Opinions

Joe Lubin: Ether and BTC Didn’t Face Regulations Unlike New Projects: Ethereum and Bitcoin (BTC) did not have to comply with regulation, admitted Ethereum co-founder Joseph Lubin in an interview with industry news outlet Forkast.

During the interview — which took place at the Hong Kong FinTech Week — Lubin noted that new projects need to comply with regulations, and explained the impact of the application of security law to the cryptocurrency space.

Lubin said that — to attract investors — any project has to promise that its token will increase in price. Furthermore, given that the appreciation is usually obtained through the work of developers, by definition, an asset that is being sold is a security. Because of this:

“And so securities law is then implicated and now you can’t sell a utility token as it’s not a utility token, it’s a tokenized security. You can’t sell it broadly and equitably.”

Presidential Hopeful Andrew Yang Plans to Regulate Crypto Industry: Yang, an entrepreneur, lawyer, philanthropist and a Democratic candidate in the 2020 United States presidential election, wrote in a Nov. 14 blog post on the tech industry that cryptocurrencies experience the levels of fraud that they do because of lack of adequate regulations. He said:

“Other countries, which are ahead of us on regulation, are leading in this new marketplace and dictating the rules that we’ll need to follow once we catch up.”

Yang explained that cryptocurrencies and digital assets already compose a great deal of economic activity. The governmental response has lagged. “A national framework for regulating these assets has failed to emerge, with several federal agencies claiming conflicting jurisdictions,” he said.

In his broader plan to regulate the tech industry and protect U.S. citizens from big tech companies “that are prioritizing profits over our well-being,” Yang promises to promote legislation on the crypto asset market space by defining what a token is, when a token is a security, and clarify the tax implications of owning, selling, and trading digital assets, among others.

FBI: Crypto Is A ‘Significant Problem That Will Get Bigger And Bigger’: Director for the Federal Bureau of Investigation (FBI) Christopher Wray testified before the Senate Homeland Security Committee at a hearing on security threats facing the United States.

During the hearing before the U.S. Senate Committee On Homeland Security And Governmental Affairs, senators asked leaders from the FBI, Department of Homeland Security and the National Counterterrorism Center questions on topics including counterterrorism efforts, foreign influence in elections, cybersecurity measures, border security, and of course, cryptocurrencies.

Former Presidential Candidate and Republican Senator from Utah, Mitt Romney, asked the intelligence officers whether the U.S. should not take some kind of effort in dealing with cryptocurrencies and its challenges they present to law enforcement’s anti-terrorist activities. He said:

“I’m not in the Banking Committee. I don’t begin to understand how cryptocurrency works. I would think it is more difficult to carry out your work when we can’t follow the money because the money is hidden from us and wonder whether there should not be some kind of effort taken in our nation to deal with cryptocurrency.”

FBI Director Wray took the lead in answering the question, saying that cryptocurrencies already present a problem for the agency. He stated:

“For us, cryptocurrency is already a significant issue and we can project out pretty easily that it’s going to become a bigger and bigger one. Whether or not that is the subject of some kind of regulation as the response is harder for me to speak to.”

Former Nasdaq CEO Said Regulators Operate At A Pace Slower Than ‘the Speed Of Erosion’: Former Nasdaq CEO Robert Greifeld said it was “frustrating” dealing with the glacial pace of Washington D.C. regulators during his tenure, a time Wall Street was looking to move faster with electronic trading.

In a recent The Scoop podcast, Greifeld told The Block he was overwhelmed by the pace at which regulators operated, when he first took the helm at Nasdaq in 2006. He even made fun of the Securities and Exchange Commission’s (SEC) operation speed as being slower than the speed of erosion.

FinCEN Chief: US Will Strictly Enforce Anti-Money Laundering In Crypto: The United States Financial Crimes Enforcement Network (FinCEN) Director Kenneth Blanco said that Anti-Money Laundering (AML) laws will be strictly enforced in the world of cryptocurrencies.

Reuters reported that Blanco made it crystal clear that cryptocurrency companies engaged in money service businesses will have to comply with AML laws and share information about their customers.

Speaking at a conference hosted by Chainalysis, a New York-based blockchain analysis company, Blanco told the audience that the so-called travel rule also applied to digital currencies and that the government expects crypto firms to comply. He said:

“It [travel rule] applies to CVCs [convertible virtual currencies] and we expect that you will comply, period. […] That’s what our expectation is. You will comply. I don’t know what the shock is. This is nothing new.”

Stablecoins, Including Facebook-led Libra, Could Come Under Securities Rules, Says Global Watchdog: The International Organization of Securities Commissions (IOSCO), a global securities watchdog, has said that stablecoin proposals and initiatives, such as the Facebook-led Libra project, could come under some existing securities market regulations.

In a statement published last Monday, Spain-headquartered IOSCO said that given the potential benefits and risks of stablecoins, a case-by-case approach is needed to establish which specific securities rules would apply.

But, in general, stablecoins “can include features that are typical of regulated securities,” said Ashley Alder, Chair of the IOSCO board. It means that IOSCO rules may apply to stablecoins “depending on how they are structured, including those related to disclosure, registration, reporting and liability for sponsors and distributors.”

John McAfee: Authorities Should Not Expect Crypto Firms to Stop Crypto Crimes: John McAfee said that it is not the responsibility of cryptocurrency firms to help prevent crypto use in crime. McAfee delivered his remarks in an interview with Washington D.C.-based news agency The Hill on Nov. 11.

McAfee argued that authorities should not require cryptocurrency companies and trading platforms to help them control digital currency use in illicit activities. McAfee said he hopes that the “societal impact of giving people freedom from an overburden and corrupted government” prevails over “what small part criminals are going to play in this technology.” He added:

“You can’t put that responsibility on me as an entrepreneur. You can’t require me to assist you in preventing what might be a future crime.”

Former PBoC Governor: Libra Would Be Trusted If Run by IMF: The former head of People’s Bank of China (PBoC), Zhou Xiaochuan has argued that the Libra stablecoin would be more readily trusted if it were in the hands of an organization like the International Monetary Fund (IMF).

Zhou is the longest-serving governor of China’s central bank to date, having held the role between 2002 and 2018. During his tenure, China soared to become one of the world’s leading economies.