Regulation

The Crypto Industry’s 2024 Election Spending Spree

Published

4 months ago

31 July, 2024

The Crypto Industry’s 2024 Election Spending Spree

Cryptocurrency companies are on an unprecedented spending spree to oust politicians opposed to their agenda and to help elect pro-crypto candidates in the 2024 election cycle.

The cryptocurrency industry — valued at $2.5 trillion worldwide — has lobbied extensively against regulations to hold its industry accountable for widespread fraud and mismanagement of customer funds following spectacular market failures in 2022 that left many Americans without access to their money.

One of the main political action committees receiving funds from crypto companies has raised more than $202 million since January 2023 — a number that dwarfs the $27 million donated by disgraced former cryptocurrency billionaire Sam Bankman-Fried to a similar political action committee in 2022.

Crypto’s booming influence is already in effect: the industry notched wins against politicians who opposed their regulatory agenda during the primary elections, former president Donald Trump has been parroting lobbyists’ questionable data on crypto’s use among Americans, and Sen. J. D. Vance (R-OH), Trump’s running mate, has deep ties to the crypto industry. Vance introduced a bill in 2023 that would shield banks from regulatory pressure to cut ties with customers over reputational risks — allowing them to work more freely with the crypto, gun, and oil and gas industries.

Just this weekend, advisers close to Vice President Kamala Harris, the Democrats’ presumptive presidential candidate, and other Democrats signaled that they too were open to more pro-crypto policies — highlighting a reset in how Democrats, namely the Biden administration, have pursued crypto policy.

“If we don’t have bitcoin, if we don’t have cryptocurrencies, we’re going to cede leadership in financial innovation of the twenty-first century,” Rep. Ro Khanna (D-CA) said during the Bitcoin 2024 conference on July 27. “All the Democrats who have preached that we don’t want to be isolationists, well, isn’t rejecting cryptocurrencies and bitcoin being isolationists?”

The industry’s lobbyists and donors will likely push key provisions from a shelved bill that would strip oversight authority from the aggressive and heavily staffed Securities and Exchange Commission (SEC) and give it to the less-staffed and less-funded Commodity Futures Trading Commission. The bill could also undermine investor protections and reduce the ability for states to enforce their own securities laws for cryptocurrencies, experts told the Lever.

As regulations for the nascent industry are still taking shape, this election could define how the crypto industry will be regulated for millions of consumers going forward — and major crypto companies, such as Coinbase and Ripple Labs, as well as venture capitalist firms like a16z, formerly known as Andreessen Horowitz, have poured tens of millions of dollars into the fight.

In a press release describing its political spending, Ripple said the 2024 elections “will be the most consequential in crypto’s history.”

“Ripple will not — and the crypto industry should not — keep quiet while unelected regulators actively seek to impede innovation and economic growth that millions of Americans utilize,” said Ripple CEO Brad Garlinghouse. “The crypto industry intends to remain heavily invested in this effort until we see meaningful change.”

Coinbase, the largest US-based crypto exchange, issued a “call to action” to the alleged fifty-two million Americans who own crypto to advocate for more pro-crypto policies, however most of the action, money, and enthusiasm is coming from just a handful of wealthy people.

“The bulk of the money and energy is coming from half a dozen people,” said Mark Hays, a senior policy analyst for Americans for Financial Reform, a nonprofit dedicated to consumer protection and strict Wall Street regulations. “It’s [Andreessen Horowitz], it’s Ripple, it’s Coinbase . . . and not to be crass, but kind of white, male, billionaire Silicon Valley folks who are really looking to shape political outcomes to serve their business objectives through policy.”

The crypto industry has also targeted Gary Gensler, chair of the SEC, who has staunchly enforced securities law. Crypto companies have often said that current law lacks clarity for cryptocurrencies, but Gensler has levied dozens of enforcement actions against the industry, accusing some companies of offering unregistered securities.

