Bitcoin Regulations News

Minister Says India, Like Other Nations, Extremely Cautious on Libra

Finance Minister Nirmala Sitharaman has said that India — like many others, in his view — is showing a high degree of caution in regard to Facebook’s Libra.

During last week’s 2019 Annual Meetings of the International Monetary Fund and the World Bank in Washington, D.C. — which included a discussion of the Libra project —  Sitharaman told reporters from the New Indian Express that:

“On our side, the Reserve Bank Governor spoke about it during our turn to intervene. I got the sense that many countries were cautioning on rushing into this […]. Countries will have to show extreme caution much before anything is said or moved on this.” 

‘Stablecoin’ term challenged

Sitharaman noted that representatives of other nations had argued against the use of the term “stable currency” or “stablecoin,” but instead emphasize the token’s links to cryptocurrency.

As reported, Libra has been designated a stablecoin by Facebook — a type of digital asset designed to mitigate price volatility — and was initially proposed to be backed by a basket of national fiat currencies, including the U.S. dollar, euro, Japanese yen, British pound and Singapore dollar.

Sitharaman said that while presentations at the annual meetings had conceded the prospective strengths of such virtual currencies, “everyone without fail spoke about the challenges together with talking about it as a necessary step forward. So everyone was stepping cautiously on it.” 

Circumspection in regard to Libra has indeed been reverberating among citizens, crypto industry figures, governments, regulators and central bankers worldwide.

Currency wars

With the yuan not included in Libra’s proposed reserve assets, China has also ratcheted up its existing plans for a central bank digital currency in a bid to protect against the perceived threat to its monetary sovereignty and legal currency status.  

The former governor of the People’s Bank of China argued that “people valuing Libra is inseparable from the global dollarization trend.”

New Indian Express notes the concerns that digital currencies could further compound existing tensions between the global superpowers, especially in regard to currency manipulation.

Concerns over the risks posed to monetary sovereignty among all nations have prompted the United States and others to argue forcefully against the issuance of a global stablecoin. 

Under increasing pressure, Facebook revealed this week that it was open to the idea of using a multitude of stablecoins that represent unique national currencies instead of its original design, noting that while this was not the preferred option for the project, it had to remain agile.

Meanwhile, reports surfaced last month that India was seeing the first signs of an anticipated brain drain, as the government mulls stark legislation that would criminalize all domestic cryptocurrency investments. The ban would compound an existing and much-contested prohibition by the Reserve Bank of India’s ban on domestic banks’ dealings with crypto-related businesses.

Source Cointelegraph

Crypto and Blockchain News From Japan: Oct. 14–20 in Review

The cryptocurrency- and blockchain-friendly country of Japan has seen a number of significant developments for the industries this past week. A self-regulatory organization has introduced guidance for cryptocurrency custodians, while a subsidiary of major financial services firm SBI Holdings will conduct compliance policies using blockchain technology. 

Here is the past week of crypto and blockchain news in review, as originally reported by Cointelegraph Japan.

Japan Cryptocurrency Business Association releases guidelines on custody

The Japan Cryptocurrency Business Association (JCBA) — a self-regulatory organization for the cryptocurrency industry in Japan — has released guidance for cryptocurrency custody operators. 

The JCBA issued guidelines for crypto custodians ahead of the introduction of the Fund Settlement Act. The organization distinguished the various responsibilities of cryptocurrency custodians and suggested that there should be a difference in the range of virtual currencies that can be handled based on the differences in business characteristics in those assets.

Decentralized gaming platform releases Japanese-language version

The Sandbox, a decentralized gaming platform, launched a Japanese-language dashboard. The platform allows users to create and monetize characters as non-fungible tokens (NFTs). 

Users use VoxEdit to create their own NFT assets and sell them on the marketplace for Sand tokens. Users can then create and host games and contests of various genres such as martial arts and racing.

SBI subsidiary establishes blockchain-based KYC and AML verification 

SBI Security Solutions, a subsidiary of SBI Holdings, has established a new company that provides solutions for Know Your Customer (KYC) and Anti-Money Laundering (AML) processes with blockchain technology. The new company was formed in a partnership between the SBI subsidiary and international IT firm NEC.

