Category Archives: Blockchain, Crypto, Digital Assets Regulations
Singapore Announces Project Guardian to the Value Created in Leveraging Asset Tokenization
Crowdfund Insider | | May 31, 2022
Source: Pixabay
The Monetary Authority of Singapore (MAS) has announced the launch of Project Guardian, an effort to reveal the value created in leveraging asset tokenization. Singapore has long been a top Asian Fintech hub and there are multiple Fintechs in the digital asset sector based in the country.
Heng Swee Keat, Deputy Prime Minister and Coordinating Minister for Economic Policies, announced the initiative today at the Asia Tech X Singapore Summit. The Deputy Prime Minister expressed Singapore’s openness to emerging disruption as well as the potential of Web3
See: Keynote by Mr Tan Keng Heng, Executive Director, MAS: Responding to Global Trends and Returning to Fundamentals
The first pilot will be led by DBS Bank Ltd., JP Morgan, and Marketnode. This initial phase involves the creation of a permissioned liquidity pool comprising tokenized bonds and deposits. The pilot aims to carry out secured borrowing and lending on a public blockchain-based network through the execution of smart contracts.
The four identified areas that MAS seeks to research include:
- Open, interoperable networks – Explore the use of public blockchains
- Trust anchors – Establish a trusted environment for the execution of DeFi protocols
- Asset tokenization – Examine the representation of securities in the form of digital bearer assets and the use of tokenised deposits issued by deposit-taking institutions on public blockchains
- Institutional grade DeFi protocols – Study the introduction of regulatory safeguards and controls into DeFi protocols to mitigate against market manipulation and operational risk
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
 |  |  |
|---|---|---|
 |  |  |
Alberta-based Binance Canada expects to return to Ontario by 2024
FP | | June 2, 2022
In his first media interview since being tapped to lead Binance Canada, a newly created entity, Truong shed light on the company’s plans here after an eventful year that saw it withdraw from the country’s most populous province amid regulatory issues.
I usually tell that as my story of the value of compliance. A lot of people think that compliance is a cost centre, whereas I think there’s real enterprise value.
Seeking IIROC Registration
Truong said Binance has been seeking full registration as a securities and derivatives dealer with the Investment Industry Regulatory Organization of Canada — skipping the temporary registration as a restricted dealer with a provincial regulator, a path other exchanges have taken.
See: Binance hires ex-regulators and incorporates in Alberta to charter compliance course in Canada
Becoming an IIROC dealer straight away, while more onerous, allows a platform to offer more features, including leverage or margin trading. Truong said if Binance ends up offering those features to Canadians, it will likely be a limited version of what its global customers can access. Binance’s eventual Canadian platform would also have a smaller selection of coins, Truong said. While a conservative estimate of the completion date for IIROC registration would be spring 2024, Truong said he hopes it will be much sooner.
Setting up in Alberta
Alberta this year made a big push to attract crypto companies. Alberta is one of five provinces in which businesses register as securities dealers directly with IIROC and not the local securities regulator. Binance’s choice of the province, though, has nothing to do with the regulation regime, Truong said.
See: Alberta, The untold history of innovation from Canada’s badlands – Part 1
Truong’s own history of senior positions in the province, including in enforcement at the Alberta Securities Commission, played a role in the decision to register there as well.
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
| | |
|---|---|---|
| | |
DOJ: NFT Marketplace ex-Employee Charged with Insider Trading
US Department of Justice | June 1, 2022
A former employee of OpenSea, the world’s largest NFT marketplace, was charged with insider trading in the first-ever such case involving digital assets, U.S. prosecutors in New York said Wednesday.
This case concerns insider trading in NFTs on OpenSea, the largest online marketplace for the purchase and sale of NFTs. In violation of the duties of trust and confidence he owed to his employer, OpenSea, CHASTAIN exploited his advanced knowledge of what NFTs would be featured on OpenSea’s homepage for his personal financial gain.
See: Crypto Pragmatist: Checkout these free crypto (trading) tools
Nathaniel Chastain, 31, a former product manager at OpenSea was arrested by the FBI on wire-fraud and money-laundering charges, according to Damian Williams, the U.S. Attorney for the Southern District of New York.
U.S. Attorney Damian Williams said: “NFTs might be new, but this type of criminal scheme is not. As alleged, Nathaniel Chastain betrayed OpenSea by using its confidential business information to make money for himself. Today’s charges demonstrate the commitment of this Office to stamping out insider trading – whether it occurs on the stock market or the blockchain.”
See: What do you mean NFTs can now by cloned by ‘Mimics’?
