According to Ricardo Da Ros, CEO of the crypto platform Patex, many crypto users in Latin America (LATAM) seem to prefer using centralized exchanges (CEXs) over decentralized ones. He attributes this preference to a culture in the region that “has been built on trust in authority.” Da Ros suggests that this culture, combined with the […]
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The UK’s Financial Conduct Authority (FCA) has joined forces with the Bank of England (BOE) to gather public input on their forthcoming regulatory framework for stablecoins.
In a joint statement released on Nov. 6, the FCA and BOE unveiled a discussion paper to solicit feedback to shape the regulations governing stablecoins. This initiative represents the latest in a series of moves by UK authorities to establish comprehensive oversight of the cryptocurrency market.
“The proposed regulatory approach put forward by the FCA and the Bank looks to harness the potential benefits stablecoins could provide to UK consumers and retailers, in particular by making payments faster and cheaper,” the statement reads. “The proposals to regulate stablecoins aim to protect consumers, prevent money laundering with a robust set of rules and to safeguard financial stability.”
The discussion paper outlines how the BOE intends to oversee systemic stablecoins, mitigating potential threats to financial stability. Additionally, the Bank will assume regulatory authority over stablecoin issuers and wallet providers. On the other hand, the FCA will take on the responsibility of overseeing stablecoin issuance.
In essence, the regulators’ proposal ensures the safety of UK consumers and businesses participating in stablecoins transactions. Importantly, these actions follow earlier pronouncements from UK authorities, underscoring the imperative to shield users from the potential pitfalls of stablecoins, a sentiment accentuated by the collapse of TerraUSD.
Meanwhile, this collaborative effort between the BOE and FCA aligns with a related update from the UK Treasury focusing on stablecoin regulation.
Sheldon Mills, an Executive Director at the FCA, noted that stablecoins hold significant promise for enhancing payment systems. As such, soliciting input from stakeholders regarding their regulation is deemed crucial.
Sarah Breeden, a Deputy Governor at the BOE, emphasized that stablecoins have the potential to bolster digital retail payments in the UK.
Breeden continued that the proposals are designed to foster secure innovation, providing firms with clear guidance on risk management and instilling public confidence in all facets of digital currency and payments.
Notably, the UK’s aspirations to establish itself as a cryptocurrency hub have been accompanied by stringent regulatory measures. In Oct., the FCA introduced the financial promotions regime, which imposes strict compliance requirements on crypto firms.
The Bittrex motion to dismiss in its legal case with the SEC is similar to an earlier Coinbase filing as they both claim the SEC is operating outside its authority.
Crypto exchange Bittrex is looking to dismiss its ongoing case with the United States Securities and Exchange Commission (SEC). The exchange believes the SEC has no authority over the case and wants the court to dismiss the lawsuit.
Bittrex filed the motion to dismiss with the United States District Court for the Western District of Washington at Seattle. In the filing, which had both Bittrex and co-founder and former CEO William Shihara as defendants, the exchange argued against the Commission’s jurisdiction.
According to Bittrex, the SEC conducted a six-year investigation and still failed to provide one token the exchange unlawfully listed. In addition, Bittrex says the SEC’s claims miss “essential elements” and that the claims defy precedents and exceed the Commission’s authority. Furthermore, Bittrex wants to dismiss the case, arguing that the SEC is not following statutory constraints and standards.
“The SEC’s pursuit of Bittrex is especially misguided because the company has wound down its US operations, fully repaid all customers who submitted sufficiently detailed redemption requests, and entered bankruptcy. The Commission is thus pursuing purely registration-based violations against a company that is no longer operating and faces no allegations of fraud,” wrote the company.
Bittrex states three major reasons for arguing to dismiss the SEC case. First, the SEC does not have the “clear congressional authorization” to decide that tokens should be regulated as securities under the major questions doctrine. The exchange argues that the question of regulating tokens as securities is only for Congress, not the SEC or the court.
The second reason to dismiss is that the complaint does not “adequately allege” that any secondary-market transactions processed by Bittrex were in securities. Lastly, Bittrex accuses the SEC of insufficiently pleading the scope of conduct and failing to provide proper notice of claims.
In April, the SEC filed a suit against Bittrex and Shahara for running an unregistered securities exchange, broker, and clearing agency. In a press release, SEC Enforcement Director Gurbir Grewal said Bittrex circumvented registration requirements and also advised crypto securities issuers to do the same. The SEC also said Bittrex combined certain market functions to extend its profits.
In March, the SEC sent Bittrex a Wells Notice, notifying the exchange of the coming charge. Shortly after, Bittrex announced that it would suspend operations in the US because of regulatory uncertainty. By May, Bittrex filed for Chapter 11 bankruptcy in Delaware. The bankruptcy filing only affects Bittrex US and not the global parent. Bittrex had been facing operational problems and had laid off 80 staff in February.
Last week, Coinbase issued its first legal response to the SEC following the Commission’s lawsuit in early June. In its response, Coinbase asked the court to dismiss the case, claiming that the lawsuit violates its due process rights. Coinbase also argued that the action is an abuse of process.
Like the recent Bittrex motion to dismiss, Coinbase argued that the SEC lawsuit is beyond its jurisdiction. The exchange supported its argument in a filing, stating that SEC Chair Gary Gensler had told Congress that the Commission has no statutory authority to regulate Coinbase and similar businesses. According to the filing, Gensler also said that only Congress can bridge the regulatory gap.
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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.