The new company will be called “SBI Digitrust” and will be capitalized at 300 million yen ($2,766,000), 66% of which will be invested by SBI Security and 34% by NEC. SBI and NEC have jointly conducted pilots using blockchain technology and intend to combine SBI Security’s cybersecurity knowledge and NEC’s biometric authentication and AI technology.

Bitbank cryptocurrency exchange nets 30% share of the domestic market 

Japanese cryptocurrency exchange Bitbank has released data showing that its average market share in domestic physical cryptocurrency trading volume is 30%. Citing data from the Japan Virtual Currency Exchange Association, Bitbank COO Hiroyuki Mihara wrote that Bitbank’s domestic spot trading share during this period averaged 30.2%.

While 30% may seem impressive for a single exchange in a crypto-friendly country like Japan, it represents a decline in market share for Bitbank. Mihara attributed the decline to the fact that several trading pairs for crypto and yen (JPY) are not available on the exchange, including Ether (ETH)/JPY, Litecoin (LTC)/JPY, and NEM (XEM)/JPY.

Source Cointelegraph

Facebook Could Use Fiat-Pegged Stablecoins for Libra

Facebook is reportedly open to the idea of using national currency-pegged stablecoins for its forthcoming Libra project.

According to Reuters on Oct. 20, David Marcus, the head of the Libra project for Facebook and CEO of Facebook’s wallet service Calibra, said that Libra could use various fiat-based stablecoins, instead of the initially proposed token. 

Speaking at a banking seminar on Sunday, Marcus reportedly stated that the main goal of the project was to create a more efficient payment system and that it was not opposed to looking at alternative approaches. Marcus said:

“We could do it differently,” he said. “Instead of having a synthetic unit … we could have a series of stablecoins, a dollar stablecoin, a euro stablecoin, a sterling pound stable coin, etc […] We could definitely approach this with having a multitude of stablecoins that represent national currencies in a tokenized digital form […] That is one of the options that should be considered.”

The originally proposed backing for the Libra token was a basket of various national currencies including the U.S. dollar, euro, Japanese yen, British pound and Singapore dollar.

The project needs agility amid a hostile regulatory environment 

Marcus reportedly noted that the aforementioned stablecoins were not the Libra Association’s preferred option for the project, but said that it must remain agile.

The association — the project’s governing body — has lost several key members in recent weeks, including such major payment and e-commerce firms as PayPal, Visa, eBay, Mastercard and Stripe. 

According to United States Treasury Secretary Steven Mnuchin, the firms left the Libra Association because the project was “not up to par” with American Anti-Money Laundering standards.

Indeed, Libra is continuing to face pressure from global regulators, who are voicing increased skepticism over the project and its possible effect on global financial stability. 

Financial ministers and central bank heads from the G20 countries have recently raised concerns that global stablecoins could negatively affect the sovereignty of monetary policy, particularly in developing nations. On Oct. 18, German Federal Minister of Finance Olaf Scholz said that global regulators should prevent Libra’s issuance outright.

Facebook CEO Mark Zuckerberg will testify about the project before the U.S. House of Representatives Financial Services Committee on Oct. 23.

Source Cointelegraph

Telegram Writes Investors to Counter FUD Before Feb. SEC Hearings

In a letter to investors, Telegram encouraged investors to view the United States Securities and Exchange Commission (SEC) hearing recently rescheduled for February as “a positive step.”

Cause for optimism

The letter, sent on Oct. 19, briefly reassures investors that the recent rescheduling of hearings until Feb. 18-19 is good news while maintaining that the company will not be distributing Gram tokens until that time. In their own words: 

“Telegram views this development as a positive step towards resolving this matter through the court system in an expeditious manner, and we and our advisers will be using the time to ensure that Telegram’s position is presented and supported as strongly as possible at the February hearing.”

A conclusive decision?

Telegram’s argument has largely been that its Gram tokens do not qualify as securities and thus do not fall under the purview of the SEC. In the letter, the Telegram team anticipated the February hearings resolving this matter more satisfactorily than the originally scheduled Oct. 24th hearing, writing:

“The February hearing is different from the one previously scheduled for October 24, because in the February hearing Telegram anticipates asking the court to rule on the core argument that Grams are not securities. The October 24 hearing, in contrast, was only to consider whether a delay should have been mandated, without conclusively resolving the core argument.”

