Crypto-Backed SALT Claims $1.3 Billion Backlog, Suspends New Memberships

Crypto-Backed SALT Claims $1.3 Billion Backlog, Suspends New Memberships

Secured Automated Lending Technology (SALT) has an enviable problem if its recent Medium post is to be believed. The membership-based crypto-as-collateral loan platform has declared “a demand of over $1.3b in loan requests” is forcing it to suspend “new membership registrations, loan requests, and purchases of SALT.”

Also read: How To Regain Control From Nanny Zuck

SALT Comes to a Halt

Colorado-based SALT has only been around since late 2017, but during that time it claims to have issued “over $23m in blockchain-backed loans.” If that wasn’t enough, “there is still a demand of over $1.3b in loan requests that we are diligently working to address,” a recent communication from the company explained.

Using a member’s cryptocurrency holdings as collateral for cash loans, enthusiasts are able to leverage their gains in decentralized currency markets in the event they’d like to pay off debt or whatever financial spirit moves them. And they’re able to do it without giving up crypto holdings per se.  

Crypto-Backed SALT Claims $1.3 Billion Backlog, Suspends New Memberships

Evidently, it’s catching on. “Due to the enormous demand and loan requests we will be temporarily suspending new membership registrations, loan requests, and purchases of SALT on our platform. Existing members will still be able to deposit SALT on the platform and upgrade their membership in the interim. We plan to begin adding members and turn on all associated features as soon as we have satisfied the automation of our current loan process and have served the current pending loan requests.”

SALT’s business model is essentially larger loans floated by accredited investors; those with a net worth of more than a million dollars or with six-figure salaries. The minimum loan is 5,000 USD, and it does seem to be working well – maybe too well – to the tune of over 60,000 members. 

Alternatives to SALT

“The process of scaling and automating our processes and technology,” SALT continues, “has been progressing well but we’ve recognized an opportunity to focus our team’s time and resources on this important goal and on addressing the existing demand before we continue to add new memberships and loan requests.”

Cypto-Backed SALT Claims $1.3 Billion Backlog, Suspends New Memberships

While SALT figures out how to scale, other lending programs abound within the ecosystem. Coinloan is a crypto asset collateral lending program that offers significantly smaller loans and easier access. Ripio’s RPN Global Lending is more peer-to-peer in its approach. Ethlend of Switzerland works off of the Ethereum blockchain, and touts its decentralized features.

And even though SALT is “temporarily halting these features we will be able to dedicate all of our time and energy on serving those that have been integral to our success thus far, as well as positioning our platform to address the future demand for SALT’s lending platform,” which includes moving into US states such as Arkansas, Delaware, New Jersey, and North Carolina to push commercial loans.

What are your thoughts on crypto loan programs? Let us know in the comments section.


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France Cracks Down on Bitcoin Derivatives

France Cracks Down on Bitcoin Derivatives

Autorité des marchés financiers (AMF), the independent regulatory body governing France’s stock market, issued two statements today, one on initial coin offerings (ICOs) and another on the prospect of bitcoin derivatives. Both point to more oversight to come for crypto in France, including everything from formal authorizations to a ban on advertisements.  

Also read: How To Regain Control From Nanny Zuck

France Cracks Down on Bitcoin Derivatives

AMF, France’s markets regulator, insists bitcoin derivatives are subject to the European Union’s Markets in Financial Instruments Directive (MiFID II) which trigger all manner of new rules and authorizations. In its 22 February published missive, The AMF considers that the offer of cryptocurrency derivatives requires authorisation and that it is prohibited to advertise such offer via electronic means,” the agency argues. “The AMF has reached the conclusion that platforms which offer these products must abide by the authorisation and business conduct rules, and that these products must not be advertised via electronic means.”

During its analysis the AMF determined “the legal qualification of the notion of “derivative” in the context of cryptocurrency derivatives and […] to consider whether a cryptocurrency could be legally regarded as an eligible underlying. The notion of “derivative” is not defined in EU legislation per se.”

