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| 1 | | The International Organization of Securities Commissions (IOSCO), the international securities watchdog, has recently proposed global standards for the crypto industry. The move marked the first global attempt to regulate crypto assets and digital markets. More: - IOSCO Chair Jean-Paul Servais said the proposed rules represent a turning point in dealing with risks from crypto assets.
- Servais also stated that the crypto industry has been allowed to expand on a false foundation, which has to change.
- The issues, which the proposed regulations aim to tackle, include conflicts of interest, market manipulation, cross-border regulatory cooperation, crypto asset custody, operational risks, and treatment of retail customers.
- The guideline consists of 18 measures that include well-established safeguards already implemented in existing markets.
- The watchdog aims to finalize the standards by the end of the year after collecting public opinion on the regulations.
- The agency expects its 130 members to adopt the standards to fill in the gaps in their national rules, preventing a fragmented regulation approach.
Zoom Out: - IOSCO is an umbrella group of securities commissions and regulators worldwide.
- The watchdog's members include the U.S. Securities and Exchange Commission (SEC), Japan's Financial Services Agency (FSA), Britain's Financial Conduct Authority (FCA), and Germany's BaFin.
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What the numbers say: Bitcoin (BTC) trading volume in the U.S. dollar (USD) has declined by nearly one-third since November 2022 when FTX, previously the third-largest crypto exchange, filed for bankruptcy. The platform's collapse caused many countries, including the U.S., to tighten their regulatory approach towards the crypto industry to tackle the risks regarding digital assets. The increased scrutiny of the crypto market probably reduced investor interest, creating a risk perception. Bitcoinity's data has shown that leading cryptocurrency Bitcoin's trading volume in the U.S.' legal tender, USD, decreased to $582,000, down from $1.48M in November last year. Details: The data has an important place, especially since Bitcoin is the cryptocurrency with the highest ownership rate among U.S. crypto investors. According to the data compiled by Statista and Measure Protocol, 83% of the investors in the country held Bitcoin in their portfolio as of February 2023, a higher percentage than any other crypto asset. Relevance: Cathie Wood-led investment management firm Ark Invest's analyst Yassine Elmandjra recently estimated that the U.S. could lose its leading position in the global crypto industry to the countries embracing crypto, such as the United Arab Emirates (UAE), South Korea, Australia, and Switzerland, mainly due to its strict regulatory glance. Elmandjra cited CoinMetrics' data showing that Bitcoin's daily trading volume in the U.S. declined by 75% from $20B in March to just around $4B last week, adding that crypto liquidity in the country significantly dropped. The firm analyst concluded these findings by pointing out that the regulatory uncertainty in the U.S. seems to be discouraging both existing industry players and new entrants. Brands that should care: The tightened regulatory environment in the U.S. forced many crypto-related companies, including Coinbase, Gemini, Marathon Digital, and Strike, to intensify their global expansion plans, embarking on a quest for alternative markets. Most recently, Coinbase launched a new Bermuda-based international derivatives exchange for institutional crypto traders outside the U.S., and its executive team visited the UAE for strategic development in the region after entering a legal conflict with the U.S. Securities and Exchange Commission (SEC). Another U.S.-based crypto exchange Gemini also recently launched a crypto derivatives platform that only caters to users outside the U.S. The U.S.-based crypto mining firm Marathon Digital made similar moves by increasing its initiatives in different parts of the world, including Abu Dhabi and Paraguay, while Strike moved its headquarters to El Salvador from the U.S., citing the anti-crypto regulatory environment in its native. | | | |
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| 3 | | Seychelles-based crypto exchange OKX has announced its plans to open a European hub in Paris, France, joining other crypto-related firms picking the country to build a regional base. The platform has also applied for regulatory approval to operate as a licensed digital asset service provider in the country by registering with the Autorité des Marchés Financiers, the French market regulator. More: - OKX's president, Hong Fang, said they see operating in France as crucial for their engagement with European regulators.
- The company plans to hire around ten people in France within six months.
- An OKX spokesperson said they aim to increase the employee numbers in France to around 100 people over the next three years.
- The companies seeking to operate as a digital asset service provider in France must go through certain checks, including the ones regarding anti-money laundering.
- European Union's (EU) newly-passed crypto regulations, the Markets in Crypto Assets (MiCA), also require all crypto firms seeking to operate in the EU to register with at least one of its member states before January 2025.
- That's why the move was considered a significant step for OKX's presence in Europe.
Zoom Out: - Over the last several months, France has become an attraction point for many crypto firms, mainly due to President Emmanuel Macron's crypto-friendly approach to embracing the industry.
- In March, the stablecoin issuer Circle also announced its intention to establish a European base in Paris, citing the country's commercial environment and crypto-friendly climate.
- Other crypto firms selecting Paris as their European hub over the last two years include crypto exchanges Binance and Crypto.com.
