Hong Kong Central Bank is asking the banks in the area to be more friendly to crypto clients.
Hong Kong banks have recently been featured in news headlines after reports that they were secretly helping crypto platforms.
The shift in crypto regulation in Hong Kong marks a major shift in Asia.
The Central Bank of Hong Kong has specifically asked banks under it to help crypto firms by providing financial services. It wants the banks to work well with “virtual asset service providers” by providing them with fiat ramps and similar services.
Crypto adoption turnaround happens in Asia spearheaded by Hong Kong
In a May 2023 meeting, HKMA asked its banks not to fear giving financial services to crypto platforms. It asked major banks, including HSBC, Standard Chartered and the Bank of China, not to be afraid to offer these services. It noticed that amid reports that other banks had already been doing it, these three weren’t accepting crypto exchanges as their clients.
The Hong Kong Monetary Authority (HKMA) is the region’s central bank and regulator. Its bank had previously feared it regarding offering crypto services as mainland China has been against the industry since its first innovation went public. However, a June 15 report from Financial Times now indicates the opposite.
HKMA is now pressuring international banks not to offer their services to crypto exchanges to change the course of their actions as it believes in paying attention to emerging markets and trends.
🚨 BREAKING: 🇭🇰 Hong Kong Govt Pressures Banking Giants to Accept #Crypto Clients 🚀
HSBC, Standard Chartered, and Bank of China under Fire 🔥
In April 2023, HKMA also issued a circular to banking institutions urging them to be more aware of emerging markets like crypto. It asked them to pay attention and develop a more ambitious approach to new sectors as they could be crucial in future economies.
U.S. might lag further behind in crypto regulation and adoption
These developments from Asia are encouraging, as the region has been known to go hard on crypto. Japan and China have both been resilient in the need for industry reforms. However, Japan accepts the trading of several crypto asset classes. At the same time, China has introduced a blanket ban on all crypto-related assets apart from its own PBOC-issued digital Yuan (e-CNY).
It shows that the tide is turning in that region. However, it is a shocker as the once “friendly” relationship between the crypto industry and the U.S. is becoming a bit sour. Details of poor regulation and hidden deliberations like Hinman’s Documents have surfaced, which showcase aggressive greed and misconduct by top regulators like SEC.
The SEC is already suing Coinbase and Binance for operating without first registering with them. However, it’s good to note that Coinbase had cleared with them before starting operations there. Also, SEC has not yet released a regulatory framework to guide exchanges in what is or is not a security.
Both the crypto community and lawmakers have heavily criticized this move. As a result, a bill has been tabled in the House of Representatives to restructure the SEC and slash the power given to top executives to reform the regulator. However, it could take longer for the U.S. to catch up with other regions like the E.U., which have already introduced and passed crypto regulation bills into law.
Keep watching Fintech Express for updates on crypto regulation and other fintech-related developments.
Hinman documents were released on June 13 showing contempt from SEC to smother the crypto industry
EX SEC Director Bill Hinman said that some crypto assets could evolve into commodities
The information recorded in Hinman documents calls the industry irrelevant sparking outrage from law practitioners and the crypto industry
SEC regarded as the wrong regulator for the crypto industry
What are Hinman documents?
Hinman documents are internal messages from regulators tied to SEC on ex-director Bill Hinman’s infamous 2018 speech. The documents include emails, his speech and messages pointing to discussions about the crypto industry, regulation approaches and its relevancy in the U.S.
What are the contents of Hinman documents?
It’s been around five years since Bill Hinman gave a speech about the crypto industry and SEC regulation. He touched on SEC’s lawsuit against Ripple which was not very well received by the crypto community. As such, the SEC conducted follow-ups behind the scenes and wanted Hinman documents hidden from the public.
However, on May 16, 2023, a US Judge in the case against Ripple ordered the Hinman documents to be released to the public.
In Hinman’s speech, he claimed that the fact that some tokens achieve decentralization as they gain users makes them commodities and no longer securities. As such, he deemed it, not a fit for the SEC to “register and regulate” such assets.
An internal comment regarding his speech reads
“The fact that tokens on a sufficiently decentralized network are no longer securities- and no longer required to register with all the benefits to investors of registrations- seems to point out to what might be considered the “regulatory gap” that exists in this space.”
The comment continues “In other words, this speech acknowledged that there is an “other” category-its not a security because there is no controlling group {At least in Howey sense} yet, like many other things (medication, credit cards) there may need be a regulation to control customer purchases”
This comment acknowledges the fact that tokens on sufficiently decentralized networks are not securities as they do not satisfy Howeys factors.
