The post Coinbase Obtains a Major Payment Institution License for Singapore Expansion! appeared first on Coinpedia Fintech News
Coinbase Singapore has obtained a major payment institution license from the Monetary Authority of Singapore, allowing the company to expand its digital payment token services in the country. Singapore is a significant market for Coinbase, with 25% of Singaporeans considering crypto the future of finance and 32% being either current or past owners of crypto. The nation is also home to over 700 Web3 companies, making it a pivotal market for the growth of the crypto and Web3 economies. Coinbase has actively developed and released products tailored to the Singaporean market and plans to continue fostering strong relationships with industry associations and making region-specific investments.
The post Hong Kong to Publish Cryptocurrency Trading License Applicants List! appeared first on Coinpedia Fintech News
Hong Kong’s Securities and Futures Commission (SFC) has said it will publish a list of companies that have applied for licenses to offer cryptocurrency trading services to retailers. The move comes as public concern over such platforms mounts in the wake of JPEX’s decision to suspend trading after being identified by the SFC as having provided investment services to retail investors in Hong Kong without the necessary license. Although two platforms have been licensed since the SFC’s new rules came into effect in June, only four more have applied. Around HKD1.43bn ($182m) of assets have been frozen on JPEX.
According to a recent report by Fortune, Coinbase, the U.S. cryptocurrency giant, has officially pulled the plug on its plans to acquire FTX Europe. Initially, Coinbase had aimed to extend its foothold into the European derivatives market through this acquisition. However, the decision comes after an increasingly competitive landscape and ongoing regulatory challenges.
The High-Stakes Derivatives Market
The allure of FTX Europe lies primarily in its “highly profitable” derivatives business, which had been operating under a Cyprus regulatory licence. Unique among European exchanges, FTX Europe was the only firm licensed to offer perpetual futures—a derivatives product that accounts for a significant chunk of trading volumes. It’s worth noting that derivatives represent nearly 75% of the global crypto trading volume, which reached a staggering $2.13 trillion in June, up 13.7% from the previous month.
Coinbase was not the lone contender in this corporate tug-of-war. Crypto.com and Trek Labs had also expressed their interest in FTX Europe. FTX’s European branch had been operating profitably before its parent company declared bankruptcy last fall, which attracted the attention of several exchanges eager to expand their derivatives offerings.
Coinbase’s Financial Motivations
Coinbase’s most recent quarterly report revealed $707 million in revenue for Q2 2023. Of that, $327 million came from spot trading, marking a 13% decline from the previous quarter. The acquisition of FTX Europe would have been a strategic move to counter this declining revenue. Last August, Coinbase had also gained regulatory approval in the U.S. to offer Bitcoin and Ether futures via its Commodity Futures Trading Commission-regulated exchange, FairX.
Coinbase’s withdrawal from the acquisition talks occurs amid increasing regulatory scrutiny on crypto exchanges. Regulatory challenges have been a persistent concern for the firm, especially as it looks to expand its global footprint.
What’s Next for Coinbase?
Despite ditching its plans to acquire FTX Europe, Coinbase remains open to other strategic acquisitions and partnerships.
“We continuously evaluate opportunities to expand our business and engage with global teams strategically,” said a spokesperson from Coinbase.
Meanwhile, the deadline for the sale of FTX Europe has now been extended to September 24, giving other interested parties a brief window to seal the deal. Meanwhile, FTX is also likely to sell its assets as it owes over $9 billion to its debtors, who recently received court permission to sell off assets.
In a business landscape often characterized by profit-over-principle, Ripple not only acquired blockchain startup Fortress Trust but also took on the financial burden of a recent security incident affecting Fortress’s customer base. This move has redefined the playbook for corporate social responsibility in the crypto realm.
The Ethical Acquisition Move of Ripple
Days before the announcement, Fortress Trust revealed that its customers had been affected by a third-party vendor security compromise. Where most companies might see a chance to lower an acquisition bid, Ripple, already a minority stakeholder in Fortress, saw an opportunity for goodwill. Accelerating the acquisition process, the fintech giant also pledged to compensate affected customers.
The decision to cover Fortress customers’ losses was not just tactical but ethical. This creates a new narrative in how acquisitions, particularly in the crypto world, can be human-centric.
XRP Price Dip
While Ripple’s extraordinary move has captured industry-wide admiration, its cryptocurrency, XRP, experienced a puzzling price slump. Bill Morgan, an Australian lawyer, questioned if Ripple had sold XRP to finance this charitable gesture: “The question looms whether Ripple unloaded a considerable chunk of XRP, contributing to the price’s dip.”
