by Samuel Mbaki | Jun 7, 2023 | Regulation
Key Points
- The ongoing battles between the SEC and crypto organizations have sent Robinhood back to the drawing board to figure out whether to keep or delist crypto assets seen as securities
- The crypto and stocks trading exchange is seeking to keep its hands clean off of possible scuffles with a hawkish SEC
- The crypto assets that Robinhood is weighing on delisting include SOL, ADA, and Polygon Matic
Robinhood: no trading crypto assets in the US SEC securities list
Robinhood has returned to the drawing board to try and minimize its chances of picking legal fights with the U.S. SEC. The exchange seeks to delist several crypto assets the regulator sees as securities to avoid defending themselves in court and incurring extra costs.
Robinhood wants to do away with Solana, Cardano, and Polygon Matic trading following recent charges that the U.S. SEC has been pressing. The SEC sued Binance.US on May 5, claiming it offered securities to U.S. citizens while not being registered as a securities broker.
A day later, the regulator went after Coinbase alleging that the exchange is also an unregistered securities broker that is putting investors at risk. The regulator has been in this frenzy for quite some time as it spent the better part of last year going after celebrities and big names in the crypto industry for promoting securities via paid promotions and not disclosing that they had been paid.
It also began the year by charging Kraken crypto exchange $30 million in fines and ordering it to close down its crypto staking program in the U.S., alleging that it’s a security that risks the monies of U.S. citizens. As such, it is a message enough that platforms like Robinhood that offer crypto assets trading in the U.S. should be more selective with their products.
In this context, Robinhood has seen it fit to delist some of the tokens highly contested as securities by the exchange until more clarity is available. Keep watching Fintech Express for updates on crypto and other Fintech-related developments.
by Samuel Mbaki | Jun 6, 2023 | Regulation
Key Points
- The U.S. SEC has gone after crypto exchange Coinbase, a day after filing one against Binance.US and its founder, Changpeng Zhao.
- The US SEC’s new crypto lawsuit against Coinbase has sent the exchange’s stocks down to 13% at the time of writing.
Coinbase faces a crypto lawsuit from SEC
U.S. SEC has filed a crypto lawsuit against Coinbase Exchange less than a day after suing Binance.U.S. The new lawsuit comes as a climax of the tension that has been there between the regulator and Coinbase for the past several months.
The U.S. SEC had sent a Wells Notice to Coinbase alleging that it had been breaking several rules under its jurisdiction. The notice warned that the regulator could press charges against the exchange if those services continued being offered in the U.S. without its approval.
The tension began when CEO Brian Armstrong hit back, saying that his organization had sought clearance with the SEC before opening for business in the country and was granted permission. Therefore, a crypto lawsuit, later on, could be groundless and ridiculous.
Armstrong said that his team was ready to challenge the SEC in court. Now, the SEC has served the exchange on claims that it acts as an unregistered securities broker in the nation. An excerpt from the lawsuit reads:
“The Coinbase Platform merges three functions that are typically separated in traditional securities markets—those of brokers, exchanges, and clearing agencies. Yet, Coinbase has never registered with the SEC as a broker, national securities exchange, or clearing agency, thus evading the disclosure regime that Congress has established for our securities markets. All the while, Coinbase has earned billions of dollars in revenues by, among other things, collecting transaction fees from investors whom Coinbase has deprived of the disclosures and protections that registration entails and thus exposed to significant risk.”
The SEC continues to say that Coinbase has been
“Operating as: an unregistered broker, including by soliciting potential investors, handling customer funds and assets, and charging transaction-based fees; an unregistered exchange, including by providing a market place that, among other things, brings together orders of multiple buyers and sellers of crypto assets and matches and executes those orders; and an unregistered clearing agency, including by holding its customers’ assets in Coinbase-controlled wallets and settling its customers’ transactions by debiting and crediting the relevant accounts.”
By the time of writing, Coinbase had not replied to the matter and did not reply to a query by Fintech Express regarding the crypto lawsuit on time. Keep watching for updates on regulation and other Fintech-related updates.
by Samuel Mbaki | Jun 6, 2023 | Banking
- According to predictions by Morgan Stanley, top European stocks may lose their value in summer by over 10%.
- The drop is most likely to happen owing to the continued decline in economic growth and deteriorating liquidity in the European Zone.
Morgan Stanley expects a significant price fall in top European stocks
Morgan Stanley has predicted that the top European stocks may fall by over 10% this summer as a harsh economic season grapples the Euro Zone. Morgan Stanley has already cut its sector rating on financial to neutral in favour of Pharmaceuticals.
According to Morgan Stanley, European companies have held up better than others in the rest of the world in 2023 despite facing more challenging economic times. However, they haven’t gone unimpacted as their profits this year are set to decline to 6%, which is still higher than the estimated 10%.
