Spike in power use from server farms servicing Bitcoin led to illicit coal mining, endangering lives & climate goals.
Alex Oh said in a resignation letter that she was leaving because of a "development" in a case on which she worked as a corporate lawyer."In light of the time and attention it will take from me, I have reached the conclusion that I cannot address this development without it becoming an unwelcome distraction to the important work of the division," Oh said in a resignation letter.
Category Archives: Blockchain, Crypto, Digital Assets Regulations
China’s latest crackdown on crypto caused by climate concerns
Aljazeera via Bloomberg | May 26, 2021
Spike in power use from server farms servicing Bitcoin led to illicit coal mining, endangering lives & climate goals.
China’s escalating push to rein in cryptocurrency mining was triggered in part by concern that the practice has stoked a surge in illicit coal extraction, endangering lives and undermining Xi Jinping’s ambitious environmental goals.
Authorities decided to act after concluding the spike in electricity consumption from server farms underpinning Bitcoin and other tokens was a key factor behind rising demand for coal in certain parts of China, according to a person who participated in high-level government meetings on the issue and asked not to be identified discussing private information.
See: Cryptocurrency and energy consumption debate
While China’s central government has enforced a strict ban on digital-asset exchanges and discouraged crypto mining for years, authorities in some remote areas of the country have been more welcoming of the industry because it brings in much-needed revenue. About 65% of the world’s Bitcoin mining took place in China as of April 2020, according to an estimate by the University of Cambridge.
Growing concerns about the environmental knock-on effects help explain why China’s Financial Stability and Development Committee said on May 21 it would crack down on crypto mining and trading, in what amounted to one of the government’s most forceful condemnations of the crypto ecosystem to date.
China’s National Energy Administration and National Development and Reform Commission didn’t immediately respond to requests for comment.
Disentangling crypto mining’s impact on coal consumption in China isn’t easy, especially during periods of economic recovery when power demand is rising more broadly. But in areas like Xinjiang and Inner Mongolia that have long been favorite destinations for the industry, Chinese authorities have drawn a direct link between crypto and coal.
See: Clean Energy Bitcoin Mining Joint Venture Agreement Signed by Link Global Technologies and Neptune Digital Assets
Some observers are skeptical of China’s emissions pledges, but the country’s top leaders have vowed to make the fight against climate change a priority despite the potential short-term economic drag. At a climate summit convened last month by Joe Biden, Xi reiterated China’s plan to reach peak carbon emissions by 2030 and attain net-zero status by 2060, in part by reducing coal consumption.
For a Chinese government wary of the anonymity, volatility and borderless nature of digital assets, crypto miners represent an obvious target. The country’s regulators have long warned that cryptocurrencies can facilitate money laundering, fraud and terrorist financing.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
 |  |  |
|---|---|---|
 |  |  |
Billionaire Ray Dalio says he owns bitcoin, and its ‘greatest risk is its success’
CNBC | Taylor Locke | May 24, 2021
Though billionaire investor Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, has previously expressed concern about the future of bitcoin, he has also noted that the cryptocurrency earned his respect.
Now, he reveals, “I have some bitcoin,” Dalio told CoinDesk during its 2021 Consensus conference. The interview was recorded on May 6 and published Monday.
But Dalio maintains that the cryptocurrency still faces risk.
“Bitcoin’s greatest risk is its success,” he said.
See: Billionaire investor Ray Dalio on capitalism’s crisis: The world is going to change ‘in shocking ways’ in the next five years
And if it succeeds, “one of the great things, I think, as a worry is the government having the capacity to control ... bitcoin, or the digital currencies. They know where they are, and they know what’s going on,” he said.
“The more we create savings in [bitcoin], the more you might say, ‘I’d rather have bitcoin than the bond.’ Personally, I’d rather have bitcoin than a bond. And then the more that happens, then it goes into bitcoin and it doesn’t go into credit, then [governments] lose control of that.”
This isn’t the first time Dalio expressed concern about the risk of government regulation.
“I am not a bitcoin/cryptocurrency expert,” he wrote in a January post titled “What I Think of Bitcoin,” but “I suspect that Bitcoin’s biggest risk is being successful, because if it’s successful, the government will try to kill it and they have a lot of power to succeed.”
In March, Dalio warned of the possibility that the U.S. government could ban bitcoin as it did with gold during the 1930s if the cryptocurrency is seen as a competitive threat to Treasury bonds.
See: Four Levers to Deleverage the Economy | Summary of Ray Dalio’s Economic Machine
However, James Ledbetter, editor of fintech newsletter FIN and a CNBC contributor, previously told CNBC Make It that it’d be quite difficult for the government to effectively ban bitcoin.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
Goldman Sachs Reconsiders Whether Bitcoin is Legitimate Asset
Decrypt | Tim Hakki | May 22, 2021
Little over a year ago, the investment bank said crypto was not an asset class. Now it’s taking a second look.
