Tag Archives: regulatory

Regulatory Caution Among Asian Nations Amid Reports of Illicit Financing

Regulatory Caution Among Asian Nations Amid Reports of Illicit Financing

With a plethora of reports of crypto-related terrorist financing having been published in recent weeks, it’s understood that Asian nations may be looking to exercise caution when it comes to the current ongoing process of establishing regulatory guidelines for crypto.

That’s according to a report published by the South China Morning Post (SCMP) on Thursday. The use of cryptocurrency by Hamas to fund its attack on Israel is being seen as the catalyst that may drive authorities in various Asian nations to take a more cautious approach to regulating digital currencies, according to analysts cited by the publication.

Raj Kapoor, the founder of India Blockchain Alliance (IBA), commented on these recent developments, stating:

”It is a kick on the backside for most governments. All regulatory bodies will take a closer look at crypto regulation. Governments will need to start implementing new rules and regulations.”

At the recent G20 summit held in New Delhi, a joint declaration called for the regulation, supervision, and oversight of crypto assets, among other measures. The declaration emphasized the importance of supporting “a coordinated and comprehensive policy and regulatory framework.”

Kapoor stressed the importance of revisiting the declaration and developing solutions to implement its objectives.

Renewed scrutiny

Events in Palestine in recent weeks have led to renewed scrutiny when it comes to monitoring illicit financing activity via cryptocurrency. Only days following the recent Hamas attack, Israeli authorities moved to freeze specified crypto accounts.
That scrutiny has continued in recent days, with more accounts having been frozen on crypto platforms such as Binance, while more still have been identified as suspicious, with requests for further information having been submitted in respect of over 200 additional accounts.
On Wednesday it emerged that the United States Treasury’s Office of Foreign Assets Control (OFAC) had sanctioned a Gaza-based crypto platform.

Potential over-reaction

While crypto-related terrorist financing has been widely publicized, blockchain analytics firm Chainalysis warned on Wednesday that crypto’s role in this illicit activity has likely been overstated. In its blog post on the subject, the firm stated:
“Although terrorism financing is a very small portion of the already very small portion of cryptocurrency transaction volume that is illicit, some terrorist organizations raise, store, and transfer funds using cryptocurrency.”
Additionally, Chainalysis stated that it had seen “overstated metrics and flawed analyses of these terrorist groups’ use of cryptocurrency.” Peter Van Valkenburgh, Director of Research at non-profit crypto advocacy group Coin Center, also believes that reporting on the matter is not balanced. Taking to X, he stated:

“Sensational early reporting on the scale of Hamas crypto fundraising significantly misstated the amounts involved.”

Coin Center’s Director of Communications, Neeraj Agrawal, highlighted an article which claimed that crypto “fueled Hamas’ terror attack on Israel” in its title, only to reveal within the body of the article that “cryptocurrency is still far from the largest funding source for terrorism.”

Anndy Lian, a Singapore-based author and inter-governmental blockchain adviser, noted that while some countries may consider banning cryptocurrencies as a solution, this could merely drive illicit financing underground and make it more challenging to trace and halt. Lian argued that cryptocurrencies are traceable and trackable, unlike traditional fiat currencies like US dollars.

Source: https://coinmarketcap.com/community/articles/6531dbf64a59da6222691216/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Anndy Lian: The Rise of Crypto ETFs and Regulatory Considerations

Anndy Lian: The Rise of Crypto ETFs and Regulatory Considerations

Crypto assets have been gaining popularity and legitimacy in recent years, attracting the attention of investors, regulators, and policymakers worldwide.

One of the most significant developments in the crypto space is the emergence of crypto exchange-traded funds (ETFs), which are investment vehicles that track the performance of a basket of crypto assets or related products.

Crypto ETFs offer several advantages for investors who want to gain exposure to the crypto market without dealing with the technical and operational challenges of buying, storing, and securing crypto assets directly. They also provide more liquidity, transparency, diversification, and tax efficiency than other forms of crypto investment.