France Cracks Down on Bitcoin Derivatives

The AMF describes growth in crypto exchanges as a boom, offering “binary options, CFDs or Forex contracts with an end-of-day maturity (rolling spot forex), where the underlying is a cryptocurrency. Such contracts allow investors to bet on a cryptocurrency’s rise or fall, without holding the underlying.”

As a result, the legal status of crypto is almost irrelevant because the AMF determined “a cash-settled cryptocurrency contract may qualify as a derivative.” Furthermore, the agency found the European Market Infrastructure Regulation (EMIR) will be invoked, along with MiFID II, setting into motion rules for over the counter (OTC) derivatives and their online exchanges such as complying with “authorisation, conduct of business rules, and the EMIR trade reporting obligation to a trade repository. Above all, these products are subject to the provisions of the Sapin 2 law, and notably the ban of advertisements for certain financial contracts.”

AMF Also Takes a Hard Look at ICOs

The AMF publishes the summary of responses to the public consultation on initial coin offerings (ICO) was also revealed the same day, summarizing 82 comments from the French public concerning ICOs and their regulatory fate.

According to the agency, “a large majority of respondents expressed support for setting up an appropriate legal framework for this new type of fundraising.” Respondents were “digital economy players, individuals, finance professionals, market infrastructures, academics and law firms.”

France Cracks Down on Bitcoin Derivatives

The AMF offered three options for consideration going forward: “Promote a best practice guide without changing existing legislation (option 1); Extend the scope of existing texts to treat ICOs as public offerings of securities (option 2); Propose new legislation adapted to ICOs (option 3).” Of those, option 3 received 66% approval.  

“Respondents unanimously consider that an information document is necessary to inform buyers of tokens,” and should include project specifics, rights, distribution scheme, along with identifying the project’s heads and team. “Finally, the vast majority of respondents favour the establishment of rules making it possible to ensure the escrow of funds raised, and the setting up of a mechanism to prevent money laundering and terrorist financing,” the release concluded.

In response to the respondents, AMF officials have vowed to “continue work” on the prospect of regulating ICOs.

Is France overreacting? Let us know in the comments section.


Images courtesy of Pixabay, AMF.


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Russia to “Tame and Test” Crypto Technologies in Crimea

Russia to “Tame and Test” Crypto Technologies in Crimea

A proposal to “tame” crypto technologies in Crimea has been made in Russia’s parliament this week. A local representative of the Russian Association of Cryptocurrencies and Blockchain told deputies the republic’s jurisdiction can be used to “test the new phenomenon”. RACIB has been working on a roadmap to implement the “Crypto-Crimea” plan and set up a blockchain technology development center on the peninsula.

Also read: Russian Authorities Criticized over Proposed Crypto Regulation

Testing Ground with а Special Status

Russia to “Tame and Test” Crypto Technologies in CrimeaEver since its accession to the Russian Federation in 2014, Crimea has existed in somewhat extraordinary circumstances, putting up with its special status, in both political and economic terms. Internationally, the self-proclaimed republic has been placed under economic blockade after its secession from Ukraine, following the “Euromaidan”. Domestically, Crimea is a federal subject, like many other constituent entities, but also a special economic zone. Moscow is aiding its development to compensate for the sanctions. Militarily, it is probably one of the most heavily guarded territories in the country, with the Russian Black Sea Fleet stationed there.

The special status of Crimea’s jurisdiction offers an opportunity to experiment with economic initiatives before implementing large-scale projects on federal level. That can help Crimea become a testing ground for innovations related to distributed ledger and blockchain technologies. The local crypto community has recognized that potential and is trying to attract Moscow’s attention. Other federal subjects have already made similar attempts.

We eagerly expect the introduction of legislation on digital assets and crowdfunding in the State Duma.

That’s what Victoria Bilan, the local representative of RACIB, told lawmakers during a parliamentary hearing on Tuesday, Regnum reported. She added that the association supports the draft bills in general. “We understand the conservatism of the Central Bank, but we think Crimea’s jurisdiction can be used to tame cryptocurrency technologies and test these new phenomena”, Bilan said. She noted the special economic zone status of the Republic and reminded parliamentarians about the investment blockade.