The SEC and Telegram

This letter is just the latest in an extensive back-and-forth between the SEC and Telegram surrounding the launch of the latter’s Telegram Open Network and its associated Gram tokens, the distribution of which was the subject of an SEC emergency action on Oct. 11. 

By deeming Gram tokens securities, the SEC labeled their sale in the U.S. — which netted roughly $1.7 billion — an unregistered security offering and thus illegal. Telegram responded with a filing on Oct. 16, refuting the “emergency” nature of the SEC’s complaint and countering by criticizing the commission’s lack of action in the preceding 18 months during which they were aware of the coming launch of TON.

Source Cointelegraph

TON’s ‘Force Majeure’ Clause — Is Telegram About to Refund Investors?

Telegram’s grand entry into the cryptocurrency world is in limbo. After months of rumors, hype and anticipation, Telegram Open Network’s (TON) titan $1.7 billion sales round was declared illegal by the United States Securities and Exchange Commission (SEC).

Just days before the Oct. 16 public token distribution, the SEC dealt Telegram a crippling blow by issuing an emergency action and restraining order. Down, but not out, Telegram is now officially postponing the TON launch date. But after a “force majeure” clause in the purchase agreement was made public, investors are concerned that Telegram could shirk its obligations to return funds from Gram token sales in the event of a delay.

Related: Telegram’s TON Launch and Token Distribution — All the Details to Date

The road to the SEC gatekeepers is strewn with slain projects, many dreamed up by bigger and wealthier players than the Durov brothers. For a while, at least, Pavel and Nikolai seemed to have sidestepped dealing with the SEC altogether. But as always, when dealing with the SEC, the devil is in the details.

After withdrawing to reassess its options, Telegram hit back with a strongly worded legal challenge to the SEC, requesting to deny the commission’s injunction. The firm argued that it has voluntarily engaged with the authority for the past 18 months, only to be slapped with the ban at the eleventh hour. The legal challenge shows Telegram isn’t going anywhere without a fight.
TON launch timeline

Telegram files legal rebuttal

Telegram announced it would analyze its options in the aftermath of the SEC emergency action. A few days of ominous silence followed, broken only by the forthright legal challenge from Telegram filed on Oct. 16. In the filing, Telegram formally requested the United States District Court for the Southern District of New York to deny the SEC’s request for a preliminary injunction.

Published with only two days to spare before the counterclaim window closes, the filing does not mince its words, stating that the “SEC’s instant application is an ‘emergency of its own making.’” Telegram appears to lay the blame at the feet of the SEC, claiming that it had gone above and beyond to assist the commission:

“Telegram produced to the SEC thousands of pages of documents and communications with U.S. purchasers; submitted five detailed legal memoranda regarding the securities question at issue; participated in three in-person presentations during which it answered hundreds of questions and requested feedback; regularly engaged in email and telephone discussions regarding a wide range of topics relating to the TON Blockchain and Grams; and made modifications to the technology and operation of the TON Blockchain in response to the SEC’s stated concerns.”

Telegram also suggested that the SEC deliberately left their legal action until the last minute with the firm’s obligation to reimburse investors in mind:

“The SEC (i) never requested that Telegram delay the launch of the TON Blockchain; (ii) never advised Telegram of its intention to seek injunctive relief; and (iii) waited until the eleventh hour to file an ex parte application to enjoin Telegram’s launch.”

The company’s complaints are not limited to timing or etiquette alone. Telegram also stated that the SEC’s classification of Grams as a security is incorrect and that the tokens are merely a currency or commodity such as gold or silver:

“The SEC’s action hinges on a fundamentally flawed theory that Grams constitute a ‘security’ subject to the U.S. securities laws — a theory that runs counter to longstanding Supreme Court precedent, the SEC’s own views.”

While arguing that the SEC’s claims are baseless, along with the commission’s readiness to fight any legal challenge in court, Telegram elected to delay the launch of TON and the token distribution date until all legal issues are resolved. Telegram also argued in the filing that there is no need for the court to enter a preliminary injunction.