Though the XRP price drop has raised eyebrows, it needs to be noted that short-term price moves mean nothing in the grand scheme of things.
Strengthening the Regulatory Fortress
Pending due diligence and regulatory nods, the acquisition would add a feather to Ripple’s cap in the form of a Nevada Trust License, currently held by Fortress Trust—a subsidiary of Fortress Blockchain Technologies.
Besides the financial ramifications, this deal could also serve as a crucial stepping stone in Ripple’s regulatory journey
Revising Corporate Responsibility Narratives in Crypto
John Deaton, founder of CryptolawUS, lauded Ripple’s ethical stance and resilience, pointing out that Ripple had emerged unweathered from a 30-month-long SEC investigation without a single charge of fraud or misrepresentation.
This shows a maturation in the crypto industry. A company as big as Ripple taking responsibility beyond contractual obligations is a strong sign for things to come.
This acquisition follows Ripple’s $250 million purchase of Swiss custody startup Metaco earlier this year, marking a substantial appetite for strategic investments. But what sets the Fortress deal apart is its blend of corporate philanthropy and strategic business alignment.
The message is clear: Even in the ever-changing crypto landscape, a bit of old-fashioned goodwill can go a long way.
Elon Musk’s venture X, a subsidiary of SpaceX, has confirmed the Rhode Island Currency Transmission License, allowing it to process fiat and digital currency transactions, including cryptocurrencies. This license confirms Musk’s growing interest in digital currencies, particularly Bitcoin. X aims to develop new and innovative payment solutions, and this milestone marks another step towards shaking up the financial sector.
Komainu, the crypto custodian, has received a full Virtual Asset Service Provider (VASP) license from Dubai’s Virtual Asset Regulatory Authority (VARA). The license allows the company to offer institutional staking, collateral management, and custody services via its Komainu Connect platform. Komainu is among the first firms to receive a full VASP license in Dubai, a growing region for crypto. VARA established a four-stage licensing process in March 2022 to provide a regulatory framework for digital assets. Komainu is planning to double its Dubai headcount by the end of the year.
Abu Dhabi has granted a license to virtual asset firm M2 to offer crypto services, marking a significant step in the country’s plans to establish itself as a global hub for digital currency. M2 will now be able to provide digital asset trading, custody, and financing activities to its clients. The move is a part of Abu Dhabi’s efforts to accelerate fintech growth and cement its position as a leader in the crypto industry. The UAE capital has been actively investing in blockchain and crypto technology in recent years, with a view to driving economic diversification and boosting employment.
In yet another withdrawal, Binance has officially announced that it is withdrawing its application for a license from the German financial regulator BaFin. The exchange is already under pressure from the EU countries as the company is also pulling back from other markets, including Austria, Belgium, and the Netherlands. Additionally, Binance’s U.S. arm is facing legal action from regulators for operating an unregistered exchange.
Many experts are claiming it to be the calculative move by Binance as they are testing the regulatory waters before jumping in the pool.
European Union Law Giving Positive Hints? A Smart Move by Binance!
Whereas a spokesperson from Binance clarified that they have proactively withdrawn the BaFin application due to significant changes in the global market and regulatory landscape. However, they still plan to reapply for the appropriate licensing in Germany, ensuring that their submission accurately reflects the current changes in the industry.
On the other hand, previously, there were reports that BaFin was likely to reject Binance’s license application, but the company’s spokesperson had initially denied this and mentioned ongoing discussions with officials.
Besides Germany, Binance has also given up its registration with Cyprus’ securities regulator and decided to exit the Netherlands after a failed registration attempt. Furthermore, it has been ordered to halt operations in Belgium.
Despite facing challenges in various European markets, Binance’s CEO Changpeng “CZ” Zhao stated that France remains their flagship center in Europe. Additionally, the upcoming European Union laws, set to take effect in 2024, will enable crypto service providers to operate across the bloc with a single license.
Well, Binance has calculated the market strength in Europe and to establish there they must ensure clear terms with the regulators. Hence despite the rejections and withdrawals company is hopeful to expand its horizon.