FBI Assistant Director-in-Charge Michael J. Driscoll said:
In this case, as alleged, Chastain launched an age-old scheme to commit insider trading by using his knowledge of confidential information to purchase dozens of NFTs in advance of them being featured on OpenSea’s homepage. With the emergence of any new investment tool, such as blockchain supported non-fungible tokens, there are those who will exploit vulnerabilities for their own gain. The FBI will continue to aggressively pursue actors who choose to manipulate the market in this way.
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
| | |
|---|---|---|
| | |
US Fed’s CBDC Report Comments: The Good, Bad, and Ugly
Rich Turrin | May 29, 2022
The Fed’s report on CBDC was published at the end of January and the comment period officially closed on May 20, 2022 meaning that we can now look at what representatives from banking, stablecoins, and crypto had to say about the report! For the record I am no fan of the Fed’s long-awaited report on a U.S. central bank digital currency (CBDC) and proclaimed that it read like a high school book report. I wrote about the report in great detail: here.
The Ugly: American Bankers Association
It’s no surprise that the American Bankers Association (ABA) was going to come after the digital dollar with knives drawn. Download ABA response: Here
“ABA’s analysis suggests that deposits accounting for 71% of bank funding would be at risk of moving to the Federal Reserve. This could increase the average cost of funding for banks by approximately 170 basis points. Such an increase in average funding costs would be unsustainable and would undermine the economics of the banking business model."
See: Federal documents warn of sweeping implications if ‘digital loonie’ adopted
Bank of Canada scenario analysis of a CBDC on bank deposits show that even under the most severe scenario where 40% of deposits migrate to CBDC bank funding is still healthy. Full report: Here
The ABA’s 71% figure which they pass off as “analysis” assumes all bank deposits in the United States will convert to CBDC! The reality is very different: So using the ABA’s figures the actual impact will be far less than placing “71% of funding at risk.” Using the ABA’s own figure of $16.9 trillion (rounded to 17) the impact will be:
- $446 billion = 2.7% of $17 trillion in bank deposits
- $1 trillion = 5.8% of $17 trillion in bank deposits
The Bad: Stablecoin Circle
Download Circle’s response to the Fed: Here
See: Alt-M Analysis: Where the U.S. Feds CBDC Proposal Goes Wrong
- Many of the potential benefits of a CBDC detailed in the discussion paper are already being met by existing blockchain-based payment system innovations.
- Bringing stablecoins like Circle’s USD Coin (“USDC”) under common-sense regulatory guidelines would ensure proper supervision over an asset that is already achieving many of the Federal Reserve’s objectives in a potential CBDC.
- If a digital asset behaves like a currency or payment system, it should be afforded the benefits of digital legal tender status or conformity with well-laid money transmission, e-money, financial markets infrastructure and prudential rules.
The Good!: Crypto, Stellar
Stellar’s response was the most upbeat of them all: Here, saying:
- Can a CBDC promote financial inclusion? We think so.
- A well-designed CBDC could have a positive effect on inclusion and the economy by expanding access to and usage of affordable financial services.
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
| | |
|---|---|---|
| | |
What do you mean NFTs can now by cloned by ‘Mimics’?
Cointelegraph Magazine | Kelsie Nabben | May 31, 2022
In the precariousness of Web3 open-source code, iterative development and “move fast” ethos, things break [and] things are also made. A new project allows anyone to create a copy of someone else’s NFT, aptly named “Mimics.”
Cloning your NFTs
Anonymous Founder, Mimics:
I think I just broke the NFT market
It turns out that art NFTs have a line of code in them called “tokenURI” or “URI” that acts like a pointer to the image being displayed. As the code is public, you can redirect your own NFT to make it look like anyone else’s. If you want your NFT to display a Cypherpunk, a Bored Ape, or how about a Pudgy Penguin?
See: After you die what happens to your digital assets and NFTs?
This means that your rare and expensive cartoon image NFT can essentially be cloned, not just by right-clicking copy-save as, and making another NFT of the same image but as a verifiable copy that has remnants of the real thing through code. Users rushing to clone a Bored Ape should beware, however:
Joni Pirovich, Crypto lawyer:
This could be a blatant breach of copyright or other IP. To determine rights that attach to the ownership of the token, and any image or metadata associated with the token, the buyer should try to identify whether any terms and conditions and any IP license applies to the ‘sale.
What does this mean?
At this stage, Mimics don’t have implications for NFTs beyond artworks (such as copying NFTs with distinct functionalities to attest to membership). Only the metadata such as name, description, media and other attributes that are provided by the tokenURI can be mimicked. Instead of being “law” to provably enforce the rules of the system, code here is the undermining factor in NFT security.