Roadmap to Crypto-Crimea

Russia to “Tame and Test” Crypto Technologies in CrimeaThe Russian cryptocurrency and blockchain association has been working on a roadmap to implement the so-called “Crypto-Crimea” plan. Some of its aspects should be presented this week at the “Blockchainrf – 2018” international conference in Moscow and during the Yalta International Economic Forum in April. The group working on the project met in early February to set the main goals. Attracting direct investments in the region was defined as a priority. They will be channeled through the creation of a dedicated Blockchain Technology Development Center expected to be opened within a couple of months.

The members of the working group, which includes representatives of the local authorities, have to arrange Crimea’s participation in the federal digital economy program as a “regulatory sandbox”. They will also make proposals to adopt a special legal framework regulating the activities of fintech companies within the Crimean Free Economic Zone.

Other Russian regions have also expressed desire to become testing grounds for crypto and blockchain technologies and spearhead their adoption in the Russian Federation. This week the head of the Republic of Udmurtia urged deputies to hurry up with the new legislation. Alexandr Brechalov offered its territory for experimental implementation of innovative crypto projects. Kaliningrad and Leningrad Oblasts have announced intentions to accommodate large mining operations and also called on the government to quickly adopt the regulatory framework.

Do you think that the special status of Crimea presents an opportunity for rapid development of cryptocurrency and blockchain technologies and businesses? Share your thoughts in the comments section below.


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Venezuela Orders Government Services to Accept Any Cryptocurrency

Venezuela Orders Government Services to Accept Any Cryptocurrency

Venezuela’s president Nicolas Maduro has ordered the country’s consular services, as well as several other services and gas stations, to accept any cryptocurrency including the nation’s own petro. In addition, he has announced the launch of another cryptocurrency, this time backed with gold.

Also read: Indians Look to Buy Bitcoin Overseas as Regulations Tighten

Maduro’s Orders

Maduro has ordered various government services to accept any cryptocurrency including the petro, Venezuela’s oil-backed currency which began its private pre-sale on February 20. This announcement was broadcasted nationwide from the Miraflores Palace and also reported on the website of the Superintendency of Cryptocurrencies. The president said:

I order the payment of consular services in all embassies and consulates of the Bolivarian Republic of Venezuela in the world, [and] all consular services in the country, in the petro currency or in any cryptocurrency.

Maduro Orders Government Services to Accept Any CryptocurrencyMaduro also announced that “the National Association of Airlines will be able to pay in petro or in any cryptocurrency [for] the fuel and the services associated to the airlines in the rendering of their services in Venezuela.”

Furthermore, he ordered “a manual be established for the payment of tourist services in the country through the Venezuelan cryptocurrency or any other virtual currency.” According to him, “service providers, hotels, inns, national and international tourist services” asked him for authorization so they can “begin charging in cryptocurrencies and petro.”

Crypto Accepted at Border Gas Stations

Maduro Orders Government Services to Accept Any CryptocurrencyAt the petro launch event, Maduro also revealed, “we are going to establish new international gasoline services at the border.”

He elaborated that his government “will charge in petro [for] all Venezuelan fuel that is sold in the service stations located at the different points of the border of Venezuela and Colombia.” Citing that several service stations are charging in Colombian pesos and bolivars in international prices, he declared that starting on Wednesday:

In the revitalized gasoline services plan to combat the smuggling of gasoline at the border, we will proceed to charge in all cryptocurrencies, especially the petro.

Major State-Owned Companies to Use Petro

Maduro Orders Government Services to Accept Any CryptocurrencyThe Superintendency of Cryptocurrencies confirmed on Wednesday that three state-owned companies “will also make sales and purchases with the petro.” They are the oil and natural gas company Petróleos de Venezuela (Pdvsa), its petrochemical subsidiary Pequiven, and the conglomerate Venezuelan Guayana Corporation (Cvg).

