Contained within several notices from the Canadian Securities Administrators (CSA), are clarifications of the regulations in place that can determine the legality of Initial Coin Offerings (also called Initial Token Offerings). The CSA’s main concern with ICOs in their current form will most certainly be the lack of investor protection for Canadians. Like securities laws in the United States that provide investor protection, Canada also has regulations regarding the sale of ICO tokens to its citizens.
We recently examined the structural misunderstandings of cryptocurrencies that were expressed in a blog post by one of New Zealand’s largest banks ASB). However, it seems that this misunderstanding of cryptocurrencies, blockchain technologies, and the power dynamic between them and traditional power structures is endemic throughout the entire global financial system. Bloomberg just released a piece from its editorial board, revealing their own limited knowledge in this area.
One of the main sources of frustration for those of us who are blockchain and cryptocurrency enthusiasts is the degree to which big companies and large financial institutions still don’t understand our industry. Earlier this week, one of New Zealand’s largest banks ASB released a blog post by their General Manager of Global Markets, Nigel Annett. We believe that post offers tremendous insight into how financial institutions and other major organizations are thinking about cryptocurrency and blockchain adoption.
The former Chair of the Federal Deposit Insurance Corporation (FDIC) recently said that regulators should move to monitor and regulate digital currencies, but argued that the government should not move to ban them. She made the remarks in an appearance on CNBC’s Fast Money, during a panel discussion about a potential crypto crackdown.
The U.S. Commodity Futures Trading Commission today announced two new enforcement actions related to alleged fraud in the cryptocurrency industry. The commission filed actions against US-based Cabbage Tech, Corp. DBA Coin Drops Market (CDM) and The Entrepreneurs Headquarters Limited, which is registered in the UK. Both entities are accused of various types of fraud involving digital currency tokens.
Visa CEO Alfred Kelly recently offered his thoughts on whether the credit card company might offer cryptocurrency payment processing in the near future. On Tuesday. CNBC interviewed Kelly during a conference of the National Retail Federation. Kelly suggested that digital currencies like Bitcoin are not money, and said that Visa will not process those types of transactions:
With the value of Bitcoin and other digital currencies in steep decline in recent days, many skeptics are once again racing to write cryptocurrency’s obituary. However, billionaire entrepreneur and Dallas Mavericks owner Mark Cuban appears to see things differently. In response to a Twitter question about when his team’s fans would be able to use Bitcoin to purchase tickets to the game, Cuban offered a two-word response:
Governments around the world have been struggling to respond to the digital currency revolution. In nations like China, regulators have moved to restrict cryptocurrency-related activities like ICOs and trading at local digital currency exchanges. Other nations have moved to implement new regulations to ensure that cryptocurrencies are covered by existing anti-money-laundering and terrorist financing rules. According to a board member at the Deutsche Bundesbank, however, an even more centralized solution is needed.
As Bitcoin and other digital currencies exploded in value in the last year, many investors enjoyed a dramatic return on their investment. Some of those fortunate investors have apparently decided to harness some of that newfound wealth and use it to purchase real estate in the UK. On the surface, that might seem like a prudent decision, given the ongoing volatility in cryptocurrency markets. In practice, however, many UK investors are experiencing unexpected resistance from the country’s lenders.
Treasury Sec Mnuchin: US Will Work With G-20 Partners to Prevent Cryptocurrency from Becoming “Swiss Bank Account”
In remarks offered at an Economic Club of Washington event on Friday, U.S. Treasury Secretary Steven Mnuchin acknowledged that the United States will work with other nations to ensure that digital currencies are not misused by “bad people.” Much of that effort will focus on preventing people from using cryptocurrencies in the same way people once used Swiss bank accounts.
ATW Tech subsidiary Voxtel is reportedly planning to integrate the EMC2 digital currency throughout its platforms, thanks to a partnership between its parent company and the Einsteinium Foundation. The plan was announced in a recent press release, and involves a four-phase plan to deploy the cryptocurrency for Voxtel platforms like messaging, voice services, and mobile donations.
Venezuela’s legislators weighed in on President Nicolas Maduro’s plan for the so-called “petro” digital currency on Tuesday, declaring it illegal and open to corruption. The country’s legislature, which is controlled by Maduro’s political opponents, suggested that the scheme was little more than a plan to sell off the nation’s oil reserves. One of those lawmakers, Jorge Millan, observed:
On Tuesday, Kodak announced plans to create a new blockchain-based image rights platform it is calling KodakOne, as well as a new cryptocurrency called KodakCoin. The platform will provide photographers with a secure digital record of their ownership rights. The new currency will allow photographers to participate in what the company is calling “a new economy for photography.”
Bank of Israel Deputy Governor Nadine Baudot-Trajtenberg sought to clarify the central bank’s position on digital currency Monday, in remarks offered at a parliamentary finance committee meeting. According to a Reuters report, she said that the central bank does not recognize cryptocurrencies as currencies:
Groundbreaking technology, spectacular returns in 2017, and a lack of cryptocurrency knowledge among the general public, is presenting a once in a lifetime opportunity for con artists. They can promise anything, deliver nothing, and collect a small fortune from unsuspecting investors. Misleading people to believe they will see spectacular returns from these activities is setting off red flags with investor protection agencies.
A new Visa crackdown on a major card provider has resulted in the suspension of a number of pre-paid cryptocurrency cards, according to a report in The Telegraph. The suspension will impact several thousand cryptocurrency users who use those cards to access funds from ATMs and make payments at businesses in their area.
British media reported in late December on the Bank of England’s possible plans to introduce a reserve bank digital currency linked to sterling. According to those reports, the BOE had created a research unit to investigate the possibility of launching the cryptocurrency as early as this year.
Initial coin offerings have been in the news quite a bit in recent months, as blockchain and digital currency startups have become increasingly reliant on them for their capital formation needs. By some estimates, more than 4 billion dollars in capital have been raised using this funding mechanism. The fact is that ICOs have become an increasingly popular option for raising capital. However, that popularity has been accompanied by increased government scrutiny.
A report in the Financial Times on Monday suggests that the government of Russian President Vladimir Putin is moving forward with plans to develop its own digital currency. According to media reports, Putin personally gave the order to create the so-called cryptoruble, which will be a digital version of the nation’s existing hard currency.
According to Egyptian media reports, Egyptian Grand Mufti Shawki Allam has issued an official fatwa that declares Bitcoin impermissible under Islamic Sharia law. The nation’s top imam reportedly released the fatwa on Monday, declaring that the “virtual currency” is forbidden since it has no backing from centralized authorities and carries with it a risk that traders could suffer financial ruin.