This update is brought to you by Bridge Protocol (TOLL) as part of a series.
Bridge is a blockchain digital identity provider specializing in compliance for services like Know-Your-Customer (KYC), Anti-Money-Laundering (AML) and more. Read last month’s update here.
- SEC continues to reject bitcoin ETFs. Similar to the Winklevoss’ ETF rejection; two ETFs filed by ProShares and GraniteShares that would track bitcoin and futures contracts, were both failed and SEC cited the same concerns about fraud and manipulation of bitcoin markets.
The SEC said, “that NYSE Arca, which filed the ProShares application, had not met its requirement “that a national securities exchange’s rules be designed to prevent fraudulent and manipulative acts and practices. Among other things, the Exchange has offered no record evidence to demonstrate that bitcoin futures markets are ‘markets of significant size.’”
2) Colorado is investigating 3 ICOs. Gerald Rome, Colorado’s securities commissioner signed orders requiring three cryptocurrency companies to show cause for allegedly promoting unregistered initial coin offerings (ICOs), according to an announcement published by Colorado’s Department of Regulatory Agencies. The companies being investigated are Bionic Coin, Sybrelabs Ltd. (also known as CryptoARB), and Global Pay Net (also known as GLPN Coin and GPN Token). According to the announcement, orders to show cause have previously been issued to four other crypto companies as well.
3) California passes first blockchain bill. California AB2658 was submitted to legislature in February. It calls for a group to report to legislative body, “the potential uses, risks and benefits of the use of blockchain technology by state government and California based businesses.” It comes with a mixture of private and government members, total of 17 to be exact. Report is to be completed by July 2020.
4) Ripple CEO and ex-SEC Commissioner says all ICOs are securities and must be regulated that way. Brad Garlinghouse appeared on a podcast with Joseph Grundfest, a former commissioner for the SEC. They clearly agreed on the show that all Initial Coin Offerings (ICOs) should be declared securities. Garlinghouse stated that he does not see the ICO boom slowing down “any time soon”, as regulators do not exhibit aggressive behaviour regarding them. He stated that they should, as it is a “little bit of a chaotic market”. Grundfast also agreed with Garlinghouse, stating that ICOs are the “most open and notorious violation of securities laws since the Code of Hammurabi.”
1) The Chinese government issues another directive. They have decided to restrict a number of crypto chat rooms like, “Digital Currency Bar” and “Virtual Currency Bar.” Tencent has agreed to supervise its WeChat network and block any trading via the app. Mid-August, Regulators from China sighted that they will be blocking over 100 foreign crypto exchanges, this is in a bid to discourage local investors. According to Shanghai Securities Times, the authorities in China under the ‘China National Fin Tech Rectification’ had identified multiple foreign IP addresses offering illegal crypto services.
2) National Internet Finance Association (NIFA), which is a self-regulatory body and foundation of the People’s Bank of China and meant to work with government; made significant changes to its platform. A “token sales” portal was added on NIFA’s platform solely for the purpose of reporting potential illegal ICO’s or exchanges.
3) Chinese authorities issue joint warning on “Illegal” crypto fundraising. Chinese regulators and the Central Bank issued a joint statement regarding cryptocurrency. Issued last week, the warning comes as a joint statement from the People’s Bank of China — the country’s central bank, the Ministry of Public Security, the Banking Regulatory Commission, the General Administration of Market Supervision and the Central Network Information Office. These warnings cited complaints that crypto projects that rent overseas servers while relying on chat forums and online trading tools and payment gateways to collect funds from the public. “High returns and low risk, with strong deception” the notice said. “In practice, the criminals illegally profited from the so-called virtual currency price movements, setting profit and cash withdrawal thresholds.”
1) Proposal to create “Special Crypto Zone.” Jung Byung-guk, a leader of South Korea’s Bareunmirae Party wants to set up a special crypto zone for ICOs. The aim is to design a tight-knit area that businesses can help promote growth and synergy together. “It is hoped that tightly-packed blockchain companies will be able to increase synergies and improve regulatory efficiency.”
2) South Korean province will issue its own digital currency in a move to replace a state loyalty scheme. Officials in Gyeongsangbuk-do will partner with blockchain startup Orbs to create Gyeongbuk Coin, which it will roll out to consumers in lieu of the existing “Hometown Love Gift Cards.” “There are still many problems to be solved by notifying merchants of the way they use coins, creating separate programs, and issuing coins,” The News Asia quotes Sunghyun Chung, head of the science and technology policy department of Gyeongsangbuk-do as saying.