However, several regulatory challenges and uncertainties may limit their growth potential and market acceptance. I will explore the rise of crypto ETFs, their mechanics, regulatory hurdles, and their potential to reshape the investment landscape.

What is a Crypto ETF and How Does It Work?

An ETF is a type of fund that trades on a stock exchange like a regular stock. It typically holds a portfolio of assets that track an underlying index or benchmark, such as a stock index, a commodity, a currency, or a sector. Investors can buy and sell shares of an ETF through a broker or an online platform, just like any other stock.

A crypto ETF is a type of ETF that tracks the performance of a basket of crypto assets or related products. There are different types, depending on how they obtain exposure to the crypto market. Some examples are:

  • Physical-backed crypto ETFs: They hold actual crypto assets in custody and issue shares that represent a proportional ownership of the underlying assets. For example, a Bitcoin ETF would hold Bitcoin (BTC) in a secure vault and issue shares that reflect the value of Bitcoin.
  • Futures-based crypto ETFs: They use futures contracts or other derivatives to gain exposure to the price movements of crypto assets without holding them directly. For example, a Bitcoin futures ETF would buy and sell Bitcoin futures contracts on a regulated exchange and issue shares that reflect the value of the contracts.
  • Synthetic crypto ETFs: They use swaps or other complex financial instruments to replicate the performance of crypto assets without holding them directly or indirectly. For example, a Bitcoin synthetic ETF would enter into an agreement with a counterparty to exchange the returns of Bitcoin for another asset or index.
  • Crypto-related ETFs: They invest in companies or sectors that are involved in or benefit from the development and adoption of crypto assets and technologies. For example, a blockchain ETF would invest in companies that provide blockchain solutions or services.

Why are Crypto ETFs Popular?

They are popular because they offer several benefits for investors who want to access the crypto market in a convenient and cost-effective way. Some of these benefits are:

  • Liquidity: Trade on regulated stock exchanges with high volumes and low spreads, which means investors can buy and sell them easily and quickly at any time during market hours. This contrasts with buying and selling crypto assets directly on unregulated or illiquid platforms, which may involve delays, fees, or risks.
  • Transparency: Disclose their holdings, fees, and performance on a regular basis, which means investors can monitor their investments and make informed decisions. This contrasts with buying and selling crypto assets directly on platforms that may lack adequate disclosure or oversight.
  • Diversification: Allow investors to diversify their portfolios across different types of crypto assets or related products, which may reduce their overall risk and volatility. This contrasts with buying and selling individual crypto assets directly, which may expose investors to high concentration risk.
  • Tax efficiency: May offer tax advantages for investors who hold them in certain jurisdictions or accounts. For example, in some countries, investors may defer capital gains taxes on crypto ETFs until they sell them, whereas they may have to pay taxes on every transaction involving direct ownership of crypto assets.
  • Accessibility: Allow investors to access the crypto market without having to deal with the technical and operational challenges of buying, storing, and securing crypto assets directly. For example, investors do not need to set up digital wallets, manage private keys, or worry about hacks or thefts.

What are the Regulatory Challenges for Crypto ETFs?

Despite their popularity and benefits, crypto ETFs also face several regulatory challenges and uncertainties that may limit their growth potential and market acceptance. Some of these challenges are:

  • Lack of global harmonization: Crypto assets and related products are subject to different and evolving regulatory frameworks across different jurisdictions, which may create inconsistencies, gaps, or conflicts for crypto ETFs. For example, some countries may allow or ban certain types of crypto ETFs, while others may have different definitions, classifications, or requirements for them.
  • Lack of clear guidance: Such products are often novel and complex, which may pose difficulties for regulators to understand, monitor, and supervise them. For example, regulators may have questions or concerns about the valuation, custody, liquidity, risk management, or governance of crypto ETFs.
  • Lack of investor protection: They are often volatile, speculative, and risky, which may expose investors to potential losses or frauds. For example, investors may face market manipulation, cyberattacks, operational failures, or counterparty defaults involving crypto ETFs or their underlying assets or products.
  • Lack of market infrastructure: It often relies on emerging or untested technologies, platforms, or services, which may lack adequate standards, safeguards, or interoperability for crypto ETFs. For example, crypto ETFs may face challenges or risks in accessing, verifying, or transferring crypto assets or products across different systems or networks.

