Category Archive : Regulatory News

Post-ETF policy landscape and Novi fears, Oct. 18–25

The biggest regulatory story of the week, if not the year, has been the United States Security and Exchange Commission’s lack of opposition to the launch of the first-ever Bitcoin (BTC) exchange-traded funds, which took eight long years to materialize. While the first ETFs are tracking CME-traded Bitcoin futures rather than the asset’s spot price, the crypto space is already anticipating a pure-Bitcoin ETF as a logical next step. This bar might prove to be immensely difficult to clear, however, as SEC Chair Gary Gensler seems far less convinced of the stringency of investor protections that such products offer.

Below is the concise version of the latest “Law Decoded” newsletter. For the full breakdown of policy developments over the last week, register for the full newsletter below.

Crypto and the national security game

The U.S. Treasury Department revealed last week that the increasing use of digital assets poses a growing threat to the nation’s sanctions program. Adversaries can now use these alternative financial rails to mitigate the effects of U.S.-imposed sanctions within the dollar-denominated realm. Just a few days later, a high-ranking Treasury official reiterated the department’s heightened focus on targeting crypto infrastructure used by bad actors. The official also made it clear that there is an understanding within the department that most crypto transactions serve perfectly legitimate purposes.

Novi anxiety

It took mere hours for a group of Senate Democrats to get extremely nervous about Facebook’s limited pilot of its digital wallet, Novi, run in partnership with Coinbase and Paxos. The test saw a remittances corridor opening between the U.S. and Guatemala for a small number of users, whereby they could send and receive Pax Dollar (USDP), a dollar-backed stablecoin.

A group of five senators, including vocal crypto critic Elizabeth Warren and Banking Committee Chairman Sherrod Brown, responded with a letter condemning Facebook’s…


FTX US Finalizes Acquisition of LedgerX

The completion of the acquisition signals an expansion of FTX US regulated futures and options offerings

Published: Oct. 25, 2021 at 6:57 AM MDT|Updated: 1 hours ago

BERKELEY, Calif., Oct. 25, 2021 /PRNewswire/ — West Realm Shire Services Inc. (“FTX US” or “the Company”), a leading US-regulated cryptocurrency exchange, today announced that it has finalized its acquisition of Ledger Holdings Inc., parent company of LedgerX LLC. (“LedgerX”). The Company also disclosed that it has rebranded LedgerX to FTX US Derivatives.

Logo for FTX.US (PRNewsfoto/West Realm Shires Services Inc.)

Brett Harrison, President of FTX US, commented on the news, “The completion of this acquisition is just the first step of many to provide the FTX US user base with access to the best products on the market. It should also be seen as a pivotal moment for FTX US as we continue to execute on our strategy to bring regulated crypto derivatives to our US user base. We believe the integration of the two organizations provides us with not only a technological advantage, but also furthers our working relationship with the regulatory community in a positive, constructive and transparent manner.”

With the finalization of the sale and purchase agreement for this acquisition, FTX US will gain a CFTC regulated Designated Contract Market (DCM), Swap Execution Facility (SEF), and Derivatives Clearing Organization (DCO). These will be available to both retail and institutional investors 24×7 and offer block trading and algorithmic trading opportunities for institutional investors. The acquisition will have no material impact on LedgerX’s operations as it will continue to provide its current offerings to its existing customer base.

Zach Dexter, CEO of FTX US Derivatives added, “As the regulatory environment in the crypto ecosystem continues to evolve, we look forward to acting as a resource and an example of how the protections afforded by proper regulatory oversight and licensing can  boost consumer…


Sino Global Capital launches $200 million fund with backing from FTX

Sino Global Capital, the China-based crypto venture capital firm led by Matthew Graham, has launched a $200 million fund with backing from FTX.

Sharing the news exclusively with The Block on Monday, Sino Global said the fund, Liquid Value Fund I, is close-ended. That means it has a hard cap of $200 million. A “substantial” portion of that amount has already been hard committed by partners like FTX, said Graham.

“We are excited to support the launch of Sino Global Capital’s institutional fund,” said FTX CEO Sam Bankman-Fried. “From the very beginning, Matthew and the Sino Global Capital team supported the FTX vision and then worked with us to help make it a reality. The Fund will now provide more opportunities to projects that are pushing crypto and blockchain technologies to the next level.”

This is the first time Sino Global has accepted outside capital for a fund. Until now, the firm has used proprietary capital to invest in crypto startups. Sino has invested in over 20 crypto projects to date, including Solana, FTX, Serum, and Wintermute.

Some of these investments will be transferred into the new fund, said Graham. These include LayerZero, Clearpool, Orca, and some yet-to-be publicly announced investments.

