USA

Crypto, Blockchain Hearing at US Senate Banking Committee: The July 30th hearing, titled “Examining Regulatory Frameworks for Digital Currencies and Blockchain,” follows the previous hearings in mid-July that examined the regulatory hurdles surrounding Facebook’s Libra. Circle CEO Jeremy Allaire was a witness in front of the Senate Committee on Banking, House, and Urban Affairs on behalf of The Blockchain Association, along with Rebecca M. Nelson, a specialist in international trade and finance, and Mehrsa Baradaran, a professor of law at University of California, Irvine School of Law.

IRS Warnings to Bitcoin Traders Offer Clues to Coming Tax Guidance: The IRS’ recent warning letters to 10,000 traders offer hints at what its forthcoming guidance on crypto taxes might say. While the letters are not guidance, the tea leaves indicate the IRS might be changing its required methods for calculating the value of crypto holdings and the forms and schedules for reporting them. Major questions remain unresolved, including how hard forks and airdrops should be treated.

The Federal Reserves Plans New Interbank 24/7 Payments Platform: The Federal Reserve Board is developing a new real-time payment and settlement service. The platform, called the FedNow Service, is designed to leverage technology that is more efficient and secure than existing infrastructure. Its purpose is to enable the Federal Reserve Banks to offer around-the-clock payments in the US, with a focus on speed, efficiency and security. The near-instantaneous transfer of funds will be available seven days a week, 365 days a year, offering a key advantage over traditional banks that stop processing transactions on the weekends.

LedgerX: Media Misreports BTC Futures Status, Option ‘Coming Soon’: United States-regulated crypto derivatives and clearing platform LedgerX was reported to launch the first physically settled Bitcoin futures contracts in the country, therefore stealing a march on Bakkt and ErisX. However, the Commodities Futures Trading Commission soon refuted that information by stating that the exchange has not yet been properly cleared by the agency. Now, a LedgerX official has told Cointelegraph that the media publication that broke the news — CoinDesk — had “misunderstood the scope of the launch,” which in turn led to the confusing publication. Meanwhile, the exchange’s CEO is threatening to sue the CFTC on social media while his company offers no comment on that. Cointelegraph has also reached out to CoinDesk regarding the comment obtained from LedgerX, and was referred to a follow-up article that explained the situation from its point of view.

New York Crypto Task Force: Industry, Government to Review Regulations: In late July of 2019, the New York State Assembly appointed six members to its Digital Currency Task Force, claiming to be the first state-drafted crew across the United States to deal with cryptocurrencies and blockchain. While it is unclear if the influx from Facebook’s Libra has hastened the NY legislators to assemble the team, the first reports from the Digital Currency Task Force are expected to arrive not sooner than the very end of 2020. Despite the recent appointments, the crypto task force isn’t fully formed yet. It will consist of 13 members, six of whom have been appointed by the Assembly, while the remaining seven will be selected by Gov. Andrew Cuomo. Previously, it was announced that the Assembly would appoint just three instead of six members, while the rest would be drafted by the Senate and the governor.

Judge Rules to Extend Bitfinex and iFinex Case in New York: Justice Joel M. Cohen of the New York Supreme Court (NYSC) has ruled to extend the preliminary injunction in the ongoing case of crypto exchange Bitfinex and Tether’s parent company, iFinex, against the New York Attorney General (NYAG), on July 29th. Cohen reportedly decided to give a 90 day extension to the case, which apparently means that OAG can continue investigating. Lawyers of Tether tried to appeal to dismiss the motion immediately, but Cohen rejected their appeal. Speaking before the court, iFinex also argued that the court does not have subject matter jurisdiction because Tether is not a security or commodity as there is no futures market. The companies’ defense also stressed that Tether and Bitfinex are two different companies with two different business models, and that it is not proper to treat them as a single entity as the OAG does.

Bitfinex-NY Attorney General Case: Injunction Extended — What’s Next?: TDespite everything that’s been said about Tether and Bitfinex, defying all the scrutiny and suspicion, they continue to survive as a controversial pillar of the global crypto ecosystem. And in their ongoing legal battle with the New York State Office of the Attorney General, they continue to fight against the attempt to sue them and their parent company, iFinex. Against all the odds, they’re doing a good job of holding their ground. This was underlined most clearly at the end of July, when Justice Joel M. Cohen of the New York Supreme Court (NYSC) ruled to extend the attorney general’s preliminary injunction against iFinex and its subsidiaries. This was to provide the OAG with more time to investigate its case but also to provide the judge himself with more time to decide whether to accept or reject iFinex’s appeal to have the case dismissed, based on the alleged grounds that it doesn’t operate in the state of New York. But even if the same Justice Cohen has previously criticized the attorney general’s injunction for being “vague, open-ended and not sufficiently tailored” to prove what has caused or will cause harm against New York residents, this latest delay doesn’t necessarily mean that iFinex will have its appeal accepted. In fact, as certain legal experts suggest, the attempts to have the case dismissed on jurisdictional grounds, as well as its receipt of a stay of document demands, might indicate that it’s trying to divert scrutiny away from the fundamental issue of whether it defrauded its customers.

Senior CFTC Official Who Set Bitcoin Futures Policy Is Leaving: The U.S. Commodity Futures Trading Commission (CFTC) is losing another senior level staffer. Bloomberg Law reports that a number of sources have said Amir Zaidi, director of the CFTC’s Division of Market Oversight (DMO), is to leave the regulator within weeks. Zaidi had been in the post since early in 2017 and was the official responsible for setting policy on bitcoin futures trading and redrafting the rules on OTC swaps markets. Before joining the CFTC in 2010, Zaidi was an associate in the Corporate and Securities Group at international law firm Arnold and Porter LLP. Previously, he’d also held financial analyst roles at Goldman Sachs and the Federal Reserve Bank of New York.

US Department of Commerce hiring computer scientist with crypto and blockchain experience: The U.S. Department of Commerce is looking to hire a computer scientist with “specialized” experience in cryptocurrency and blockchain technologies. According to a job posting on USAJobs, an official government jobs portal, the department’s non-regulatory agency, the National Institute of Standards and Technology (NIST), plans to hire a person with experience in “setting up blockchain test beds and conducting research and analysis of blockchain technologies, crypto ledgers and crypto contracts.”

New Jersey Calls Two ICOs ‘Fraudulent Securities,’ Issues Stop Order: New Jersey’s Bureau of Securities has announced enforcement action against two state-based initial coin offerings. Canadian and American regulators coordinated under the North American Securities Administrators Association (NASAA) and executed by New Jersey officials have issued emergency orders against Zoptax and UNOcall, two NJ-based ICOs. Part of “Operation Cryptosweep,” the Bureau of Securities alleges both ICOs were offering fraudulent securities offerings. Zoptax was seeking between $500,000 and $3.4 million for its Zoptax Coins while UNOcall was issuing tokens and investments in its staking protocol which offered daily interest returns between 0.18% — 0.88%. New Jersey’s Attorney General’s Office says the nature of issuance, the purpose of the investments, and misleading consumer information was behind the decision. A full stop on issuance was ordered.