What is the Potential Impact of Crypto ETFs?

They have the potential to reshape the investment landscape by creating new opportunities and challenges for investors, regulators, and policymakers. Some of the possible impacts are:

  • Increased adoption and innovation: May increase the adoption and innovation of crypto assets and technologies by making them more accessible and attractive to a wider range of investors, especially institutional and retail investors who may otherwise be reluctant or unable to enter the crypto market directly.
  • Increased competition and integration: May increase the competition and integration between the traditional and crypto financial systems by creating new products and services that bridge the gap between them. For example, crypto ETFs may enable investors to trade crypto assets on stock exchanges or use them as collateral for loans or derivatives.
  • Increased regulation and supervision: May increase the regulation and supervision of crypto assets and related products by bringing them under the purview of existing or new regulatory frameworks and authorities. For example, crypto ETFs may require registration, authorization, disclosure, reporting, auditing, or compliance with certain rules or standards.
  • Increased education and awareness: May increase the education and awareness of crypto assets and technologies by providing more information and resources for investors to learn about them. For example, crypto ETFs may offer educational materials, webinars, podcasts, or newsletters to explain their features, benefits, risks, or performance.

The Bottom Line

Crypto ETFs are a growing phenomenon in the crypto space that offer several advantages for investors who want to gain exposure to the crypto market in a convenient and cost-effective way.

However, it faces several regulatory challenges and uncertainties that may limit their growth potential and market acceptance. They have the potential to reshape the investment landscape by creating new opportunities and challenges for investors, regulators, and policymakers.

Many of my friends are looking forward to the regulated crypto ETFs together with the Bitcoin halving next year. They believe that the real bull run will start from there. Do you feel the same too?

 

Source: https://www.techopedia.com/anndy-lian-the-rise-of-crypto-etfs-and-regulatory-considerations

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Addressing the US debt crisis: The role of crypto and regulatory clarity

Addressing the US debt crisis: The role of crypto and regulatory clarity

The US faces a debt crisis that threatens to undermine its economic stability and global leadership. The national debt has surpassed US$30 trillion, and interest payments are projected to become the largest expenditure by 2051, surpassing even Social Security.

The debt-to-GDP ratio is expected to rise to 136 per cent by 2028, a level that many economists consider unsustainable. The causes of this fiscal imbalance are manifold, but they include wars, recessions, tax cuts, pandemic relief, and infrastructure spending. The consequences could be dire, as the US could face higher borrowing costs, lower growth, reduced public investment, and diminished credibility.

In this context, the crypto industry offers a potential alternative to the traditional financial system, one that is more decentralised, transparent, and innovative. Crypto assets, such as Bitcoin and Ethereum, are powered by blockchain technology, which allows for peer-to-peer transactions without intermediaries.

Crypto platforms, such as Coinbase and Binance, provide users with access to a variety of digital assets and services, such as trading, lending, staking, and gaming. Crypto enthusiasts argue that crypto can empower individuals, foster innovation, and create new economic opportunities.

However, the crypto industry also faces significant challenges, especially in the US. The regulatory environment for crypto is unclear, inconsistent, and hostile. The Securities and Exchange Commission (SEC) has sued several crypto platforms, such as Coinbase and Binance, for allegedly operating illegally as brokers, exchanges, and clearing agencies without proper registration.

The SEC has also rejected numerous proposals for crypto exchange-traded funds (ETFs), which would provide investors with easier access to crypto assets. The SEC claims that it is protecting investors from fraud and manipulation, but many in the crypto industry accuse it of stifling innovation and creating uncertainty.

Coinbase, the largest crypto exchange in the US with over 100 million customers and billions of dollars in daily trading volume, has launched a campaign to bring regulatory clarity to the crypto industry in the US.

