[Crypto Headlines] September 2018
The Securities and Exchange Commission Suspends Trading in Multiple Cryptocurrency-Based Securities
According to Consumer Reports, the SEC suspended the trading of Bitcoin Tracker One and Ether Tracker One. The securities, issued by a Swedish company, were considered ETFs, but were cited by the SEC as being noted as “non-equity linked certificates.” Trading is suspended until at least September 20, 2018. The SEC has not yet granted ETF status to any cryptocurrency, but is scheduled to make a decision about a proposed Bitcoin ETF on September 30th.
Later in the week, the Motley Fool took comments from one SEC commissioner, Hester Pierce, as an example for support of Bitcoin ETFs at the SEC. However, just one day later, SEC Chairman Jay Clayton released an official statement saying,
“The Commission’s longstanding position is that all staff statements are nonbinding and create no enforceable legal rights or obligations of the Commission or other parties” (Greg, 2018).
With so much uncertainty regarding the potential future of Bitcoin ETFs, it is essential to continue to watch the SEC’s actions for further news of potential regulations.
Citigroup Explores Crypto Trading by Proxy with Digital Asset Receipts
Early in September, an anonymous source leaked to Business Insider that Citigroup was exploring plans to allow investors to trade cryptocurrencies, such as Bitcoin, via proxy by using Digital Asset Receipts (DARs). This comes on the heels of further SEC actions against cryptocurrency-based ETFs (see above).
Considering prior SEC actions and previous instances of cryptocurrency hacking and theft, the cryptocurrency trading world is ripe for innovative solutions. According to Bloomberg, Citigroup’s proposed plan would be to issue receipts to firms who would buy Bitcoin from third-party sources, then allow investors to buy and sell the receipts.
Depository Receipts (DRs) are already used as tradable financial securities, often with the purpose of being able to invest in foreign companies without the need to trade in foreign markets. Investopedia has a great introduction to depository receipts for those who wish to learn more about the subject. While Citigroup’s proposed DARs differ from traditional DRs, the anonymous insider reportedly told sources that the DARs would function similar to ADRs, which are American depository receipts.
Gemini Launches a Stablecoin
Gemini announced the release of a Tether competitor, Gemini dollar. The main point that sets Gemini apart from other stablecoin competitors is its purported regulation. The Gemini dollar is planned to be custodied by a US bank and eligible for a type of FDIC insurance.
The Winklevoss twins, founders of Gemini, have experienced regulatory hassles in the past when the SEC rejected the Winklevoss Bitcoin Trust. Will they be able to muster the regulatory backing they envision for the Gemini dollar?
South Korea Seeks Cryptocurrency Regulation Cooperation
South Korea was one of the early interested locales in cryptocurrency; however, the South Korean government has taken steps to regulate cryptocurrency markets, including the 2017 decision to ban ICOs. Yoon Suk-Hoon, governor of the country’s Financial Supervisory Service, remarked that South Korea seeks to “improve transparency in transactions to prevent illegal activities.” He gave these remarks at the opening of the 20th Integrated Financial Supervisors Conference (IFSC) in Seoul. The IFSC is an international financial industry supervisory organization with members from around the world, including many countries in Asia, Europe, and the Americas.
It is yet to be seen if other countries will work together to create complementary or blanket cryptocurrency regulations. It is also unknown if such regulations would impact cryptocurrency markets, and if so, whether the impacts would be positive or negative. In the past, crypto markets have both ebbed and flowed based on not only various regulatory decisions, but even non-binding statements from officials.
Iran Embraces Cryptocurrency
Iran has decided to officially recognize cryptocurrency mining. The Central Bank of Iran is now working on creating a policy to help govern this new industry in the country. Multiple media sources report that Iran is seeking to introduce a national cryptocurrency, which they may intend to use as a way to work around US sanctions. Iran is not the first country to try to create a digital currency, Venezuela has worked to create their own cryptocurrency, the Petro, and Tunisia, Senegal, and the Marshall Islands also have worked on national digital currencies.
Author: Mia S.
Revisor: Jay Jie
References
[1] Dalli, K. (2018, September 10). SEC suspends trading in two crypto-based securities. Retrieved September 19, 2018, from https://www.consumeraffairs.com/news/sec-suspends-trading-in-two-crypto-based-securities-091018.html
[2] Caplinger, D. (2018, September 17). Bitcoin ETFs Have a Supporter at the SEC. Retrieved September 19, 2018, from https://www.fool.com/investing/2018/09/17/bitcoin-etfs-have-a-supporter-at-the-sec.aspx
[3] Thomson, G. (2018, September 18). Bitcoin, Ether and Ripple Up in the Air as SEC Delivers a Sobering Reminder. Retrieved September 19, 2018, from https://hacked.com/bitcoin-ether-and-ripple-up-in-the-air-as-sec-delivers-a-sobering-reminder/
[4] Natarajan, S. (2018, September 9). Citigroup Planning Crypto Trading by Issuing Receipts. Retrieved September 19, 2018, from https://www.bloomberg.com/news/articles/2018-09-10/citigroup-is-said-to-plan-crypto-trading-by-issuing-receipts
[5] Wilmoth, J. (2018, September 10). Winklevoss’ Gemini Launches U.S. Dollar-Pegged Cryptocurrency. Retrieved September 19, 2018, from https://www.ccn.com/breaking-winklevoss-led-gemini-cryptocurrency-exchange-launches-tether-competitor/
[6] Berman, A. (2018, September 19). South Korean Official Proposes Greater Cooperation for Global Crypto Regulation. Retrieved September 19, 2018, from https://cointelegraph.com/news/south-korean-official-proposes-greater-cooperation-for-global-crypto-regulation
[7] Gogo, J. (2018, September 04). Iran Officially Recognises Cryptocurrencies. Retrieved September 19, 2018, from https://news.bitcoin.com/iran-officially-recognizes-cryptocurrency-mining/
[8] Meyer, D. (2018, July 26). Iran Is Planning to Launch Its Own Cryptocurrency In Order to Bust U.S. Sanctions. Retrieved September 19, 2018, from http://fortune.com/2018/07/26/iran-sanctions-cryptocurrency/
[9] Cuthbertson, A. (2018, August 29). Iran plans national cryptocurrency to evade US sanctions. Retrieved September 19, 2018, from https://www.independent.co.uk/life-style/gadgets-and-tech/news/iran-national-cryptocurrency-us-sanctions-bitcoin-trump-a8512596.html
