USA

The SEC Wavers on Bitcoin ETFs: The US Securities and Exchange Commission (SEC) is postponing its decision on a Bitcoin (BTC) and US Treasury bond exchange-traded fund (ETF) proposal submitted earlier this year by Wilshire Phoenix, a New York-based financial services firm.

The SEC says it will continue reviewing the ETF application, with a new deadline set for February 26th, 2020.

So far, the federal securities regulator has not approved a single Bitcoin ETF application, having denied over a dozen such proposals in the past couple years. The SEC has cited concerns regarding market manipulation and surveillance sharing in the crypto asset market as the two key areas that need to be addressed before it considers approving a digital currency-based ETF.

To that end, Bitwise submitted a letter on Wednesday to the SEC in response to the Commission’s 112-page disapproval order of its own proposal. Despite the SEC’s rejection, Bitwise says it remains committed to creating an SEC-approved Bitcoin ETF.

Congress Eyes New Regulatory Framework in 2020 Cryptocurrency Act: A new draft bill dubbed the “Crypto-Currency Act of 2020” aims to provide a comprehensive regulatory framework for crypto assets in the US.

If enacted in 2020, the proposal could become the key piece of legislation sought by industry leaders who are looking to legitimize the space and also provide legal clarity for consumers, investors and companies that interact with cryptocurrencies and crypto-related businesses.

“[The bill aims] to clarify which Federal agencies regulate digital assets, to require those agencies to notify the public of any Federal licences, certifications, or registrations required to create or trade in such assets, and for other purposes.”

The proposal outlines in broad strokes how the government and its appropriate agencies would regulate new digital instruments and crypto-related businesses, defining and distinguishing various types of crypto assets, providers, solutions and protocols.

List of covered terms

Crypto-commodity

Crypto-currency

Crypto-security

Decentralized oracle

Digital asset

Federal digital asset regulator

Reserve-backed stablecoin

Synthetic stablecoin

The three agencies acting as “Federal digital asset regulators” will establish regulatory oversight. They are the Commodity Futures Trading Commission (CTFC), the Securities and Exchange Commission (SEC), and the Financial Crimes Enforcement Network (FinCEN), respectively monitoring crypto-commodities (CFTC), crypto-currencies (FinCEN) and crypto-securities (SEC). Synthetic stablecoins would fall under the purview of the SEC.

The bill also proposes that FinCEN be allowed to trace crypto transactions, as well as anyone engaging in such transactions, “in a manner similar to that required of financial institutions with respect to currency transactions.”

FinCEN could also require crypto businesses and individuals engaged in related activities to submit certain reports or records in the event of criminal, tax, or regulatory investigations.

You can check out the draft bill here.

8 Congress Reps Send Letter to IRS Urging Further Crypto Tax Clarity: Eight members of the United States (U.S.) Congress sent a letter to the Internal Revenue Service (IRS) urging the agency to provide additional clarity on cryptocurrency tax laws.

A letter dated Dec. 20, signed by eight U.S. Congress members, stated:

“We wrote in April of this year urging the issuance of guidance for taxpayers who use cryptocurrencies and we are pleased to see that you have issued guidance and addressed many questions we posed. We are, however, concerned that this recent guidance creates many new questions related to the topics it seeks to address, namely forks and airdrops.”

Cointelegraph reached out to several signatories of the letter but had not received any comment as of press time. This article will be updated as we get more information.

The IRS originally came out with an official ruling on cryptocurrency tax expectations on Oct. 9, 2019, Cointelegraph reported. The ruling noted several points of taxation, including a tax on holders in the event of a cryptocurrency fork or airdrop, regardless of the holder’s knowledge of such an airdrop, or price action following the airdrop.

The Dec. 20 letter detailed that the original Oct. 9 IRS ruling used hypothetical examples for reference that are not actually applicable or plausible, and are therefore unclear for tax-paying citizens.