“Breaking the law and not liking the law are different than lack of clarity and, with all due respect, I think that is what we have a lot of in this field,” Gensler said during a recent Senate hearing on June 13.

The crypto industry has promoted the internet-based currencies, claiming that cryptocurrencies are an alternative to government-issued currencies, like the dollar or the yen. Cryptocurrencies have exploded in popularity in recent years, growing into a $2.5 trillion global industry; although, many buying crypto treat these currencies like investments, rather than using them for everyday purchases.

Crypto has been marketed to everyday consumers as a way to fight back against large banks that have screwed regular people over. Crypto companies ran commercials during the Super Bowl, placed ads in key locations around Washington, DC, during the 2022 primary elections, and publicized that their products were a way to earn passive income.

But crypto’s boom came to a screeching halt in 2022 after three major exchanges — Celsius, Terra, and Bankman-Fried’s FTX — failed. With the collapse of these online platforms, where digital currencies were bought, sold, and traded, millions of Americans lost access to their funds. Some people lost their life’s savings, and because the funds are not thoroughly regulated, many of the funds cannot be fully recovered.

Now, as the 2024 election looms, crypto companies have discarded their old messaging of fighting big banks and standing up for the little guy, by partnering with major banks, leaning into libertarian values, and casting their support for Trump.

This includes the founder of Kraken, an exchange that allegedly violated sanctions against Iran; the Winklevoss twins, two brothers who were former business partners with Mark Zuckerberg in the early days of Facebook, who went on to create their own crypto exchange called Gemini; and others.

“President Donald J. Trump is the pro-Bitcoin, pro-crypto, and pro-business choice,” Tyler Winklevoss posted on X. “It’s time to take our country back. It’s time for the crypto army to send a message to Washington. That attacking us is political suicide.”

Trump has reportedly raised more than $4 million in cryptocurrency donations for his reelection. When he spoke at a bitcoin conference on July 27, he pledged to fire SEC chair Gensler “on day one,” and promised to make the United States “the crypto capital of the planet.”

Trump later held a conference after the event that reportedly cost $800,000 to attend.

Leading the crypto industry’s political movement is Fairshake PAC, a crypto-backed political action committee that has accumulated a staggering $202 million since January 2023. Fairshake has been supporting pro-crypto candidates and trying to oust candidates — mostly Democrats — who have pushed back on the crypto agenda.

The group has spent more than $12 million against Democrats so far this election cycle, according to OpenSecrets. Josh Vlasto, a Fairshake spokesperson, is also a former aide to Sen. Chuck Schumer (D-NY) and previously served as chief of staff to former New York governor Andrew Cuomo (D).

Defend American Jobs, another crypto-focused political action committee, has raised nearly $20 million and spent more than $17 million since September 2023, according to federal election data.

“The crypto industry is spending hundreds of millions of dollars to distract policymakers and the public from its long rap sheet of criminal convictions, predatory conduct, illegal behavior, bankruptcies, lawsuits, and scandals,” said Dennis Kelleher, president of consumer advocacy group Better Markets. “These crypto PACs are looking to make the crypto industry’s work in Congress even easier by trying to defeat elected officials who put the public interest first and are not crypto-lackeys.”

The amount of money that has poured into campaign coffers has seemingly convinced Vice President Harris to adopt a more friendly position on cryptocurrencies, as the Democratic Party’s presidential candidate tries to cozy up to the tech and investor industries by having her advisers meet with industry leaders.

It’s a transition echoed by others on the Left. Fourteen current members of Congress, as well as other politicians, recently sent a letter to Jaime Harrison, the Democratic National Committee chair, urging the party to adopt a more pro-crypto platform, and to potentially fire SEC chair Gensler. The decision to send the letter appears to stem from the crypto industry’s outsize role in elections.