1/ It’s been 5 years since Bill Hinman gave his infamous speech – and through the SEC’s lawsuit against @Ripple (and 7 court orders), we can finally share what happened behind the scenes through the now public emails / drafts of the speech. pic.twitter.com/sx2TpW0TYe
The unsealed Hinman documents show that in this sense, truly decentralized crypto assets not satisfying Howeys factors, make the SEC liable for ignoring multiple warnings about poor regulation with no basis in law. As such, their actions are just but unlawful and here to create confusion showing greed and ill intentions by the regulator.
When Hinman served as the Head of SEC’s Corp Fin, he gave his infamous speech declaring that its ‘common sense’ when crypto assets attain sufficient decentralization it transitions into being a commodity as there no longer is a controlling group. Though he claimed that his speech was his own opinion, the SEC Chair of the time, Jay Clayton publicly pointed to the speech.
The speech also remained on the regulator’s website which shows that it acknowledges its contents. As such, the SEC has continued to pressure crypto assets that are already decentralized and use them to “scare” the markets.
Even with a change in regime in 2021, the SEC has continued to push its agendas of crypto “having no relevancy in the U.S.” as current Chair Gary Gensler has continually said. Gary Gensler has been in the limelight for trying to smother crypto in favor of a digital dollar.
In an interview with CNBC after suing Binance and Coinbase in the US, Gary Gensler said that the U.S. doesn’t really need any more digital currencies as the dollar is already there. In his own words, he said
“We don’t need more digital currency… we already have digital currency, it’s called the U.S. dollar,” Gensler said. “We have not seen, over the centuries, that economies and the public need more than one way to move value.”
What Senior SEC officials said to Hinman as he drafted his speech
Upon the unsealing of Hinman documents, information has surfaced that several senior SEC officials talked to Bill Hinman as he prepared his speech. The Head of Trading and Markets (T&M) commented saying that some of his deliberations were wrong but he ignored
“Because the list of factors is so extensive – and appears to include things that go beyond the typical Howey analysis – we have concerns this might lead to greater confusion on what is a security.”
T&M directly asked Hinman to tie his new factors as “more closely and explicitly to the Howey analysis.” As usual, Hinman ignored the warnings.
7/T&M directly asked Hinman to tie his newly invented factors “more closely and explicitly to the Howey analysis.” Again, Hinman ignored the suggestion. pic.twitter.com/uVZQYcmGV8
The Office of General Counsel (OGC) and T&M called a factor invented by Hinman irrelevant and uncalled for. However, Hinman went ahead and kept it in the speech.
T&M and OGC noticed that Hinman has skipped over the threshold jurisdiction question of “whether a digital asset meets the legal standards of a security.” However, Hinman as usual skipped it to ask if SEC oversight on the asset class could be beneficial, completely disregarding the present “regulatory gap.”
On June 4, 2018, Hinman wrote that he did not see the need to regulate ETH as a security and was on the verge of calling Vitalik Buterin to confirm their standing.
Regarding the mention of Ether in the speech, OGC warned that it would be difficult for the U.S. SEC to touch on the asset in the future. Now the current SEC chairman, Gary Gensler has hinted at ETH being a security as OFAC threatened to introduce censorship on the chain. He did this despite knowing the controversies behind Hinman documents and his agency being reckless in the past. As a result, the markets were affected resulting in claims of market manipulation being in play.
Though ETH Chain censorship hasn’t happened, something more controversial has, the SEC has charged crypto stakers like Coinbase and Kraken in the U.S. for facilitating the staking of ETH and other crypto tokens. It even asked Kraken to close down its staking operations in the country on top of a $30M fine earlier this year.
Is it market manipulation or hate? One thing is SEC is not the best regulator for the crypto industry
The deliberations from Hinman documents show that poor leadership has led SEC regulation down this dark alley. As such, more light should be shed on the SEC and an investigation against all those who backed Hinman including the ones who have been using flawed regulatory approaches on the crypto industry.
Could we be seeing market manipulation or is it pure hatred that is pushing SEC to smother the crypto industry when other regions like the Eurozone, Russia, UAE and Hong Kong are slowly coming to terms with the innovation? You tell me!
But what is evident is that SEC has no regard for playing fair in crypto regulation as the head already “does not see the need for any more crypo assets in the U.S.” forgetting that it’s not up to him to see the need for it. It’s up to citizens to have financial freedom and regulators stepping up to match their needs by providing security in their investments but not dictating what they go for!
Warning: This is an opinion piece and does not in any way show the stand of Fintech Express regarding SEC or any other crypto regulatory approaches. Read and research more to make your own deliberations.
A U.S. Court has asked Binance.US and the Securities and Exchanges Commission to negotiate and prevent a total asset freeze.
United States District Judge Amy Berman Jackson threw away the request from SEC to freeze Binance.US assets, saying it was unnecessary.
