regulators Archives -
Commissioners of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have come together to discuss their regulatory approaches to bitcoin futures contracts and bitcoin exchange-traded funds (ETFs). The two regulators are also open to collaborating on their oversight of crypto investment products.
CFTC Regulating Bitcoin Futures
At a Bipartisan Policy Center event entitled “The Year Ahead for Capital Markets” last week, SEC Commissioner Hester Peirce and CFTC Commissioner Brian Quintenz discussed their agencies’ approaches to regulating crypto investment products.
Explaining his agency’s oversight of bitcoin futures contracts listed by Cboe Futures Exchange and CME Group, Quintenz stated:
We have a process in the Commodity Exchange Act that allows the exchanges to self-certify a contract if they believe it meets the requirements of the Act.
He elaborated that the CFTC has a “review period in which we can say no we disagree with you and here’s why, but if we don’t disagree, [then] they have the opportunity to go ahead and self-certify that contract.” He noted that both of the above “exchanges pursue that self-certification [route] so these contracts get listed without our approval but also without our disapproval.”
The commissioner also revealed, “Our jurisdiction over those contracts requires that they not be readily susceptible to manipulation … in any capacity,” adding that there is also the “question of how easily can we discover it and usually it’s very easily.”
SEC Reluctant to Approve Bitcoin ETF
SEC Commissioner Peirce, sometimes known as “crypto mom” within the Bitcoin community, said that “At the SEC we’ve been unwilling to … sign off on a bitcoin ETF, an exchange-traded product based on bitcoin,” voicing:
My concern about our approach in that area is it looks a little bit like a merit-based approach judging the underlying bitcoin markets.
Contradicting her agency’s view that bitcoin markets are not regulated enough, Peirce argued that “there are lots of markets that aren’t regulated but we nevertheless build products on top of them.” She concluded, “I think we have to be very careful with that kind of reasoning.”
Her statement echoes a similar one she made in August last year when she explained that the SEC “looked through to the underlying asset [bitcoin] … and raised some concerns about the market for that underlying product.” Crypto mom believes that “by doing that they went beyond what the statute allows us to do and we should have really focused on the market where the exchange-traded product would trade as opposed to focusing on the underlying bitcoin markets.”
Commodities vs. Securities
Quintenz proceeded to describe significant differences between securities and commodities, stating:
We only have fraud and enforcement jurisdiction over the commodity space. Our oversight jurisdiction is over the commodity derivatives space, so the trading of commodities themselves like things like Ebay we don’t have any type of oversight over that.
He emphasized that having no oversight is “not necessarily a bad thing” if trading platforms “can implement a free-market approach” to solve problems such as market manipulation. “Because of our lack of statutory oversight capability, I’ve suggested that these platforms come together to form some type of self-regulatory structure where they can discuss, agree to, implement, and hopefully examine or audit themselves.”
In addition, he clarified that these platforms can set standards themselves “however they view is appropriate … from conflicts of interest, business conduct, insider trading, redemptions, custody, liquidity…”
SEC and CFTC Open to Collaborating
Peirce was also asked whether she thought that “the SEC and other regulators generally take a too-restrictive approach to cryptocurrencies” and whether “regulation in this area [is] burdensome.” She replied that restrictive may not be the word she would use, but rather it is “too confusing.” She proceeded to say that this is “an area where I think Brian and I are interested in working together,” elaborating:
There [are] questions about where your jurisdiction ends and ours begins and again we don’t want to have overlap there so you know my main concern has been that I think we need to do a better job providing guidance.
What do you think of the differences between how the CFTC and SEC approach bitcoin investment products? Let us know in the comments section below.
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The post Regulators Explain Why Bitcoin Futures Are Easier to Approve Than Bitcoin ETFs appeared first on Bitcoin News.
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An excessive number of regulatory agencies are interfering with the prospects of successful development of cryptocurrencies in Ukraine, according to a high-ranking representative of the country’s central bank. What the sector needs instead is proper regulations and laws that will allow it to grow, the banker insists.
NBU Official Urges Banks to Embrace Innovation
Mikhail Vidyakin, who heads the important Strategies and Reforms Department at the National Bank of Ukraine (NBU), believes that the main issues around the legalization of digital assets are institutional in nature. There are too many regulators responsible for the oversight of the industry, while cryptocurrencies are not yet regulated and defined in Ukrainian law.
Speaking to the Let Know crypto news outlet, Vidyakin said he favors regulations that would give the crypto market a chance to develop. He also emphasized traditional banks should be open to the fintech sector, which provides a new delivery channel for financial services. The banker thinks authorities in Kiev should first reduce the number of regulatory agencies tasked with government control over crypto businesses and then address the lack of regulations and legal definitions for the financial innovations.
Vidyakin is not the first Ukrainian official to call for the legalization and regulation of cryptocurrencies in the country. Last January, Ukraine’s minister of justice Pavel Petrenko made similar recommendations. He insisted that “Bitcoin must be brought into the legal field.”
The status of digital assists was also discussed during a meeting of the National Cybersecurity Coordination Center in Kiev. Its members expressed concerns over “the uncontrolled circulation of cryptocurrencies in Ukraine.” The Secretary of the National Security Council Oleksandr Turchynov stressed that “the development of the cryptocurrency market cannot be left unattended.”
