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Spain’s financial regulator has clarified its position on regulated investment funds investing directly in cryptocurrencies. These type of funds are legal under Law 22/2014, and investments can be made through three types of legal entities.
Funds Directly Investing in Cryptocurrencies
Spain’s National Securities Market Commission (CNMV – Comisión Nacional del Mercado de Valores) recently clarified its position on registered funds investing in cryptocurrencies directly. The CNMV is the Spanish government agency responsible for regulating the securities markets.
In a Questions and Answers document addressed to fintech companies on activities and services that can have a relationship with the Commission, one of the questions was “Can a fund registered by the CNMV directly invest in cryptocurrencies?” The Commission replied:
This type of funds would have a legal place in Law 22/2014, which regulates, in addition to venture capital entities, other collective investment entities of closed type and their management entities.
Law 22/2014 establishes, among others, closed-end collective investment entities (EICC), closed-end investment funds (FICC), and closed-end investment companies (SICC), Iclg describes.
EICC, FICC, or SICC
The CNMV explained that the investments could be made through EICC, FICC, or SICC.
For EICC, Article 2.1 of the above law mandates that “the divestment policy of its participants or partners” must meet two requirements. Firstly, the fund’s “disinvestments [must] occur simultaneously for all investors or participants,” the Commission detailed. Secondly, “what is received by each investor or participant is based on the rights that correspond to each one of them, according to the established terms in its bylaws or regulations for each class of shares or participations.”
Both FICC and SICC have their own “numerous requirements and conditions,” the CNMV noted. For example, an FICC registered with the Commission must be “managed by a management company of closed-end type collective investment entities (SGEIC) or by a collective investment institution management company (SGIIC) that is authorized to manage this type of funds.” The Commission also noted that “the FICC and the SICC are not subject to the supervision of the CNMV (except [for] self-managed SICC)” based on the provisions of article 85 of Law 22/2014.
While registered funds can theoretically invest in cryptocurrencies directly, the Commission emphasized that there are many factors to consider, reiterating:
The investment of FICC and SICC in cryptocurrencies raises a series of practical problems on how to comply with the regulations regarding the valuation of assets, the management of liquidity and the custody guarantee.
Europa Press reported earlier this month that the CNMV “will apply [its] securities regulations to cryptocurrencies until there is European regulation.” The news outlet quoted CNMV’s general director of Strategic Policy and International Affairs, Víctor Rodríguez, saying:
The approach adopted by the CNMV is to try to apply the existing securities regulations as long as we do not have an international or European reference standard.
What do you think of the CNMV’s approach to cryptocurrencies? Let us know in the comments section below.
Images courtesy of Shutterstock, CNMV, and Wikipedia.
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The number of new cryptocurrency exchanges is rapidly growing worldwide. This new crypto exchange roundup features four platforms located in South Korea, Thailand, Vietnam and the Philippines.
South Korea’s Coinbit
South Korean game developer Axia Soft Co. Ltd. has recently launched a crypto exchange called Coinbit. For its grand opening, the exchange is offering zero commission trades until the end of May.
Coinbit says 50 cryptocurrencies will be listed initially and more than 100 coins will be listed by the end of the year. Among supported cryptocurrencies are bitcoin, ether, ripple, bitcoin cash, ethereum classic, litecoin, waves, stox, eos, vechain, omisego, qtum, and neo.
Cryptocurrency exchange Jibex has recently opened its doors in Thailand. The exchange is backed by IT company J.I.B. Computer Group Co. Ltd, a distributor and seller of computer hardware and IT trading products with 150 stores nationwide.
Initially, only five cryptocurrencies will be supported: bitcoin, bitcoin cash, ether, litecoin, and ripple. More will be added in the future, according to Jibex CEO Thuntee Sukchotrat. The exchange also offers a wallet supporting those five cryptocurrencies.
For the grand opening, Jibex is waiving its commission of 0.24%. No trading fee will be charged for 45 days ending on June 26.
Jibex Chairman Dr. Thantharaksuk Chotirat commented:
The partnership with J.I.B. Computer Group (JIB) will give users peace of mind and confidence in their investment. The service is good, fast and attentive to all customer needs.
Kenninex crypto exchange has recently launched in Vietnam, headquartered in Ho Chi Minh City.
The exchange claims to be “the first live cryptocurrency exchange in Vietnam…[and] the first e-money trading platform in Vietnam to have a trading office where investors can experience our services as well as receive effective investment advice,” according to its website.
Customers can currently convert bitcoin and ether into VND and vice versa. The transaction fee is usually 0.4% but has been reduced to 0.2% for the first month of launch, according to local media.
The Philippines’ Coinvil
While Coinbit, Jibex, and Kenninex have already launched, this next exchange has not. South Korean blockchain technology and services company Glosfer and Coinvil have agreed to collaborate to build and launch a cryptocurrency exchange in the Philippines. Glosfer will build the platform while Coinvil will operate the exchange. Coinvil CEO Park Rae-hyun commented:
The Philippines will become the largest cryptocurrency trading market that connects Europe and Asia.
