- Congress Members Suggest Laws Aimed toward Higher Clarifying Digital Asset Regulation
- SEC Division of Examinations Threat Alert Sign Continued Concentrate on Digital Belongings
- Federal Reserve Publishes White Paper on Central Financial institution Digital Foreign money
- BitPay, Inc. Reaches Settlement with OFAC
- Coinbase Pronounces Submitting of Registration Assertion
- Knowledge Tree Recordsdata Bitcoin ETF Proposal
Congress Members Suggest Laws Aimed toward Higher Clarifying Digital Asset Regulation
Home Representatives Patrick McHenry (R-N.C.) and Stephen Lynch (D-Mass.) launched legislation on March 9, 2021 aimed toward authorizing regulatory companies to raised make clear cryptocurrency definitions. Amongst different actions, H.R. 1602, the “Eradicate Boundaries to Innovation Act of 2021,” would authorize the creation of a working group composed of business specialists and representatives from the Securities and Trade Fee (“SEC”) and Commodity Futures Buying and selling Fee (“CFTC”) to guage the present authorized and regulatory framework round digital property within the U.S. and put together a report offering evaluation and suggestions inside a 12 months of being shaped.
On the identical day, Home Consultant Warren Davidson (R-Ohio) launched laws to make clear the categorization of digital property. H.R. 1602, the “Token Taxonomy Act of 2021” proposes to amend the Securities Act of 1933 and the Securities Trade Act of 1934 to:
- Exclude digital tokens from the definition of a safety;
- Direct the Securities and Trade Fee to enact sure regulatory modifications relating to digital models secured by public key cryptography;
- Regulate taxation of digital currencies held in particular person retirement accounts; and
- Create sure tax exemptions associated to transfers or gross sales of digital forex.
You possibly can learn the textual content of the Eradicate Boundaries to Innovation Act here.
You possibly can learn the textual content of the Token Taxonomy Act of 2021 here.
SEC Division of Examinations Threat Alert Sign Continued Concentrate on Digital Belongings
The Securities and Trade Fee’s (“SEC”) Division of Examinations (the “Division”) issued a Risk Alert on February 26, 2021 reflecting the Division’s continued deal with digital asset securities. The Alert each (1) supplies Division observations from examinations of funding advisers, broker-dealers, and switch brokers relating to digital asset securities, and (2) outlines areas of focus for the Division’s future examinations of these entities.
Within the announcement of the Threat Alert, the Division acknowledged that it “encourages market contributors to mirror upon their very own practices, insurance policies and procedures, as relevant, and to advertise enhancements of their supervisory, oversight and compliance applications.”
The Division highlighted six areas of main threat for funding advisers that handle digital property primarily based on previous examinations: portfolio administration, recordkeeping, custody points, investor disclosures, pricing consumer portfolios, and acceptable registration necessities. The Division additionally pointed to 6 areas of regulatory and compliance threat for broker-dealers: safekeeping funds and operations, registration necessities, disclosing conflicts, anti-money laundering procedures and controls, choices, conflicts of curiosity disclosures, and outdoors enterprise actions procedures and controls.
Federal Reserve Publishes White Paper on Central Financial institution Digital Foreign money
On February 24, 2021, employees of the U.S. Federal Reserve revealed a paper figuring out preconditions for a central financial institution digital forex that’s of day by day use by most people. The paper notes that the preconditions fall into 5 areas:
- Clear coverage aims (i.e., understanding the forex’s function, how the forex can be utilized, and the potential worth the forex supplied);
- Broad stakeholder help (i.e., working in direction of gaining help from key stakeholders, which embrace authorities our bodies, finish customers, monetary establishments, know-how and infrastructure suppliers, academia, and requirements improvement organizations);
- Robust authorized framework (i.e., creating a transparent place on points resembling: the first regulator, authorized tender standing, anti-money laundering issues, privateness protections and authorized roles and duties for the central financial institution);
- Strong know-how (i.e., know-how improvement and evaluation work are wanted within the areas of system integrity, operational robustness, and operational resilience); and
- Market readiness (i.e., making a plan and course of for consumer adoption).
The white paper explains that it’s meant to “spark additional inquiry.” However, the white paper cautions “[e]ach of the preconditions by itself will take important time to attain, and these preconditions characterize solely a place to begin. As Federal Reserve Chair Jerome Powell just lately remarked on CBDCs, ‘[T]right here is quite a lot of work but to be completed.’”
BitPay, Inc. Reaches Settlement with OFAC
On February 18, 2021, the Treasury Division introduced that the Treasury’s Workplace of International Belongings Management (“OFAC”) reached a settlement with fee processer BitPay, Inc. OFAC alleged that between roughly June 10, 2013 and September 16, 2018, BitPay processed 2,102 transactions on behalf of people who, primarily based on IP addresses and data out there in invoices, had been positioned in jurisdictions that had been topic to U.S. sanctions. BitPay agreed to a
$507,375 fee to settle the alleged violations.
Coinbase Pronounces Submitting of Registration Assertion
Coinbase International, Inc. introduced it filed a registration assertion on Kind S-1 with the SEC. Coinbase acknowledged in a February 25, 2021 press release that its Class A typical inventory shall be listed on the Nasdaq International Choose Market underneath the ticker image “COIN”. As we beforehand reported, Coinbase submitted a draft registration assertion on December 17, 2020. On January 28, 2021, Coinbase revealed a press release offering further particulars relating to the proposed submitting.
You possibly can view the submitting here.
Knowledge Tree Recordsdata Bitcoin ETF Proposal
On March 11, 2021, New York Metropolis-based asset supervisor WisdomTree Investments filed a registration assertion with the U.S. Securities and Trade Fee to launch a Bitcoin exchange-traded fund (ETF). In keeping with the submitting, The WisdomTree Bitcoin Belief could be an exchange-traded fund that points widespread shares listed on the Cboe BZX Trade, Inc. and traded underneath the ticker image BTCW.