March 3rd, 2023

Crypto community reacts as Bitcoin bear market fears continue

The crypto market saw a sharp decline at 12 am UTC on March 3. The price of Bitcoin (BTC) fell by over 5% from around $23418 to $22163, according to CryptoSlate data. Most of the drop occurred within an hour as the BTC price fell by over $1,000 in seconds.

The price of the second-largest cryptocurrency followed suit with a 5.4% decline from around $1,643 to $1,554 around the same time.

Many other cryptocurrencies also suffered losses as Dogecoin (DOGE) slipped 5.8% over the past 24 hours, while Cardano (ADA) and XRP (XRP) are down 3.78% and 2.73%, respectively.

The fall in crypto prices triggered liquidations that crossed $251 million over the past 24 hours, most of which were triggered after the sharp dips in prices, according to Coinglass data.

Binance saw the most liquidations, around $90 million over the past 24 hours, the data indicates. OKX followed at a close second with $75.83 million of liquidations over the past day.

Over $222 million worth of long positions were liquidated, while short positions made up a little over 8% of the total liquidations over the past 24 hours, Coinglass data shows.

Total Ethereum (ETH) positions liquidated over the past day stood at $49.24 million. BTC liquidations stood at $84.06 million, according to Coinglass.

What caused the dip

Crypto bank Silvergate is owned by Silvergate Capital Corporation, whose share price dropped 49% upon the announcement that it will delay its annual report to the Securities and Exchange Commission. The firm said it needed more time to complete its audit.

Silvergate bank said that it may file for bankruptcy owing to a massive sell-off. It is also unable to repay its debts. Many firms, including Coinbase, Circle, and Paxos severed all ties with the troubled bank.

Regarding the crypto market, Sora Ventures CEO Jason Fang told CryptoSlate:

Obviously there’s the current fud surrounding Silvergate and Binance, and we think that the market isn’t in a clear bull yet, but there are some certain sectors that outperform everytime the market dumps, it could be sectors surrounding L2, LSDs, zk rollups, etc. Since the narrative is different every time, we think keeping an eye on the market during these drops is definitely worth it, and its a good metric to observe which sectors the smart money is betting on.

Alex Kuptsikevich, FxPro senior market analyst, believes the crypto market tumbled in reaction to Silvergate’s uncertain future. He told CryptoSlate:

“The plunge into this area came as a market reaction to the potential bankruptcy of Silvergate. The news triggered a wave of stop orders on fears that the situation could cause a domino effect in the industry.”

Kuptsikevich said that the dip pushed Bitcoin’s price below its 50-day moving average, “which does not bode well for the short-term outlook, although this signal will only be reliable at the close of the day.”

He added that the market sentiment is “moderately positive” and supports the “buy-the-dip” mood. Many Twitter users claimed to have bought Bitcoin and taken advantage of the price fall.

But many investors panicked and, per Kuptsikevich, were scared that the Silvergate crisis could soon escalate to the FTX level.

In response to the latest events, investor Anndy Lian told CryptoSlate:

“Silvergate Bank’s share price has fallen by more than 50% to an all-time low after it announced it would review its books with auditors and warned of several headwinds. A vast majority of the bank’s crypto-friendly industry clients have left or are leaving the company, including Coinbase, Circle, Paxos, Crypto.com, Galaxy, and Gemini which have all suspended business with the bank. The bank’s clients leaving was reported to have happened less than a day after the announcement of the audit review.

This means that it is now harder for crypto companies to sustain relationships with a U.S. bank. Many institutional clients will not be able to transact big amount of crypto until they find better safer solutions to work around. As we speak, I know some of my friends are moving their funds out of some banks in Puerto Rico.

There will be a big vacuum in the short term. I know many of the crypto organisations are now looking for offshore solutions and the more adventurous ones are shifting to Asia to run their trading desks.”