SEC claims Telegram breached Form D restrictions

Although the public token distribution was eagerly awaited by the crypto community in October, the event that drew the ire of the SEC is embedded in the fine print of the company’s February 2018 private sales round.

Related: US SEC Halts TON Launch Over $1.7B ICO — Highest-Level Action Yet?

In February 2018, Telegram filed what is known as a “Form D,” a type of application that relieves companies of the obligation to register their securities with the SEC. While this might sound like a staggering oversight in an otherwise robust framework of regulatory law, the Form D does not give applicants full freedom to act at will. Mark Boiron, partner at U.S. law firm FisherBroyles, explained the premise of a Form D to Cointelegraph:

“A Form D is filed only when an offering is completed under an exemption from registration under the Securities Act of 1933, known as Regulation D.” This exemption is most commonly used by crypto projects that make use of Simple Agreements for Future Tokens (SAFTs) to sell the rights to receive tokens, and in doing so, are selling a security. Boiron went on:

“As a result, the projects that use SAFTs need to file a Form D. If you search Form D on the SEC’s website for the term ‘simple agreement for future tokens,’ then you will see many results pop up. The other time a Form D is filed would be when crypto itself is sold as a security, but that is rare.”

Companies looking to stave off the all-seeing eye of the SEC need to choose from two possible exemptions, both with their own respective restrictions. The first, 506(b), bears the most constraints for prospective applicants. Under this exemption, applicants may sell the security to accredited investors, along with a maximum of 35 nonaccredited investors. The caveat: The security cannot be advertised. The SEC also gave a description of which nonaccredited investors are eligible for sales:

“Each purchaser who is not an accredited investor either alone or with his purchaser representative(s) has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment.”

Telegram chose the second, a decision that would play a central role in the SEC’s decision to stop TON dead in its tracks — 506(c). This exemption allows the security to avoid SEC registration if sold to accredited investors alone, while permitting the applying company to advertise.

This fateful decision is the epicentre of the SEC’s restraining order. Although the initial coin offering (ICO) may well have sold to accredited investors, those very same investors could resell their newly acquired assets. For the SEC, this constituted a violation of the exemption. Consequently, the SEC alleged that Telegram and TON did not register their sale of the Gram tokens, which it considers securities.

In its Oct. 16 legal challenge to the SEC, Telegram sought to dispute the claims that Grams were offered through an ICO, stating that the company has never engaged in such an activity. The firm maintains that the tokens were sold in private purchase agreements according to the necessary regulatory framework:

“Unlike other digital assets that were offered to the general public through so-called Initial Coin Offerings (‘ICOs’), Telegram did not — and will never — offer any securities to the public through an ICO.”

In a statement to Cointelegraph, attorney for German legal firm Winheller, Benjamin Kirschbaum, explained that attempting to prevent regulation by the SEC is fairly common:

“It is quite common to try to prevent regulation by the SEC and similar authorities by only targeting qualified investors. While the definition of what a ‘qualified investor’ is differs from jurisdiction to jurisdiction, at least in the Western Hemisphere such an offering usually does not need to submit a prospectus.”

Gary E. Murphy, counsel at New York-based legal practice Debevoise & Plimpton, told Cointelegraph that although the Form D application route is available, it is difficult to launch a cryptocurrency in a compliant way in any other form than a security, as determined by the Howey Test:

“For the SEC to not view TON as a security, one prong of the Howey test would have needed to not exist. The most likely way to achieve that in a new network is to build the network with the funds from the SAFT sale under Regulation D and publicly disclose that the issuer (in this case Telegram) will no longer provide any development or other efforts to grow the network as a technical matter or to bring users to the network.”

Murphy added that this route might not be the most appealing to Telegram from a business standpoint, as it would deny a swift launch of the service, “As a result, there are very few, if any, real options to launch TON compliantly.”

TON seeks delay

According to an investor message shared with Cointelegraph on Oct. 16, Telegram announced to investors that it will seek to delay the launch deadline to April 30, 2020. In the letter, published on Wednesday, Telegram outlined that moving the deadline will require the permission of a majority of purchase amounts received by Telegram in relation to the Stage A purchase agreements. The same requirements for an extension of the presale round also apply.

