Canadian financial regulatory authorities are considering putting in place rules for cryptocurrency exchanges in the country.
The Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) published a consultation paper on Thursday, seeking input from the fintech community on how regulatory requirements can be developed for cryptocurrency platforms.
“The emergence of digital and crypto assets continues to be a growing area of interest,” said Andrew J. Kriegler, president and CEO of the IIROC in a separate statement on Thursday, adding:
“We must adapt to innovation, and provide clarity to the market about how regulatory requirements might best be tailored and applied to these unique business models, while maintaining investor protection.”
Considering the “novel” features and risks of cryptocurrencies, the regulators proposed applying securities laws wherever applicable.
For instance, if cryptocurrencies are securities and/or derivatives traded on an exchange, that exchange would be subject to securities and/or derivatives regulatory requirements, they said. Most “utility tokens” have involved the distribution of securities, usually as investment contracts, they added.
The agencies are of the view that cryptocurrency platforms are hybrid in nature, meaning they can perform functions of one or more market participants, including alternative trading systems, exchanges, dealers, custodians and clearing agencies.
Therefore, they are considering the preparation of a set of “tailored” regulatory requirements to address the risks and features of cryptocurrency platforms.
Currently, none of the cryptocurrency exchanges in Canada is recognized as an exchange nor is authorized to operate as a marketplace or dealer, according to the paper.
The recent QuadrigaCX saga highlighted the lack of regulations covering the cryptocurrency industry in Canada.
The Canadian cryptocurrency exchange’s CEO, Gerald Cotten, died last December, apparently without leaving a way for staff to access the computer storing the failing exchange’s funds. QuadrigaCX still owes its customers roughly $190 million in both cryptocurrency and fiat.
Last month, the securities watchdog in the Canadian province of British Columbia, the British Columbia Securities Commission (BCSC), said that it has no remit to regulate the troubled exchange.
The CSA and IIROC consultation paper is open for public comment until May 15.
ETH/USD technical analysis: Ethereum bleeds below $200 as US senate frowns at Facebook’Libra
- The cryto market is bleeding as Facebook’s libra may face legal issues.
- ETH is under strong selling pressure now below the $200 mark
Breaking: Bitcoin tumbles under $10,000 as U.S. Senate mulls Facebook’s Libra
ETH/USD daily chart
The July’s selloff keeps going as the market trades below the $200 mark and the 50 and 100 SMAs. Cryptocurrencies are dropping on the back of potential legal and privacy issues with Facebook’s Libra.
ETH/USD 4-hour chart
The market is seen as weak below 220 resistance and its main SMAs. The level to beat for bears is 180 followed by 120 on the way down.
Additional key levels
|Today last price||198.54|
|Today Daily Change||-29.55|
|Today Daily Change %||-12.96|
|Today daily open||228.09|
|Previous Daily High||235.48|
|Previous Daily Low||202.87|
|Previous Weekly High||318.46|
|Previous Weekly Low||262|
|Previous Monthly High||363.54|
|Previous Monthly Low||226.48|
|Daily Fibonacci 38.2%||223.02|
|Daily Fibonacci 61.8%||215.32|
|Daily Pivot Point S1||208.81|
|Daily Pivot Point S2||189.53|
|Daily Pivot Point S3||176.2|
|Daily Pivot Point R1||241.42|
|Daily Pivot Point R2||254.76|
|Daily Pivot Point R3||274.03|
Facebook’s Libra Should Be Regulated Like a Security, Says Former CFTC Chair
Libra is a security, says a former Commodity Futures Trading Commission (CFTC) chairman in prepared remarks to the U.S. House of Representatives.
Gary Gensler, who chaired the CFTC from 2009 to 2014 and previously held leadership roles at the U.S. Treasury Department, says in written testimony that Facebook’s new cryptocurrency project looks like an investment vehicle and that Libra may even resemble some banking structures.
Gensler will testify before the House Financial Services Committee on Wednesday, as part of a panel of expert witnesses on the potential implications of Libra. He will join Public Citizen president Robert Weissman, Columbia University law professor Katharina Pistor and Georgetown University law professor Chris Brummer.