Consequently, Maduro explained that “suppliers and creditors of these companies must conduct their commercial transactions of purchase-sale in a percentage of their products and supplies in the petro [starting] from today.”

Furthermore, during a Patria Para Todos (PPT) party event on Wednesday, the Venezuelan president revealed that:

Next week we will launch the petro-gold that will accompany the petro…We already have 36 exchange houses in the world that are working with Venezuela and the petro.

Petro Skeptics

Maduro Orders Government Services to Accept Any CryptocurrencySince the launch of the petro, many skeptics have expressed doubt towards the cryptocurrency. Harry Colvin, director and senior economist at Longview Economics, told CNBC that it is doubtful the petro will be a success, adding that “Venezuela has been known for misappropriation of assets in the past and the central bank has just created hyperinflation so I imagine there’ll be trust and transparency issues.”

Moreover, the Venezuelan National Assembly has already declared the petro illegal ahead of its launch. “If Maduro loses the election in April – or is forced out of power – then petros would probably be made illegitimate,” Colvin noted.

Johns Hopkins professor Steve Hanke, a noted economist and Senior Fellow of the Cato Institute, tweeted on Wednesday:

With Venezuela’s traditional currency failing, why should investors have any faith that the petro will be a stable currency. The petro is just another desperation play by Maduro.

What do you think of Maduro’s plans? Let us know in the comments section below.


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Australia’s Consumer Watchdog Received 1289 Crypto Complaints in 2017

Australis Consumer Watchdog Received 1289 Crypto Complaints in 2017

The Australian Competition & Consumer Commission (ACCC) has revealed that it received more than 1,200 complaints relating to cryptocurrencies via its ‘Scamwatch’ portal during 2017. In light of the number of complaints, the Australian Securities and Investments Commission (ASIC) has issued a warning to potential investors outlining the risks associated with cryptocurrency investment.

Also Read: Tesla Hit by Hackers Who Used its Systems to Mine Cryptocurrency

Australia’s Consumer Watchdog Received 1,289 Complaints Relating to Cryptocurrencies Last Year

Australia's Consumer Watchdog Received 1289 Complaints About Crypto Scams in 2017The Australian Broadcasting Corporation has reported that data obtained from the ACCC indicates that Australian citizens’ losses to cryptocurrency scams totaled $1,218,206 AUD ($955,000 USD approximately) for 2017. The number of complaints received last year has prompted Australia’s corporate regulator, ASIC, to issue a warning to potential cryptocurrency investors.

John Price, the ASIC commissioner, recently described cryptocurrencies as “quite speculative products [that] can be quite high-risk. It’s been quite well documented that some of these products are scams, so please don’t invest unless you’re prepared to lose some or all of your money.”

Increasing Regulation of Australia’s Cryptocurrency Sector

Australia's Consumer Watchdog Received 1289 Complaints About Crypto Scams in 2017From April onward, Australian businesses providing cryptocurrency exchange services will be required to register with AUSTRAC, Australia’s financial intelligence agency, and report information regarding the transactions of their customers.

Under the new legislation, it will be illegal for an “unregistered person” to provide virtual currency exchange services. “Businesses that trade digital currencies for money, and vice versa, will be required to enroll and register with AUSTRAC,” Justice Minister Michael Keenan said in August 2017 during a parliamentary speech regarding the then regulatory proposals.

Angus Taylor, Australia’s new federal minister for cyber security, recently praised the new legislation, stating “We’ve had a lot of cooperation from the cryptocurrencies because they know they need to be legitimate, they know they need to be part of our financial system, and they know they don’t want to be facilitating illegal and criminal activity.”

“We’ve acted early, we’ve acted much earlier than many other countries around the world,” Mr. Taylor added. “Obviously cryptocurrencies are growing, and it’s appropriate that the Government establish a regulatory framework with a particular focus on criminal activity.”

Do you think that cryptocurrency scams warrant further regulatory intervention, or should the onus be placed on investors to conduct proper due diligence? Share your thoughts in the comments section below!