“There is a public perception that the party holds a negative viewpoint on digital assets, largely due to the current SEC’s approach to these transformative technologies,” the group wrote. “We believe this previous hostility does not reflect our party’s progressive, forward-looking, and inclusive values. From an electoral standpoint, crypto and blockchain technologies have an outsized impact in ensuring victories up and down the ballot.”

Coinbase and a16z did not respond to requests for comment.

Before he was charged and sentenced to prison for twenty-five years, Bankman-Fried, the mop-topped billionaire who fashioned himself as a leader for the crypto industry, frequently lobbied lawmakers and lavishly donated to politicians overseeing key committees governing the crypto industry.

The industry faced major setbacks in the spring of 2023, when Silicon Valley Bank and Signature Bank — two institutions that partnered heavily with crypto and tech companies — failed after funding for start-ups began drying up amid rising inflation, and depositors made a run to pull their money out.

After the collapse of those institutions, many crypto companies began partnering with major traditional banks that were deemed “too big to fail” during the 2008 financial crisis. These banks include JPMorgan Chase, Citi, Bank of America, Wells Fargo, and other regional banks.

These setbacks also opened up space for Coinbase to essentially fill the void vacated by Bankman-Fried.

“[Coinbase has] tried to take a more conservative approach than some of the more Wild West firms out there, but they, like everyone else, have a business model set up that is at odds with basic financial regulatory standards,” Hays with Americans for Financial Reform said.

Coinbase has donated a staggering $51 million to just seven groups so far this election cycle, according to federal records. The exchange gave $500,000 to both the Congressional Leadership Fund and the Senate Leadership Fund — two political action committees dedicated to electing Republicans.

Coinbase also gave $500,000 to HMP and SMP, two political action committees set up to elect Democrats.

Nearly $46 million of Coinbase’s spending went to Fairshake alone. Coinbase Commerce, a Coinbase subsidiary, also gave $15.5 million to Fairshake, according to election data, bringing the total that Coinbase gave to Fairshake to at least $61.5 million.

According to OpenSecrets, Fairshake has spent money supporting both Democrats and Republicans, but who the group opposes is much different. Fairshake has spent $0 opposing Republicans and more than $12 million attacking Democrats in tight primary races.

Fairshake spent the bulk of its money — more than $10 million — opposing Rep. Katie Porter (D-CA) during a primary race for a senate seat against Rep. Adam Schiff (D-CA), who received an A-rating from the crypto industry. The group also spent more than $2 million opposing Rep. Jamaal Bowman (D-NY) during his primary race earlier this year, according to Follow the Crypto, a website dedicated to tracking crypto industry campaign spending.

Both Bowman and Porter were deemed “strongly against crypto” by Stand With Crypto, a nonprofit dedicated to “common-sense regulations for the crypto industry.”

Besides Coinbase, other major donors to Fairshake include Ripple Labs; AH Capital Management, an investment arm of a16z; Ben Horowitz and Marc Andreessen, cofounders of a16z; Jump Crypto, a blockchain technology company; Tyler and Cameron Winklevoss; and Brian Armstrong, Coinbase’s CEO.

Coinbase, Ripple Labs, AH Capital Management, Horowitz, Andreessen, and even Fairshake have also donated to Defend American Jobs PAC, another political action committee dedicated to pushing pro-crypto candidates that has raised nearly $20 million. The committee has spent more than $15.5 million supporting Republican candidates so far this election cycle, according to OpenSecrets.

Additionally, Defend American Jobs has spent more than $500,000 supporting Blake Masters in a Republican primary race for a seat representing Arizona in Congress. Masters previously ran against Sen. Mark Kelly (D-AZ) in 2022, in which Masters ran an infamous and disturbing ad highlighting his intense love of guns.

In addition to generous campaign donations, crypto companies have also zeroed in on the key agencies overseeing their industry.

For years, the crypto industry has lobbied lawmakers and regulators to allow the Commodity Futures Trading Commission (CFTC) to govern crypto, rather than the comparatively heavily staffed and well-funded SEC. The CFTC has only 725 employees, a budget of $365 million, and has traditionally regulated trades and futures contracts for the agricultural and resource-based markets.