Such an arrangement, however, means that one group of investors could vote to extend the deadline, while the other may not. The firm has encouraged investors to make a decision about the extension before Oct. 23, ahead of the Oct. 24 court date with regulators in New York.

Majeure trouble ahead: Legal experts speak out

As if the ban and impending court date wasn’t enough drama for both investors and Telegram, another legal technicality with the potential to have a major impact reared its head on Oct. 14. Should the delay to the network launch go ahead, investors that participated in the gargantuan Gram sale event may not see their spent funds in the near future.

As previously reported by Cointelegraph, Telegram’s pledge to return money to investors could be superseded by a so-called “force majeure” clause in its purchase agreement. Contrary to the company’s claims, the force majeure clause of the contract outlined that the company is absolved of responsibility for any delay caused by acts of God, natural disasters, war, and most importantly, governmental action or regulatory changes. Debevoise & Plimpton’s Murphy outlined to Cointelegraph that the presence of the force majeure clause does not necessarily equate to a total loss of investment funds:

“The Force Majeure clause, on its face, does not explicitly reference the termination provision in Clause 7.1 or the obligation thereunder to pay the Termination Amount if Network Launch has not occurred as of October 31, 2019. Thus investors may have a technical argument that the Force Majeure provision simply doesn’t apply with respect to the obligation to either launch the TON Network by October 31, 2019 or pay the Termination Amount.”

According to Murphy, investors could argue that Telegram is more than able to return funds from the Gram token sales rounds by virtue of the firm’s size and revenue, thereby cancelling out the need for the force majeure:

“They might point out that the Telegram Messenger app is functional and has a very large user base, which can provide an alternative source of funds for covering the payment of the Termination Amount. Telegram also has traditionally had access to funding from its founder.”

Kirschbaum postulated that the validity of the force majeure could depend on the type of investor involved in the purchase of the Gram tokens:

“Since the prospectus requirements and other rules regarding securities are in place to protect the average investor, the rules regarding qualified investors shall enable issuers to only deal with experienced clients (such as banks, security brokers, insurance companies, experienced wealthy individuals) where the lawmaker presumes that they can do their own due diligence before investing in any vehicle.”

If Kirschbaum’s hypothesis is correct, judges could side against accredited investors if the scenario, based on questioning the investor experience and assuming due diligence was conducted, does indeed occur. Regarding noninstitutional and inexperienced investors that do not fit the SEC description, Kirschbaum added that the clause may not be applicable:

“Since those investors are presumably experienced, a section in the T&C like Telegram, where a return of investment is excluded due to regulatory issues, seems valid. In such cases, experienced investors can make up their own mind on how high the risk of regulatory action is.”

Gary Murphy told Cointelegraph that investors could press on Telegram for knowingly keeping them in the dark regarding the securities classifications of the token, saying: “Given that Telegram did not treat TON as securities, there could very well be a claim investors could bring. However, without seeing all of the offering documents, it is difficult to judge.” 

Source Cointelegraph

Telegram Asks Court to Deny SEC’s Action, Says Gram Is Not a Security

Telegram responded to the United States securities regulator, arguing that Gram, the native cryptocurrency for the Telegram Open Network (TON), is not a security.

Telegram requests to deny SEC’s injunction

In an Oct. 16 filing, Telegram urged the United States District Court for the Southern District of New York to deny the U.S. Securities and Exchange Commission’s (SEC) request for a preliminary injunction.

Moreover, the firm asked the court to enter an order that maintains the status quo regarding the offer, sale or distribution of Grams.

The filing is released two days in advance of Telegram’s ordered deadline to release a counterclaim on Oct. 18, the firm noted in the document.

“Emergency” of SEC’s own making

In reference to the SEC’s recent emergency action against Telegram on Oct. 11, the filing document claims that ”the SEC’s instant application is an ‘emergency’ of its own making.”

Reiterating its previous claims, Telegram’s legal council wrote that the firm has been voluntarily engaged with the authority regarding both the TON blockchain and Grams for the past 18 months, but the authority has not provided any clear feedback on the matter. Specifically, Telegram stressed that the authority allegedly decided to do so because Telegram promised to reimburse its investors in case if TON does not launch by Oct. 31.

