Crypto Regulation News: New Bitcoin ETF approved in Canada, Swiss canton of Zug starts accepting tax payments in crypto, Pretrial settlement not in the cards in SEC vs. Ripple case, Robinhood to offer crypto deposits and withdrawals, Bitcoin selling at 36% premium in Nigeria, Russia prepares bill on crypto taxation, India’s crypto ban is coming, and more!

Paradigm
Paradigm
Feb 22 · 12 min read

Vol. 62, 9th February — 22nd February

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TL;DR

  • The International Monetary Fund (IMF) estimates that central bank currencies will confront major obstacles in a rapidly digitizing financial system.
  • Congress is blaming Robinhood, not Reddit.
  • BitPay settles with OFAC over alleged sanctions violations.
  • New York Attorney General Letitia James announced last Wednesday that her office has filed charges against crypto investment app startup Coinseed and two of its executives.
  • Lawmakers have sent a letter to DLive and BitTorrent executives “expressing concern” about the way some users have utilized the platform to incite violence.
  • SEC Commissioner Hester Peirce is reportedly vocalizing the urgent need for regulatory clarity across the crypto sector.
  • Former Democratic presidential candidate Andrew Yang says he has big plans for Bitcoin and cryptocurrencies as he frontruns the mayoral race for the city of New York.
  • Coronavirus pandemic could accelerate decision-making on digital currency launch, says Bank of Canada official.
  • Canadian investment firm CI Financial, with Mike Novogratz’s Galaxy as subadvisor, has filed for a new bitcoin exchange-traded fund (ETF).
  • Austrian regulators call for stricter crypto regulations amid rising fraud.
  • The Swiss canton of Zug is now accepting Bitcoin and Ether for tax payment from local companies and individuals.
  • Sweden extends digital krona digital currency pilot until 2022.
  • The Israel Securities Authority has approved a request from Simetria to operate a digital bulletin board for investors ahead of its digital securities exchange launch.
  • U.S. prosecutors charge North Korean hackers with stealing more than $100 million from crypto firms.
  • The vice president of RippleX James Wallis says Ripple is currently working with central banks on developing digital currencies.
  • The PayBito exchange will suspend all XRP trading pairs.
  • Russia may soon recognize Bitcoin and other cryptocurrencies as property.
  • Kyrgyzstan central bank plans to introduce licenses for crypto exchanges.
  • The SEC of Thailand is looking to establish qualifications for crypto investors as digital currency purchases increase.
  • Crypto industry concern mounts ahead of the likely introduction of a bill to ban retail traders from cryptocurrency activities in Hong Kong.
  • In the wake of the recent ban on Nigerian banks’ servicing of crypto exchanges, Bitcoin’s price in the country has seemingly spun out of control.
  • Jack Dorsey and Jay-Z to set up 500 BTC blind Bitcoin trust in India, Africa.
  • And more!
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Reports

The International Monetary Fund (IMF) estimates that central bank currencies will confront major obstacles in a rapidly digitizing financial system.

In a new blog post, the IMF says that as digital currencies increasingly crop up and the financial sector rapidly evolves, the public and private economic sectors will clash and put pressure on central banks to innovate and keep up with tech powerhouses.

“Today’s, or even tomorrow’s, money is unlikely to meet the needs of the day after… Keeping with the pace of change of technology, user needs, and private-sector competition will be challenging for central banks…

Central banks would thus have to become more like Apple or Microsoft in order to keep central bank digital currencies on the frontier of technology and in the wallets of users as the predominant and preferred form of digital money…

Much depends on each central bank’s ability and willingness to consistently and significantly innovate. Keeping pace with technological change, rapidly evolving user needs, and private sector innovation is no easy feat.”

The IMF believes that the best way for central banks to compete with the fast-paced digital currency revolution is to build a system where the private sector can convert its assets into a central bank currency.

“The answer lies in a fundamental symbiotic relationship: the option to redeem private money into perfectly safe and liquid public money, be it notes and coins, or central bank reserves held by selected banks…

In short, the option of redemption into central bank currency is essential for stability, interoperability, innovation, and diversity of privately-issued money, be it a bank account or other. A system with just private money would be far too risky. And one with just central bank currency could miss out on important innovations. Each form of money builds on the other to deliver today’s dual money system — a balance that has served us well.”

The proceeds of crypto crime fell by more than $5 billion in 2020, due to increasing regulatory compliance by crypto exchanges and declining scams.