In Gensler’s remarks, obtained by CoinDesk, he describes how the Libra cryptocurrency might be classified as a security.
At the heart of his argument is Libra’s structure: Libra itself is intended to act as a kind of stablecoin, with its value pegged to a basket of sovereign currencies and government bonds. Members of the Libra Association, the governing council charged with overseeing the cryptocurrency’s ongoing development after it launches, will receive a Libra investment token – a security token, as Facebook has acknowledged.
Collateral earned on the basket of currencies backing Libra (referred to as the Libra Reserve) will go to holders of the investment token, according to documentation Facebook published about the project last month.
Gensler argues this means Libra itself looks like a security, saying:
“As currently proposed, the Libra Reserve, in essence, is a pooled investment vehicle that should at a minimum, be regulated by the Securities and Exchange Commission (SEC), with the Libra Association registering as an investment advisor.”
‘Pooled investment vehicle’
According to Gensler, Libra is a security for the same reasons that the Libra Investment Token is a security.
There may be debates on whether and how Libra qualifies as a security under the Investment Company Act of 1940, the Howey Test, or the “Reves Family Resemblance Test,” but none of these are strictly important for this analysis, he argues, explaining:
“It’s unambiguous that [the Libra Investment Token] is a security as it will receive a net return based upon interest on the Libra Reserve.”
In Gensler’s view, the actual Libra token is “part of the same pooled investment vehicle,” and therefore faces the same market risks as the investment token.
The SEC is already considering whether Libra could be considered a security, and therefore falls under its purview, according to a Wall Street Journal report.
“Further, investor protection will be just as important for the proposed Libra token as it is for investors in international bond funds or in commodity ETFs such as gold, silver, or oil ETFs,” Gensler says. “I also believe that each Authorized Reseller of the Libra token would need to be a registered broker dealer.”
He describes holders of Libra as a “2nd class of investors” in the Libra Reserve.
Securities concerns aside, aspects of Libra’s setup also may fall under banking regulations, Gensler adds.
The Libra Reserve is effectively proposing “a private form of money” which can be used for payments, storing value and lending “the proceeds to banks (as deposits) and governments (as debt securities),” he says.
These applications are similar to services offered by banks.
“Thus, there is some basis to consider the Libra Reserve as a bank or to apply bank-like regulation to it,” Gensler proposes. “At a minimum there should be restrictions on Libra Reserve’s investments and prohibition on its ability to lend or operate as a fractional bank.”
(It’s worth noting there’s actually precedent for a stablecoin issuer operating as a fractional bank: Tether.)
Ripple (XRP/USD) forecast and analysis on July 16, 2019
Cryptocurrency Ripple (XRP/USD) is trading at 0.3111. Cryptocurrency quotes are trading below the moving average with a period of 55. This indicates a bearish trend on Ripple. At the moment, cryptocurrency quotes are moving near the lower border of the Bollinger Bands indicator bands.
Ripple (XRP/USD) forecast and analysis on July 16, 2019
As part of the Ripple course forecast, a test level of 0.3280 is expected. Where should we expect an attempt to continue the fall of XRP/USD and the further development of the downward trend. The purpose of this movement is the area near the level of 0.2430. The conservative sales area for Ripple is located near the upper border of the Bollinger Bands indicator at 0.3540.
Cancellation of the option to continue the decline in the Ripple rate will be a breakdown of the upper border of the Bollinger Bands indicator bands. As well as the moving average with a period of 55 and closing quotations of the pair above the 0.3650 area. This will indicate a change in the current trend in favor of the bullish for XRP/USD. In case of a breakdown of the lower border of the Bollinger Bands indicator bands, one should expect an acceleration of the fall of the cryptocurrency.
Ripple (XRP/USD) forecast and analysis on July 16, 2019 implies a test level of 0.3280. Further, it is expected to continue falling to the area below the level of 0.2430. The conservative area for selling Ripple is located area of 0.3540. Canceling the option of falling cryptocurrency will be a breakdown of the level of 0.3650. In this case, we should expect continued growth.