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Crypto Regulation

SEC Commissioner Warns Celebrities Will Not Bail Out Crypto Buyers

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Celebrities will not bail out naive cryptocurrency buyers, SEC commissioner warns

U.S. Securities and Exchange Commissioner Hester Peirce told Washington-based newspaper Roll Call that cryptocurrency investors have to manage their risk tolerance when taking cryptocurrency advice from celebrities.

Peirce, who is affectionally called “Crypto Mom” because of her pro-cryptocurrency stance, warns that there will no bailouts if things go south:

It’s your money that’s on the line, so do your own research and make your own decision based on your own risk tolerance and your own circumstances. After all, if things turn out badly, the celebrity won’t be there to bail you out.

During the initial coin offering (ICO) mania, some celebs were charged by the SEC with unlawfully shilling tokens on their social media profiles. Actor Steven Seagal, who became a Russian citizen in 2016, agreed to pay a disgorgement of roughly $330,000 in 2020. After he failed to pay the whole fine, the agency moved to collect money through his U.S. representatives.

A slew of musicians, actors, athletes and prominent influencers hopped on the crypto train once again to cash in on the ongoing bull run.

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As reported by U.Today, Kim Kardashian’s ad promoting a dubious cryptocurrency called “Ethereum Max” was seen by a third of crypto owners.

In September, Charles Randell, the head of the UK’s Financial Conduct Authority (FCA), stated that those who invested their money in the token promoted by Kim K had to be prepared to lose it all.

Dogecoin, the meme cryptocurrency touted by centibillionaire Elon Musk, rapper Snoop Dogg and a bunch of other stars, is currently down 66% from its historic peak that coincided with Musk’s appearance on “Saturday Night Live” in early May.

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Law professor Lawrence Cunningham told Roll Call that celebrities, who often have little to no knowledge of crypto, are fueling crypto speculation, which can cause system risks:

At scale, that can lead to a systemic misallocation of capital with adverse system-wide effects.

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Stablecoins

Just-In: Japan to Impose Stricter Regulations on Stablecoins

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The Financial Services Agency (FSA) of Japan has announced that they will follow the US regulator’s footsteps in the matter of strengthening regulatory oversight for Stablecoins. According to reports from a local publication, the FSA has declared the updated restrictions on Stablecoins issuance in the nation, in lieu of which, only banks and wire transfer services will now be able to issue stablecoins.

The Japanese authorities referred to the Tether fiasco in the US, noting that by imposing restrictions on the issuance of Stablecoins, the government aims to ascertain the economy’s stability by preventing mass liquidation amid fear that the issuer of the currency going bankrupt. The FSA has clarified that it shall introduce the legislation of Stablecoins by next year, further confirming that they took regulatory framework inspiration from the US. Additionally, Japan is aiming to launch a yen-based cryptocurrency by 2022 as well.

Japan to Impose Additional AML Restrictions

Along with restrictions on the issuance of Stablecoins, the FSA also plans on imposing additional security protocols to make the decentralized industry less risky, ensuring consumer protection. According to reports, the authorities will publish the updated and stern anti-money laundering guidelines. Regulatory oversight will substantially increase on intermediaries like wallet providers involved in stablecoin transactions. These wallet providers will be required to follow the Japan’s law on preventing transfers of criminal proceeds by verifying user identities and reporting suspicious transactions.

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The Japanese regulators are following up on their initiation of fastening crypto laws in the nation. Earlier this year, the FSA formed a new division to oversee a broader market of “decentralized finance”. Thus, regulating all blockchain-based financial operations that don’t have central intermediaries. Furthermore, Japan’s Finance Ministry joined the regulation project in lieu of the fast-moving development of the crypto industry.

“Japan can no longer leave things unattended with global developments over digital currencies moving so rapidly”, Reuters quoted the Ministry’s note.

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Crypto Regulation

Banks Must Meet These Conditions To Deal Crypto, US Regulator Says

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The mainstream adoption of digital assets has been one of the main targets that the crypto space set.

More and more moves are taking place in order to achieve this important goal and they continue.

Banks adopting crypto for their clients is one important step in this direction and you can check out the latest news about this below.

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US regulator details conditions for banks to deal crypto

It’s been just revealed that the U.S. Office of the Comptroller of the Currency (OCC) is outlining the conditions that national banks and federal savings associations have to mark before engaging in specified crypto activities.

The online publication the Daily Hodl says that according to the regulator, national banks and federal thrift institutions must do the following:

“demonstrate that they have adequate controls in place before they can engage in certain cryptocurrency, distributed ledger and stablecoin activities.”

The OCC also addressed some matters regarding interpretive letters issued in 2020 and early 2021.

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The regulator noted that banks can do the following:

“provide crypto custody services, hold dollar deposits that back stablecoins, act as nodes for distributed ledgers to verify payments and engage in particular stablecoin activities to facilitate payments on blockchain networks after notifying their supervisory office.

The same regulator also notes that the bank should not engage in the activity until “it receives a non-objection from its supervisory office.”

The Acting Comptroller of the Currency, Michael J. Hsu stated the following issues:

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“Because many of these technologies and products present novel risks, banks must be able to demonstrate that they have appropriate risk management systems and controls in place to conduct them safely.”

The regulator also said that this will “provide assurance that crypto-asset activities taking place inside of the federal regulatory perimeter are being conducted responsibly.”

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Cryptocurrency

Breaking: India Likely to Table Cryptocurrency Bill Before Parliament Session

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India is reportedly working to table the much-talked cryptocurrency bill before or during the upcoming parliament session. The bill will be reportedly tabled during the upcoming union cabinet meeting while the winter session is set to start from November 29.

The said cryptocurrency bill comprises new regulations on crypto assets, their classification, and intended tax earnings from them. If the bill gets the cabinet nod, it might get approved during the upcoming parliament session. Earlier, inside sources indicated that the government might regulate cryptocurrencies as an asset class and will prohibit their use as a payment.

A top government official indicated that the new regulations would incorporate taxes on crypto gains based on the current rules of capital gains.  Tarun Bajaj, Revenue Secretary shed some light on the taxation on crypto assets and explained,

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“We will take a call. I understand that people are already paying taxes on it. Now that it has really grown a lot, we will see whether we can actually bring in some changes in the law or not. But that would be a Budget activity. We are already nearing the Budget; we have to look into it at that point in time,”

The Indian crypto ecosystem has strived despite the uncertainty around regulations for nearly four years. According to one report, the Indian crypto ecosystem has become a $6 billion industry with several new unicorns. Now with the government looking set to clear crypto regulations, the Indian crypto ecosystem could reach new highs.

Indian Central Bank Still Sceptic of Cryptocurrency

The Reserve Bank of India (RBI), the Indian central bank is still quite a sceptic about digital assets use and has warned about its potential harm to the financial system. RBI governor Shaktikanta Das has recently warned about the disastrous impact that digital assets could pose on macroeconomic and financial stability.

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The infamous banking ban was also imposed by the RBI in 2017 that choked the crypto ecosystem and created many misconceptions among the mainstream. The banking ban was later overturned by the Supreme court of India in 2019.

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