Many analysts claim the recent dip is a signal for the BTC price to keep going down, but others are more optimistic. Quantum Economics CEO Mati Greenspan told CryptoSlate:

“Including yesterday’s sudden dip, Bitcoin and crypto are having one of their strongest years ever. No major support lines have been broken and the long term chats look bullish as ever.”

Source: https://cryptoslate.com/crypto-community-reacts-as-bitcoin-bear-market-fears-continue/

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March 3rd, 2023

How Hong Kong’s stricter crypto regulations aim to boost investor confidence

Hong Kong has been a major financial hub for many years, and in recent years, it has shown increasing interest in blockchain and cryptocurrency technologies. The government of Hong Kong has indicated its support for the industry’s development, and many initiatives are underway to help create a favorable environment for crypto and blockchain businesses.

Hong Kong has a well-established regulatory framework for financial services, which has helped attract many crypto and blockchain companies. The Hong Kong Monetary Authority (HKMA) has launched several initiatives to support the development of blockchain and digital currencies. For example, the HKMA is working on developing a central bank digital currency (CBDC), and has also launched a blockchain-based trade finance platform.

Many active blockchain and cryptocurrency communities in Hong Kong provide support and resources for businesses and developers in the industry. Many events and conferences related to blockchain and cryptocurrency in the city help create networking opportunities and promote the industry’s growth.

In December 2022, the Legislative Council of Hong Kong passed an amendment to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), introducing a licensing regime for virtual asset service providers (VASPs).

Hong Kong’s New Regulatory Framework

Hong Kong has recently implemented new regulatory frameworks for cryptocurrency trading and services. The updated Anti-Money Laundering Ordinance is in line with the Financial Action Task Force (FATF) Recommendation 15, which requires virtual asset service providers (VASPs) to adhere to anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations.

The new regulations require all VASPs operating in Hong Kong to obtain a license from the Securities and Futures Commission (SFC). Without a license, individuals and businesses cannot offer VA services or declare themselves as a provider.

The Hong Kong government closely regulates all activities related to the provision of virtual asset (VA) services. The term “VA services” encompasses a broad range of electronic services that include, but are not limited to:

(a) Offering virtual assets for sale or purchase regularly, resulting in a binding transaction; regularly introducing or identifying persons to other parties with the purpose of negotiating or concluding virtual asset transactions that are binding or with the reasonable expectation of doing so;
(b) Possessing direct or indirect control over client money or client virtual assets in the provision of such services.

It is important to note that crypto trading platforms that allow trading in financial products such as securities and futures contracts are not subject to the new licensing regime, as they are already regulated under the Securities and Futures Ordinance. Another thing to note is that the new licensing requirements extend to all crypto exchanges registered in Hong Kong under the Companies Ordinance, including those based outside of Hong Kong that actively target Hong Kong citizens in their marketing efforts.

Prohibition on Unlicensed VA Service Providers

The amended Ordinance also prohibits unlicensed persons from performing regulated functions related to the business of providing VA services. Such functions may include the buying or selling of virtual assets, managing virtual asset portfolios, and providing virtual asset custodian services.

Unlicensed individuals or businesses cannot advertise VA services in Hong Kong. The SFC can take enforcement actions against unlicensed entities, including issuing fines and revoking licenses.

Impact on VASPs

The new regulations have significant implications for VASPs operating in Hong Kong. The licensing process is rigorous and requires VASPs to demonstrate compliance with AML/CFT requirements. Licensed VASPs are subject to ongoing supervision and monitoring by the SFC.

The licensing process requires VASPs to provide detailed business information, including ownership structure, management team, and risk management systems. VASPs must also conduct customer due diligence and transaction monitoring to detect and report suspicious activities.

VASPs that fail to comply with the regulatory requirements may face severe consequences, including fines, license revocation, and reputational damage. The regulations aim to promote a safe and stable virtual asset market in Hong Kong and protect the interests of investors and consumers.

Benefits of the New Regulatory Framework

The new regulatory framework for virtual asset services in Hong Kong has several benefits for VASPs and investors. Firstly, the regulations provide clarity and certainty about the legal and regulatory environment for virtual asset services in Hong Kong. This clarity can help attract more investors and businesses to the market.