“The weakness that we have, or the shortcoming, is that we have to rely on folks coming to us and providing tips or complaints,” said CFTC chair Rostin Behnam during a June 13 Senate hearing. “We don’t have those traditional regulatory tools — registration, custody, surveillance, oversight — that have really made American capital and derivatives markets so strong.”

The CFTC has oversight authority of bitcoin because the agency considers it a commodity and, to a lesser degree, the agency oversees certain activity on crypto exchanges. But the bulk of crypto regulation has historically been handled by Gensler’s SEC — a sprawling agency with more than 4,600 employees, and a budget of $2.1 billion.

The SEC has been aggressive at times in issuing enforcement actions against crypto exchanges and developers who create new cryptocurrencies, with actions dating back to 2012. The agency views cryptocurrencies as a security — a financial product akin to a stock issued by a company — which has much stricter oversight and enforcement than commodities overseen by the CFTC.

In 2023, the SEC issued forty-six cryptocurrency-related enforcement actions, more than double the amount the agency issued in 2022, according to Cornerstone Research, a financial analysis and legal firm. Crypto companies have painted Gensler as an enemy of crypto, and Gensler has not shied away from that label.

“It is a field that is rife with abuse and fraud,” Gensler said during a June 13 Senate hearing. “And some of the leaders of this whole field are either in jail, about to go to jail, or awaiting extradition. I mean tens of billions of dollars have been put at risk.”

According to lobbying disclosures, crypto companies, trade associations, and nonprofits associated with crypto have spent nearly $7 million in the first two quarters of 2024 lobbying lawmakers and regulators on a slew of crypto-related issues, including the Financial Innovation and Technology for the 21st Century Act (FIT21) — a bill packed with a number of crypto wish lists.

Coinbase alone has spent more than $2.3 million so far this year lobbying lawmakers and regulators on the bill and other issues, disclosures show.

The FIT21 would create a new asset class specifically for cryptocurrencies, called “invest contract assets,” which exclude them from the definition of a security, and likely hands oversight from the SEC over to the CFTC, according to an analysis by Better Markets.

The bill would allow the CFTC to collect registration and annual fees from crypto exchanges, but those fees would be capped at $40 million annually and the ability to collect those fees would expire after four years.

“This fixed cap is especially problematic given the hundreds of exchanges currently offering bitcoins and the need for the CFTC to hire staff, draft regulations, acquire technology, and enforce the provisions of the bill and the new rules,” Better Markets wrote.

The bill would also, according to Gensler, adopt a structure that runs counter to decades of Supreme Court rulings that establish what is and isn’t a security. He’s concerned this could erode long-standing investor protections, and “undermine the broader $100 trillion capital markets.”

“[Crypto exchanges] are choosing to not comply with US law that protects our capital markets,” Gensler said during Senate testimony. “Whether it is stored on an accounting ledger called blockchain or whether it is stored on a notepad, it doesn’t matter.”

The House of Representatives passed the crypto bill with two-thirds of lawmakers voting in favor. However, experts predict the bill will likely die in the Senate due to the Senate’s slower process of passing bills.

Currently standing in the way of the bill’s passage in the Senate is Sen. Sherrod Brown (D-OH), chairman of the Senate Committee on Banking, Housing, and Urban Affairs, which oversees the bill’s passage in the Senate. Brown has received an F-rating from Stand With Crypto, and has highlighted how cryptocurrencies have been used for illicit purposes.

Key provisions of the bill could still be attached to must-pass legislation before the year’s end.

Rep. Patrick McHenry (R-NC) has been one of crypto’s most important cheerleaders and is set to retire at the end of the current session. In an interview with CoinDesk, a crypto-focused news outlet, McHenry said that he is looking at “anything, and everything” to attach crypto legislation to before he leaves.