Do you think the number of new cryptocurrency exchanges will keep growing? Let us know in the comments section below.
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Images courtesy of Shutterstock, Coinbit, Coinmarket Calendar, Kenninex, Glosfer, Bangkok Post, and Jibex.
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United States Securities and Exchange Commission (SEC) Commissioner, Hester Peirce, delivered a speech before the Medici Conference earlier this month discussing many issues pertinent to ICOs. Mrs. Peirce indicated that the SEC is open to discussion of developing a regulatory sandbox for ICOs, however, expressed a number of concerns surrounding the legislative model. The commissioner also warned of the potentially stifling effect of applying “blanket” classifications to the emerging field of cryptocurrencies.
SEC Commissioner Welcomes Discussion of Regulatory Sandboxes
Commissioner Peirce opened her speech by stating that “Back in Washington, DC, there has been a lot of talk about regulatory sandboxes,” adding that “A number of forward-looking regulators, both here and abroad, have created regulatory sandboxes.”
Mrs. Peirce cites a number of examples of effective regulatory sandboxes, including the United Kingdom – where the Financial Conduct Authority governs a sandbox that “allows businesses to test innovative products, services, business models and delivery mechanisms in the real market, with real consumers,” and Singapore – where the Monetary Authority of Singapore uses regulatory sandbox apparatus to “encourage[e] more Fintech experimentation so that promising innovations can be tested in the market and have a chance for wider adoption, in Singapore and abroad.”
“The motivating notion behind a regulatory sandbox,” Mrs. Peirce asserts, “is that the regulator in a sense sits in the sandbox with the innovator. Not only is she right there to make sure that nobody gets hurt, but she has a front-row seat on the innovative process. She sits at the entrepreneur’s shoulder as he thinks through how to address structural and aesthetic weaknesses in his sandcastle.”
“Talk of sandboxes is welcome, and my fellow regulators’ sandboxes have already yielded great dividends,” Mrs. Peirce added.
Concerns Surrounding Regulatory Sandbox Approach
Despite expressing her openness to discussion surrounding regulatory sandboxes, the commissioner outlined a number of qualms held regarding the legislative model.
Mrs. Peirce states that “The regulator may insert itself inappropriately into the creative process,” stressing that “The regulator should be careful not to try to control the development of new technologies. Not only is it outside the regulator’s proper function, but such micromanagement can result in the regulator forcing new technology to fit existing—and familiar—regulatory frameworks regardless of whether those frameworks are appropriate.”
“The law deserves respect, but technological progress should not be bound by the limits of the regulator’s lawyerly imagination,” added Mrs. Peirce.
Commissioner Peirce also outlined concerns that regulatory sandboxes create “the temptation […] for regulators […] to substitute their own judgement for that of consumer and investors,” emphasizing that “Regulators do not need to take on the impossible task of deciding what products and services will win over consumers. The market is efficient at signaling which products and services people want in their lives and which they would rather do without.”
Regulation as Instrumental in Defining the Future Direction of Innovative Technology
Mrs. Peirce stated that “The world of tokens and ICOs is still in its infancy,” emphasizing that “Determining the appropriate regulatory regime also will mean determining the shape these transactions will take as they mature.
The commissioner added that “While it’s tempting to envision what might come to pass if these concepts were free to develop in whatever way the market dictated, without being pinned down with a label […] there comes a point where regulatory uncertainty is a greater roadblock than confinement within a particular regulatory regime.”
Commissioner Peirce “Wary of any Blanket Designation for all ICOs”
Mrs. Peirce expressed caution regarding regulators seeking to hastily create a broad label for the dynamic and still emerging ICO sector.
After arguing that the majority of “tokens or coins used in initial coin offerings […] look the most like securities,” the commissioner stresses “This is not to say that all ICOs must be deemed securities offerings. Given the undeveloped nature of this area, I am wary of any blanket designation for all ICOs. Instead, the best path forward, at least for the time being, is to evaluate the facts and circumstances of each offering.”
Commissioner Peirce also implied that the SEC will develop a unique apparatus of ICOs deemed to fall under the regulator’s purview, stating “For those ICOs and tokens that do come under the SEC’s jurisdiction, it will fall to us to devise an appropriate regulatory structure for these new types of deals.“
The Regulatory Challenge of Innovation
Mrs. Peirce stated that “Innovation is always a challenge for regulators. We are used to the way things have been done. Our rules have grown up in response to past technologies. Figuring out whether and how they apply to new ideas is difficult.”
Commissioner Peirce also warned that regulators “must be careful not to let our lack of familiarity with new technology breed anxiety and therefore bad regulation,” adding that “There is a risk, when something truly innovative comes along, that regulators will focus only on the harms the innovation may bring and miss entirely the opportunity it presents to improve people’s lives.”