Binance, the largest crypto exchange has withdrawn its license application from Germany’s BaFin due to a change in the global market and regulatory situation. The cryptocurrency exchange has retrenched from several markets, including Austria, Belgium, and the Netherlands, and faces a lawsuit from US regulators for operating an unregistered exchange. Despite a money laundering probe in France, Binance CEO Changpeng Zhao said France remained the exchange’s flagship center in Europe.
The post Binance CEO Files License Application in Response to CFTC Lawsuit! appeared first on Coinpedia Fintech News
Binance CEO Changpeng Zhao have filed a license application with the U.S. District Court for the Northern District of Illinois, as they plan to file a legal memorandum to initiate a motion to dismiss the lawsuit filed by the U.S. Commodity Futures Trading Commission (CFTC). The CFTC had charged Binance and its CEO with violating U.S. derivatives rules. The defendants are expected to respond to the lawsuit by July 27, 2023. Binance and CZ deny allegations and claim to operate within the legal framework.
The post Australian Regulator Cancels FTX Australia’s Financial License appeared first on Coinpedia Fintech News
The financial license of FTX Australia, the bankrupt crypto exchange’s local subsidiary, has been withdrawn by ASIC, the Australian financial services regulator. With around 30,000 retail clients and 132 local companies served, FTX faced financial troubles leading to its November bankruptcy filing. Administrators from KordaMentha were appointed to restructure FTX Australia and its subordinate, revealing an estimated misappropriation of $8.7 billion in customer assets. FTX is currently engaged in discussions with potential backers to facilitate a potential relaunch of the exchange.
According to sources familiar with the matter, Germany’s financial watchdog has chosen not to grant a custody license to Binance, a cryptocurrency exchange. It is unclear whether this decision was a formal one from the Federal Financial Supervisory Authority (BaFin) or simply an expressed intention during ongoing discussions.
A spokesperson for Binance stated that they are actively working to meet BaFin’s requirements and are confident in their team and measures. BaFin declined to comment on specific companies due to professional secrecy requirements in Germany.
Binance withdrawing from several jurisdictions following SEC lawsuit
Recent reports suggest that Binance has withdrawn its application for regulatory approval in Austria and has also ceased its registration with Cyprus’ securities regulator. Additionally, the company decided to exit the Netherlands after a failed registration attempt and was ordered to halt operations in Belgium. Furthermore, it is currently facing allegations from the U.S. securities regulator for operating an unregistered trading platform.
In response to these developments, Binance stated that it is streamlining its European strategy in preparation for the forthcoming crypto regulation by the European Union (EU). The company aims to obtain regulatory approval in one of the EU markets, allowing it to operate throughout the single market.
The spokesperson for Binance reiterated the company’s commitment to collaborative work with regulators worldwide and highlighted their focus on ensuring full compliance with the new EU rules on crypto-assets (MiCA).
Binance currently does not possess a crypto custody license in Germany. This lack of license restricts the company’s ability to advertise its services, which can impede its growth. Several other fintech companies, such as Crypto.com, Cakedefi (backed by influencer Julian Hosp), and Uniswap, have also faced scrutiny from German regulators.
Despite the absence of a license, Binance remains a prominent crypto app in Germany. Users can freely access the Binance website and app, as there are no explicit prohibitions in place. According to Wirtschaftswoche, the company boasts a customer base of two million individuals.
When Aaron Kaplan, co-CEO of Prometheum, stepped onto the stage in Congress, few within the crypto realm knew his name. His statement, proclaiming the SEC’s legal regime for digital assets as effective and dismissing the need for new laws, certainly caught the attention of Crypto Twitter. Kaplan presented his firm, Prometheum, as a shining example of a regulated crypto firm, having recently obtained a “special purpose broker-dealer” licence from the SEC.
However, doubts are now emerging about the validity of Kaplan’s grandiose claims, making his firm the new talk of the town for all the wrong reasons.
High-Stakes Spat: Paradigm vs. Prometheum
The ongoing dialogue between Kaplan and Rodrigo Seira, Special Counsel at VC firm Paradigm, has added fuel to the fire. The pair clashed on a recent podcast hosted by crypto journalist Laura Shin, with Seira, a Harvard Law graduate, questioning the effectiveness of Prometheum’s approach in the complex world of securities law.
The Conundrum of Compliance
Despite Kaplan’s proclamations about Prometheum’s compliance with the SEC’s legal regime, critics argue that Kaplan’s firm is falling short of its promises. While the licence allows the firm to store and trade crypto securities, it doesn’t permit the trading of Bitcoin or Ethereum, which make up the lion’s share of the crypto market. Seira argued that while Prometheum may have secured a licence, it lacked a concrete business model.