“We still expect a down cycle from the second half of 2023 onwards due to declining margins and slowing economic growth (which we believe is only just beginning),” said Graham Secker, head of European equity strategy at Morgan Stanley.
Keep watching Fintech Express for updates on Macro-Finance and other fintech-related developments.
by Samuel Mbaki | Jun 6, 2023 | Technology
- Apple Vision Pro headset revealed at the WWDC on June 5 and dubbed the first special computer edging out VR, AR and metaverses.
- The device will be rolled out in the U.S. in 2024 before shipping to other nations.
- This innovation has sparked a debate on social media on whether it’s the next technological step away from metaverse and virtual reality.
Apple Vision Pro headset challenges Metaverse’s continuity
Apple has released its newest product, the Apple Vision Pro headset, a virtual and augmented reality-powered device that challenges the highly hyped virtual existence “metaverse”. The searches of the word Metaverse and developments towards it have been slowing down and causing considerable losses to several companies like Meta.
This innovation had massive hype in 2021 when there was a bull cycle, but it died down as virtual and augmented reality competition set in. In the launch of the new Apple Vision Pro headset at WWDC on June 5, 2023, the word metaverse was omitted in the whole presentation.
The company has dubbed the product its first “spatial computer”, moving further away from the metaverse. It has indicated that it will launch it in the U.S. near 2024, bearing a hefty retail price tag of $3,499, after which it will roll out to other countries.
Comparatively, Meta and Microsoft have both released their headsets which are used in generally the same purpose. However, instead of focusing on the terms “AR”, “VR”, and “Metaverse”, Apple has decided to go with “Spatial Computing.”
Additionally, the Apple Vision Pro headset has the capabilities of both AR and VR, as it can even create the full experience of immersive environments. An excerpt from the official announcement reads:
“Featuring visionOS, the world’s first spatial operating system, Vision Pro lets users interact with digital content in a way that feels like it is physically present in their space.”
Though the product is distanced from buzzwords, it has received a generally high reception from social media, with people believing that it could be another step toward the future of technology.
Keep watching Fintech Express for more updates on Tech and Fin-Tech-related stories.
by Samuel Mbaki | Jun 6, 2023 | Cryptocurrencies
Key Points
- CFTC, Coinbase and Robinhood have been called up to testify in the U.S. Congress on June 6 regarding a newly proposed crypto regulation bill
- The trio will send its representatives to share the organization’s views on the bill that could see some digital assets classified as commodities.
CFTC, Coinbase and Robinhood join Capitol Hill in talks about crypto regulation
The United States Commodities regulator, CFTC, has been called upon by Congress to witness and contribute to talks and reviews about a newly tabled crypto regulation bill. The bill will possibly see some crypto and digital assets get classified as commodities, which will fall under the CFTC’s jurisdiction.
The regulator will be accompanied by two more crypto organizations, Coinbase and Robinhood, which will serve as industry representatives and must testify.
“Tomorrow I have the honor of testifying on Capitol Hill before the House Committee on Agriculture to share Coinbase’s views on the Digital Asset Market Structure Discussion Draft […] released last week,” said Coinbase Chief Legal Office Paul Grewal in a statement on June 5.
Other witnesses in the proceedings will be former CFTC Chair Chris Giancarlo, former CFTC commissioner Dan Berkvitz and FIAconnect founder Walt Lukken. The developments come when an uproar regarding crypto regulation in the U.S. continues as the SEC keeps going after crypto organizations.
The moves by SEC have been heavily criticized as it is classifying select crypto assets as securities without following due process. As such, economists fear innovation will bypass the U.S. and head to other nations, which may affect their economies significantly in the long term.
In a June 5 Twitter thread, Grewal gave a rundown of what his testimony will focus on.
“The U.S. is falling behind. We cannot afford to ignore crypto while other markets take advantage of our absence, developing rules and regulations that enable the industry to thrive and risk sending jobs, investment, and technological leadership overseas,” Grewal noted, adding that:
“We need a clear rulebook in the U.S. to achieve the full promise of crypto. Until rules and laws are developed that reflect the realities of this new economic system, we cannot realize the full potential of making our financial system faster, fairer, and more affordable.”
He added
“While regulation establishes clear rules for the industry, it also provides important accountability measures for potential bad actors. U.S. legislation helps good guys innovate and ensures bad guys are held accountable.”
“How we define digital assets is critical for enabling innovation. Digital assets are diverse, and if we fail to effectively draw clear definitions of which assets are securities, which are commodities, and which are neither, crypto will continue to sit in regulatory limbo.”
Keep watching Fintech Express for updates on this and other Fintech-related stories.