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20+ South Korean Cryptocurrency Exchanges Voluntarily Undergo Evaluations

20+ South Korean Cryptocurrency Exchanges Voluntarily Undergo Evaluations

Over twenty cryptocurrency exchanges in South Korea have agreed to undergo evaluations, including the country’s top four exchanges: Upbit, Bithumb, Coinone, and Korbit. This is part of their self-regulatory efforts, in conjunction with the Korean Blockchain Association.

Also read: Indians Look to Buy Bitcoin Overseas as Regulations Tighten

21 Exchanges Participating So Far

The Korean Blockchain Association, an industry group formally launched in January with 66 members, is primarily focused on self-regulation. The association, “composed of 33 virtual currency exchanges, said 21 of its members, including major players Upbit, Bithumb, Korbit, and Coinone, will undergo evaluations,” Yonhap reported on Wednesday.

20+ South Korean Cryptocurrency Exchanges Voluntarily Undergo EvaluationsAccording to local media, crypto exchanges that have confirmed their participation in self-evaluation include Glosfer, Nexcoin, Zeniex, Kairex, Kcx Exchange, Komid, Coinway, Coinzest, Plutus DS, Dexko, Gopax, Okcoin Korea, and Huobi Korea.

The main purpose of the evaluations is to determine if members have complied with a set of self-regulatory measures that the group has set.

An official of the association was quoted by Asia Economy saying, “I respect member companies’ willingness to create a secure cryptocurrency market…We will make efforts to ensure strict and fair self-regulatory review.” Kim Hwa-joon, vice chairman of the association, was quoted by Zdnet detailing:

It will include capital standards, security standards, principles on listing procedures, disclosure of information, etc, and I expect investors to believe that they [exchanges] are more stable if they have passed the examination.

According to data collected by the Korean government, sales by local cryptocurrency exchange operators soared approximately 88-fold in 2017 compared to the previous year.

Self-Regulatory Efforts Challenged

The association first announced self-regulation in December when the government introduced a set of cryptocurrency measures to curb speculation in the crypto market. It “also established a set of specific ethical codes for the virtual currency bourses, including strict rules on insider trading and market manipulation,” Yonhap noted.

However, recently small and medium-sized exchanges have been voicing concerns regarding the effectiveness of joining the association and declaring self-regulation. They were led to believe that, by joining the association, they would be able to obtain virtual accounts from banks after the government-mandated real-name system went into effect.

20+ South Korean Cryptocurrency Exchanges Voluntarily Undergo EvaluationsHowever, following the implementation of the real-name system, banks are reluctant to issue virtual accounts to small and medium-sized exchanges, choosing only to provide services to the country’s top four exchanges.

Earlier this week, twelve crypto exchanges including Gopax, Coinnest, and Coinpia, sent a joint statement to the association, requesting a meeting to discuss the issue of virtual account issuance.

Kim acknowledged the problem and was quoted by Fntimes saying:

Disputes may arise in operating the organization..We are trying to solve this problem.

The association has also discussed the problem with Choi Heung-sik, the director of the country’s Financial Supervisory Service (FSS). He promised to encourage banks to work with more crypto exchanges, citing that there are three banks that have set up the real-name system but are not using it to issue virtual accounts for crypto exchanges.

What do you think of South Korean crypto exchanges voluntarily undergoing evaluations? Let us know in the comments section below.


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Russian Lawmaker Proposes Legalization of Cryptocurrencies to Attract Investments

Russian Lawmaker Proposes Legalization of Cryptocurrencies to Attract Investments

The head of the Russian State Duma Committee for Economic Policy has proposed legalizing cryptocurrencies in order to attract foreign investments including from countries with anti-Russian sanctions.

Also read: Indians Look to Buy Bitcoin Overseas as Regulations Tighten

Proposal to Legalize Cryptocurrencies

Russian Lawmaker Proposes Legalization of Cryptocurrencies to Attract InvestmentsThe chairman of the State Duma Committee for Economic Policy, Sergey Zhigarev, proposed the legalization of cryptocurrencies at the recent parliamentary hearings in the State Duma on the development of the digital economy, Tass reported on Tuesday.