Secondly, the regulations promote transparency and accountability in the virtual asset market. Licensed VASPs must maintain proper records, conduct regular audits, and report suspicious activities to the relevant authorities. These requirements can help deter fraud and other illicit activities in the market.

Thirdly, the regulations help promote a level playing field for all VASPs operating in Hong Kong. The licensing process ensures that all VASPs meet the same high standards and are subject to the same regulatory requirements. This can help create a more competitive and fair market for virtual asset services in Hong Kong.

How to get the license?

Crypto businesses must obtain a license from the Securities and Futures Commission, the regulatory body for securities and futures markets. To get a license, the business must pass a ‘fit and proper’ test that involves criminal background checks, AML/CFT performance history, financial standing, educational or other qualifications, reputation, experience, character, reliability and financial integrity of the person. The business must also apply for approval of the premises to keep records or documents required under the Ordinance. Additionally, each director of the applicant and the ultimate owner must be determined as ‘fit and proper’ to be associated with providing the VA service.

To meet the regulatory requirements of the new Ordinance, licensed crypto businesses must introduce AML/CTF measures, including customer due diligence, transaction monitoring and record-keeping, screening clients against international sanctions and watchlists for PEP status, and screening clients in adverse media. They must also comply with Travel Rule requirements and appoint an eligible auditor within one month after becoming a licensed provider. Furthermore, they must prepare financial statements and other documents for prescribed periods and submit them with the auditor’s report to the Commission within four months after the end of the financial year to which they relate.

The licensed provider must also submit an annual return to the Commission and pay a prescribed fee within one month after each anniversary of the license’s grant date. Finally, the licensed person must notify the Commission in writing of any change in information that the licensed person or ultimate owner has provided under the requirements of the Ordinance, including intended cessation of business or intention to change the address at which it proposes to provide any VA service.

Final words

The SFC will have broad powers to supervise AML/CTF and regulatory compliance by licensed VASPs, including imposing sanctions. Businesses that operate without a license or violate AML rules can face significant fines and imprisonment for senior management. In the case of fraudulent activities or deception involving virtual assets, fines can reach up to 10,000,000 HKD (1,277,000 USD) and imprisonment for up to 10 years.

The new regulations will come into effect on April 1, 2023. Some provisions, including licensing requirements, will go into effect on June 1, 2023. Businesses are advised to start preparing for the new regulations as soon as possible and reviewing their AML/CTF policies and controls to identify potential gaps in the requirements.

Overall, implementing these new regulations is expected to attract more institutional investors to the Hong Kong cryptocurrency market, as they will have greater confidence in the safety and legitimacy of the industry. The move also brings Hong Kong’s cryptocurrency regulations in line with global standards and best practices.

Hong Kong has experienced significant events since 2019 that have had a major impact on the city and its people. Hong Kong has faced many challenges, from protests and political unrest to the COVID-19 pandemic to the introduction of national security law and political changes. I hope the city’s new crypto agenda pushes a critical step forward. By embracing the opportunities of new technologies, protecting investors, and promoting transparency, Hong Kong can continue to be a leader in the global financial industry.

Some “#AnndyLian Food for Thought” before I end this article:

The Japanese government recognized early on that allowing retail investors to participate in the cryptocurrency market could help drive adoption and promote innovation. My question is: “Will Hong Kong follow Japan’s approach to allowing retail investors to trade cryptocurrencies in a regulated environment?”

This could be one of their selling points. I am eager to find out.

Source: https://cryptoslate.com/op-ed-how-hong-kongs-stricter-crypto-regulations-aim-to-boost-investor-confidence/

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March 1st, 2023

Blockchain Fest Singapore 2023- Cryptocurrency Laws and Regulations: Insights from experts

Blockchain technology and cryptocurrencies have gained immense popularity in recent years, with the potential to revolutionize various industries. However, with new technology comes the need for regulation to ensure its safe and effective use. The Blockchain Fest Singapore 2023 is a premier event that brings together industry experts, policymakers, investors, and entrepreneurs to discuss the latest developments in the blockchain and cryptocurrency industry.

