Blockchain Industry Finds Itself Amidst Creation of New Cryptos, New Regulations, and New Restrictions

Blockchain Industry Finds Itself Amidst Creation of New Cryptos, New Regulations, and New Restrictions

Congress asks SEC for clearer regulation, Russia flagged Cashberry, cease and desist order against crypto entities, Mongolia licenses first e-currency, Venezuela to launch Petro, no venture firm certification for South Korean exchanges, ESMA extends restrictions on financial derivatives

  • After crypto industry experts, it is is the members of House of Representatives that try pulling the strings of the SEC to settle on clearer crypto regulations. A letter was sent by the officials to the SEC Chairman Jay Clayton seeking feedback on the organization’s plans to regulate the crypto industry.

We all want a fair and orderly market, we want all the same things regulators do. It doesn’t have to be done in the same way it was done in the past, and we need to be open to that.

Mike Lempres, chief policy officer at Coinbase (at a roundtable conference between lawmakers, regulatory authorities, and cryptocurrency experts)

  • Russia’s Central Bank declared Cashberry to be a ‘classic Ponzi Scheme’. Cashberry used aggressive marketing on mass and social media, offering high-value returns and tried targetting investors with a shallow understanding of crypto investments. Accused of looting thousands of investors, Cashberry is suspected to be one of the biggest Ponzi schemes in the recent years.
  • Bitconnect, Magma Foundation, and Pension Rewards charged with cease and desist order for ‘promoting unregistered and potentially fraudulent securities in North Dakota in the form of initial coin offerings (ICOs)’ by the North Dakota Securities Commissioner. The action has been taken under Operation Cryptosweep including 40 US and Candian securities regulators.
  • Mongolia couldn’t resist the crypto wave and now has its first licenced digital currency circulating. Bank of Mongolia has now approved the largest telecom operator of the country, Mobicom, to issue the digital currency. Candy, Mobicom’s digital currency, is well built up and is ready for daily commercial purposes.
  • Venezuela to soon launch its oil-backed cryptocurrency Petro to the global market. It will be the first crypto in the world to be created and administered by a government. The financial institutions have been strictly adviced by the government to accept and treat Petro just as Bolivar, the country’s fiat currency. Venezuela’s president is hopeful to see a renovation of the country’s shattered economy following the acceptance of this new currency and technology.
  • The South Korean government gives a red flag to providing venture firm certification to cryptocurrency exchanges. This will be resulting in the surge of taxes for the crypto exchanges, and the ones who have been previously certified will be eligible for the additional taxes once their certification expires. It has risen a concern that the government's decision might hamper the growth of the industry as a whole.

Because there is no significant blockchain technology gap between South Korea and the other countries, it is a good opportunity for South Korea to lead the industry. The Government will actively back domestic companies to help them lead the global blockchain market.

Min Won-ki, the Second Vice Minister or Science and ICT

  • Restrictions imposed on financial derivatives, inclusive of contracts-for-differences based on cryptocurrencies, have been extended by ESMA, Europe’s securities watchdog, making it applicable till the end of January 2019. The authorities decision was backed by the statement that the asset class has a relatively immature status and poses a major risk on investors.
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