Solana has been one of the most successful investments of Sino to date. When asked how the firm will replicate that performance for the new fund, Graham said the same “bottom-up” investment approach will be applied to it. “We will be using our same approach of betting on and then working with and supporting entrepreneurs that have similar values of a high-trust and long-term approach to the ecosystem,” he said.

The Liquid Value Fund I will invest across crypto projects, including DeFi and NFT infrastructure, and focus more on the Solana and Ethereum ecosystems.

While the fund will invest globally, its key market focus is Asia, including India. “We see India as an extremely important, yet idiosyncratic, market for crypto,” said Graham, praising the country’s…


EQONEX Lists “Game Changing” Polkadot (DOT) Token

Published: Oct. 25, 2021 at 3:15 AM MDT|Updated: 1 hour ago

SINGAPORE, Oct. 25, 2021 /PRNewswire/ — EQONEX, the crypto exchange of Nasdaq-listed Eqonex Limited (Nasdaq: EQOS), today announces it has listed the Polkadot (DOT) token on its platform.

The Polkadot network is a “game changing” viable alternative to Ethereum according to research published by EQONEX Labs.

Claire Zhao, Blockchain Researcher from EQONEX Labs, has “high hopes” for the performance of the network saying it offers the “perfect trifecta of solutions”: blockchain interoperability, decentralized governance, and scalability.

“We’re excited to make the token available for trading through a DOT/USDC pairing,” said Richard Byworth, CEO of the Nasdaq-listed crypto ecosystem EQONEX Group. USD and USDC are fully fungible on the platform meaning that USD holders can purchase DOT using the USDC market.

The complexity in the Polkadot protocol’s design has created challenges for traders with very few custodians able to provide safe storage of the coin, and some other exchanges have had to indeed freeze withdrawals as the protocol pushes changes through. EQONEX Group custodian Digivault is pleased to have solved these technical challenges and will provide safe custody and exchange services for DOT.

“The beauty of trading Polkadot on the EQONEX exchange is the default custody in Digivault”, said Robert Cooper, CEO at Digivault.

The new DOT listing follows the announcement that Digivault, EQONEX Group’s crypto custodian, became the first custodian registered by the UK’s Financial Conduct Authority (FCA), to provide secure custody services for DOT.

“We’ve listed this token due to its contribution to solving the problems of being able to offer interoperability, decentralisation and scalability simultaneously. Polkadot has also designed a ground-breaking blockchain protocol which allows for communication between different blockchains that are then connected, from a security and governance perspective by the core…


Australia May Get More Beneficial Cryptocurrency Regulation To Foster Digital Asset Innovation – CryptoMode

New cryptocurrency legislation will be coming to Australia shortly. Contrary to what most may expect, the new rules will offer more reasons for getting involved in Bitcoin and altcoin. Through amicable regulations, Australia may become the global leader in the digital economy. 

Australia Prepares To Embrace Crypto Further

  • New regulatory measures regarding cryptocurrency and digital assets are coming to Australia.
  • Senate committee members made 12 proposals to adjust current licensing requirements and crypto regulation, including taxation guidelines.
  • The main objective is to regulate to increase legitimacy without stifling innovation.
  • Currently, cryptocurrencies are assets and subject to capital gains tax and ATO reporting if held for over a year or subject to financial gain.
  • One of the amendments may offer a 10% tax redemption to miners using renewable energy.
  • Another change seeks to recognize DAOs (decentralized autonomous organizations), as the lack of inclusion in existing company structures prevent establishing large-scale projects.
  • Through these changes, Australia can become a leader in the digital assets space.
  • However, another plan is to explore a CBDC option, bringing a central bank digital currency to the island nation. 
  • As one in six Australians own cryptocurrency – primarily Bitcoin – more regulatory clarification will benefit millions of people. 
  • Accommodating regulations can pave the way for similar legal changes in other countries globally. 
  • There are several ways to spend Bitcoin in Australia today, including at various physical locations!

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US regulators eye the cryptocurrency sector By Cointelegraph

In her monthly Expert Take column, Selva Ozelli, an international tax attorney and CPA, covers the intersection between emerging technologies and sustainability, and provides the latest developments around taxes, AML/CFT regulations and legal issues affecting crypto and blockchain.

Lately, news headlines are focused on regulators’ concerns over the lack of investor protections in the cryptocurrency market, which has ballooned to more than $2 trillion, and the possible risks to financial stability.

Selva Ozelli, Esq., CPA, is an international tax attorney and certified public accountant who frequently writes about tax, legal and accounting issues for Tax Notes, Bloomberg BNA, other publications and the OECD.