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.
Stablecoins are pegged to a given currency or commodity and usually tag along with its prices; thus should not deviate from the tagged asset’s value.
There are different types of stablecoins depending on their mode of backing.
What are stablecoins?
Stablecoins are cryptocurrencies whose values are always pegged to that of another currency, commodity, or financial instrument. They are an alternative to the high volatility of other cryptocurrencies and fiat currencies, which may be hard to use digitally.
As such, stablecoins are better to use as a mode of exchange than highly volatile cryptocurrencies. They do not have to be tied to a currency like the U.S. dollar. They can be tied to commodities like gold too.
Types of stablecoins
Stablecoins differ according to the mode of backing. In that way, we currently have three types of stablecoins:
Fiat-collateralized (backed by fiat money or physical commodities)
Crypto collateralized (backed using other cryptocurrencies like BTC and ETH)
Algorithmic (tied to the value of a commodity or a currency using an algorithm that controls how and when coins are burnt or minted to maintain their peg)
Top stablecoins
The market cap of stablecoins exceeds $127 billion, making them an essential part of a current $1T industry. There are many stablecoins in the market, but only a few could have reliability of 80%+. Here are the top six stablecoins by market capitalization
Tether USDT – $83.28B
USD Coin – $28.11B
Dai- $4.6B
Binance USD – $4.49B
True USD – $2.01B
Pax Dollar- $1B
What is Tether USDT?
Tether USDT is the world’s largest stablecoin by market capitalization. It is the most popular among crypto enthusiasts as it has been leveraged for years and pegged to the dollar. Both physical and crypto assets back it. USDT is minted and managed by its parent company, Tether.
What is USD Coin (USDC)
Like Tether USDT, USD Coin(USDC) is pegged to the U.S. Dollar. It is managed by its parent company Centre Consortium. This stablecoin is the world’s second-largest one and brags a liquid backing of 100% cash and cash equivalents.
What is Dai (DAI)
DAI is a dollar-pegged crypto asset on the Ethereum network. It is currently the third largest by market cap but has been crippled by depends severally. This stablecoin brags to be the world’s first decentralized, collateral-backed cryptocurrency. Unlike the USDT and USDC, it is algorithmic and was issued by MakerDAO.
What is Binance USD coin (BUSD)
Binance USD (BUSD) is a fiat-backed crypto asset pegged to the U.S. Dollar and issued by Paxos. It has reserves that are equal to customer deposits and are held in FDIC-insured U.S. Banks. However, it has been under pressure by U.S. regulators to wind up its operations and close for good.
What is True USD (TUSD)
True USD (TUSD) claims to be the first independently verified digital asset that equates to 1:1 for U.S. Dollars. It is a multichain stablecoin that uses traditional banks, escrow accounts, and third-party attestation in its operations to decrease counter-party risks, offer transparency and do away with fraud.
What is Pax Dollar (USDP)
USDP is a USD-pegged digital asset issued by Paxos. Unlike traditional banking, it aims to offer its users the ability to store and send money digitally in U.S. dollars in a free, unrestricted way. It is fully regulated and 100% backed by cash reserves.
Risks associated with stablecoins
There are different risks that are associated with holding stablecoins. Here are the two main ones
De-pegging
Stablecoins are known to lose their peg resulting in huge losses to their users. However, not all of them collapse for good. Some lose their peg momentarily, including the largest ones like Tether USDT.
A Tether USDT de-peg has sent a shockwave across the crypto market as #Curve3Pool seems to be in distress. CTO Ardoino says Tether is ready to buy back any amount as it works to restore the peg. Here is more about the story👇👇#crypto#USDT#Tetherhttps://t.co/U6LulnSRwK
Regulators, at times, are not in favor of assets that could weaken their economies. As such, lawmakers and regulators may rally to bring down all stablecoins pegged to their currencies in fear of the fiat currencies weakening. It has already happened in the U.S., where several lawmakers wanted stablecoins done with, and NYDIC asked Paxos to stop issuing BUSD.
Keep watching Fintech Express to learn more about the crypto industry and other fintech-related fields.
A Tether USDT de-peg has sent a shockwave across the crypto market as Curve 3Pool seems to be in distress.
USDT’s value plummeted to slightly under a dollar, but issuing company, Tether, says it is ready to buy back any amount while it works on restoring the peg
Tether’s USDT traded on a discount of up to 0.25% on June 15, 2023, due to imbalances in Curve 3Pool. Curve 3Pool is one of the most popular pools for stablecoin trading in decentralized finance. Therefore, a miscalculation or imbalance of reserves can affect its stablecoins.
Tether is ready to buy back any USDT amounts to restore the peg
Tether Chief Technology Officer (CTO), Paolo Ardoino, has talked about the dip, saying that the imbalance in Curve 3Pool indicates a broader tension in the crypto market. In an interview with The Block, he expressed that Tether is a liquidity gateway in the crypto industry; when bull markets set in, they see inflows, and when a bear cycle occurs, outflows increase.
