As Bitcoin price briefly goes above $20,000 mark industry observers say, ‘Don’t get happy too early’

As Bitcoin price briefly goes above $20,000 mark industry observers say, ‘Don’t get happy too early’

As per reports, a brief rise in crypto price was witnessed in the last 24 hours and sentiment has temporarily improved.

 

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 “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”.

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Anndy Lian: “DeFi will be too profitable to simply kill off with regulation”

Anndy Lian: “DeFi will be too profitable to simply kill off with regulation”

Decentralized finance (DeFi) poses both opportunities and challenges for governments and regulators coming out of the pandemic. Take the case of the USA where tricky new regulations around crypto have been tacked on the key infrastructure bill, lead by Senator Elizabeth Warren, including her urging Treasury Secretary Janet Yellen to identify and remedy risks posed by cryptocurrencies.

At the same time, you have countries like Kazakhstan, Canada, U.S.A. is benefiting from the migration of crypto miners following China’s crackdown, now allowing bitcoin to be used by their banks. The task for the DeFi sector is to carry on educating Governments and regulators on the benefits of DeFi especially in parts of the world where banking is hard to access, and in promoting crypto entrepreneurship for the future. Nevertheless, governments are trying to know more to get themselves fitted with the new DeFi trends.

DeFi is here to stay, that’s worth saying first and foremost. What shape it takes, and how much it will be a benefit to everyone rather than a select few, depends on all stakeholders working together. DeFi startups that take a proactive attitude, following best practices, and in dialogue with their regulators, will be in the best position to advance not just their business but also the interests of their customers. Obviously, recent examples such as Binance reigning in the amount of leverage they are offering for futures contracts show that it’s prudent to take account of the regulatory landscape.

As a pro-government crypto advisor myself, I emphasise the value of working with regulators and the public to explain the risks involved in different products are vital.

 

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Regulators are Coming for the DeFi Goose and Its Golden Eggs

  • There are two big sources of ambiguity: one is conceptual and linguistic, and the other relates to international consistency.
  • DeFi’s survival is “guaranteed” by the fact that it’s much too lucrative for governments to completely hobble it.

Regulation is becoming a very hot topic in the crypto industry as governments try to understand how they should respond to this still relatively new phenomenon. With United States-based crypto companies now fighting the infrastructure bill battle in the House after a defeat in the Senate, the industry could potentially look very different in a few years, after recently proposed rule changes have been implemented.

Various sub-sectors within crypto will likely be affected in different ways by incoming regulation, but one area that may be affected more than most is decentralized finance (DeFi). This is largely because, due to its arguably decentralized nature, it would potentially be very hard to carry out know-your-customer (KYC) and anti-money laundering (AML) checks on users if it becomes truly decentralized.

According to industry figures who spoke to Cryptonews.com, DeFi is currently dogged by vagueness, ambiguity and inconsistency in the application of existing rules, as well as proposed new laws. However, while most observers agree that DeFi will likely suffer from ongoing regulatory uncertainty in the short-to-medium term, they also say that regulators will ultimately choose to adopt guidelines that nurture – rather than nuke – the fledgling sector.

Ambiguity…and more ambiguity

The aforementioned infrastructure bill provides a good example of the kind of minefield that current and incoming regulations present to the DeFi world.

The original draft of the bill included decentralized exchanges and peer-to-peer marketplaces in its definition of “broker,” thereby encompassing much of DeFi with its proposal to subject all “brokers” to the requirement to report large transactions to the Internal Revenue Service (IRS).

Coin Center executive director Jerry Brito celebrated an amendment that sought to remove both decentralized exchanges and peer-to-peer marketplaces from the scope of the bill. However, a subsequent proposed amendment proposed altering the language yet again, so that only proof-of-work mining appeared to be excluded by the new definition of “broker.”

This isolated example illustrates just how tricky it will be for DeFi players to navigate future regulations.

But there are plenty more examples of this kind of lack of clarity and certainty. It’s a common feature of pretty much all laws and regulations that will affect the DeFi sector, from the European Commission’s recent anti-money laundering proposals to the Financial Action Task Force (FATF)’s soon-to-be-revised guidelines.

There are two big sources of ambiguity: One is conceptual and linguistic, and the other relates to international consistency.