The filing reads:

“Despite the SEC knowing for 18 months that if the TON Blockchain did not launch by October 31, 2019, Telegram would be obligated under its agreements with private purchasers to return the funds it raised, the SEC (i) never requested that Telegram delay the launch of the TON Blockchain; (ii) never advised Telegram of its intention to seek injunctive relief; and (iii) waited until the eleventh hour to file an ex parte application to enjoin Telegram’s launch.”

Gram is “merely a currency or commodity”

In the document, Telegram pushed back the U.S. securities regulator by claiming that its Gram token is not a security. The firm emphasized that Telegram already treated the Private Placement as a securities offering pursuant to valid exemptions to registration under the Securities Act of 1933. Once the TON blockchain launches, the grams will merely be a currency or commodity like gold or silver, but not a security, the firm wrote.

Telegram is not an ICO

Telegram also considered the ambiguity of Gram’s connection with initial coin offering (ICO) products, stating that Telegram has never issued a security to the public through an ICO. Telegram explained that instead of doing an ICO-like product, the firm entered into private purchase agreements with a limited number of purchasers that provided the future payment of Gram currency. The firm wrote:

“Unlike other digital assets that were offered to the general public through so-called Initial Coin Offerings (“ICOs”), Telegram did not — and will never — offer any securities to the public through an ICO.”

While informing that court that Telegram has decided to delay the launch of the TON blockchain, the firm concluded that there is no need for the Court to enter a preliminary injunction in the filing.

As reported, in addition to declaring Gram token illegal, the SEC also issued a temporary restraining order on the issuance of Gram tokens, with a court hearing scheduled for Oct. 24.

Source Cointelegraph

Supreme Court of India Postpones Cryptocurrency Ban Hearing to November

The Supreme Court of India has postponed a hearing that would consider the Reserve Bank of India’s (RBI) ban on providing services to cryptocurrency-related business.

In an Oct. 16 session on the ban that prohibits banks and financial institutions from providing digital currency-related services, the court shifted the date of the next hearing to Nov. 12. The date was further extended to Nov. 19 due to national holidays in India, which fall on the initial set date.

The Reserve Bank of India against cryptocurrencies

In late August, the Supreme Court slammed the country’s central bank over its handling of the cryptocurrency business ban and ordered it to address complaints, giving the bank two weeks to justify it.

Originally issued in early April 2018, the RBI’s crypto circular prohibits banks from providing services to any individual or business that deals with cryptocurrencies while adding that it was also exploring releasing its own cryptocurrency in the future.

Following the circular release, the High Court of Delhi criticized it, stating that the RBI’s decision to end dealings with crypto businesses violates the constitution. The Supreme Court has continued to uphold the RBI ban even after hearing a number of petitions.

Complete ban on digital currencies

In late April, the Indian government reportedly began inter-ministerial consultations on the “Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019″ draft bill, having found support from a number of government departments.

In June, the RBI denied having any knowledge or involvement in the draft, claiming that it had had no communication from the central government about the proposed law and had not received a copy of the draft bill.

Later in July, a government panel recommended that the government ban cryptocurrencies and impose sanctions for any dealings involving crypto assets.

Source Cointelegraph

Libra ‘Absolutely Not’ in Jeopardy Without PayPal, Visa

Head of Facebook’s Calibra claimed that the recent withdrawal of the seven firms from the Libra Association has no impact on the project.

Dropouts will still be able to work with Libra

In an interview with Yahoo Finance on Oct. 15, Calibra’s David Marcus argued that Facebook’s cryptocurrency project is “absolutely not” in jeopardy after PayPal, Visa, Mastercard, Stripe, eBay, Mercado Pago and Booking quit the Libra Association.

Marcus emphasized that companies outside the formal association will still be able to offer services on the platform:

“One thing that is not well understood is that you don’t need to be a member of the Libra Association to build services and products. So if Visa and Mastercard want to issue cards for Libra wallet at a later stage, they can still do it without being members of the association.”

The Calibra executive further expressed his respect to the seven companies’ decision to leave the project and thanked the firms for having the courage to “look at potentially disrupting themselves.” 

Marcus said that he understands that the firms have a responsibility to their shareholders, which “were under a lot of pressure.”