Even more, telling is Kaplan’s inability to identify any other tokens that Prometheum intends to center its business around. This glaring oversight has led some to question the feasibility of Prometheum’s business model, despite its licensure.
Past Woes and Present Questions
Adding to the scepticism surrounding Kaplan’s assertions is his past involvement in a dubious blockchain startup. His appearance before Congress and alignment with Democratic Party talking points on crypto regulation have further raised eyebrows.
Yet, how Kaplan came to testify before Congress remains a mystery. While some suggest luck and timing, others perceive it as part of a broader narrative that paints a distorted picture of crypto regulation.
The controversy around Prometheum raises pressing questions about the state of crypto regulation. While Kaplan presents his firm as the poster child for a “regulated” crypto company, critics argue that this depiction is a farce.
The real test for Prometheum now lies in its ability to clear the cloud of doubt surrounding its credibility and business model.
Ripple, the cryptocurrency firm, has now secured an in-principle regulatory green light to operate in the city-state of Singapore, a move that underscores the company’s ongoing commitment to expanding its global footprint while also proving its mettle as an innovator in the increasingly scrutiny-rich world of blockchain-driven finance and digital assets, where the regulatory landscape is becoming increasingly complex and demanding.
License approval in Singapore
With a major payment institution license from the Monetary Authority of Singapore, Ripple has attained crucial regulatory approval that is set to pave the way for the unstoppable expansion of its revolutionary digital payment token products and services.
Ripple will now unlock the full benefits of its groundbreaking cross-border transfers of XRP cryptocurrency to its esteemed customers, mainly banks and other financial institutions.
This strategic move by Ripple reinforces the tech company’s commitment to diligently comply with evolving regulatory guidelines while still upholding its unwavering dedication to exceptional innovation, resulting in even greater optimism and confidence in the future of digital finance and international payments.
Services by Ripple!
In San Francisco, Ripple has gained global recognition for their innovative products and services, such as the XRP cryptocurrency and blockchain-based interbank messaging solutions, which offer enhanced efficiency and security in cross-border payments.
Now XRP effectively acts as a bridge between currencies to facilitate faster and more cost-effective transactions. In addition, RippleNet, the company’s revolutionary blockchain-based international messaging system, has emerged as a game-changer for large-scale fund transfers between financial institutions, providing unmatched levels of transparency, scalability, and seamless integration.
The Significant Development in Singapore
Ripple also partnered with InstaReM, a Singapore-based fintech firm that provides cross-border payment services to individuals, SMEs, and financial institutions. The partnership aims to provide faster and cheaper international payments to consumers and SMEs in Singapore and beyond. In addition, InstaReM is using Ripple’s payment infrastructure to expand into new markets, including Europe and the US.
Furthermore, Ripple has also established a presence in Singapore through its investment arm, Xpring, which is focused on supporting blockchain-based projects and startups. Xpring has invested in several Singapore-based startups, such as gaming and e-commerce platform Tixel and blockchain-based travel platform Wego.
Overall, Ripple’s partnerships and investments in Singapore have positioned the company as a key player in the country’s digital economy. As Singapore aims to become a leading fintech hub in Asia, Ripple’s blockchain-based payment solutions could play a crucial role in facilitating cross-border transactions and driving innovation in the sector.
With a discernible shift in its strategic operations, Germany’s largest banking institution, Deutsche Bank, has initiated proceedings to secure a license that will allow it to offer digital asset custody services in the country, according to a report from Bloomberg. This move is a clear indication of the bank’s intent to immerse itself deeper into the growing world of cryptocurrency.
Taking Steps into the Crypto World
In a recently held conference, David Lynne, head of the bank’s commercial banking unit, announced Deutsche Bank’s plan to enhance its presence in the digital asset market. He revealed that the bank has already submitted its application to Bafin, the German securities watchdog. This marks a significant stride in the bank’s journey towards fostering a more expansive digital asset portfolio.
The bank’s effort to secure a digital asset license is not an isolated endeavor, but a part of a more comprehensive strategy. Lynne explained that the move is designed to augment the fee income generated by Deutsche Bank’s corporate banking division. The intention is to integrate digital assets into their suite of offerings, providing a more diversified portfolio for their customers.
Deutsche Bank’s approach to integrating digital assets is in sync with the strategies employed by its investment subsidiary, DWS Group. The firm has also been working tirelessly to increase revenue through digital asset-related offerings, reinforcing the bank’s commitment to this emerging field.