Robinhood’s reputation has taken a battering lately, but it hopes to regain credibility among the crypto community by introducing cryptocurrency transfers.

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Opinions

U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce is reportedly vocalizing the urgent need for regulatory clarity across the crypto sector.

Pierce, who has been a long-time supporter of crypto and has continually advocated for clearer regulations surrounding digital assets, tells Reuters that SEC guidance is needed as large corporations such as Tesla and BNY Mellon look to participate in the digital asset sector.

“[The participation of corporate actors] adds to the urgency of us taking some sort of action in this area to provide more clarity…

It’s not only that there have been calls for clarity for some time and that a new administration brings the chance to take a fresh look, but it also is a moment where it seems others in the marketplace are also taking a fresh look.”

In a new interview with Forkast News, Pierce further addresses the SEC’s role in regulating digital assets, admitting that under current legislation, it can be difficult for companies to understand when an asset is a security.

“We have a specific definition of security which is actually quite broad and that has caused some people consternation and difficulty in trying to figure out exactly what the parameters of a security might be in our space… And that’s where most of the problems arise…

Former Democratic presidential candidate Andrew Yang says he has big plans for Bitcoin and cryptocurrencies as he frontruns the mayoral race for the city of New York. In a new post, the politician who wants to provide Americans with $1,000 every month as a universal basic income tells his 1.9 million followers that he wants to transform the world’s financial capital into a hub for Bitcoin and cryptocurrencies if he becomes the next mayor of New York City.

“It’s going to be a dollar economy as far as the eye can see,” said James Bullard.

As Ripple squares up for battle against the U.S. Securities and Exchange Commission, former SEC Chair Mary Jo White is coming to Ripple’s defense. In an interview with Fortune Magazine, White, who served as the 31st SEC chair from 2013–2017, reveals that she is not convinced that the SEC’s lawsuit against Ripple, which accuses the firm of selling unregistered securities in the form of XRP, has merit.

“I think the probability of an ETF has gone up,” said Cathie Wood.

Several financial institutions in the U.S. are “are seriously considering launching some type of cryptocurrency service,” an Elliptic co-founder said.

“I don’t have Bitcoin, and I’ll never ask you to send me any,” said Joe Biden.

Former Coinbase chief technology officer Balaji Srinivasan has warned that India’s impending ban on Bitcoin and other cryptocurrencies would be like banning the “financial internet.”

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USA

Both parties are currently not considering terms for a pretrial settlement.

Another exchange has chosen to steer clear of XRP while the SEC’s pursuit of Ripple Labs continues. The PayBito exchange, which processed $1.1 billion worth of trades in 24 hours leading up to the time of publication, will suspend all XRP trading pairs. Four XRP trading pairs have historically been available on PayBito, with XRP/USDT trades proving the most popular.

the spotlight was definitely on the gamified trading app, rather than the traders on r/WallStreetBets in last week’s hearing. None of the representatives seemed particularly interested in putting the screws to Reddit CEO Steve Huffman, and many seemed to give Keith Gill the same props the rest of us did.

Robinhood CEO Vlad Tenev denied that the platform was helping hedge funds, calling on the SEC to get rid of a two-day settlement rule.

: OFAC alleges BitPay’s “deficiencies” in its sanctions compliance program led to about 2,102 transactions from 2013 to 2018 that could be considered violations.

New York Attorney General Letitia James announced last Wednesday that her office has filed charges against crypto investment app startup Coinseed and two of its executives.

: Lawmakers have sent a letter to DLive and BitTorrent executives “expressing concern” about the way some users have utilized the platform to incite violence.

The City Commission of Miami is now looking into the feasibility of allowing Miami residents to pay taxes and receive salaries in Bitcoin.

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Europe

The initiative will assess 450 proposals aimed at boosting the integrity of social media posts with the help of blockchain technology over the next three years. Dubbed “TruBlo,” the project will oversee a wealth of blockchain development as part of the European Commission’s Next Generation Internet initiative. The French financial services firm, Worldline, has been appointed to lead TruBlo. Worldline was founded in 1970 and generated 2.3 billion euros ($2.8 billion) in revenue in 2019. An estimated 450 proposals will be assessed in the coming years as part of the initiative’s goal of “developing trust and reputation models on blockchain,” as reported by Finextra. It is expected that 45 of the proposals will receive partial funding, while nine will be funded to completion.

The Swiss canton of Zug is now accepting Bitcoin and Ether for tax payment from local companies and individuals.

Sweden’s exploration into CBDCs will continue until 2022 as the nation’s central bank seeks to construct a digital version of the krona.