“We basically have a consensus product out of the House of Representatives that gives us a fighting chance in every legislative product that makes its way to the President’s desk,” McHenry said.

Hays, with Americans for Financial Reform, said the bill offers a “patina of legitimacy” while undermining consumers and that the crypto industry is using the “Washington pay-to-play” rule book to push their agenda.

“The crypto industry has long claimed that it needs regulatory clarity to address crypto regulation for consumers and investors and that the old rules don’t work for them,” Hays said. “The problem is that this bill is really more of a cure that’s worse than a disease.”

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Regulation

Cryptocurrency Regulation in Slovenia 2024

Published

4 months ago

1 August, 2024

Chain Feed Staff

Cryptocurrency Regulation in Slovenia 2024

Slovenia, a small but highly developed European country with a population of 2.1 million, boasts a rich industrial history that has contributed significantly to its robust economy. As the most economically developed Slavic nation, Slovenia has grown steadily since adopting the euro in 2007. Its openness to innovation has been a key factor in its success in the industrial sector, making it a favorite destination for cryptocurrency enthusiasts. Many believe that Slovenia is poised to become a powerful fintech hub in Europe. But does its current cryptocurrency regulatory framework support such aspirations?

Let’s explore Slovenia’s cryptocurrency regulations and see if they can push the country to the forefront of the cryptocurrency scene. My expectations are positive. What are yours? Before we answer, let’s dig deeper.

1. Cryptocurrency Regulation in Slovenia: An Overview

Slovenia is known for its pro-innovation stance, providing a supportive environment for emerging technologies such as blockchain and cryptocurrencies. Under the Payment Services and Systems Act, cryptocurrencies are classified as virtual assets rather than financial or monetary instruments.

Regulation of the cryptocurrency sector in Slovenia is decentralized. Different authorities manage different aspects of the ecosystem. For example, the Bank of Slovenia and the Securities Market Agency supervise cryptocurrency transactions to ensure compliance with financial laws, including anti-money laundering (AML) and counter-terrorist financing regulations. The Slovenian Act on the Prevention of Money Laundering and Terrorist Financing (ZPPDFT-2) incorporates the EU’s Fifth Anti-Money Laundering Directive (5MLD) and aligns with the latest FATF recommendations. All virtual currency service providers must register with the Office of the Republic of Slovenia.

2. Cryptocurrency regulation in Slovenia: what’s new?

This year, there have been several noteworthy developments in the cryptocurrency sector in Slovenia:

July 25, 2024: Slovenia has issued a €30 million on-chain sovereign digital bond, the first of its kind in the EU, with a yield of 3.65%, maturing on 25 November 2024.

May 14, 2024: NiceHash has announced the first Slovenian Bitcoin-focused conference, NiceHashX, scheduled for November 8-9 in Maribor.

3. Explanation of the legal framework for cryptocurrency taxation in Slovenia

Slovenia’s cryptocurrency tax framework provides clear guidelines for both individuals and businesses. According to the Slovenian Tax Administration, tax treatment depends on the status of the trader and the nature of the transaction.

Individuals: Income earned from cryptocurrencies through employment or ongoing business activities is subject to personal income tax. However, capital gains from trading or market fluctuations are exempt from taxation.
Society: Capital gains from cryptocurrency activities are subject to a corporate income tax of 19%. Value added tax (VAT) generally applies at a rate of 22%, although cryptocurrency transactions considered as means of payment are exempt from VAT. Companies are not allowed to limit payment methods to cryptocurrencies only. Tokens issued during ICOs must comply with standard accounting rules and the Corporate Tax Act.

4. Cryptocurrency Mining in Slovenia: What You Should Know

Cryptocurrency mining is not restricted in Slovenia, but the income from mining is considered business income and is therefore taxable. This includes rewards from validating transactions and any additional income from mining operations. Both natural persons and legal entities must comply with Slovenian tax regulations.