The event promises to provide valuable insights into the regulatory landscape of the industry, its challenges and opportunities, and the future of blockchain technology and cryptocurrencies. With a focus on the legal and regulatory frameworks that govern the industry, attendees can expect to gain a better understanding of the current state of regulations and how they impact the growth of the industry.

The first panel for the event is “Blockchain & Cryptocurrency Laws and Regulations 2023”. The panel shares valuable insights into the regulatory landscape of the industry, its challenges and opportunities, and the future of blockchain technology and cryptocurrencies. With a focus on the legal and regulatory frameworks that govern the industry, attendees can expect to gain a better understanding of the current state of regulations and how they impact the growth of the industry. The panel is moderated by Surya Sarella, BlockSol Media, CEO and with a panel of experts:

– Anndy Lian, Best Selling Book Author “NFT: From Zero to Hero”
– Chris Holland, HM, Partner
– Mike Chiam, PDLegal Partner, ABA Founding Member
– Tuhu Nugraha, Executive Director Indonesia Blockchain & Metaverse Center (IBMC)
– Matthew Townsend, Partner, Reed Smith LLP

The moderator for the panel is Surya Sarela, CEO at Blog Soulmedia. Each speaker represents a crucial stakeholder, contributing to the debate from private, public, and policy perspectives. The panel discussion aims to answer the question: “Are countries or regulators around the world moving or heading towards banning or discouraging crypto?”

Chris Holland, the HM, partner, began by highlighting the lack of uniformity in crypto regulations worldwide. He emphasized the importance of having standard and consistent regulations to apply to the industry. However, tax laws are not the same globally, and similarly, crypto regulations will not be treated similarly worldwide. Brazil is relatively hostile towards crypto, whereas other countries like the UAE, Singapore, and the UK have more encouraging crypto regulations, including permitting crypto transactions while trying to foster financial stability.

Anndy Lian, best selling book author, added to the discussion by sharing his experience talking to different regulators and governments since 2018. He realized that most regulators and governments are very open to cryptocurrency, with only a few being anti-crypto. He added that big nations like India and many others are very receptive and open to cryptocurrency.

Mike Chum, PD legal partner and ABA founding member, added to the discussion by highlighting the importance of recognizing cryptocurrencies as a new asset class that requires new regulations. He believes the current regulations need updates to make them suitable for cryptocurrency.

Matthew Townsend, Reads Smith LLP partner, added to the discussion by emphasizing the need for clear regulations in the cryptocurrency industry. He believes that clear regulations would protect investors and facilitate useful investments.

Tuhu Nugraha, Executive Director Indonesia Blockchain & Metaverse Center echoed the sentiments of many industry experts when he emphasized the importance of understanding the regulatory framework for the blockchain and cryptocurrency industry. He highlighted that while innovation and growth are important, it is equally crucial to ensure that these developments are in line with existing laws and regulations.

The Blockchain Fest Singapore 2023 provides an excellent platform for industry experts, entrepreneurs, investors, and policymakers to engage in fruitful discussions and exchange ideas on the latest developments in the blockchain and cryptocurrency industry. With the rapid growth of the industry, it has become increasingly important to have a clear understanding of the regulatory landscape to ensure that blockchain technology and cryptocurrencies can reach their full potential. The event promises to be an exciting opportunity for attendees to gain insights into the current regulatory framework, its challenges, and future trends in the industry. With the participation of renowned speakers and industry leaders, the event is sure to provide valuable information and knowledge to all attendees, helping them stay ahead of the curve in this fast-changing industry.

Source: https://www.financialexpress.com/blockchain/blockchain-fest-singapore-2023-cryptocurrency-laws-and-regulations-insights-from-experts/2998970/

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