Anndy Lian, the Chairman of the crypto exchange BigONE and the Chief Digital Advisor to the Mongolian Productivity Organization, said,

“At the FATF recent Plenary meeting in June this year, a key takeaway was the concern around the apparent lack of consensus across different jurisdictions and between industry players regarding the best way to comply with the Travel Rule. And while the private sector has led the way in developing solutions to enable implementation of the Travel Rule, ‘a majority of jurisdictions have not yet implemented the FATF’s requirements.’”

For Lian, the real issue and challenge for the DeFi sector is the uneven compliance with the Travel Rule across jurisdictions, which “poses real headaches for both DeFi businesses and their customers.”

But in terms of incoming and future regulation, there’s also a big problem related to semantics and conceptual clarity. According to the MakerDAO (MKR) community member PaperImperium, technical terms aren’t used consistently by regulators and the crypto industry, making it unclear as to what exactly policymakers want.

PaperImperium told Cryptonews.com:

“A great example of this is the debate around stablecoins. As the Gorton-Zhang paper from a few weeks ago makes clear, later confirmed by private discussions, even a term as simple as ‘stablecoin’ has a different meaning in policy circles than in the cryptoverse.”

Most people working within crypto would use the term “stablecoin” to signify any token that is purposefully trying to remain in a price band around a given benchmark. However, PaperImperium said, “policymakers and regulators are generally talking about redeemable-upon-demand-for-fiat tokens to the exclusion of algorithmically managed tokens.”

This creates a big headache for stablecoins such as DAI, which is generated by MakerDAO. In fact, prior to the recent infrastructure bill, the Democratic Representative Don Beyer has put forward a draft bill that would effectively outlaw all stablecoins that don’t meet certain regulatory criteria and aren’t registered by their issuer. The latter condition is something that DAI, for instance, could never meet.

Still, most people working within DeFi claim that regulation is not only inevitable, but good for the sector in the long term.

Layerzero, a member of MakerDAO’s Sustainable Ecosystem Scaling Core Unit Team, explained:

“I believe regulation is necessary and a sign that the industry matures. Not having legal certainty is a risk that hinders future growth.”

And Layerzero added,

“I welcome good regulation that provides legal certainty to market participants and that doesn’t hinder innovation, but of course, this is hard to achieve. The problem is that the current regulatory framework is outdated and was not designed for decentralized ledger technology.”

DeFi’s golden eggs

New proposals are coming thick and fast at the moment, and it’s uncertain what regulatory hurdles the DeFi ecosystem will have to clear in the months and years to come. It’s also uncertain whether all soon-to-be-imposed hurdles will actually be clearable, and whether further growth in DeFi sector might become somewhat restricted as a result.

Still, DeFi industry players estimate that the sector will endure for a long time to come, even if its mature form may be somewhat different from how it is now.

For ​​Skirmantas Januškas, the CEO and Co-founder of DappRadar, DeFi’s survival will be guaranteed by the fact that it’s much too lucrative for regulators and governments to completely obliterate.

He told Cryptonews.com:

“The sheer amount of wealth generated and locked into our industry – especially now, at a time when governments inject trillions into the economy by way of rescue packages to the detriment of, say, infrastructure and other long-term needs that must also be met – makes us the proverbial goose that laid the golden eggs. And the act of laying golden eggs is a potentially taxable event.”

Given that DeFi went from USD 1 billion in total value locked in to around USD 90 billion in just under a year (according to DeFi Pulse), most governments will want to extract a portion of the value it has generated for tax and public spending. In other words, they will seek to avoid imposing too-stringent regulation.

Januškas added:

“Regulators worldwide will likely seek to capitalize on our industry, just as we crypto natives have, and this places us in a very strong position in a dialogue that is only just starting. And while it may take years of regulations being proposed, effected, repealed, before we come to a solution that safeguards consumers’ and governments’ interests and still harbors innovation, the regulations that do come into force will likely work to DeFi’s advantage in the long run.”

Anndy Lian agreed that DeFi will be too profitable to simply kill off with regulation, regardless of how that regulation will end up looking in a few years. In his view (as someone who actually does advise governments), DeFi poses both opportunities and challenges for governments and regulators emerging from the coronavirus pandemic.