5. Timeline of the evolution of cryptocurrency regulations in Slovenia

Here is a timeline highlighting the evolution of cryptocurrency regulations in Slovenia:

2013:The Slovenian Tax Administration has issued guidelines according to which income from cryptocurrency transactions should be taxed.
2017:The Slovenian Tax Administration has provided more detailed guidelines on cryptocurrency taxation, based on factors such as the trader’s status and the type of transaction.
2023The EU has adopted the Markets in Cryptocurrencies Regulation (MiCA), which establishes a uniform regulatory framework for cryptocurrencies, their issuers and service providers across the EU.

Final note

Slovenia’s approach to the cryptocurrency industry is commendable, reflecting its optimistic view of the future of cryptocurrency. The country’s balanced regulatory framework supports cryptocurrency innovation while protecting user rights and preventing illegal activities. Recent developments demonstrate Slovenia’s commitment to continuously improving its regulatory environment. Slovenia’s cryptocurrency regulatory framework sets a positive example for other nations navigating the evolving cryptocurrency landscape.

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Regulation

A Blank Slate for Cryptocurrencies: Kamala Harris’ Regulatory Opportunity

Published

4 months ago

1 August, 2024

Chain Feed Staff

A Blank Slate for Cryptocurrencies: Kamala Harris' Regulatory Opportunity

Photo by The Dhage of Shubham ON Disinfect

As the cryptocurrency landscape continues to evolve, the need for clear regulation has never been greater.

Vice President Kamala Harris is now leading the charge on digital asset regulation in the United States, presenting a unique opportunity for a clean slate. This fresh start can foster innovation and protect consumers. It can also pave the way for widespread adoption across industries, including real estate agencies, healthcare providers, and online gambling platforms like these online casinos in the uk. According to experts at SafestCasinoSites, these platforms have advantages such as bonus offers, a wide selection of games, and various payment methods. Ultimately, all this increased adoption could push the cryptocurrency market forward.

With that in mind, let’s take a look at the current state of cryptocurrency regulation in the United States, which is a complex and confusing landscape. Multiple agencies, including the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Financial Crimes Enforcement Network (FinCEN), have overlapping jurisdictions, creating a fragmented regulatory environment. This lack of clarity has hindered innovation, as companies are reluctant to invest in the United States, fearing regulatory repercussions. A cohesive and clear regulatory framework is urgently needed to unlock the full potential of cryptocurrencies in the United States.

While the US struggles to find its footing, other countries, such as Singapore and the UK, are actively embracing the cryptocurrency industry with clear and supportive regulatory frameworks. This has led to a brain drain, with companies opting to set up in more hospitable environments.

Vice President Kamala Harris has a unique opportunity to change this narrative and clean up the future. cryptocurrency regulation. By taking a comprehensive and inclusive approach, it can help create a framework that balances consumer protection with innovation and growth. The time has come for clear and effective regulation of cryptocurrencies in the United States.

Effective regulation of digital assets is essential to fostering a safe and innovative environment. Key principles guiding this regulation include clarity, innovation, global cooperation, consumer protection, and flexibility. Clear definitions and guidelines eliminate ambiguity, while encouraging experimentation and development to ensure progress. Collaboration with international partners establishes consistent standards, preventing regulatory arbitrage. Strong safeguards protect consumers from fraud and market abuse, and adaptability allows for evolution in response to emerging trends and technologies, striking a balance between innovation and protection.

The benefits of effective cryptocurrency regulation are many and far-reaching. By establishing clear guidelines, governments can attract investors and traditional users, spurring growth and adoption. This, in turn, can position countries like the United States as global leaders in financial technology and innovation. Strong protections will also increase consumer confidence in digital assets and related products, boosting economic activity.