Deutsche Bank’s corporate banking division initially suggested the possibility of introducing a digital asset custody service in late 2020. However, there was no clarity about the timeline of the launch.
A Growing Trend
The global banking landscape is showing an increased interest in providing crypto custody services, indicative of the industry’s progressive embrace of digital assets. In a recent noteworthy development, Ripple, the blockchain payment powerhouse, enhanced its international footprint by purchasing Metaco, a Swiss firm specializing in custody services.
This strategic acquisition, worth $250 million, allows Ripple to extend its range of services. Other banking giants are not far behind in this trend either. Institutions like BNY Melon, Fidelity, and BNP Paribas are actively exploring opportunities in the realm of cryptocurrency safekeeping.
Breaking! Binance Withdraws from Netherlands: SEC Legal Battle and Unsuccessful VASP License Bid Add to Regulatory Woes
In an unexpected development, Binance, a global leader in cryptocurrency exchanges, has declared its departure from the Netherlands. This decision emerges during a challenging time for the company, as it grapples with a lawsuit from the U.S. Securities and Exchange Commission (SEC) and the unsuccessful attempt to obtain a Virtual Asset Service Provider (VASP) license from Dutch authorities.
Binance’s Unsuccessful Bid for VASP License
Binance’s decision to leave the Netherlands is a direct result of its failure to secure a VASP license from the Dutch regulators. This license is a critical marker of a company’s adherence to Anti-Money Laundering (AML) guidelines. Despite its efforts, Binance could not meet the Dutch authorities’ stringent requirements.
The repercussions of this decision will begin to affect Dutch residents from July 17, 2023. From this date onwards, they will only have the option to withdraw their funds from the platform, as per the exchange’s statement.
Binance communicated this decision on its website, stating, “We regret to announce that Binance is leaving the Dutch market. This unfortunately means that no new users residing in the Netherlands will be accepted as of today. Starting from 17 July, 2023, existing Dutch resident users will only be able to withdraw their assets from the Binance platform. No further purchases, trades or deposits will be possible. We encourage those users to take appropriate action by withdrawing assets from their accounts.”
Binance’s Regulatory Challenges
Binance’s regulatory woes are not limited to the Netherlands. The company is also facing a lawsuit from the SEC, which accuses the crypto exchange of offering unregistered securities. Binance has strongly denied these allegations, but the lawsuit has cast a shadow over its operations.
While Europe has generally been open to cryptocurrency exchanges and their AML efforts, Binance’s recent experiences in the Netherlands have been challenging. Despite being AML compliant in several European countries, including France, Italy, Spain, Poland, Sweden, and Lithuania, Binance has encountered regulatory hurdles in the Netherlands. This comes shortly after Binance announced its plans to leave Cyprus to fully comply with the new European Union rules on crypto-assets, known as MiCA.
Binance’s Commitment to Compliance
Despite these challenges, Binance remains committed to its Dutch users and plans to continue its dialogue with Dutch regulators. The company has stated that it will continue to explore ways to achieve compliance and regulatory approval in the Netherlands.
Binance has been deeply involved in an extensive registration process as a virtual asset service provider with the Dutch regulatory body. The company has made significant efforts to explore various alternatives to continue serving Dutch residents while adhering to the country’s regulations. Despite these efforts, Binance stated, “Regrettably, our comprehensive exploration and attempts to align our services with Dutch regulations have not led to a successful VASP registration in the Netherlands at this juncture.”
Existing Dutch users of Binance will receive an email detailing the implications of this development for their accounts. The email will provide comprehensive information about their assets on the Binance platform and any necessary actions they need to take.
Binance’s departure from the Netherlands is a clear indication of the increasing regulatory scrutiny faced by cryptocurrency exchanges worldwide. As governments and financial regulators demand greater transparency and adherence to financial laws, companies like Binance must adapt.
Binance remains committed to its mission of promoting global cryptocurrency adoption. The company has stated that it will continue to invest in compliance and work with regulators to ensure it meets all legal requirements. The path forward may be challenging, but Binance is prepared to navigate these hurdles.