Crypto Regulations Long Overdue
A number of draft laws designed to regulate the crypto sector and proposals for tax breaks have been introduced in the Ukrainian parliament since the fall of 2017. However, very little real progress has been made toward their adoption.
In October 2018, a new regulatory concept was announced. According to the document, Ukraine will fully legalize cryptocurrencies in two stages within the next three years. The legal status of crypto exchanges should be determined in 2019. Crypto wallet providers and custodial platforms will be regulated by 2021.
The new policy was approved by the Financial Stability Council which includes representatives of the National Bank of Ukraine (NBU), the Ministry of Finance, the Deposit Guarantee Fund, the National Securities and Stock Market Commission (NSSMC), and the National Financial Services Market Commission. At least two of these institutions, the NSSMC and the NBU, will be tasked with the direct oversight of the crypto industry.
A study released by USAID in December estimated that Ukrainians trade around $ 775 million of cryptocurrency annually. The authors of the research titled “Transformation of the financial sector” suggested that digital coins should be recognized as “currency valuables” and regulated like foreign fiat currencies.
What is your opinion about the role of regulators and the future of cryptocurrencies in Ukraine? Share your thoughts in the comments section.
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The post Central Bank Official: Regulators Are Hindering the Development of Cryptocurrencies appeared first on Bitcoin News.
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Malaysia’s securities regulator and central bank are to strengthen their scrutiny of initial coin offerings (ICOs) through new rules meant to eliminate issues of unfair trade practices and alleged risk of money laundering and terrorism financing. The Securities Commission Malaysia (SC) and Bank Negara Malaysia (BNM) said they will also tighten regulation in the trade of cryptocurrencies to boost investor security.
‘Fair and Orderly Trading’
“The SC will regulate issuances of digital assets via ICOs and the trading of digital assets at digital asset exchanges in Malaysia,” the regulators said in a joint statement released Dec. 6. “Regulations are currently being put in place to bring digital assets within the remit of securities laws to promote fair and orderly trading and ensure investor protection,” they added.
Bitcoin and other digital currencies are not recognized as legal tender in Malaysia, but they aren’t banned either. That means individuals or companies trading cryptocurrency are free to do so, but are not protected by law. However, under the anti-money laundering legislation, all crypto asset exchanges operating in Malaysia are subject to reporting obligations.
Malaysian finance minister Lim Guan Eng said cryptocurrency regulations will come into force during the first quarter of 2019. He also warned individuals and companies planning to issue new cryptocurrencies with a stern: “Don’t do it,” advising to wait for guidance from the country’s central bank.
Lim Guan Eng said the government was open to emerging forms of money such as virtual currency, but only if they adhere to the law.
Now the Securities Commission and Bank Negara are starting to put that regulatory framework together. The two “will enter into coordination arrangements to ensure compliance with laws and regulations under the purview of both regulators,” said the statement.
It added: “Initial coin offering issuers and digital asset exchanges which are involved in the issuance or dealing of digital assets with a payment function will need to comply with relevant BNM laws and regulations relating to payments and currency matters.”
Malaysia is slowly emerging as a hotbed of cryptocurrency trading. The government isn’t particularly averse to the technology. For example, Pakatan Harapan, Malaysia’s ruling party, is raising political funding through a cryptocurrency called “harapan coin,” in preparation for the 2019 general elections. Party officials say they have submitted documents of the harapan coin to Bank Negara for approval.
What do you think about the regulatory developments in Malaysia? Let us know in the comments section below.
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The post Malaysian Financial Regulators to Intensify Scrutiny of ICOs, Cryptocurrencies appeared first on Bitcoin News.
Christopher Woolard of the United Kingdom (UK) Financial Conduct Authority (FCA) has indicated that UK regulators are planning a “comprehensive response” to the illicit adoption of crypto assets amid increased adoption among local businesses and consumers. Despite announcing increased regulatory action regarding illegal use of crypto, Woolard stated he does not view crypto assets as a threat to financial stability.
UK Regulatory Institutions Collaborate to Assess Crypto
Speaking at the Regulation of Cryptocurrencies event in London, Christopher Woolard, the executive director of strategy and competition at the FCA, stated that the regulator is planning to take significant action to crack down on the illicit use of cryptocurrencies.
In response to the dramatic increase of crypto adoption in recent years, Woolard stated that the FCA has sought to facilitate collaboration between itself and Her Majesty’s Treasury (HMT) and the Bank of England to examine the impact of cryptocurrencies and distributed ledger technology with regard to “consumers […] market integrity, and the risk of financial crime.”.
Woolard stated: “The FCA, HM Treasury and the Bank of England are each taking a number of steps over the coming months to address these harms and to encourage future beneficial innovation.”
Plans To Take Significant Action
Woolard announced that the HMT plans to take significant action against the use of cryptocurrency in the financing of illegal activities.
Woolard stated: “To combat financial crime risks, the treasury will undertake one of the most comprehensive responses globally to the use of crypto assets for illicit activities,” adding that the HMT will be “applying and going further than the existing directive, the fifth EU Anti-Money Laundering Directive.”
Despite the firm tone, Woolard stated that he and the Financial Stability Board do not view cryptocurrencies as a threat, however, and emphasized the need for regulators to remain vigilant.
The FCA official also expressed his expectation that crypto assets will continue to see increased adoption among UK consumers and businesses.
Do you think that regulators worldwide are ceasing viewing cryptocurrencies as a threat? Share your thoughts in the comments section below!
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