by Samuel Mbaki | Jun 9, 2023 | Regulation
Key Points
- SEC chairman has explained that the regulator had a meeting earlier this week where they discussed and introduced two more rules for Swap Markets
- He also says that the regulator has adopted a set of final rules to remove references to credit ratings from Rules 101 AND 102 of Reg M per a mandate by Congress in the wake of the 08 financial shakedown.
Swap markets need more attention, says SEC chair
SEC chair Gary Gensler has announced the introduction of more rules for Swap Markets. He says investors need more protection as misconduct in such markets could affect many involved parties.
In a Twitter post, Gary Gensler says that the regulator saw it fit in their latest meeting to introduce two more rules in the Swap markets. In his words, Gnsler said:
“Any misconduct in the security-based swaps market noit only harms direct counterparties but also can affect reference entities and investors in those reference entities. Given these markets size, scale and importance, it is critical that the commission protect investors and market integrity through helping prevent fraud, manipulation, and deception relating to security-based swaps. Today’s rules will do just that.”
He added that they also adopted a set of final rules to remove references to credit ratings from Rules 101 & 102 of Reg M, fulfilling an important mandate issued by Congress in the wake of the ’08 financial crisis.
Keep watching Fintech Express for updates on financial regulation and other fintech-related developments.
by Samuel Mbaki | Jun 9, 2023 | Regulation
Key Points
- Mica has been published in the E.U. official journal.
- The crypto legislature will take effect by the end of 2024 to create a unified crypto assets regulation in the European Union Member States.
MiCA crypto regulations added to E.U. official journal- the countdown to effect starts.
E.U. has published MiCA regulations in its official journal, kickstarting the countdown to them taking effect by the end of 2024. These regulations have been in development over the past few years. They will play a big part in harmonizing crypto regulations in the region, as all European Union member states will be using them.
The European Union Markets in Crypto Assets (E.U. MiCA) legislation was published on June 9, 2023, triggering the count down to December 30, 2024, where it should be effected. This bill was signed into law on May 31. Still, it has been agreed upon by the E.U. lawmakers to give the crypto industry time to read and digest them before they are effected to avoid bringing hasty regulation that may send innovation away from E.U. member states.
The crypto industry has hailed the E.U. for introducing the proper regulatory framework in the area, unlike the U.S., which charges exchanges without having put in similar efforts first.
Today, Binance’s CEO praised the European Union for the legislation and said that since there is a new framework in Europe, his exchange and others will have time to adequately adjust and adhere to it to serve both the law and the investors.
In the meantime, crypto organizations are getting under fire in the U.S. as SEC is going hard after them. By now, Bittrex and Kraken have been charged with ongoing court proceedings for Ripple, Coinbase, and Binance. These organizations are being sued for offering securities assets to U.S. citizens without the ‘knowledge’ of the SEC.
Keep watching Fintech Express for updates on crypto regulation and other Fintech-related developments.
by Samuel Mbaki | Jun 9, 2023 | Regulation
Key Points
- Binance.US to suspend deposits and withdrawals in USD as banking partners sever ties with them.
- Binance CEO CZ has clarified that Binance.US deposits have never mixed with the funds in the international exchange.
- SEC seeks a restraining order to freeze Binance.US funds to prevent asset flight
Banks are severing ties with Binance.US after SEC charges
More pain for Binance.US customers as banks have decided to move away from the exchange in light of the SEC court battle. They have withdrawn their services of powering the Binance USD fiat ramp, making it impossible to withdraw or deposit USD to the exchange anymore.
Following the developments, Binance.US has announced that it will suspend the deposit and withdrawal of funds from the exchange via USD on June 13, 2023. The exchange is in a court battle with the Securities and Exchange Commission after the regulator filed 13 charges against it on June 5, alleging that it was operating as an unlicensed securities broker.
The SEC is particularly interested in the bank transactions of Binance and Binance.US, where it believes that the exchanges and their founder Changpeng Zhao were violating U.S. securities laws. SEC alleges that Zhao’s influence over the two exchanges has led to the movement of billions between them, attracting their interest. However, Binance CEO, CZ does not accept the allegation clarifying that funds from the two exchanges were never mixed.
The SEC has now filed a motion to grant a restraining order against Binance.US, alleging that the exchange could be used to transfer U.S. customer deposits offshore. While this motion has yet to be granted, the withdrawal of banking institutions from the exchange has led to the immediate need for the closure of the USD fiat ramp as the exchange no longer has a way to serve the demands of its U.S. customers.
