With the exception of BitMEX and Arthur Hayes, the U.S. Commodity Futures Trading Commission doesn’t seem to have any other cryptocurrency exchanges, blockchain company executives or DeFi projects on its enforcement radar — at least not in the immediate future.
Last month, the CFTC charged cryptocurrency exchange BitMEX and several senior company executives — including CEO and co-founder Hayes — with operating an unregistered trading platform and violating the know-your-customer and anti-money laundering (KYC/AML) requirements under the Bank Secrecy Act. Despite the criminal charges, Hayes — a Hong Kong resident — has remained out of reach of U.S. authorities because of a suspended extradition treaty.
When asked if CFTC is investigating other platforms as well, Tarbert reportedly replied: “I’ll say maybe.”
But in reality, the CFTC doesn’t seem like it is looking into any more cryptocurrency exchanges in an official manner at this time.
Freedom of Information Act requests sent by Forkast.News to the CFTC since April reveal that the agency investigated Arthur Hayes and BitMEX’s parent company HDR Global Trading. But the CFTC would not disclose more details or subpoenas under the enforcement-themed exemption 7a because an active investigation was underway. A second FOIA request made by Forkast.News last month for information on the top cryptocurrency exchanges and a number DeFi projects has come back from the CFTC with a “no documents” response.
“The difference between FOIA exemption 7a [which is used to withhold documents due to law enforcement proceedings] and ‘no responsive documents’ reply is the difference between meat and vegetables,” attorney David Reischer, CEO of LegalAdvice.com, told Forkast.News. “The 7a exemption requires a two-step analysis on whether a law enforcement proceeding is pending or prospective, and the release of information about it could reasonably be expected to cause some actual harm. The ‘no responsive documents’ reply means that the agency searched and found no relevant records.”
Braden Perry, a former CFTC enforcement attorney and now a law partner at Kennyhertz Perry, believes that the commission would go after the low hanging fruit of Bank Secrecy Act violations for not having adequate know-your-customer and anti money laundering provisions, which is what allegedly did Hayes and BitMEX in, but would stop short of broad regulatory action because a “hasty attempt to reign in every potential for wrongdoing would likely fail and cause more damage than good to the DeFi environment.”
“The CFTC’s increasingly expanded view of their jurisdiction will likely be challenged, especially against offshore exchanges and participants that have limited ties to the United States,” Perry told Forkast.News. “This is dangerous territory for the CFTC.”
Perry points to the possibility that a campaign against DeFi platforms would be “regulation by enforcement, as opposed to a defined regulatory framework, transparent and clear to all participants.”
“The last thing any industry wants is what the CFTC appears to be doing: regulation by enforcement, in which agencies decide that some practices should have been illegal, and instead of declaring it illegal from now on through rulemaking, go back and prosecute the people who were doing it before,” Perry added “But that regulatory framework cannot catch innovation and many times frustrate those willing to adopt new technology.”
As Forkast.News has previously reported, there is a regulatory framework for cryptocurrency exchanges and DeFi that is making its way through Congress.
The Digital Commodity Exchange Act (DCEA) would seek to “regulate the trading venues which list emerging digital commodities, such as Bitcoin, Ether, their forks, and other similar digital assets, for trading,” to an official public summary of the bill. The end result of the bill would be the creation of a digital commodity exchange, or DCE, to replace the existing regulatory setup of exchanges being regulated as money service providers. The DCEA also delineates legislative responsibilities for token creation and sales, which would categorize the token itself as a commodity under the purview of the CFTC.
While Perry says the proposed bill is a “start” and hits some existing pain points such as custody of funds and market data, there’s not enough clarity in the bill to bring exchanges and projects to the U.S. from their offshore domiciles.
“If the CFTC really wants to reign in offshore market participants, they need to understand their lack of action is pushing these companies offshore,” Perry said. “Without a transparent structure, the DeFi’s are stuck watching their back as opposed to looking to the future.”
Author: News Bureau
Thailand’s New Rules Help Securities Companies Launch Crypto Exchanges – BTC Shore
Thailand has reportedly revised its net capital rules which help securities firms launch cryptocurrency exchanges. The country now has 15 licensed crypto service providers.
The Thai Securities and Exchange Commission (SEC) has revised its net capital (NC) rules which help securities companies provide crypto services, the Bangkok Post reported Wednesday.
“The revised NC rules are expected to help free up liquidity for securities firms that plan to enter new business such as open digital or cryptocurrency exchanges,” the publication conveyed, adding that some securities companies have consulted with the SEC to launch a cryptocurrency exchange.
Securities companies operating crypto businesses will be allowed to calculate the net capital funds with the value of these cryptocurrencies. “The maximum amount calculable for digital assets to a firm’s NC is 50% of the asset value,” the publication noted. The new rules will also count crypto assets as capital funds.
For securities companies that operate crypto businesses and stores crypto assets for their customers, the rules require them “to maintain more than 1% of the cold wallet’s capital funds (offline system) and 5% of the client’s assets stored on another system (hot wallet or online system).” For crypto companies that do not provide crypto custody service, “the NC requires shareholders’ equity to be over 500,000 baht [$16,469].”
