Regulation comes for crypto staking: Love Decoded, 6-13 February
Last week, the United States Securities and Exchange Commission (SEC) entered into an agreement with the cryptocurrency exchange Kraken. The latter will stop offering crypto betting services to US customers and pay $30 million in disgorgement, prejudgment interest and civil penalties.
While the sum of fines could hardly bring an entity like Kraken out of balance, the future of betting concerns the crypto market. The court settlement attracted not only the general crypto community, but also investors, politicians and industry leaders, with Cinneamhain Ventures partner Adam Cochran calling SEC Chairman Gary Gensler “an agent of an anti-crypto agenda” rather than a regulator. CEO of the Blockchain Association, Kristin Smith, urged Congress to take such important matters under its direct control.
CEO and co-founder of cryptocurrency exchange Coinbase, Brian Armstrong, believes banning retail crypto-stakes in the US would be a “terrible” move by the country’s regulators. Armstrong also criticized the current lack of regulatory clarity in the US and subsequent “regulation by enforcement” which he says is driving companies such as FTX offshore.
Even SEC Commissioner Hester Peirce has publicly rebuked her agency over the shutdown of Kraken’s crypto-betting program. The commissioner blasted her agency, arguing that regulation by enforcement is “not an effective or fair way to regulate” an emerging industry. Peirce suggested that the regulator was “lazy and paternalistic,” and suggested that the SEC should have initiated a “public process to develop a workable registration process that provides valuable information to investors.”
South Korean regulator issues guidance on security tokens
South Korea established guidance that specifies which digital assets will be considered and regulated as securities in the country. The law considers securities as financial investments where investors are not required to make further payments after their initial investment. The Financial Services Commission (FSC) also provided examples of which digital assets are most likely to be classified as securities. According to the FSC, this could include tokens that provide a stake in business operations, give owners rights to dividends or residual assets, or provide profits to investors.
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Dubai issues crypto regulations for virtual asset service providers
The Virtual Asset Regulatory Authority (VARA), the regulator charged with overseeing cryptocurrency laws in Dubai, has issued new guidelines for virtual asset service providers (VASPs) operating in the emirate. All market participants, whether licensed by VARA or not, must comply with the marketing, advertising and promotion regulations. Violators will be fined between $5,500 (20,000 dirhams) and $55,000 (200,000 dirhams), and repeat offenders could face fines as high as $135,000 (500,000 dirhams). However, the rules only apply to market participants in Dubai, except those operating under the Dubai International Financial Centre.
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Interpol wants to police metaverse crimes
The International Criminal Police Organization, or Interpol, is investigating how it could police crimes in the metaverse. According to Interpol Secretary General Jurgen Stock, the list of possible crimes will only expand to potentially include crimes against children, data theft, money laundering, financial fraud, counterfeiting, ransomware, phishing as the number of metaverse users grows and the technology continues to develop. and sexual assault and harassment. The move to oversee the metaverse comes nearly four months after Interpol launched its own metaverse in October 2022 at Interpol’s 90th General Assembly in New Delhi, India.
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