The withdrawal has nothing to do with regulatory concerns

According to Marcus, the departure of the seven firms has nothing to do with regulatory matters as Libra project is “fleshing out all of the regulatory requirements and oversight required for this to operate.” 

However, the executive admitted that the process around Libra will continue to be difficult and will become even harder before it gets easier, while the association members should have the passion, energy and fortitude to press forward.

The news comes after Libra was formally founded in Geneva, Switzerland, on Oct. 14, with the 21 remaining initial members, including Uber, Lyft, Coinbase, Spotify and Vodafone.

As reported, Libra hopes to attract 100 members before its public launch slated for the first half of 2020. 

Meanwhile, U.S. Rep. Warren Davidson said recently that Facebook adding Bitcoin (BTC) to Calibra would be a “way better idea” than creating a new currency.

Source Cointelegraph

UAE Financial Watchdog Asks for Public Feedback on Crypto Regulation

The United Arab Emirates’ (UAE) Securities and Commodities Authority (SCA) has published draft regulations for crypto assets.

Seeking feedback from the industry

According to an official statement from Oct. 15, the SCA will be collecting public feedback on the draft regulations until Oct. 29 before providing the final drafted legislation regarding the industry.

All parties involved in the crypto industry, including investors, brokers, financial analysts, researchers, media and others, are invited to provide their feedback on the document, the SCA noted, adding that the proposals will be taken into consideration for the final regulation.

Providing guidance after enforcing regulation

As noted in the statement, the draft consists of 28 parts covering all aspects of the crypto asset industry in the UAE, including requirements for token issuers, security and custodial policies, measures for protecting investors and combating financial crimes, information security controls, as well as technology governance standards, among others.

Once the regulation is implemented, market participants will reportedly be able to request the SCA’s guidance on a specific part of the industry and regulatory requirements through its electronic services system, the authority said.

ICOs in the UAE

Previously, the SCA announced its plans to introduce initial coin offering (ICO) regulations in the country by the end of the Q1 2019. At the time, the authority’s CEO Obad Al Zaabi noted significant demand in ICO registration and licensing, while local media reported that the SCA will be working with the Abu Dhabi Securities Exchange and Dubai Financial Market to develop a platform for ICO token trading.

In early 2019, the UAE government and Saudi Arabia announced an agreement to cooperate on the creation of a cryptocurrency in order to better understand the implications of blockchain technology as well as facilitate cross-border payments.

Source Cointelegraph

FINRA Approves Grayscale’s Public Quote for Crypto Fund Shares

New York-based digital asset management fund Grayscale Investments has received regulatory approval to publicly quote the shares of its diversified cryptocurrency fund.

First publicly-quoted diversified crypto fund

Grayscale was approved by the United States Financial Industry Regulatory Authority (FINRA) to publicly quote its Grayscale Digital Large Cap Fund (GDLCF) on over-the-counter (OTC) markets, according to a press release on Oct. 14.

The recent approval purportedly enables the first publicly-quoted security based on a selection of digital currencies in the U.S., the firm stated. The shares will be available for purchase through investment accounts similar to other unregistered securities.

DTC-eligible shares

There will be no trading volume in the shares’ public quotation until they are eligible with the Depository Trust Company (DTC), one of the world’s largest securities depositories. According to the press release, Grayscale is expected to get the shares DTC-eligible in the near future.

The GDLCF comprises of several different major cryptocurrencies.  As of Sept. 30, 2019, the fund was over 80% Bitcoin (BTC), 9.9% Ethereum (ETH), 5.8% XRP, while Bitcoin Cash (BCH) and Litecoin (LTC) accounted for 2.2% and 1.8%, respectively. 

Grayscale added that DLC is not registered with the Securities and Exchange Commission and is not subject to disclosure and certain other requirements mandated by U.S. securities laws.

Grayscale is a subsidiary of major crypto venture capital company Digital Currency Group. The firm’s Grayscale’s Bitcoin Investment Trust, allegedly the sole Bitcoin investment trust in the U.S., reportedly surged 300% this year as of July.

On Oct. 9, Grayscale’s director of sales and business development Rayhaneh Sharif-Askary claimed that the interest of institutional investors in cryptocurrencies doubled in Q2 2019.

Source Cointelegraph