The post Brazil Grants Payment License to Mercado Bitcoin Exchange appeared first on Coinpedia Fintech News
Brazil’s central bank approved Mercado Bitcoin as a payment service provider. This empowered the firm to launch “MB Pay”, a financial technology platform offering clients digital banking with cryptographic assets. MB Pay facilitates investment in digital fixed income and the staking of cryptocurrencies, giving access to financial transactions—the firm plans to use a debit card for converting digital currency into fiat currency. Brazil’s top crypto exchange ‘Mercado’ has 3 million customers and a $5B trading volume. The license is a milestone for Mercado Bitcoin and the Brazilian crypto industry.
The post Gemini Exchange Sets Sights on UAE: Initiates Crypto License Application appeared first on Coinpedia Fintech News
Gemini Exchange has announced plans to expand into the United Arab Emirates (UAE). The company is set to begin the process of acquiring a crypto license to serve customers in the UAE, a region rapidly becoming a significant hub for cryptocurrency. Gemini aims to meet the needs of this vibrant crypto community and found a high intent to purchase crypto in the region, even among non-owners. This move is part of Gemini’s initiative to become a truly global company, providing customers with a safe, secure, and user-friendly platform to interact with crypto. “Amazing awaits,” the company says.
The post Binance Obtains First Southeast Asian License in Thailand. appeared first on Coinpedia Fintech News
Thailand’s Ministry of Finance grants digital asset licenses to Gulf Binance, a crypto venture established by Binance and Gulf Energy’s innovation arm Innova. These licenses grant permission for the company to conduct a cryptocurrency exchange that is seen as overseen by the National Securities & Exchange Commission. The new crypto venture combines Binance’s expertise with the Gulf’s understanding of this Thai market. Today Binance states that Gulf Binance is to launch a digital asset exchange in Thailand by Q4, 2023.
Coinbase Expands Offshore With Bermuda License as US Regulators Remain Hostile Towards Crypto Industry
Coinbase has obtained a license to operate in Bermuda, one of the first countries to establish a comprehensive legal framework for digital assets. According to reports, Coinbase plans to launch an offshore derivatives exchange in Bermuda as soon as next week. The move follows Coinbase’s announcement of plans to expand operations in Abu Dhabi, as part of its “Go Broad & Go Deep” strategy.
John Deaton reacts to Coinbase’s offshore move
John Deaton, a notable figure in the cryptocurrency industry, has suggested that the potential departure of Coinbase from the US may be attributed to the actions of an unelected bureaucratic official. Specifically, he is referring to Gary Gensler, Chair of the Securities and Exchange Commission (SEC), which has taken a strict stance on regulating crypto firms.
Deaton argues that the SEC’s lack of clarity on what constitutes a security, as well as its issuance of Wells Notices to crypto companies for possible securities violations, is un-American. He further notes that other major crypto exchanges, such as Binance, Bittrex, and Kraken, have also faced regulatory scrutiny and that the tight rules are driving crypto firms away from the US market.
The introduction of an offshore exchange in Bermuda would allow Coinbase to offer exotic crypto-related derivatives that are largely unavailable in the US due to regulatory restrictions. This would help the exchange to better compete with Binance, which currently dominates the global crypto trade, and to diversify its revenue base.
Coinbase’s move to establish a presence in Bermuda may suggest that the company is exploring other options as US regulators become increasingly hostile to the crypto industry. CEO Brian Armstrong recently warned that crypto firms may seek to relocate offshore in the absence of clear regulatory guidelines in the country.
Not all are happy with Gary Gensler
Congressman Tom Emmer criticized Gary Gensler, Chair of the Securities and Exchange Commission (SEC), calling him an incompetent “cop on the beat” who is putting Americans in harm’s way and pushing US firms to China. Emmer stated that Gensler has not finalized any rules for crypto companies to comply with, but he still abuses the SEC’s enforcement powers against them.
He also accused Gensler of inappropriately regulating through public statements, often contradicting himself and causing chaos in the marketplace. Emmer believes that Gensler is pushing innovation into the hands of China, the US’s number one adversary. Many Americans are unhappy with Gensler’s approach to regulating the crypto industry and hope that he will be soon fired from his position at SEC.
In the face of stricter crypto regulation in Estonia, CryptoWallet has renewed its license, keen to take advantage of these new favourable conditions.
“We are fully compliant, have the required shared capital, and are launching products that will enhance our users’ lives” according to Aleksander Smirnin, CryptoWallet’s COO. The startup is releasing a crypto card with over 800 supported coins later in 2023.
The crypto market in Estonia is set for some big changes in 2023, offering big opportunities for some and challenges for others.