He believes that it will attract foreign investments, including from countries that have imposed sanctions on Russia. He was quoted saying:

The legalization of digital currencies as a means of payment can help attract investments from foreign countries, including Western ones with sanctions, so we have an instrument that will help us attract the capital we need today.

“There will be a transformation of the whole banking and financial system,” he told other lawmakers, adding that the intermediaries “will disappear, and we need to be ready for this.”

The deputy also noted that soon large companies with their own cryptocurrencies could enter the market, adding that “we will witness the birth of a new market, free and open. It is to be hoped that Russian companies are involved.”

Government’s Monopoly Challenged

Russian Lawmaker Proposes Legalization of Cryptocurrencies to Attract InvestmentsZhigarev explained at the meeting that, for the first time in history, the government’s monopoly on the production of money is under threat. “This is an irreversible process that is difficult to control, only those cryptos that are backed up by some real assets have their prospects,” he asserted.

Earlier this month, the first deputy chairman of the Bank of Russia, Olga Skorobogatova, called cryptocurrency “a dangerous investment instrument because of high volatility,” RNS reported. She emphasized that from the state’s point of view, cryptocurrencies are “extremely dangerous,” stating:

The central bank is against allowing the exchange of cryptocurrency in the territory of Russia and will discuss this issue with the finance ministry.

The Bank of Russia is currently working with the finance ministry and the State Duma to establish the legal framework for cryptocurrencies. Meanwhile, the Ministry of Finance has published a draft bill for the regulation of cryptocurrency.

Zhigarev also pointed out that another challenge for the legalization of cryptocurrencies such as bitcoin is “the lack of an infrastructure for transferring cryptocurrency into [fiat] currency (rubles, dollars, euros, etc.) and back,” Tass conveyed. As an example, he said there are significantly more bitcoin ATMs (BTMs) in the US than in Russia. The BTM tracking website Coinatmradar currently shows 38 BTMs in Russia compared to 1,525 BTMs in the US.

Do you think Russia will allow cryptocurrency to be a legal means of payment? Let us know in the comments section below.


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Islamic Republic of Iran to “Control and Prevent” Growth of Cryptocurrencies

Islamic Republic of Iran to “Control and Prevent” Growth of Cryptocurrencies

جمهوری اسلامی ایران‎ The Islamic Republic of Iran has apparently changed course on cryptocurrency, or perhaps it has clarified its real position previously mischaracterized by the press. It’s increasingly difficult to get a real handle on the official status of crypto in the Persian homeland.  

Also read: How To Regain Control From Nanny Zuck

Iran to Control and Prevent Cryptocurrency

Hamed Jafari reported as soon as two weeks ago, Iran was considering issuing “a local cryptocurrency, a cryptocurrency consortium with specific countries and regulating the already established cryptocurrencies such as bitcoin.” Not more than last week, International Business Times insisted “a half dozen contenders” in Iran were vying to bring the country its first set of initial coin offerings (ICOs).

Indeed, Iran under the weight of international sanctions seems to be a perfect breeding ground for cryptocurrency. Paypal, Mastercard, Visa are all forbidden. Its fiat currency continues to fall against the dollar to all-time lows even as its regime struggled recently to reform interest rates and forgive loans. Crypto might be a way around pretty brutal financial conditions. Reports last year seemed to suggest the country was considering as much.

Islamic Republic of Iran to “Control and Prevent” Growth of Cryptocurrencies
Mohammad-Javad Azari Jahromi

Iran Front Page, however, an independent news aggregation site, is throwing cold water on region some by insisting the Iranian central bank never recognized bitcoin as legal tender. The banker also said it had no intention of “actively facilitating Bitcoin transactions.”

Local Crypto?

Indeed the bank is reported to have explained how “wild fluctuations of the digital currencies along with competitive business activities underway via network marketing and pyramid scheme [tactics] have made the market of these currencies highly unreliable and risky.” Additionally, Iran’s central bank is said to be looking at a way to “control and prevent digital currencies in Iran.”