The letter specified “dominion and control” as relating to forks and airdrops in the Oct. 9 IRS ruling, requesting transparency on the matter. Due to a lack of clarity surrounding each specific point that triggers a taxable event, the receptor of a fork or airdrop could face taxation without any knowledge of such an event.

The letter also points out a lack of guidance within the current IRS ruling regarding various crypto-based finance, including futures trading and interest earned from digital asset deposits, as well as all crypto-based income.

NYDFS appears to be building RegTech solutions to improve its supervising capabilities: The New York Department of Financial Services (NYDFS), the state’s financial and cryptocurrency regulator, appears to be building RegTech (regulatory technology) solutions to improve its supervising capabilities.

The NYDFS is seeking a director to help design, build, and manage a program to facilitate the testing of RegTech solutions that have the potential to “significantly” improve its supervising capabilities, including those related to regulated entities.

The successful candidate could take inspiration from other regulators’ RegTech efforts, including the Bank of England, said the NYDFS. The Bank of England, the U.K.’s central bank, has been developing a RegTech strategy “to improve its efficiency and effectiveness as a regulator.”

Fidelity-Backed Startup Fireblocks Is Now Certified Secure by Ernst & Young: New York-based digital asset security firm Fireblocks has successfully completed a major examination carried out by Big Four auditing firm Ernst & Young (EY).

Fireblocks, which provides an institutional-grade platform for secure transfer of blockchain-based digital assets, received the Service Organization Control (SOC) 2 Type II certification performed by EY, the firm said in a press release shared with Cointelegraph on Dec. 19.

Following multiple EY inspections, which reportedly took more than six months, Fireblocks is now recognized as a company providing technology and services that meet existing strict security and data protection laws worldwide. As such, global Fireblocks’ customers can be sure that their data is protected and compliant with their company controls, policies and regulatory requirements, the firm claimed in the announcement.

Op Ed: U.S. Cryptocurrency Regulation Faces Uncertainty in 2020 on Bitcoin Magazine. The future of cryptocurrency regulation in the United States remains uncertain. The lack of a clear regulatory framework makes it difficult for market participants to act without fear of reprisal. The guidance issued and actions taken by the U.S. Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and Congress in 2019 provide a road map for how cryptocurrency regulation will develop in 2020. Here are five of the most significant regulatory milestones that we’ve seen this past year.

1. The SEC Released Guidance to Token Issuers

2. The SEC Denied the Latest Attempt for a Bitcoin ETF

3. CFTC Chairman Touted a Principles-Based Approach to Cryptocurrency Regulation

4. Congress Introduced a Bill Focused on Stablecoins

5. The SEC Approved a Closed-End Fund Based on Bitcoin Futures

SEC-Licensed Broker-Dealer BitOoda Secures $7M Seed Funding: United States-based cryptocurrency brokerage BitOoda has secured $7 million funding from major investors including former senior investment exec at JPMorgan.

Founded in 2017, BitOoda positions itself as a digital asset financial services platform that combines digital finance and applied science.

According to an official announcement on Dec. 23, BitOoda’s new seed round featured founder of international energy analytics firm PIRA Energy Gary Ross, who is also a former head of global oil analytics and chief energy economist at S&P Global Platts. Other investors included Roy Salame, former managing director and head of global investment opportunities group at JPMorgan, as well as Calvin Schlenker, former senior executive at British Petroleum.

As noted in the announcement, the firm has purportedly distinguished itself by designing and executing two major products including financial swap the BitOoda Difficulty and physical hashpower contract the BitOoda Hash.

Robinhood Fined $1.25M For Failing To Ensure Best Execution When Routing Customer Orders: Investment app Robinhood was fined $1.25 million by FINRA. The regulatory agency accused the firm of failing to have proper diligence that ensured customer orders being executed at the best market between 2016 and 2017. Robinhood currently routes its NYSE-listed security orders to five venues, including Citadel, Two Sigma, and Virtu.