The campaign, dubbed “Stand With Crypto,” urges the 52 million Americans who own crypto to contact their government representatives and push for an overhaul of the financial system and a clear regulatory framework for digital assets.

Coinbase argues that the current “enforcement only” approach by the SEC is putting jobs, innovation, and global leadership at risk. Coinbase calls for legislation that allows fair rules for the road to be developed transparently and applied equally.

They are also expanding their presence in other jurisdictions that have more favourable regulations for crypto. Coinbase announced that it obtained registration with the Bank of Spain to act as a crypto exchange and custodian wallet provider.

This follows similar registrations in Germany and Ireland earlier this year. Coinbase said that it is “encouraged” by regulatory developments in the European Union and UK and will continue to invest in Europe and the UK. Coinbase hopes to offer its customers more products and services in these markets, such as crypto ETFs.

Coinbase is not alone in seeking regulatory clarity and diversification. Many other crypto platforms are looking outside the US for growth opportunities. For instance, Binance has established regional subsidiaries in Singapore, Australia, Jersey, Uganda, and Brazil. Kraken has applied for a banking license in Wyoming. Gemini has partnered with a UK bank to offer crypto savings accounts.

The US government should take note of these developments and reconsider its approach to crypto regulation. The US has the potential to be a leader in the crypto space, but it risks losing its competitive edge if it continues to stifle innovation and create uncertainty.

The US should embrace crypto as an opportunity rather than a threat and work with the industry to create a balanced and clear regulatory framework that protects investors while fostering innovation. The US should also address its debt crisis before it becomes too late and hard. Crypto could be part of the solution rather than part of the problem.

How crypto can help solve the debt crisis

Crypto can help solve the debt crisis in several ways. First, crypto can provide an alternative store of value and hedge against inflation. As the US government prints more money to finance its spending, the value of the dollar could decline, and inflation could rise.

This would erode the purchasing power of savers and investors and increase the cost of living. Crypto assets, such as Bitcoin, have a limited supply and are not controlled by any central authority. They can preserve their value and offer protection against currency devaluation and inflation.

Second, crypto can enable more efficient and inclusive financial services. The traditional financial system is plagued by high fees, slow transactions, intermediaries, and barriers to entry. Many people are unbanked or underbanked, meaning they lack access to basic financial services, such as savings, credit, and insurance.

Crypto platforms, such as Coinbase, Bybit and Binance, can offer low-cost, fast, and secure transactions without intermediaries. They can also provide access to a variety of digital assets and services, such as lending, staking, gaming, and NFTs. Crypto can empower individuals, especially those in developing countries or marginalised communities, to participate in the global economy and improve their financial well-being.

Third, crypto can foster innovation and growth. The crypto industry is one of the most dynamic and creative sectors in the world. It attracts talent, capital, and ideas from diverse backgrounds and disciplines.

It constantly experiments with new technologies, protocols, and applications. It creates new markets, products, and business models. Crypto can drive innovation and growth in other industries as well, such as energy, healthcare, education, and entertainment. Crypto can also generate tax revenues and jobs for the US government and economy.

Final thoughts

The US is facing a debt crisis that could have serious consequences for its economic stability and global leadership. The crypto industry offers a potential alternative to the traditional financial system, one that is more decentralised, transparent, and innovative.

However, the crypto industry also faces significant challenges in the US due to unclear, inconsistent, and hostile regulation. Coinbase has launched a campaign to bring regulatory clarity to the crypto industry in the US and has expanded its presence in other jurisdictions that have more favourable regulations for crypto.

The US government should take note of these developments and reconsider its approach to crypto regulation. The US should embrace crypto as an opportunity rather than a threat and work with the industry to create a balanced and clear regulatory framework that protects investors while fostering innovation.

The US should also address its debt crisis before it becomes too late and hard. Crypto could be part of the solution rather than part of the problem.

 

 

Source: https://e27.co/addressing-the-us-debt-crisis-the-role-of-crypto-and-regulatory-clarity-20231006/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j