At the speech’s conclusion, Mrs. Peirce stated that “The best path forward is for regulators to approach ICOs and tokens with intense curiosity. We must put in the effort to learn about these new technologies and employ the staff necessary to support our understanding.”
“My hope is that we can navigate these new waters collaboratively. The SEC’s role is not to hand out permission slips for innovation. Innovation happens—organically through private decisions and irrepressible human creativity. We at the Commission have a role to play in protecting investors and market integrity by deterring and punishing fraud and setting clear rules. As we sit atop our lifeguard’s stand and survey the beach, however, let’s not lose sight of the benefits new technology can provide in the area of capital formation, market efficiency, economic growth, and overall societal well-being.”
Do you think that a regulatory sandbox for ICOs is a good idea? Share your thoughts in the comments section below!
Images courtesy of Shutterstock, sec.gov
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This week a Bitcoin Cash organization was founded called the Cash Consortium (C2) that aims to be a technical group framed off of the World Wide Web Consortium’s (W3C) open standards. C2 is an international community that intends to bolster open standard development in order to provide long-term Bitcoin Cash growth.
The Cash Consortium: Open Standards for Bitcoin Cash
Much of the cryptocurrency community understands what open source or open standard development is, and most of them embrace the idea. Furthermore, organizations like the W3C and other believers of open standards welcome the sharing of open sourced code that allows anyone the rights to study, change, and distribute OSS protocol for any purpose. Open standards also allows other developers to review a protocol’s design in order to prevent flaws and bugs within the software by coming up with sets of development standards that everyone agrees to and uses. The Cash Consortium will have engineers from leading companies to work together to build Bitcoin Cash (BCH) development standards much like how developers build on the open web with shared concepts like HTML.
“The C2’s mission is to lead Bitcoin Cash to its full potential by developing protocols and guidelines that ensure the long-term growth of the blockchain,” explains the C2 website.
Bitcoin Cash is the soundest money the world has ever known. It has scarcity, fungibility, divisibility, durability and transferability. It’s our intention that it remain the soundest money the world has ever known — Bitcoin Cash enables smart contracts/property, colored coins, tokens, ICOs and much more. We intend to standardize these emerging technologies in a way that plays to Bitcoin Cash’s strengths.
A Formal Bitcoin Standards Body
At the moment organizations that are listed as members of C2 include Cointext, Atlantis Labs, Akari Global Foundation, the Bitcoin Cash Fund, Bitbox, Blockpress, Centbee, and the social network Yours. Last night news.Bitcoin.com spoke with the creator of the Cash Consortium, Carlos Cardona, who is also the lead developer of Bitbox, the open source development toolkit for Bitcoin Cash. Cardona tells us he is a firm believer in open standards and explains why he initiated the C2 organization.
“When I was in college I was a member of the W3C’s HTML5 Working Group. There were engineers from Apple, Google (who I was with), Microsoft, Firefox and many more meeting up regularly in working groups to flesh out the next generation of technical specs for the web (HTML/CSS etc),” Cardona tells news.Bitcoin.com. “When the spec was nearing completion the teams would each implement it. Some open source like Firefox. Some closed source like Internet Explorer. But both implementing technical specs which were created together.”
When I joined the blockchain space several years ago it surprised me that there was no formal Bitcoin standards body.
Huge Forces at Play Are About to Phase the Blockchain Industry
Then Cardona says he started thinking about the upcoming Bitcoin Cash upgrade that will not only increase the block size by 4X but the fork will also add Satoshi OP_Codes that can enable the ability to create color coins and smart contract features on the BCH network.
“With the new OP_Codes coming I had recently been thinking again about how to best standardize on new transaction types and then Memo/Blockpress happened,” Cardona emphasizes. “Having recently updated Bitbox’s block explorer to support both Memo and Blockpress I was struck with the same feeling I had during IE6/FF days — writing code twice with slightly different APIs because there was no standard. With OP_RETURN going from 80 bytes to 220 bytes we’re just seeing the start of OP_RETURN prefixed protocols — That got me thinking again about a standards body.”
In my opinion our industry spent many years fighting the Blockstream wars and became complacent — Things which I would expect in any other nearly decade old tech industry (such as a tech consortium) doesn’t exist in our space. The final part which caused me to move on it was when I found out Zuckerberg created a blockchain division last week. To me that is just a sign that HUGE forces are at play which are about to phase shift our entire industry.
Cardona Believes the Opportunity to Move Quick and be Proactive is Now
“I believe we have the opportunity to move quick, be proactive, build bridges and standardize or some much larger player will step in an do it for us,” Cardona adds.
What do you think about the Cash Consortium (C2)? Do you think its a good idea for BCH developers to initiate open standards for protocol and application development? Let us know what you think about this subject in the comments below.
Images via Bitcoincash.org, Pixabay, The Cash Consortium, and Open Stand logos.
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The post The Cash Consortium Launches Open Standard Initiative for Bitcoin Cash appeared first on Bitcoin News.