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| 4 | | Hong Kong has accepted its long-awaited licensing regime for crypto exchanges as part of its plans to turn the region into a crypto hub, allowing retail investors to trade major tokens, including Bitcoin (BTC) and Ether (ETH), on licensed platforms. The region's Securities and Futures Commission (SFC) will open applications for digital asset trading platform licenses on June 1. More: - The regulator said stablecoins should not be admitted for retail trading until Hong Kong's planned extensive regulatory framework for stablecoins comes into effect, which is expected to happen by 2024.
- The guidelines also explicitly prohibit offering crypto gifts, including airdrops, for crypto exchanges to incentivize retail customers to invest.
- The new regime will hold the platform operators responsible for conducting due diligence.
- Under the new rules, the crypto exchanges will have to always maintain 5M Hong Kong dollars (~$640,000) of capital at minimum.
- The regime will also require digital asset trading platforms to submit their liquid capital, a summary of bank loans, advances, credit facilities, and a profit and loss analysis to the SFC at the end of each month.
- The platforms will hold their own assets separate from the client assets.
- All tokens listed on the exchanges will need to go through due diligence checks, have a 12-month track record, and pass smart contract audits.
- The guidelines also clarify the requirements for anti-money laundering, cybersecurity standards, and customer protection, along with the fines paid to the platform violating these measures.
Zoom Out: - There are currently only two licensed crypto exchanges in Hong Kong: HashKey and OSL.
- The SFC has yet to approve any digital asset trading platform to cater to retail investors.
- However, many crypto exchanges, including OKX and Bitget, recently revealed their plans to apply for a license under Hong Kong's new licensing regime.
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| 5 | | A developer, Salvatore Leggiero, has recently announced his plans to construct the world's first-ever Bitcoin Tower in Dubai. The 40-story skyscraper will aim to showcase the importance of digital assets, symbolize Dubai's tribute to Bitcoin, and bridge between digital and physical real estate. More: - The tower will incorporate a new hotel chain in the shape of Bitcoin.
- The hotel chain will embrace cutting-edge technologies, including AI, blockchain, and NFTs.
- Guests will be rewarded with NFTs that offer exclusive benefits to the holders.
- In addition, they will be able to pay their rental fee through an annual percentage yield generated from cryptocurrencies they staked.
- Leggiero defined the project as the first hotel that gives the guests back the money they paid.
- The renowned architect Simone Micheli will also create virtual environments for the hotel.
- Leggiero, who also serves as the CEO of Metaverse Investments LLC, urged individuals with diverse backgrounds to participate in the project by submitting their works that will ultimately form an exclusive NFT collection dedicated to the Bitcoin Tower.
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| 6 | | The Open Network (TON), originally launched by the instant messaging app Telegram, has launched a $25M accelerator program to support projects built on its blockchain ecosystem. The program will invest $50,000 to $250,000 in each participant project. More: - The participants will also be able to access partnerships and mentorships from the TON's network.
- The program partners include Gotbit, Web3Port, Tonstarter, TEB, and Cypher Capital.
- The first startups to be eligible for funding will be selected from among projects that participated in a recent TON hackathon.
- The TON Accelerator Program will prioritize projects working on decentralized finance (DeFi).
- Those seeking to participate must build their projects on the TON network, have a ready minimum viable product (MVP), and need support in marketing, business, and technology to be eligible for funding.
Zoom Out: - TON was initially developed by Telegram as the platform's first big step toward Web3.
- However, the legal conflicts with the U.S. Securities and Exchange Commission (SEC) forced Telegram to abandon the project in 2020.
- Since then, TON has been run by the TON Foundation, embodying community members as an open-source blockchain project.
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- Binance, the largest crypto exchange by trading volume, has denied the claims in a Reuters report alleging the firm's U.S. arm, Binance.US, of mixing its corporate revenue with customer funds in 2020 and 2021 on a daily basis, violating the U.S. banking regulations.
- The Philippines' Securities and Exchange Commission has issued a warning that the U.S.-based crypto exchange Gemini's derivatives trading platform launched last month has been operating without a permit in one of its jurisdictions.
- Bankrupt crypto lender BlockFi had to withdraw its reorganization plan statements following an order issued by the U.S. Bankruptcy Court for the District of New Jersey.
- Crypto exchange Bitget has obtained a regulatory license in Poland to operate as a registered virtual asset service provider in the country.
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 | Staff Writer | | Doga is a tech and science editor who has been writing news for nearly 10 years. She worked for leading tech platforms and mainstrem media channels as an editor and presenter throughout his career. Then, she carried her know-how to more than one platform. She is a part-time cat lover and binge-watcher, and also fond of science, space, and emerging tech. She always has a story to tell. She is a bit addict to the laughter and -unfortunately- the '90s culture. | | This newsletter was edited by Aaron Crutchfield | |
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