A thriving cryptocurrency industry can significantly contribute to GDP and job creation, which has a positive impact on the overall economy. Furthermore, effective regulation has paved the way for the growth of many companies such as tech startups, online casinos, and pharmaceutical companies, proving that clear guidelines can unlock new opportunities without stifling innovation. This is a great example of how regulation can alleviate fears of regressive policies, even if Kamala Harris does not repeal the current progressive approach. By adopting effective regulation, governments can create fertile ground for the cryptocurrency industry to thrive, driving progress and prosperity.

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Regulation

Think You Own Your Crypto? New UK Law Would Ensure It – DL News

Published

4 months ago

1 August, 2024

Chain Feed Staff

Think You Own Your Crypto? New UK Law Would Ensure It – DL News

The UK Law Commission has developed a bill that will address a situation of legal uncertainty.
The commission’s goal is to ensure that cryptocurrencies are legally treated as personal property.

UK law is not entirely clear whether cryptocurrencies can be considered personal property.

This is according to the UK Law Commission, which argues that while most investors assume that when they buy cryptocurrencies, they are “acquiring property rights in the same way as buying, say, a watch or a laptop.”

“As the law currently stands, this is not necessarily the case,” the respected legal body said in a new report on Tuesday.

The report was accompanied by a solution: a new bill to consolidate the legal status of digital assets as personal property.

This could be huge for the estimated 4.7 million Britons valued hold cryptocurrencies.

“This will allow the courts to determine a range of issues,” the report says.

If passed, the law would help clarify how cryptocurrencies are treated in cases of bankruptcy, estate planning or theft.

Flexible law

The commission is an independent body responsible for reviewing UK law. It began investigating whether English and Welsh property laws apply to digital assets in 2020.

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At the time, then-Chancellor of the Exchequer Rishi Sunak expressed ambitions to transform the UK into a cryptocurrency hub as Britons invested more.

In 2023, the commission decided that, in most cases, the legislation of England and Wales is sufficiently flexible to regulate cryptocurrencies.

This means that any asset, from Bitcoin to non-fungible tokens and some types of digital contracts, can be considered personal property, without Parliament having to write extensive new laws.

There was one small area of uncertainty, however: it was unclear whether cryptocurrencies fell within the two categories of personal property recognised under UK law.

These two categories are made up of tangible assets (cars, laptops, bags) and intangible assets (contracts, stocks, and debt).

The bill that will now go to Parliament to be converted into law aims to remedy this situation.

Without that clarification, courts may try to lump cryptocurrencies together with intangible assets, said Adam Sanitt, head of litigation, knowledge, innovation and corporate support EMEA at law firm Norton Rose Fulbright. DL News in March.

This is problematic because intangible assets are creations of the legal system, while cryptocurrencies are not.

“How the law treats digital assets, what rights you have over them, how you own them, how you transfer them to other people—that treatment is different, because digital assets don’t exist by virtue of the legal system, but independently of it,” Sanitt said.

The money in your bank account, for example, is a legal creation. The government could pass a law to cancel it.

However, if the UK passed a law banning Bitcoin, Bitcoin would not cease to exist.

Sanitt said: “That’s why digital assets are so important: neither the government nor the legal system can take them away from you.”

Contact the author at joanna@dlnews.com.

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Regulation

The Solution the Cryptocurrency Industry Needs

Published

4 months ago

1 August, 2024

Chain Feed Staff

The Solution the Cryptocurrency Industry Needs

The cryptocurrency industry has performed remarkably well since its inception, but now faces a critical hurdle that requires careful consideration and regulatory expertise to overcome. Despite the industry’s rapid growth and rate of global adoption, the gap between the industry and global regulation is only widening as new innovations break through into the public domain.

Although efforts are being made on both sides, regulators’ lack of familiarity with cryptocurrencies and the industry’s lack of regulatory expertise are hindering innovation in the sector. To address this issue, traditional financial institutions (TradFi) such as MultiBank Group have started venturing into the cryptocurrency sector.