See: UK Court recognizes NFTs as ‘private property’
Mimics prove the thesis by well-known cryptographer “Moxie” that crypto lacks cryptography in some respects — referring to cryptographically secure components of the codebase that make aspects of unique ownership provable, private and/or permissioned. Ironically, someone has already used the mimic contract to copy Moxie’s NFTs. The purpose of a blockchain ledger is to prove provenance, yet it is still extremely difficult to verify that an NFT is from a legitimate artist.
Current NFT standards do the opposite of protecting your art at the code level. Maybe this article and the associated code will provide some impetus” for a future where ERC standards are improved and iterated on and become even more widely adopted. The goal is to build a better standard for their information infrastructures.
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
| | |
|---|---|---|
| | |
Senator Cynthia Lummis’ landmark crypto bill: Full Draft
The Block | Kollen Post | May 27, 2022
US Senator Cynthia Lummis (R-WY) has spent months teasing details of a comprehensive bill that addresses crypto regulation. The Block has obtained a draft version dated March 1 that offers key details about the scope and impact of the bill.
The 70-page draft focuses on numerous aspects of US crypto regulation. These areas include which activities would fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC) and other federal regulators.
Extensive sections on stablecoin regulation and digital asset tax policy address many of the key blind spots in crypto regulation today.
See: SEC Regulation: Constructing a Crypto Regulatory Framework – New Tech, Old Rules
The bill appears to place significant aspects of the US crypto industry under the auspices of the CFTC.
“Except as otherwise provided by this section, the [CFTC] shall have exclusive jurisdiction over any agreement, contract, or transaction involving a contract of sale of a digital asset that is offered, solicited, traded, executed, or otherwise dealt in interstate commerce.”
Perhaps crucially, the draft bill adds the term “ancillary asset” to the Securities Exchange Act, defining it as:
“An intangible asset that is offered, sold, or otherwise provided to a person in connection with the purchase and sale of a security through an arrangement or scheme that constitutes an investment contract.”
Read: Yellen Renews Call for Stablecoin Regulation After Terra’s algorithmic stablecoin tumbles
Further, an ancillary asset “may include a digital asset, as defined in section 9801 of title 31, United States Code, that is used to facilitate the governance of a distributed ledger technology network or decentralized autonomous organization.
Continue to the full article --> here
View the crypto bill full draft --> 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
| | |
|---|---|---|
| | |
‘Fearless Girl’ creator sells NFTs to cover $3M legal fees
New York Post | Jessica Cherner | May 23, 2022
The famous “Fearless Girl” statue has been touted as a unique symbol of inspiration for women’s equality. But, it turns out, she’s not exactly one of a kind.
The famous Kristen Visbal, the artist behind the 50.4-inch-tall bronze sculpture — a young girl assuming Superman’s iconic stance, originally as she faced off against Wall Street’s charging bull — is facing a breach of contract lawsuit from State Street Global Advisors, the asset-management firm that commissioned the piece in 2017, for copying her own work. So she’s decided to double down and sell even more “Fearless Girl” replicas, as well as NFTs, to cover her reported $3 million court costs.
The NFTs, which feature “Fearless Girl” in different positions and sometimes with slightly varying hairstyles, are being sold in five stages on NFT marketplace OpenSea. The first, dubbed the “Interstellar Collection” and now available in a limited edition of 125, goes for 3.57 ETH ($7,235). It includes a short film of a comet racing through space, erupting on a city sidewalk and transforming into the “Fearless Girl,” as well as a 22-inch replica of the statue.
See: UK Court recognizes NFTs as ‘private property’
The artist was sued by State Street in 2019, after she created 25 full-size bronze replicas of “Fearless Girl” and sold eight of them for $250,000 each. Visbal also sold some 100 miniature versions for around $6,000 a pop.
A spokesman for State Street Global Advisors said, “In short, the allegations of breach include Ms. Visbal’s sale of a ‘Fearless Girl’ replica to a class action law firm and two financial companies in Australia, all of which is a breach of a clause in the contract that requires both parties’ approval before sale. The sale also violates SSGA’s exclusive intellectual property (copyright and trademark) rights.” In its court filing, the company claims that the artist has caused “substantial and irreparable harm” to both “Fearless Girl” and to State Street by creating and selling copies.
But a defiant Visbal, who lives in Rehoboth, Del., told The Post: “I didn’t make her for any company. I made her to celebrate women and for the public at large.”
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
| | |
|---|---|---|
| | |