“Tether is the gateway for liquidity, inbound and outbound. So when the interest in crypto grows, we see inflows; when the sentiment on the crypto market is negative, we see outflows.”
It is not the first time that Curve 3Pool has had an imbalance. In March 2023, the pool had a similar issue where the balances of DAI and USDC stablecoins exceeded 45% of each. Also, in November 2022, after the collapse of FTX, the volatility in the pool was highly noticeable same as the Terra ecosystem collapse.
Despite the current situation looking ugly for a struggling market, Ardoino has said that the company is closely monitoring the situation and will have a remedy sooner than later. Keep watching Fintech Express for more updates on crypto and other fintech-related news and developments.
European Union has passed the first regulatory framework for the artificial intelligence industry.
The law requires generative AI systems like GPT4 to be reviewed before commercial release. It also bans real-time facial recognition.
The development sets the bloc above most world governments and powers as the industry is newly formed and highly unregulated.
EU leads the world in regulating artificial intelligence by passing the first comprehensive set of regulations. The new rules will monitor how generative AI like GPT4 is built and released commercially. It will also bring users more protection, like inhibiting live recording, detailing, and other facial recognition systems.
Artificial intelligence gets regulated in the EU
European Union spearheads Artificial Intelligence regulation worldwide as its parliament approves a landmark framework called EU AI Act. The framework becomes the first to go into effect in the West.
Artificial Intelligence (AI) has recently become a main topic, with its risks being widely spoken about by people like Elon Musk. However, just because an innovation is risky doesn’t mean it should be banned. Otherwise, it could be rebuilt illegally and overrun the world later when we are not well prepared for it.
As such, lawmakers in different places, including the U.S., have drafted bills to make AI more friendly. This approach has been slow as only the European Union has managed to pass a regulatory bill through all legal processes required to make it a law.
The bloc’s parliament voted on June 13, 2023, to adopt the EU AI Act with 499 votes in favor, 28 against it, and 93 abstentions. Though it passed through this crucial stage, it is still far from becoming law.
The next stage is for negotiators at European Union institutions like the EU executive body and 27 member states. On Monday, U.K. Prime Minister Rishi Sunak boldly pitched to make the U.K. the “geographical home” of AI safety regulation as the nation heads to holding its first global AI safety summit later in the year.
Keep watching Fintech Express for updates on AI and other technology-related news and developments.
France is trying to lure tech billionaire Elon Musk to invest in the country by building the next Tesla Gigafactory there.
The nation’s digital minister, Jean-Noel Barrot, says they have invested in electric batteries and would love to welcome EV manufacturers and specifically Musk, there.
Nevertheless, Barrot says that Twitter could face a ban in the EU if it fails to comply with the upcoming Digital Services Act.
France Digital Minister Jean-Noel Barrot hints that the country is planning to convince Elon Musk to invest in the next Tesla Gigafactory there. Barrot made these statements in an interview with a CNBC Journalist on June 14 though she also noted that if his Twitter platform does not comply with the upcoming EU Digital Services Act, it will get banned.
France to convince Elon Musk to invest in the country
In an interview with a CNBC Journalist, France’s Digital Minister Jean-Noel Barrot claimed that France had invested in electric batteries and would love to convince Elon Musk to build his next Tesla Giga factory there.
“It will be great to have a Tesla factory in France, there has been a lot of effort and energy to make sure this is possible and this can happen,” Jean-Noel Barrot told CNBC’s Charlotte Reed at the Viva Tech conference in Paris.
“We have also invested in an … entire sector of electric batteries so we will try to convince him that France is the best possible place in Europe to establish the next Tesla factory,” Barrot added.
Musk is expected to take the stage in Paris on June 15, 2023, at the Viva Tech Summit. He has been on the hunt for a new Gigafactory location, and his empire hasn’t gone unnoticed by France, who wants him to join them. He has been exploring wider networks for the Tesla market after setting up Gigafactories in U.S., Germany, and China.
When asked why Musk, Barrot praised him, saying he is a “great inventor, probably one of the greatest of the beginning of this century.”
Twitter could get an EU ban.
Barrot’s comments on wanting to lure Musk to France did not come without the topping of a possibility of a Twitter ban. Last month Barret also warned that Twitter could get banned in the country as it still does not comply with the EU’s upcoming Digital Services Act that goes into effect this August.
The Digital Services Act will force Tech giants like Twitter to police illegal content and disinformation more aggressively or risk multi-billion dollar fines.
“There will be huge scrutiny by the EU commission … on the actions Twitter is going to take to meet these new obligations. If Twitter fails to comply with these obligations , Twitter will face sanctions of up to 6% of global sales … In case those failures to comply are not … corrected, they will face an obligation to leave the EU.”
Barrot also topped up her comments, saying:
“In the past couple of weeks, what we’ve seen is not reassuring as to the ability of Twitter to comply with these new rules.”
These developments come at a time when Elon Musk is working hard to bring free speech to Twitter. However, it doesn’t go without his words that free speech is valid only when it abides by the laws. What will transpire next remains to be seen?
‘Official’ plans for a U.S. digital dollar still not introduced as research remains underway.