The Thai Royal Decree on the Digital Asset Businesses B.E. 2561 regulates the cryptocurrency sector in Thailand. It categorizes crypto businesses into three types: “digital asset exchange,” “digital asset broker,” and “digital asset dealer.” There is also a separate category for initial coin offering (ICO) portals.
A total of 15 cryptocurrency service providers have been licensed to legally operate in the country, according to the Thai SEC’s website. Some companies have received more than one license.
Eight companies are licensed to operate digital asset exchanges: Bitkub, BX, Satang Pro, Huobi, ERX, Zipmex, Upbit, and Z.com Ex. Five companies are licensed to act as digital asset brokers: Coins TH, Bitazza, Kulap, Upbit, and Z.com Ex. Four companies are approved to operate ICO portals: Longroot, T-box, SE Digital, and Bitherb.
What do you think about Thailand’s crypto regulation? Let us know in the comments section below.
The post Thailand’s New Rules Help Securities Companies Launch Crypto Exchanges appeared first on Bitcoin News.
Thailand’s New Guidelines Assist Securities Firms Launch Crypto Exchanges
Thailand has reportedly revised its web capital guidelines which assist securities companies launch cryptocurrency exchanges. The nation now has 15 licensed crypto service suppliers.
The Thai Securities and Trade Fee (SEC) has revised its web capital (NC) guidelines which assist securities corporations present crypto companies, the Bangkok Submit reported Wednesday.
“The revised NC guidelines are anticipated to assist unencumber liquidity for securities companies that plan to enter new enterprise equivalent to open digital or cryptocurrency exchanges,” the publication conveyed, including that some securities corporations have consulted with the SEC to launch a cryptocurrency alternate.
Securities corporations working crypto companies can be allowed to calculate the online capital funds with the worth of those cryptocurrencies. “The utmost quantity calculable for digital belongings to a agency’s NC is 50% of the asset worth,” the publication famous. The brand new guidelines can even depend crypto belongings as capital funds.
For securities corporations that function crypto companies and shops crypto belongings for his or her clients, the foundations require them “to keep up greater than 1% of the chilly pockets’s capital funds (offline system) and 5% of the shopper’s belongings saved on one other system (sizzling pockets or on-line system).” For crypto corporations that don’t present crypto custody service, “the NC requires shareholders’ fairness to be over 500,000 baht [$16,469].”
The Thai Royal Decree on the Digital Asset Companies B.E. 2561 regulates the cryptocurrency sector in Thailand. It categorizes crypto companies into three varieties: “digital asset alternate,” “digital asset dealer,” and “digital asset vendor.” There’s additionally a separate class for preliminary coin providing (ICO) portals.
A complete of 15 cryptocurrency service suppliers have been licensed to legally function within the nation, in accordance with the Thai SEC’s web site. Some corporations have acquired multiple license.
Eight corporations are licensed to function digital asset exchanges: Bitkub, BX, Satang Professional, Huobi, ERX, Zipmex, Upbit, and Z.com Ex. 5 corporations are licensed to behave as digital asset brokers: Cash TH, Bitazza, Kulap, Upbit, and Z.com Ex. 4 corporations are authorised to function ICO portals: Longroot, T-box, SE Digital, and Bitherb.
What do you consider Thailand’s crypto regulation? Tell us within the feedback part beneath.
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Crypto Exchange Firm Binance Sues Forbes For Misleading Article
One of the largest cryptocurrency exchange Binance has sued Forbes for misleading article leading into “millions of dollars” in losses.
Filing the lawsuit in the state of New Jersey against Forbes Media and two of its journalists, Michael del Castillo and Jason Brett, Binance claimed that “Leaked ‘Tai Chi’ Document Reveals Binance’s Elaborate Scheme To Evade Bitcoin Regulators” published by Forbes on Oct. 29 was defamatory.
The article contained an analysis of a scheme designed to “intentionally deceive regulators” in the United States.
It detailed a plan to funnel revenue from a U.S. entity back to Binance while insulating the company from U.S. enforcement.
Binance submitted that “The Story contains numerous false, misleading and defamatory statements about Binance.”
The cryptocurrency exchange is demanding both compensatory and punitive damages.
The lawsuit was filed on Wednesday, November 18, 2020 with the United States District Court of New Jersey.
The crypto firm denies that it did not create the Tai Chi document and has never implemented the scheme described within it.
Binance also claimed that Harry Zhou, reportedly the author of the document, never worked for the company.
Considering the authority and influence of Forbes Media, Binance believes that millions of news consumers could hinge their decision base on the report and therefore wants Forbes Media to remove, retract and apologize because is “false, misleading and defamatory statements.”
Reacting, Forbes Media said its report is backed by facts and non-negotiable and ready to defend the publication, Chief Communications Officer for Forbes Matt Hutchison stated.
It isn’t the first time Binance would be instituting a lawsuit against big media firm. In November 2019, Binance’s CEO, Changpeng Zhao, threatened to sue The Block, a cryptocurrency news outlet in a tweet.
No CZ, don’t get petty. Just reply with facts so that there’s no ambiguity. Be like “The block said what? Nah they’re full of shit, it was just an office building with contractors or third party vendor, etc etc” don’t threaten to sue, take the high road 🙂
— FindAHiro [Jan/3➞₿🔑∎] (@findhiro) November 23, 2019