject funds into the economy to achieve inflation targets which the ECB left unchanged so far.
SEC Charges Shopin Founder For Its ‘Fraudulent’ $42 Million ICO
“As alleged in today’s action, the SEC seeks to hold Eyal and Shopin responsible for scamming innocent investors with false claims about relationships and contracts they had secured in support of a blockchain-based universal shopper profile [...] Retail investors considering an investment in a digital asset that meets the definition of a security must be afforded the same truthful disclosures as in any traditional securities offering."Furthermore, he also told the public that Eyal lied about having forged partnerships with established retail outlets when in fact no such partnerships existed. The SEC also claims that Eyal misappropriated investor funds to pay for personal expenses. The SEC charges Shopin for this and the complaint clearly states:
“Eyal used over $500,000 of investor funds for expenses such as his rent, retail shopping, entertainment, tickets to philanthropic events, and a dating service, but omitted to disclose to investors that he would use any proceeds for his own benefit.”The official charges show that Shopin was violating the anti-fraud and registration provisions of the federal securities laws. For that, it is seeking injunctive relief, disgorgement with prejudgment interest as well as civil money penalties.
AML Chief: Crypto Companies Filed 7,100 Suspicious Activity Reports
“It is encouraging that CVC entities, dozens of whom had never filed a SAR report prior to the May advisory, are using the red flags and reporting suspicious activity back to us.’’Venezuela is one particular case where it seems that a hotbed of suspicious activity is forming according to Blanco. The Latin American country has its own oil-backed token- The Petro, and it seems that it has spawned an increasing number of the unregistered money services businesses. The country is having a lot of issues with the high inflation and Petro was the tool that was supposed to help the country.Domestically, the crypto-related companies reported more darknet-linked customer transactions and scams along with a lot of activities that targeted the elderly who have limited knowledge about cryptocurrency and therefore are opened to risks. Blanco explained that all of the financial institutions have to re-consider the crypto SAR reporting especially those who currently don’t report any activities. He said:
“If the answer is no, they need to reevaluate whether their institutions are exposed to cryptocurrency.’’The remarks came as the crypto exchange and analysts firms both boost their efforts to expand suspicious activity reporting. As it was reported by Forbes, there was a noticeable existence of the confidential indicators of suspicion for Virtual asset service providers and also a playbook for easily picking out the suspicious activity assembled by the stakeholders themselves.
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