Thanks to a variety of new legislation brought about by the country’s Financial Investigation Unit (FIU), Estonia has raised the standard for crypto-related business in the country.
For a long time, Estonia was, and still is, considered to be extremely crypto-friendly. What these new regulations bring about is higher standards for crypto platforms, requiring better KYC, personnel management, and a clear viability for the company’s product/business model.
These changes, which are designed to impede criminal financial activity and combat risk in the crypto sector, are a welcome breath of fresh air for companies like CryptoWallet, whose licenses have been fully renewed by Estonian authorities. However, this has not been the case for everyone.
Headwinds for Some, Tailwinds for Others
It has been that a staggering 90% of crypto companies may fail to meet these new standards.
This initially sparked concern from some within the crypto space, but others have quickly pointed out that many of the changes are long overdue and will positively impact the sector overall.
In the past, companies were not required to have physical local premises or even staff to do crypto business within the country. In addition, it was only required that companies have a meager €12,000 in capital reserves (compared to the new requirement of €250,000), which has long sparked concern from Estonian authorities.
With these new regulations, all of this has changed. Meaning that the ecosystem may have been radically re-orientated towards healthier, more viable businesses.
Companies like CryptoWallet that find themselves having received their virtual asset license have, in effect, had the competition weeded out for them, giving them a tailwind that they will be quick to capitalize on.
With such big changes in the market, all eyes are on the Estonian crypto scene and the new opportunities emerging there.
The Tel Aviv Stock Exchange (TASE) is seeking approval from regulators to facilitate crypto trading on its platform. This move comes after last year’s decision by Israeli banking institutions, like Bank Leumi, to offer crypto trading facilities in agreement with Paxos. The draft for public comments published on Monday, February 27, seeks to expand the authorized activities of Non-Banking Members (NBMs) to include trading in cryptocurrency.
Regulation is Needed
The cryptocurrency market has experienced turmoils over the past year, bringing material changes in crypto activity as more regulated institutions take part in this activity.
The turmoils emphasize the need for regulation in this sector, in view of the rapid development of the cryptocurrency sector over the recent years and the greater involvement of customers in this sector.
As a result, there is a growing demand from customers to transfer money originating from this activity into their accounts. This requires regulation that will mitigate the various risks (operational, legal, cyber, and other) that are inherent in the crypto activity.
The proposed structure will enable customers to deposit money (Fiat money) designated for investment in cryptocurrency and withdraw monies originating from those currencies.
The NBM will contact two functions – the first, a licensed provider of cryptocurrency trading services, and the second, a licensed provider of custodial services for those currencies.
In order to purchase cryptocurrency, the customer will deposit monies in traditional currency (NIS or foreign currency) (Fiat money) that will be deposited in an omnibus account of the NBM with the provider of the trading services.
Upon receiving an order to buy virtual assets from the customer, the purchase will be executed using the money deposited in the omnibus account and recorded in the customer’s account with the NBM.
When the customer gives the order to sell crypto, the provider of trading services will sell the coins and credit the NBM’s omnibus account by the amount of consideration received, and the consideration will be transferred into the customer’s account with the NBM.
The report, “Regulation of the Digital Assets Sector – Roadmap to a Policy,” published by the Chief Economist in the Ministry of Finance last November, indicates that the current regulatory approach in Israel, and in certain other countries, is to impose regulation on financial activities or services in digital assets similar to that currently applied to non-digital assets, taking into consideration the non-traditional and unique characteristics of this sector.
Binance, one of the leading crypto exchanges has been given Financial Services Permission (FSP) by Financial Services Regulatory Authority (FSRA), Abu Dhabi Global Market (ADGM). This license will allow Binance to give custody to professional clients only if they meet FSP’s standard provided by FSRA.
ADGM chairman, Ahmed Jasim Al Zaabi claimed that will support Binance’s operations and R&D in ADGM in order to develop Web3.0 economy solutions. It was in September that FSRA and ADGM disclosed their principles for Crypto regulations.
Recently, Binance secured a license to offer full crypto exchange products and services in Dubai. Earlier the exchange just had a license to offer some of the limited crypto exchange products and services to qualified investors.
According to the press release, with the new Minimal Viable Product license, the exchange can open a domestic bank account to hold funds of the users locally, operate the exchange, and offer payments and custody services to the users. MVP license from the Dubai regulator was received by Binance back in March.
Binance has been trying to attain global regulatory approval after facing a series of setbacks.