A forthcoming report by investment banking giant Goldman Sachs shows that the bank has read up on crypto.
Screenshots of the report were shared on Twitter today by Alex Krüger, economist, crypto trader and founder of asset management firm Aike Capital. He tweeted several screenshots from the Goldman Sachs report, entitled: ‘Crypto: a new asset class?’
Krüger said the report will be made available in its entirety on Goldman Sachs’s website “within a few days.”
The report includes perspectives from Michael Novogratz, founder and CEO of crypto investment firm Galaxy Digital Holdings, and Michael Sonnenshein, CEO of Grayscale, a crypto asset management firm that runs the largest Bitcoin trust in the world, alongside words from other financial execs and academic economists.
See: ETF investors say Coinbase listing will cause explosion in crypto investing
Unsurprisingly, Novogratz answers the question of crypto as an asset class in the affirmative. Goldman said in its report that the CEO
“argues that the mere fact that a critical mass of credible investors and institutions is now engaging with crypto assets has cemented their position as an official asset class.”
Also spoken to in the report is Nouriel Roubini, an economics professor at NYU, who flatly
“disagrees with the idea that something with no income, utility, or relationship with economic fundamentals can be considered a store of value, or an asset at all.” Nouriel “doubts the willingness of most institutions to expose themselves to cryptos’ volatility and risks.”
Continue to the full article --> here
Coindesk | James Rubin | May 22, 2021
Goldman’s Crypto Chief Worries About Fraud, but Not Cryptocurrency’s Future
The Global Head of Digital Assets at Goldman Sachs said in a Q&A published in the firm’s May 21 Global Macro Research newsletter that the cryptocurrency space, “particularly as it relates to hot storage,” was “only one big fraud away from a very negative impact on the market.”
Addressing a question about risks to the industry, Mathew McDermott, who was expressing his own views and not those of the research team,
also noted that “inconsistent regulatory actions” worldwide could “impede the further development of the crypto space.”
But McDermott, a nearly 16-year Goldman Sachs veteran, who was previously the firm’s Global Head of Cross Asset Financing, felt reassured that large crypto companies have been managing their “growth without any noticeable increase in fraudulent activity,” and encouraged about the industry. “It’s not often that we get to witness the emergence of a new asset class,” he said.
See: How Cryptocurrency is changing Fintech
Similar to most other large financial services firms, Goldman Sachs had been initially skeptical about cryptocurrency but overcame its doubts as demand for crypto-related investment products and services rose steadily among investors. Earlier this month, the investment banking giant announced in an internal memo that it had traded two kinds of bitcoin-linked derivatives and that it was aiming to participate more heavily in the market by “selectively onboarding” crypto trading service providers. It also recently launched a platform that provides crypto news and pricing.
McDermott said that the firm’s latest initiatives stemmed from rising demand among institutional investors and wealth managers.
“A portion of wealth management clients – high-net-worth individuals and family offices are already very active in the space and in some sense are leading the way for other investors,” McDermott said. “They remain interested in bitcoin, but are also increasingly focused on the broader value that cryptocurrencies can bring. They’re looking at ether in the context of the whole decentralized finance (DeFi) ecosystem and how that can really transform financial markets.”
In a March survey of 280 clients, Goldman Sachs’ Digital Asset team found that two in five respondents had some exposure to cryptocurrency, while about three in five expected to increase their holdings over the next year. The group also found that the Chicago Mercantile Exchange’s daily bitcoin futures activity in April grew a massive 900% compared to the same period a year ago.
But McDermott said that the firm is “only just starting to offer…clients access to the crypto space because of an uncertain “regulatory landscape.” He said that the firm was “looking into offering lending structures in and around the crypto space to corporate clients as well as structured notes,” and that it would “offer access to cryptocurrencies, specifically bitcoin, via fund or structured note-like products” for its wealth management clients.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
SEC’s Hester Pierce and Ark Invest’s Cathie Wood Bats for Bitcoin ETF Amid Recent Correction
CoinGape | Bhushan Akolkar | May 22, 2021
On Friday evening, May 21, Bitcoin (BTC) once again crashed under $35,000 for the second time in a week following China announcing a crackdown on Bitcoin mining operations. Bitcoin short-term investors ended up booking heavy losses while whales started buying the dips.
The interesting news is that just as Bitcoin continues to trade at new lows, SEC Commissioner Hester Pierce, also popular as the crypto mom, says that the U.S. bitcoin ETF is now long overdue. Pierce said that the U.S. SEC is running out of excuses for not approving the Bitcoin ETF. During an interview with Bloomberg on Friday, Pierce added:
“It’s well past time that we approve an exchange traded product in Bitcoin. We have a lot more information now than we did. I’m hopeful that because we have new chairman and one that’s interested in this space we’ll have a chance to take a fresh look.”