This doesn’t necessarily mean ICOs can’t take place, and there is plenty of anecdotal evidence Iranians are interested in cryptocurrency even if their government is not. Enthusiasts’ hopes were not entirely dashed as reports also explained the country’s technology minister confirmed rumors about a local cryptocurrency, state backed. Islamic Republic of Iran to “Control and Prevent” Growth of CryptocurrenciesAfter further warning about the “high risks of making investment in” cryptos such as bitcoin, saying Iranians might lose “their financial assets” as a result, “Iran’s [Ministry of Information and Communications Technology (ICT)] Minister Mohammad-Javad Azari Jahromi also declared on Wednesday that Iran’s Post Bank is working on a locally-developed cryptocurrency, which needs to be tested by the ICT ministry.”

What do you think about Iran’s plans? Are they viable? Let us know in the comments section.


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Russian Authorities Criticized over Proposed Crypto Regulation

Russian Authorities Criticized over Proposed Crypto Regulation

Criticism aimed at authorities and the new legislation on “digital financial assets” is mounting in Russia. Local officials have rebuked lawmakers in the capital over slow progress, warning that the country will have to catch up with others. Experts from the crypto sector have expressed concerns about many unresolved issues in the proposed legal framework. Russian deputies are preparing to introduce two drafts on cryptocurrencies and crowdfunding, while more than 50 other digital economy bills are pending in parliament.

Also read: Russia’s Longest-Serving Finance Minister Backs Crypto “Self-Regulation”

Hurry Up or Catch Up

“Russian parliamentarians have spent a whole year discussing regulations, never reaching a unified stance on a concept to develop the digital economy. Authorities and entrepreneurs have not been able to formulate a consolidated position on cryptocurrencies”, a local official said during a meeting in the State Duma. “We need to hurry up”, Alexandr Brechalov, head of the Russian republic of Udmurtia, told deputies in the federal assembly.

Russian Authorities Criticized over Proposed Crypto RegulationLike many of his colleagues in other Russian regions, Brechalov sees many opportunities for development in the crypto sector. His republic is home to large industrial enterprises, including IZHMASH – the machine-building concern producing AKs, drones and robots for the Russian military. Digitalization would boost other sectors of the local economy and the governor has an idea in that respect. “I heard suggestions about pilot projects. Udmurtia is ready to be the sandbox”, Brechalov said, quoted by RBC.

The young politician sharply criticized bigwigs in Moscow for their “excessive caution that once again puts us in the position to catch up”. He thinks the proposed legislation does not provide guidelines for the development of the crypto economy. It also leaves several issues unresolved, including the regulation of crypto exchanges and the taxation of cryptocurrency transactions. The governor thinks ICOs are over-regulated and that may force companies to look for other jurisdictions.

The Use of Crypto Technologies Limited

Some of Brechalov’s comments are echoing concerns expressed recently by several legal experts working in the Russian crypto sector. The lawyers told Bitsmedia that the law prepared by the Finance Ministry needs serious revision – if adopted in its current shape and form, many questions would remain unanswered.

The experts admit they cannot figure out what legal rights and obligations market participants have. The criteria to determine if a digital coin is legal is also unclear. Lawmakers have provided guidelines for ICOs but have not defined the status of tokens. Smart-contracts have been treated like ordinary contracts in the new legislation, but no such term exists in the Civil Code.

The draft law proposed by “Minfin” deals mainly with ICOs, instead of providing a solid basis to regulate decentralized ledger technologies, the lawyers said. It actually limits the use of crypto technologies in other spheres, they added.

The Fate of Bitcoin Undecided

Russian Authorities Criticized over Proposed Crypto RegulationThe fact of the matter is that Russian authorities have not yet decided what to do with cryptocurrencies like bitcoin. The Central Bank of Russia has insisted on banning their circulation in the country, quoting concerns over money laundering. However, the draft presented by the Finance Ministry in January reads that citizens can buy and sell cryptos and tokens on licensed platforms, like cryptocurrency exchanges.