Lian said,

“The task for the DeFi sector is to carry on educating governments and regulators on the benefits of DeFi especially in parts of the world where banking is hard to access, and in promoting crypto entrepreneurship for the future. Nevertheless, governments are trying to know more to get themselves fitted with the new DeFi trends.”

The question is: how long will DeFi need to wait until authorities produce the clear regulations the sector needs to grow sustainably?

“In some areas, like tax or AML, it’s a matter of months. In some others, it’s unrealistic to expect full regulatory clarity even within years,” said Jacek Czarnecki, the Global Legal Counsel at MakerDAO.

Given the likely lengths of time involved, Czarnecki suggested that new DeFi projects should definitely engage in dialogue with regulators and policymakers.

Czarnecki told Cryptonews.com,

“We have pioneered such activities at Maker, and have been meeting with both multiple national regulators (including central banks) as well as international organizations (e.g. the OECD, FATF, the Financial Stability Board) since 2018. That has helped us gain trust and awareness among the regulatory community.”

Source: https://cryptonews.com/exclusives/regulators-are-coming-for-the-defi-goose-and-its-golden-eggs-11458.htm

 

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 “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”.

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Anndy Lian Commented on “Banking Giants Laundering Billions Might Turn Against Bitcoin Too” at CryptoNews

Anndy Lian Commented on “Banking Giants Laundering Billions Might Turn Against Bitcoin Too” at CryptoNews

Banking Giants Laundering Billions Might Turn Against Bitcoin Too

Documents uncovered by an investigation conducted by 110 news organizations appear to show global banking giants moving trillions of dollars for clients allegedly involved in fraud, embezzlement, money laundering, and more, as the banks defend themselves against the allegations. Meanwhile, the crypto community appears to be divided as to whether it spells good news for crypto in general, and bitcoin (BTC) in particular. (Updated at 17:45 UTC: updates in bold.)

The evidence was uncovered by the International Consortium of Investigative Journalists (ICIJ) in a new report. The consortium said that it, together with BuzzFeed News and 108 other media organization, conducted a 16-month, cross-border investigation, and revealed the leaked documents, now known as the FinCenFiles.

The consortium wrote that “secret United States government documents reveal” that global banks “have defied money laundering crackdowns by moving staggering sums of illicit cash for shadowy characters and criminal networks.” The five named banks are JPMorganHSBCStandard Chartered BankDeutsche Bank and Bank of New York Mellon.

Furthermore, the leaked documents allegedly “show banks blindly moving cash through their accounts for people they can’t identify, failing to report transactions with all the hallmarks of money laundering until years after the fact, even doing business with clients enmeshed in financial frauds and public corruption scandals.”

These files, the authors said, include more than 2,100 suspicious activity reports (SARs) filed by banks and other financial firms with the United States Department of Treasury’s Financial Crimes Enforcement Network, also known as FinCEN.

ICIJ said:

“[The] documents identify more than [USD] 2 trillion in transactions between 1999 and 2017 that were flagged by financial institutions’ internal compliance officers as possible money laundering or other criminal activity — including [USD] 514 billion at JPMorgan and [USD] 1.3 trillion at Deutsche Bank. […] The FinCEN Files represent less than 0.02% of the more than 12 million suspicious activity reports that financial institutions filed with FinCEN between 2011 and 2017.”

ICIJ added that United States agencies responsible for enforcing money-laundering laws rarely prosecute megabanks that break the law, “and the actions authorities do take barely ripple the flood of plundered money that washes through the international financial system.”

Per the authors, the data shows that Deutsche Bank is leading by some distance, with JPMorgan in second place.

“Mobsters pushed billions through Deutsche Bank in one of the biggest dirty money scams ever,” tweeted BuzzFeed News, adding that “small businesses were crushed” in the process.

The news outlet further claimed that the bank’s executives “had direct knowledge for years of serious failings that left the bank vulnerable to money launderers.” After a USD 10 billion mirror trading scandal was exposed, “Deutsche Bank blamed it on a few middle-level staffers in its Moscow office, paid a fine, and got back to business,” reported BuzzFeed News.

Crypto as a systemic threat

News of the traditional banking system’s alleged wrongdoings came as little surprise to the crypto community.