However, customer deposits won’t be lost even if they are late in transferring their money. They can still convert it to assets like tether stablecoin and transfer it to other exchanges or crypto wallets. Keep watching Fintech Express for updates on crypto regulation and other Fintech-related stories.
by admin | Jun 8, 2023 | Regulation
Key Points
- FCA has introduced stricter crypto regulations in the U.K. that will take effect in October 2023.
- The new regulations include a “cooling off period” for first-time investors and a ban on “refer a friend bonuses.”
Crypto ads in the U.K to be under stricter regulation-FCA
The U.K. continues to crack down on crypto advertisements as the FCA introduces newer and stricter regulations. The regulator seeks to abolish the refer-a-friend bonus program used for advertising crypto projects, alleging that it hinders the chance for people to decide whether or not they want to be part of a project.
The regulator also introduced a cooling-off period for first-time investors to be implemented in all companies in the U.K. In an official statement, the executive director of consumers and competition at the FCA, Sheldon Mills, said that while the decision to buy or invest in crypto-related investments relies solely on an individual, it can be easily influenced by the kind of marketing done and lead them into making impulsive decisions that would cause regrets.
Mills added that extra guidance is needed to protect crypto investors in the U.K. in such a decision-making process
“The crypto industry needs to prepare now for this significant change. We are working on additional guidance to help them meet our expectations.”
The new rules require crypto companies to verify that individuals possess the necessary knowledge to handle crypto investments. Additionally, to promote these crypto assets, companies must include the associated risks to enhance transparency and ensure that their advertisements are fair, clear and devoid of any misleading information that could result in significant losses.
This news comes when the U.S. is pressing on with crypto regulation as the SEC is charging the two largest crypto exchanges, Binance and Coinbase, over allegations of exposing investors to risky crypto assets. Keep watching Fintech Express for updates on crypto regulation and either Fintech-related developments.
by Fintech Express | Jun 8, 2023 | Regulation, Follow up
Key Points
- Controversy has sparked again regarding SEC’s Gary Gnsler’s motivations behind charging Binance.US as lawyers allege he has a conflict of interest.
- Gary Gensler allegedly was rejected as Binance advisor in 2019, and his recent act of charging the exchange could be motivated by revenge.
- The crypto community continues hitting back at Gary Gensler’s ‘pretentious’ claim to care for investors.
Gary Gensler was rejected as Binance Advisor; Binance lawyers
Per Binance lawyers, Gary Gensler had applied to be an advisor for the exchange in 2019 but was rejected. They allege that the decision by the company to go with another person could have hurt Gensler and motivated him to go after the exchange after he was given power as the Chair of SEC.
Binance Lawyers say that Gensler is having a conflict of interest with the ongoing case as he seems to be motivated more by extorting money from the exchange rather than regulating the crypto industry fairly. They cited that the exchange is always ready to work with regulators and identify any issues that could arise from their services, a step that SEC walked all over before heading to court seeking to settle charges with the exchange.
More controversy over Gary Gensler’s motivations
Binance explains that it’s ready to comply with set regulations, and the regulators are also obligated to make the field level for all participants to foster growth and innovation and not chase it away to offshore nations. Now, SEC is seeking U.S. courts to freeze Binance.US assets, claiming that there are many parallels between Binance and the collapse of the crypto exchange FTX.
However, it has not gone unnoticed that SEC did nothing to prevent the collapse of FTX, like looking into how the exchange operates while it had been committing financial fraud under its nose for years. More controversy comes as Binance lawyers revealed that Gary Gensler was not fit to join SEC as he lied under oath during his testimony in July 2019 for Facebook’s proposed cryptocurrency and wallet.
They said that Gary stated the following words under oath.
“I do not advise any financial, technology, blockchain or other companies, nor do I own any cryptocurrencies.”
Days ago, Gensler said that the U.S. does not need more digital currencies as they are meant to be non-compliant.
“We don’t need more digital currency,” claiming that the crypto business model is “built on non-compliance.”
These comments from Gary Genslers show his interest in smothering cryptocurrencies rather than fostering their regulation and adoption. As such, the crypto community has raised their voices against him, with lawmakers telling him to prepare to appear ahead of Congress to explain why he thinks he has the power to decide for Americans.
Others have called for the crypto industry to pull their efforts together and fight the supposed “Operation Chokepoint 2.0,” which is meant to smother crypto in favour of a more state-controlled CBDC.
Keep watching Fintech Express for updates on SEC’s crypto regulation efforts and other Fintech-related developments.
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.