Despite his higher affinity to the crypto space, the newly appointed SEC Chairman Gary Gensler has been giving mixed indications on the approval of Bitcoin ETF. The SEC, however, is to announce its decision on the VanEck Bitcoin (ETF) by the end of June.
See: Canadian Regulators Green Light World’s First Bitcoin ETF for Retail Investors
During an interview with Bloomberg earlier this week, Ark Invest’s Cathie Wood said that she’s confident about her BTC price target of $500,000. Besides, Wood thinks that with the recent market correction, the odds of approval of a U.S. Bitcoin exchange-traded fund (ETF) has increased. “The odds are going up now that we have had this correction,” she said.
Bitcoin ETF is expected to bring more legitimacy to the Bitcoin market with higher institutional participation. Besides, analysts have argued in the past that a Bitcoin ETF will certainly reduce the price volatility.
Institutions Going On A Buying Spree In The Correction
While Bitcoin (BTC) enters sharp correction, the OTC deals at exchanges have shot up. As CoinGape reported, institutions have been buying the dips amid the recent BTC Sell-off. As per the Glassnode data, the Bitcoin outflow from the OTC wallets has reached the highest in 2021.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
FINTRAC announces assessment of obligations coming into force on June 1, 2021
FINTRAC | May 18, 2021
On June 1, 2021, amendments to certain Regulations made under the Proceeds of Crime (Money Laundering and Terrorist Financing Act (PCMLTFA) (the amended Regulations) will come into force and create or change obligations for reporting entities (REs) that are subject to the PCMLTFA. The amendments were published in the Canada Gazette on July 10, 2019 and on June 10, 2020; they can be found here:
- Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2019 (SOR/2019-240)
- Regulations Amending the Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2019 (SOR/2020-112)
REs are required to comply with all the obligations under the PCMLTFA and associated Regulations. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) understands that some REs may experience certain challenges in meeting their obligations by June 1, 2021. Wherever possible, FINTRAC is committed to working constructively with REs.
When will FINTRAC assess the obligations coming into force on June 1, 2021?
Given the scope of the amended Regulations, and its impact on FINTRAC and REs, FINTRAC will exercise flexibility and reasonability when assessing REs' compliance with the amended Regulations.
See: Analysis: Proposed FATF Guidance for Virtual Assets and VASPs
Using its operational policy that focusses on the examination period, FINTRAC will begin assessing compliance with the amended Regulations on April 1, 2022.
From June 1, 2021 to March 31, 2022, FINTRAC will assess compliance with the regulatory requirements in effect prior to June 1, 2021. During this period, FINTRAC will also review REs' most up-to-date compliance program elements. As some REs may have updated their compliance program to reflect new regulatory requirements, this approach will provide REs with feedback to help them meet the requirements of the amended Regulations.
FINTRAC will begin assessing compliance with the amended Regulations on April 1, 2022. However, FINTRAC may assess transactional information for a period prior to April 1, 2022, while exercising reasonability and taking into consideration the flexible measures that FINTRAC has previously communicated in the Notice on forthcoming regulatory amendments and flexibility.
Reporting large virtual currency transactions
As of June 1, 2021, REs will be required to comply with obligations related to virtual currency transactions. REs will have to submit a Large Virtual Currency Transaction Report (LVCTR) when they receive an amount of virtual currency equivalent to $10,000 or more in a single transaction (the 24-hour rule may apply).
FINTRAC recognizes that, given the short timeline and the level of effort required to implement this new reporting obligation, some REs may be facing challenges in meeting this obligation on June 1, 2021. When an RE is not able to meet this reporting obligation, FINTRAC expects it to:
- Keep records of the reportable transactions as of June 1, 2021.
- Complete the implementation of its LVCTR system as soon as possible and no later than December 1, 2021.
- Submit all the unreported large virtual currency transactions for the period of June 1, 2021 to November 30, 2021 via the FINTRAC Upload or the FINTRAC web reporting system (F2R) as soon as possible and no later than March 31, 2022.
In the fall of 2021, F2R will be updated so that REs can use it to submit LVCTRs. REs that do not report large virtual currency transactions via FINTRAC Upload are expected to start submitting all large virtual currency transactions, including those transactions that were previously reportable but had not been submitted, as soon as F2R becomes available.
See: United States: Virtual Currencies Regulatory Overview (and Comparative Guide)
By December 1, 2021, FINTRAC expects that REs will have fully implemented their large virtual currency transaction reporting systems. Consequently, from that date and going forward, REs must submit LVCTRs within five working days after the day on which they receive the large virtual currency amount.
Continue to the full article learn more about:
- Reporting electronic funds transfers
- Declaring non-compliance to FINTRAC as of June 1, 2021
- When will FINTRAC update its Assessment Manual?