And the irony of the situation was not lost on many commentators: While regulators ramp up the pressure on the crypto industry, particularly in the field of anti-money laundering (AML) measures, the banking sector appears to be running roughshod over the very same AML rules.

Commenting on a report on HSBC’s drop to a 25-year low today in the stock market, the CEO of crypto exchange Binance, Changpeng Zhao, tweeted that it “might be a good time for their treasury to buy bitcoin?”

However, Anndy Lian, investor and blockchain adviser, didn’t agree that this was a good idea, writing: “On the contrary, I hope HSBC to stay away from bitcoin. Early stages mess the soup.”

Others, like the Chief Legal Officer of crypto exchange Kraken, Marco Santori, also claimed that this will not help Bitcoin’s cause at all.

“If you think this is good for bitcoin, man you are going to be so disappointed,” he said. “I wonder if this will compel FinCEN to publish more information about the efficacy of its enforcement activity. It would serve to quell many complaints to the tune of “Why do we send all this info to FinCEN – what good has it done?”

Others, like GetLevvel CEO Chris Hart, also chimed in saying that there is a risk that “the answer to a perception of poor enforcement is more enforcement, and ‘more’ isn’t limited to fiat-based transactions.”

Bitcoin educator, author, and entrepreneur Andreas Antonopoulos also stressed that this leak will be used against cryptocurrencies. According to him, the correct analysis of this news is that AML/CTF (counter terrorism financing) and KYC (know your customer) don’t work and the report will be used to increase the use of controls and surveillance.

 

“That makes crypto-currency a systemic threat, not to the economic nature of national money, but to the control and surveillance system of geopolitical money. Math money doesn’t play politics, which makes it automatically “rogue” money,” he said, estimating that “the war on cash and the war on “illicit” money becomes an all out war on the only money that still works.”

According to him, “the solution is to stop trying to use money (a tool) to fight crime (human nature).”

“But if you think the hypocrites will back down and adopt sensible systems and laws that enable human trade and economic inclusion, you are wrong,” Antonopoulos said.

 

Banks respond

“BNY Mellon takes its role in protecting the integrity of the global financial system seriously, including filing Suspicious Activity Reports (SARs),” told Cryptonews.com Associate Director for Corporate Communications Sorrel Beynon, adding that they “fully comply with all applicable laws and regulations, and assist authorities in the important work they do.” The bank cannot by law, they claim, “comment on any alleged SAR we may have filed or that may have been illegally disclosed by third parties to the media.”

Deutsche Bank’s Head of UK Media Relations, Charlie Olivier, told Cryptonews.com that the fight against financial crime, money laundering and capital flight has been a priority for both investigating authorities and financial institutions, the latter of which, Deutsche Bank included, have invested “billions of dollars” to more support authorities in this effort. “Naturally, this leads to increased detection levels.”

Olivier stated that “the ICIJ has reported on a number of historic issues,” claiming that “those relating to Deutsche Bank are well known to our regulators.”

“The issues have already been investigated and led to regulatory resolutions in which the bank’s cooperation and remediation was publicly recognized. Where necessary and appropriate, consequence management was applied. To the extent that information referenced by the ICIJ is derived from SARs, it should be noted that this is information that is pro-actively identified and submitted by banks to governments pursuant to the law. SARs are alerts of potential issues, not proven facts,” he said.

Per the statement provided by Standard Chartered Group Media Relations Director, Josephine Wong, to Cryptonews.com, SARs are filed by the banks “when circumstances warrant and that means our screening and monitoring systems are working as intended.” A SAR filing does not mean there has been criminal activity, but that the bank has identified “something suspicious or irregular in a transaction that meets the filing requirements in the local market,” which is then reported to law enforcement “so they can investigate and, if they see fit, take further action.”

“The reality is that there will always be attempts to launder money and evade sanctions; the responsibility of banks is to build effective screening and monitoring programs to protect the global financial system,” said Wong, adding that in 2019 Standard Chartered “monitored more than 1.2 billion transactions for potential suspicious activity and screened more than 157 million for sanctions compliance.”

JPMorgan declined to comment. We contacted HSBC as well, and will update should they reply.

 

Source: https://cryptonews.com/news/leak-alleges-banking-giants-moving-staggering-sums-of-illici-7768.htm

 

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 “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”.

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