U.S. Judge asks Binance.US and SEC to reach a pact
Binance.US wins in court as U.S. District Judge Amy Berman Jackson orders SEC to negotiate and not freeze the exchange’s assets. Judge Berman has asked the two entities to reach a compromise claiming that extreme measures like the freezing of Binance.US assets are not necessary.
The SEC filed a complaint against the exchange on June 5, alleging that the exchange was acting as an unregulated securities broker in the U.S. It stated that the exchange had been exposing American citizens to unregistered and unregulated securities that could harm them in their process of investing.
The SEC quoted several instances where the exchange executives had incriminated themselves, accepting that they are an unregulated securities exchange. The regulator also flagged several bank transfers between Binance.US and the international exchange branch, saying their accounting is tied.
As such, the SEC expressed that Binance could take away funds from the U.S. platform; thus, they should be frozen to avoid funds flight. However, Judge Berman Jackson now sees no need for ‘extreme’ measures like that to be taken.
“Shutting it down completely would create significant consequences not only for the company but for the digital asset markets in general,” Jackson said at a June 13 hearing.
Judge Berman Jackson added that she wouldn’t decide on SEC’s motion for the temporary restraining order against Binance.US until the two parties had worked through their issues.
An update for the two parties’ negotiations has been scheduled for a hearing on June 15. Keep watching Fintech Express for updates on crypto regulation and other fintech-related developments.
U.S. lawmakers have filed a motion to restructure SEC and reduce the power bestowed on the chairman position.
Senator Warren Davidson wants the SEC restructured to do away with the chair position as it could be involved in market manipulation.
Senator Davidson also wants current SEC Chair Gary Gensler fired.
U.S. lawmakers have filed a bill to restructure SEC
With market manipulation possibility in mind, U.S. lawmakers have filed a bill to allow the restructuring of the SEC to do away with the chairman position. Senator Warren Davidson and Rep. Tom Emmer were responsible for introducing the “SEC Stabilization Act” into the House of Representatives, according to his June 12 announcement.
🚨 NEWS – Today I filed the SEC Stabilization Act to restructure the @SECGov and #FireGaryGensler.
U.S. capital markets must be protected from a tyrannical Chairman, including the current one. It’s time for real reform and to fire @GaryGensler as Chair of the SEC. Statement ⬇️ pic.twitter.com/0VUHxUAhtB
— Warren Davidson 🇺🇸 (@WarrenDavidson) June 12, 2023
The bill aims to fire the currency Securities and Exchange Commission (SEC) Chair Gary Gensler and do away with that position forever. The bill is backed by community cries that SEC chairpersons could be involved in market manipulation by forcing special asset classes like crypto to bend to their will without first introducing binding laws.
In a statement, Davidson said:
“U.S. capital markets must be protected from a tyrannical Chairman, including the current one. That’s why I’m introducing legislation to fix the ongoing abuse of power and ensure protection that is in the best interest of the market for years to come. It’s time for real reform and to fire Gary Gensler as Chair of the SEC.”
Davidson had been working on the bill since January this year following observations that SEC chair Gary Gensler had been showcasing too much power over markets. The bill will redistribute power between the Chair and commissioners whilst removing Gary Gensler from office. It will also add a sixth commissioner to the agency, allowing any party to hold a majority on the commission and also introduce an executive director position.
SEC chairman criticized for indirect market manipulation
The crypto market has been having bad faith with SEC chairman Gary Gensler and accuses him of market manipulation. They have been noticing that he introduces new lawsuits in questionable intervals as they coincide with green zones, which results in the market’s collapse.
Gary Gensler was also caught saying that the U.S. doesn’t need any more new crypto assets, which sent shock waves across the crypto markets. SEC also mentioned around 67 crypto assets in all their crypto lawsuits claiming they are securities. As a result, some of these assets have lost value by as much as 19%, a move that has been heavily criticized and branded as possible market manipulation.
Rep Tom Emmer, the co-author of the bill, claimed that the SEC Stabilization Act is necessary as investors will be shielded from reckless leadership.
“The SEC Stabilization Act will make common-sense changes to ensure that the SEC’s priorities are with the investors they are charged to protect and not the whims of its reckless Chair.”
Though Davidson and Emmer never mentioned crypto assets in their statements or bill, they are pro-crypto and known to be critical of Gensler’s officiating. Emmer, for instance, had called Gary Gensler a “bad faith regulator” before while Senator Davidson campaigned for crypto and served as the vice chair of the House Financial Services Committee’s new Subcommittee on Digital Assets, Financial Technology, and Inclusion.