- When will FINTRAC update its Administrative Monetary Penalties harm done assessment guides?
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
Series of Essays: Regulation in the Era of Fintech
The Regulatory Review | April 26, 2021
Technological innovation is changing the financial sector. Cryptocurrency markets have surged to all-time highs, culminating in the historic initial public offering of Coinbase, the first major cryptocurrency company to go public on a U.S. stock exchange. Retail investors have used Reddit and various commission-free trading platforms to spark unprecedented market volatility in “meme stocks,” such as GameStop. And at the same time, the Internal Revenue Service has struggled to distribute stimulus checks to millions of Americans, highlighting the need for better technological and regulatory solutions to facilitate faster payments in the United States.
New financial technology, or “fintech,” promises to make the financial system faster, better informed, and more global. Once a budding sector of finance, fintech is now a constant presence in every corner of the industry. Fintech products have opened the door to many new opportunities for consumers, investors, and businesses. But with these opportunities, come new challenges. Regulators and policymakers face key choices as they adapt to meet the needs of this constantly changing landscape while keeping investors and consumers safe.
See: SEC Commissioner Peirce speak at FFCON21 May 11-13 - Register Here
The Regulatory Review has invited policymakers, scholars, and practitioners from across the financial sector to discuss the pressing issues fintech poses for the industry and to offer their insights about how fintech will continue to impact financial institutions, markets, and regulators in the future.
More Data, More Problems
April 26, 2021 | Rick A. Fleming and Alexandra M. Ledbetter, U.S. Securities and Exchange Commission
Investors in capital markets have access to more information than ever before, but it is challenging for even sophisticated market participants to sort through all of the data. The U.S. Securities and Exchange Commission should adopt data standardization practices for corporate reporting to make accessing reported information easier and less costly for the investing public.
Did Reddit Break the U.S. Securities Markets?
April 27, 2021 | Marlon Paz, Mayer Brown LLP
Recent market volatility in GameStop and other “meme stocks” has put a national spotlight on the evolving role of technology in regulating U.S. capital markets. The U.S. Securities and Exchange Commission should improve the antiquated plumbing of the U.S. securities trading infrastructure to speed up the clearing and settling process.
DeFi Is the Next Frontier for Fintech Regulation
April 28, 2021 | Kevin Werbach, The Wharton School of the University of Pennsylvania
Decentralized finance promises significant benefits, including democratized access to financial products, improved market efficiency, easier access to liquidity, enhanced financial privacy, and faster innovation. DeFi, however, also poses serious and multifaceted risks.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
SEC enforcement chief resigns over role in Indonesian torture case
Politico | Kellie Mejdrich and Zachary Warmbrodt | Apr 28, 2021
Alex Oh said in a resignation letter that she was leaving because of a "development" in a case on which she worked as a corporate lawyer.
SEC Chair Gary Gensler's pick to serve as the agency's enforcement director resigned unexpectedly on Wednesday amid mounting criticism from progressives over her work as a corporate defense lawyer.
Alex Oh, who was in private practice for two decades before Gensler announced her new role last week, resigned after a federal judge reprimanded her and others defending oil giant ExxonMobil in a class action lawsuit brought by Indonesian villagers. It was a stunning reversal for the SEC less than two weeks into Gensler's tenure at the helm of the agency.
Oh walked away from the job as Gensler faced growing concern from progressives on Capitol Hill and in the activism community about his decision to hire a long-time corporate lawyer for one of the government's most powerful posts for overseeing the finance industry.
The episode marked a surprising political backlash from progressives who had cheered Biden's nomination of Gensler, after the former Goldman Sachs partner emerged as a tough banking regulator when he chaired the Commodity Futures Trading Commission during the Obama administration.
See: SEC Commissioner Peirce Pitches Token Safe Harbor Proposal Version 2.0
Before it was announced last week that she would join the SEC, Oh worked for two decades at the law firm Paul, Weiss, Rifkind, Wharton & Garrison, where she represented Fortune 100 companies facing government investigations, with clients including Bank of America and ExxonMobil.
Oh was part of a legal team defending ExxonMobil in a lawsuit seeking to hold the company liable for murder and torture by the Indonesian military during civil unrest between 1999 and 2001. Villagers said ExxonMobil should face liability because it hired soldiers to guard natural gas facilities in the country.
Following complaints about the conduct of ExxonMobil's lawyers, U.S. District Judge Royce Lamberth on Monday admonished Oh and others defending the company. The lawyers for the villagers had told the court that ExxonMobil's defense team had characterized them as "agitated, disrespectful and unhinged."
The SEC did not respond to a request for comment about when they were aware of the issues involving Oh and ExxonMobil. Paul Weiss Chairman Brad Karp defended Oh in a statement: “Alex is a person of the utmost integrity and a consummate professional, with a strong ethical code.”
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
| | |
|---|---|---|
| | |
