#IntlRoundup: FINRA makes its first crypto charge; ASIC to prioritize the exchange sector
The global nature of digital currencies makes following international news beneficial for investors and interested market participants. However, due to how fast news travels through the landscape, it can be easy to miss the occasional story now and again.
As part of a regular weekly roundup, Coinsquare News compiled the week’s significant international news headlines. This week, we look at FINRA’s first crypto fraud complaint, Australian financial regulators looking to increase their crypto-related efforts, and more.
U.S. regulatory authority charges a crypto firm with securities fraud
According to a report from Reuters, a Wall Street self-regulatory agency took action this week against a cryptocurrency firm believed to have operated as an unregistered security.
The Financial Industry Regulatory Authority (FINRA) is an American organization that primarily deals with regulating operations that relate to the New York Stock Exchange. This week, the organization launched a series of separate actions against crypto firms.
Notably, FINRA accused Rocky Mountain Ayre-owner Timothy Ayre of committing securities fraud following the sale and marketing of HempCoin, a cryptocurrency it claims operates as an unregistered security.
The debate between whether or not certain cryptocurrencies are securities has been prominent in recent months, both in the U.S. and internationally. In February, Jay Clayton, Chair of the Securities and Exchange Commission (SEC) said that most Initial Coin Offerings (ICOs) should be considered securities for regulatory purposes.
In June of this year, headlines broke that the SEC concluded that it would not classify either Bitcoin or Ether as securities.
Ayre, on the other hand, could face a fine or suspension from the securities industry as a result of his dealings with HempCoin. However, Ayre’s legal team said it plans to contest the charges, citing a lack of clarity around whether or not HempCoin is a security and consequently subject to federal laws.
Australian regulator outline indicates plan to increase crypto oversight
In a new publication, the Australian Securities and Investments Commission (ASIC) outlined its plans for the 2018-2019 financial year, with a section of the report discussing the cryptocurrency industry.
The Australian financial service regulator wrote that it intends on continuing to monitor threats of harm from emerging products such as cryptocurrencies and Initial Coin Offerings (ICOs). Further, it intends to increasingly mitigate these threats in the emerging landscape, aiming to especially target the exchange sector.
“As an organisation, we will adapt and evolve in responding to the rapid changes in the financial sector,” the report stated, on behalf of ASIC commissioners.
European Commission Vice-President: crypto-assets are here to stay
At the informal ECOFIN press conference in Vienna, European Commission Vice-President Valdis Dombrovskis spoke briefly on the cryptocurrency industry.
In his speech, Dombrovskis said that the Commission had a fruitful exchange of views on cryptocurrencies. Additionally, he said it believes digital assets are “here to stay” and that the market continues to grow despite the “recent turbulence.”
“In particular initial coin offerings, or ICOs, we see they have the potential to emerge as a viable form of alternative financing,” said Dombrovskis. “Already last year, ICOs helped raise over 6 billion dollars in funding and this year this figure will be substantially bigger.”
In order to carefully regulate to the cryptocurrency industry, the European Commission is working with European Supervisory Authorities. As briefly mentioned in the speech, this arrangement hopes to build a foundation for regulatory practices in the region, and will also explore if existing financial sector regulations are applicable to cryptocurrencies.
“At the same time, we also see risks linked to a lack of transparency, so there are risks for investment protection and market integrity, but also in the form of money laundering, potential fraud or hacking,” he added. “So we need to continue monitoring the developments in this area, and we need to do so also in cooperation with our international partners at the Financial Stability Board or G20 level.”
Dombrovskis further noted that the Commission has already expanded the scope of its anti-money laundering and anti-terrorism financing legislation to include cryptocurrency exchanges and custodian wallet providers.
Mt Gox releases online claim system for corporate users
On Wednesday, the Japanese exchange best known for one of the largest cryptocurrency breaches in history, Mt Gox, announced that it released an online method for corporate users to make their rehabilitation claims.
Mt Gox says its online bankruptcy filing system now lets corporate users file their proofs of claim through online methods, adding that it released online methods for individual users last month.
In the years since the Mt Gox breach devastated the cryptocurrency industry in 2014, the events have continued to loom over investors. In March of this year, Mt Gox’s bankruptcy Trustee Nobuaki Kobayashi irritated the market and the broader cryptocurrency community through selling some of the trust’s bitcoin holdings.
Those championing rehabilitation for victims of the breach hope it will help not only provide compensation, but also help the industry officially put the Mt Gox breach firmly in the past.
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