Nick Boles, who served as a Member of Parliament from 2010 to 2019, believes the world would be better off without Bitcoin.

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Asia

The SEC of Thailand is looking to establish qualifications for crypto investors as digital currency purchases increase.

Crypto industry concern mounts ahead of the likely introduction of a bill to ban retail traders from cryptocurrency activities in Hong Kong.

: The U.S. government has charged North Korean three hackers in connection with an array of cybercrime, including thefts from hundreds of businesses including several in the cryptocurrency sector.

A preliminary report from a United Nations inquiry suggests North Korea is using the proceeds from crypto hacks to funds its weapons programs.

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Rest of the World

: Canadian investment firm CI Financial, with Mike Novogratz’s Galaxy as subadvisor, has filed for a new bitcoin exchange-traded fund (ETF).

: The Ontario Securities Commission has approved another bitcoin ETF just days after North America saw its first approval. A receipt dated February 16 grants the Evolve Bitcoin ETF final approval for its prospectus and paves the way for a listing on the Toronto Stock Exchange (TSX). Cidel Trust Company, a subsidiary of Cidel Bank Canada, is the fund’s custodian. Gemini is serving as sub-custodian. The receipt was published at 2:57 p.m. ET, public records on SEDAR show.

: Tim Lane, deputy governor of Canada’s central bank, said Wednesday that the ongoing coronavirus pandemic may ultimately accelerate the institution’s decision-making process on whether to issue a digital currency.

Following initial discussions with the Bank of Canada, four top universities have submitted design proposals for a central bank digital currency.

Crypto scams appear to be dominating investment fraud cases in Austria.

Securities regulators’ down under said that they are open to a Bitcoin ETF, so long as investors are protected by the proper rules.

The Israel Securities Authority has approved a request from Simetria to operate a digital bulletin board for investors ahead of its digital securities exchange launch.

Russia may soon recognize Bitcoin and other cryptocurrencies as property. The parliament’s lower house, the State Duma, has reportedly passed the first reading of a bill that would tax digital assets. According to state news agency RIA Novosti, the proposed legislation requires local and foreign residents and organizations within Russia to report crypto transactions that amount to 600,000 rubles, or about $8,130, per year based on the market price of the cryptocurrency. Offenders who fail to pay or make incomplete tax payments will pay a penalty equivalent to 40% of the amount due. Those who submit late or inaccurate information will also be fined 10% of the undeclared amount.

An anonymous Indian official has claimed the country’s parliament will soon introduce a blanket bank on crypto assets, and give hodlers three-to-six months to liquidate.

In the wake of the recent ban on Nigerian banks’ servicing of crypto exchanges, Bitcoin’s price in the country has seemingly spun out of control.

Crypto and blockchain stakeholders in Nigeria have criticized the central bank’s decision to ban banks from servicing crypto firms.

The central bank of the Kyrgyz Republic wants to provide crypto investors with the same level of protection that is already in place in traditional finance.

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MISC

The vice president of RippleX James Wallis says Ripple is currently working with central banks on developing digital currencies.

In a new interview on the Voice of FinTech podcast, Wallis outlines Ripple’s role in the minting of central bank digital currencies (CBDCs), emphasizing that the company is not trying to uproot existing financial structures, but is rather trying to improve upon systems that are already in place.

“We are building and implementing technology, we’re not trying to disintermediate the existing financial system. We’re trying to make it better. What we’re really trying to do is bring our technology and our expertise to the enterprise world.”

Just hours after an anonymous source claimed India would issue a blanket ban on all cryptocurrencies, Jack Dorsey and Jay-Z announced a 500 Bitcoin development trust.

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Main sources

Crypto and blockchain regulation in news

The Block

Daily Hodl

Coindesk

Cointelegraph

Bitcoin Magazine

Paradigm

In chaos lies the truth

Paradigm

Written by

Paradigm

In chaos lies the truth

Paradigm

Paradigm

Paradigm is an ecosystem that incorporates a venture fund, a research agency and an accelerator focused on crypto, DLT, neuroscience, space technologies, robotics, and biometrics — technologies that combined together will alter how we perceive reality.

Paradigm

Written by

Paradigm

In chaos lies the truth

Paradigm

Paradigm

Paradigm is an ecosystem that incorporates a venture fund, a research agency and an accelerator focused on crypto, DLT, neuroscience, space technologies, robotics, and biometrics — technologies that combined together will alter how we perceive reality.

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