Following the SEC’s recent actions companies like Robinhood, Coinbase, and Bittrex have been forced to rethink their U.S. market strategy. Others like Animoca Brands have also left the U.S. with many more expected to follow as they are avoiding colliding with the regulator over trading assets that the regulator sees as securities.
The new bill comes at an opportune time when the crypto community is on the verge of hitting back at the SEC for unfavorable regulation. However, only time will tell how the courts will rule and the ruling’s influence on the industry’s future.
Keep watching Fintech Express for updates on regulations and other fintech-related developments.
Ripple CEO Bradley Kent Garlinghouse hints that the crypto community should eagerly await Hinman documents.
SEC and Ripple court battle takes a new twist as judge orders release of documents that could tip the case in Ripple’s favor
Ripple CEO positive about Hinman’s documents
On June 13, 2023, Ripple CEO Bradley Kent Garlinghouse tweeted, assuring the crypto community that upcoming Hinman’s documents are worth the wait. He hinted that the documents could play a huge role in tipping the case in Ripple’s favor and concluding it.
Its only one day left for the Hinman documents to get unsealed, and the crypto community is already showing uproars and eagerness to see them. The SEC had been fighting for the court to lock the public out of seeing the documents for over 18 months.
1. Hearing on motion to seize Binance assets in DDC; 2. Release of Hinman docs in SDNY; 3. SEC response to order on @Coinbase petition in 3rd Cir.
Not every federal court day is eventful in crypto, but tomorrow is. May God bless the US Courts.
With only a day left to the unsealing date, Ripple executives CEO Brad Garlinghouse and Chief Legal Officer Stuart Alderoty see it as worth the wait. The documents concern SEC messages on a 2018 speech by former director William Hinman. In the speech, Hinman says that cryptocurrencies such as Bitcoin and Ether may start as securities but become commodities when sufficiently decentralized.
Ripple advocates and investors believe that the imminent unsealing of documents will be instrumental in providing further insight into the legal status of Ripple’s XRP token. The timing of the unsealing of these documents couldn’t be more opportune as it comes at a time when the SEC is pressing on with crackdowns against crypto exchanges for trading crypto assets that stand as securities.
Keep watching Fintech Express for more updates on crypto and other fintech-related developments.
Democratic leaders in the United States seem to be forming a fight against crypto
Winklevoss twins believe that the move by these lawmakers might see them losing critical votes in 2024
The crypto community keeps feeling undermined in the U.S. and is weighing its options
Winklevoss twins believe that Democrats are on track to miss out on crypto votes
Winklevoss twins believe that Democrats are on the wrong side of crypto regulation, which may make them lose key votes in 2024. The two crypto investors believe that the ongoing ‘crypto crackdowns’ and open show of dissatisfaction with crypto innovations led by Democrats might make many voters favor their opponents.
One of the Winklevoss twins, Cameron, tweeted on June 11 calling out Senator Elizabeth Wallet for her continued pressure to call for an ‘army’ to rise against crypto. He quoted an article from CNN that states, “Democrats would have gotten crushed this election without young voters.”
The @SenWarren and @GaryGensler war against crypto is going to alienate an entire generation of would-be Democrats.
Winning the youth vote w/ "get out the vote" is key part of Dem playbook. Dems believe the youth vote will carry the day. pic.twitter.com/F4FQowjCVn
In his claims, Cameron says that young voters are most likely involved or interested in the crypto innovation, which makes it a poor choice for Democrats to go to war with the industry. Cameron said that Warren and Gary Gensler going after crypto with prejudice would align an entire generation of would-be Democrats.
Soon after, his twin Tyler tweeted that Warren and Gary Gensler would cost Democrats their positions in 2024.
Roe cost Republicans the mid-terms. The @SenWarren and @GaryGensler war on crypto will cost Dems the 2024 election.
These tweets by the Winklevoss twins come at a time when SEC’s Gary Gensler says he does not think the U.S. needs any more crypto assets. He added that he believes crypto is built on non-compliance, saying it doesn’t want to comply with set rules like securities laws.
His comments come when he seeks to give the SEC control over 60+ crypto assets claiming they are securities. The regulators are already suing Binance and Coinbase regarding trading assets in its 60+ list in the U.S. without its clearance. It also has a court battle going on with Ripple over XRP.
These efforts by the SEC to make the market ‘safer’ for American investors have been received by a rather unhappy crypto industry. Some people call for the community to pull efforts and challenge the regulator in court, while others warn of companies leaving the U.S., which is already happening with Bittrex and Coinbase looking for offshore crypto-friendly destinations.
As such, crypto is expected to be a major weighing point in the upcoming 2024 elections, making it necessary for Democrats to switch sides per Winklevoss twins. Keep watching Fintech Express for updates on crypto regulation and other fintech-related news and developments.