Treasury’s Graham Steele expresses concerns about the validity of a CBDC in the U.S.
Steele is concerned that a CBDC could trigger a bank run as people rush to withdraw their currencies from banks.
A digital dollar is still not sitting well with treasury Official Graham Steele on worries that it could very well trigger bank runs. Steele thinks that the in-research digital dollar could encourage further withdrawals from banks, weakening an already shaken system.
A digital dollar could be a thorn in the banking system.
While talking at a payments conference in Austin, Texas, on June 13, 2023, Graham Steele said that the U.S. has not yet decided on whether to pursue a central bank digital currency. However, an interagency working group is already in place that is researching the implications of such a currency.
He expressed his thoughts, saying that a retail CBDC will drive out further deposits from banks instead of a wholesale CBDC that is only available to institutional investors. The retail CBDC would allow individuals and businesses to conduct normal day-to-day activities, gradually replacing the common notes and coins.
In his words, Steele said
“A retail CBDC could contribute to a more competitive and innovative payment system; support financial inclusion; and help preserve the face value redemption of the currency. ” He added, “There were caveats: design decisions — such as the range of intermediaries acting as CBDC service providers — would impact those potential effects.”
Steele noted how we had seen banks such as Silicon Valley Bank and First Republic fall due to increased withdrawals than the available deposits. He said that other banks could follow if a retail CBDC gets offered and investors seize the opportunity to hold their money digitally.
“As we have seen in the recent episodes of banking turmoil, a combination of technology, highly concentrated depositor base, and access to non-deposit alternatives outside of the banking system may have changed the nature and speed of bank runs,”
“With the technology enabling the movement of deposits only getting faster, there could be additional risks associated with the introduction of CBDC.”
But a digital dollar is already in the works, Steele?
In November 2022, information surfaced that nine major banks were working hand in hand with the Federal Reserve Bank of New York to test the feasibility of a digital dollar. The CBDC would be based on distributed ledger technology.
The banks involved in the pilot phase of the digital dollar include Citibank, Wells Fargo, Mastercard, PNC Bank, T.D. Bank, Truist, BNY Mellon, HSBC, Wells Fargo, and U.S. Bank.
The U.S. digital dollar will be in the form of tokens like what is happening in the crypto industry, only that it will be settled and simulated via Central Bank Reserves on a shared multi-entity distributed ledger. Keep watching Fintech Express for more updates on Finance, Banking, 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.
Ripple vs. SEC case has been going on for the last 18+ months over claims that XRP is a security
EX SEC Director William Hinman made a speech in 2018 claiming that some assets like BTC and ETH start as securities, but they evolve into commodities
SEC has been trying to keep the documents sealed, but Judge Torres denied their motion on May 16, 2023
The documents were released on June 13, 2023, for public access
Ripple vs. SEC: Hinmans documents
Hinmans documents are internal SEC messages concerning a speech given by former director William Hinman detailing that some crypto assets evolve from being securities. Hinman said that some assets become commodities as soon as decentralization disqualifies them as securities.
The SEC has been working to keep these documents hidden from the public as it continues to crack down n crypto platforms for trading ‘securities.’ In the case against Ripple, Judge Torres denied their motion to hide the Hinmans documents in May 2023, saying that the public has the right to know what transpired.
What should you expect from Hinmans documents?
We expect to see emails and comments made by Hinman, SEC staff, and Valerie Szczepanik concerning his speech on crypto assets evolving their asset classes as decentralization sets in. You can expect to see drafts and quotes from his speech in the documents. The documents are expected to bear minimal redactions.
Will the documents refer directly to the XRP token?
Though Ripple CEO Brad Garlinghouse says these documents are worth the wait, they are not certain to have XRP token mentions. However, as the SEC was investigating XRP, which at the time was among the top 3 coins in the world, it is possible that it mentioned or, rather, SEC incriminated itself in the process of handling the token.
Why are the Hinmans documents important to the crypto industry?
The crypto industry has been under a regulation attack by the U.S. SEC, with over 67 assets accredited as Securities. Most of these ‘securities’ are highly decentralized, which will most likely disrupt what the SEC is doing currently and may result in a major shift of their regulator power over the crypto industry.
If these assets are reclassified as commodities, the SEC will be in for a wild ride as the legal status of cryptos changes, and they have been knowing it for a long time but ignoring it and going ahead to charge trading platforms in the U.S. The legal proceedings with Riplle may also shift greatly.
What is the likely impact of Hinmans documents on the Ripple vs. SEC case?
Once the Hinman documents are released, Ripple will have a 25% outright chance of winning the case as they lean heavily in their favor. On the other hand, the SEC will have around a 5% outright chance of winning the case.
These documents are important to this case as they will influence the decisions and efforts made by the SEC to regulate Ripple and other future cryptocurrency-related investments. The documents may bear comments that suggest that XRP Ripple does not satisfy all elements of the Howie Test, making it not a security for purposes of the Federal Securities Laws.
Keep watching Fintech Express for updates on this and other fintech-related developments.
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.