The chairman of the Financial Market Committee in the Duma Anatoliy Aksakov said its members were trying to speed up the legal process, RIA Novosti reported. “We have two bills, on digital financial assets (cryptocurrencies) and on crowdfunding (ICOs), which are ready. We are closely working with the government and the Central Bank to quickly take the necessary decisions in the Duma”, Aksakov stated.

No less than 50 bills dealing with different aspects of the digital economy are pending in the Duma, the deputy revealed. “We understand this is very important for the business and the state, for reducing costs and increasing labor productivity”, Anatoliy Aksakov added.

Do you think public criticism will speed up the adoption of cryptocurrency regulations in Russia? Tell us in the comments sections below.


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How South Korean Government Prevents Officials from Insider Crypto Trading

How South Korean Government Prevents Officials From Crypto Insider Trading

South Korea currently has no law against government officials insider trading with the knowledge of cryptocurrency regulations. The case against an employee of the country’s Financial Supervisory Service (FSS) accused of crypto insider trading has come to a standstill without grounds for punishment. However, the government has worked out a plan to prevent future occurrences.

Also read: Indians Look to Buy Bitcoin Overseas as Regulations Tighten

No Applicable Law Currently

The issue of insider trading using the knowledge of the government’s cryptocurrency regulations became prominent last month when an FSS employee was accused of crypto insider trading. The FSS has an active role in creating crypto regulations as well as inspecting banks for crypto-related money laundering measures.

How South Korean Government Prevents Officials From Crypto Insider TradingThe employee invested about 13 million won on July 3 of last year and sold more than half of his holdings on December 11, Chosun described. Then, on December 13, the government announced a set of strict regulations, including a ban on crypto trading for minors and foreigners.

Guilty or not, there is no law to punish government officials for insider trading of cryptocurrencies. While employees are prohibited from stock trading using insider knowledge, a senior FSS official was quoted by Edaily explaining:

Currently, there are no provisions in the regulation on virtual currency.

New Code of Conduct Could Help

How South Korean Government Prevents Officials From Crypto Insider TradingThe rules applicable to stocks do not apply to cryptocurrencies since they are currently not recognized as financial assets in Korea. To prevent future insider trading, Korean prime minister Lee Nak-yeon ordered the creation of a new Code of Conduct to address crypto trading by public officials.

The Korean Anti-Corruption & Civil Rights Commission issued the “Code of Conduct Guide to Cryptocurrency” to the government and public agencies last week. It adds cryptocurrency to Article 12 of the Civil Servant Code of Conduct which, according to Tokenpost, states that:

Public officials shall not use the information learned during their duties to assist in trading or investing in property related to securities, real estate, etc., or providing such information to others to help them trade or invest.

However, the FSS Did Not Get the Memo

How South Korean Government Prevents Officials From Crypto Insider TradingThe FSS, however, is not bound by the new Code of Conduct. According to Edaily, the document was not even sent to the FSS. “This guidance document was sent to the central administrative agency, metropolitan area, basic local autonomous body, city and provincial office of education,” an FSS official detailed. A senior official of the FSS Inspectorate confirmed to the publication, “We did not receive any letters of interest.”

The news outlet explained that this is due to the FSS being under the supervision of the Financial Services Commission (FSC) and the Securities and Futures Commission under the current law.

The Financial Services Administration Innovation Committee explained that “redefining the FSS as a public institution weakens the independence and accountability of supervisory institutions, making it more vulnerable to external pressures such as political parties,” Maekyung reported. Edaily continued:

As the FSS is not a government agency, FSS staff are not covered by the Code of Conduct.

Following media reports, the Korean government issued a statement clarifying that the FSC will inform the FSS of applicable notices “such as the prohibition of virtual currency transactions related to jobs.” An FSS official was quoted by News1 saying, “we will revise our own Code of Conduct through internal consultations,” adding that FSS staff will not be able to use internal information to trade or invest in cryptocurrency.

What do you think of the Korean government’s plan to prevent crypto insider trading? Let us know in the comments section below.


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