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The regulators are guarded, but will arrive there from July 3rd to 10th

July 11, 2020

Every Friday, Law Decoded provides an analysis of the week’s critical political, regulatory, and legal stories.

publisher’s Note

Policies are changing slowly, cryptocurrencies want to move quickly. Sometimes fair, sometimes not, the cryptocurrency industry often It shows traditional financial regulators as calcified relics, unprepared for the emerging new world.

To be fair Everyone seems to recognize that markets and trading systems need major improvements, but national and international regulators are responsible for a wider range of concerns than any particular industry. The cryptocurrency industry sometimes takes this as a personal nudge waiting for a sudden burst of the regulatory dam. Progress is more like erosion.

The regulators are guarded, but will arrive there from July 3rd to 10thThe regulators are guarded, but will arrive there from July 3rd to 10th

Even so, there have been some encouraging, albeit weird, changes in the regulatory stance this week. I will try to put together some key developments from the SEC’s stance on security tokens and the first unconfirmed IPO through a cryptocurrency exchange, as well as deciphering the CFTC’s recently announced strategy.

Kollen Post, Policy Editor, @postman_

Tokens see the light at the end of the SEC tunnel

Recently, Some industry tensions promised that tokenized securities would be the killer application of blockchain. However, the difficult situation with the reconfiguration of the global stock markets has taken some time. A new Arca product was launched in the US this week. A tokenized fund based primarily on treasury bills.

Arca had worked with the SEC for two years to convince them that the fund and its affiliated ArCoin with peer-to-peer trading can meet all of the required AML / KYC requirements and provide investors with trading security. The fact that the fund is based on government bonds with low volatility has certainly helped, as has the fact that trading will remain relatively isolated on a single portal for the time being.

An extensive list of companies advertises the SEC in clever formats to offer private investors new forms of digitized assets. The Manila massacre and bureaucracy over a Bitcoin ETF continues, while Wilshire Phoenix recently changed tactics to submit a BTC trust to the Commission, but both are investments based at least on crypto.

There are a number of digitized securities that are not tied to any particular crypto asset in the U.S. limited markets. Trading is an important part of this current delay, also because it takes a long time to get a proposal through the SEC. In this week, The SEC also voted on changes to the registry under the Investment Company Act of 1940.. They promise “an accelerated review process for applications that are essentially identical to the recent precedent”. In other words, these pioneering projects may have had some impact.

CFTC promises a new cryptocurrency framework when its president ends his first year

To a limited extent, the Commodity Futures Trading Commission is generally a less aggressive regulator than the SEC. In fact, CFTC President Heath Tarbert made a comment this week Your commission is waiting for the SEC to determine the status of most tokens as securities or products. However, The recent priority that the CFTC gave to strict rules for trading crypto assets and futures is good news for the industry.

The new guidelines of the CFTC strategy are particularly noteworthy given Tarbert’s well-documented interest in this area. and the fact that the new strategy matches the rest of his tenure as president. Indeed, July 15th is the end of its first year. The Commission’s presence in public in the past week could therefore be seen as a kind of anniversary celebration.

At this point the term “regulatory clarity” it has more or less lost all of its meaning and has become a convenient and harmless catchphrase. In the same way, “Innovation” is a word that has no specific field, but which nobody can contradict. For political reasons, the vision that the CFTC or Tarbert is working on is working The “holistic framework” for crypto assets, as expressed in the last release, remains somewhat cryptic.

But in the same way, even though the political language depends on vague goals, The priority inclusion of digital assets in a four-year plan, which has undoubtedly been the subject of a long-standing behind-the-scenes debate, is not very important.

Coinbase list maybe

Coinbase, the flagship of the United States cryptocurrency exchange, could go public later this year. According to unknown sources speaking to Reuters, Coinbase was in talks with the SEC to conduct the first public cryptocurrency exchange action in the country.

The information is difficult to confirm. Coinbase is notoriously not expressive in the media, but the rumors of an IPO could well be part of a strategy to generate advertising. Nevertheless, listing on the stock exchange would be the logical next step.

The benchmark for a unicorn is a private company valued at over $ 1 billion. A financing round in 2017 Coinbase valued at $ 1.6 billion a number that the company broke with an investment round of $ 300 million, which increased this overall rating to $ 8 billion in 2018.

Based in San Francisco, Coinbase has long focused on operating cryptocurrencies within the U.S. legal boundaries. Whatever happens to your IPO, it’s probably a collective call or a warning to the industry.

further reading

Jerry Brito, head of the Coin Center, writes about how the CBDC conversation misinterpreted the obligations to perform AML / KYC on private transactions.

By Carlos Ignacio Gutiérrez, Brookings TechStream, He asks if the current legal structures are ready for the promising AI revolution.

The Cyberlaw podcasts, They discuss recent breaches of the encrypted network law, which involves criminal activity.