The regulatory gap

Over the past decade, the cryptocurrency industry has grown dramatically as tech entrepreneurs and forward-thinking thinkers have founded a plethora of crypto platforms and protocols to push the boundaries of the space. The problem faced by these newcomers, who are often unfamiliar with the hurdles posed by financial regulators, can quickly overwhelm and stall operations.

On the other hand, regulators more attuned to TradFi systems may be equally stifled by the complexities of decentralization and blockchain technology. The unfamiliarity experienced by both innovators and regulators creates a stark regulatory divide between both sides, leading to misunderstandings and potential conflicts.

To overcome this lack of communication, a bridge must be built to bridge the gap, ensuring future stability for the cryptocurrency industry and clearer legislation from regulators.

Efforts to bridge the gap between industry

The gap between the cryptocurrency industry and regulators is slowly narrowing as efforts to regulate cryptocurrencies and Web3 space activities are gaining momentum. Specific regulatory actions are taking place in many countries, aimed at providing greater oversight of cryptocurrency transactions, cryptocurrency exchanges, and initial coin offerings (ICOs).

Despite being a positive step in the right direction, these new regulations can differ significantly between jurisdictions around the world. This fragmentation results in a regulatory environment filled with obstacles, bottlenecks, and varying requirements and prohibitions. As cryptocurrency companies and TradFi institutions attempt to navigate the minefield, the regulatory maze becomes increasingly convoluted.

TradFi institutions like MultiBank Group are working to solve this problem, as one of the largest financial derivatives institutions in the world with over 12 licenses across all continents. Founded in 2005, the Group has an impeccable and trustworthy reputation globally, extensive expertise in financial regulation and has now ventured into the cryptocurrency space via MultiBank.io.

MultiBank.io: TradFi Excellence in the Crypto Space

Expanding into the cryptocurrency space via MultiBank.io has enabled MultiBank Group to provide regulatory clarity and trust to the digital asset industry. With a substantial daily trading volume of $12.1 billion, the timely decision to enter the cryptocurrency space has the potential to set regulatory precedents and standards for years to come.

By helping to develop sensible and well-considered regulations, MultiBank.io’s established reputation allows the company to communicate effectively and clearly with regulators. Unlike others in the industry without regulatory expertise, MultiBank.io facilitates the Group’s commitment to rigorous regulatory standards, the scope of oversight and establishes the necessary transparency.

The company’s approach ensures that regulatory licenses are pre-acquired, compliance is met globally without jurisdictional barriers, and transactions remain secure at all times. By helping to create robust regulations that are both clear and innovation-friendly, MultiBank Group looks forward to standardizing the entire cryptocurrency industry for other potential innovators.

One of the biggest challenges in establishing a clearly constructed bridge between regulators and the cryptocurrency industry is effective communication. By leveraging its institutional background TradFi and acting as an intermediary with regulators, MultiBank Group is able to translate the needs of the industry to those who shape it.

This quality of mediation is essential to ensure that regulation helps develop essential technological advances rather than hinders their establishment and growth. Through the lens of TradFi when looking at the complexity of the cryptocurrency industry, MultiBank Group is able to deconstruct unfamiliar crypto arguments for regulation and create a safer and more secure space.

Where TradFi and Crypto Meet

Regulations are crucial for traders, investors, and everyday users of crypto platforms and their safety when participating in crypto markets. While strict regulations are necessary for stable market integrity, innovation should still be considered, something MultiBank Group considers a priority.

Where TradFi and cryptocurrencies converge, the Group is there to provide a balanced approach to ensure promotion for both the cryptocurrency industry and regulators seeking to protect both retail and institutional investors. This balance is critical to maintaining a thriving space where cryptocurrency innovation can thrive without compromising the security of user funds or data.

As more TradFi institutions like MultiBank Group enter the cryptocurrency space with ever-expanding expertise in regulatory understanding, the future of the industry is increasingly encouraged. The financial freedoms of the cryptocurrency space coupled with regulatory oversight for financial security will be the guiding lights for the future success of the entire cryptocurrency industry.

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