Why is FINRA Lingering on Approval Requests for 40 Digital Assets Securities Startups?


Why Is FINRA Frustrating Approval Requests For 40 Digital Assets Securities Startups?

The current cryptocurrency and blockchain climate is pretty interesting. There’s so much happening right now that everyone naturally seems to want a piece of the pie. 2019 has been a good year bitcoin for example and there is a lot more recorded investment – both individual and institutional – than there used to be in times past. There’s the Binance incubation program and there’s also Ripple Labs both of whom are spending a lot of time and Resources to help nurture and grow many up-and-coming startups focusing cryptocurrency and blockchain technology.

However in all this excitement as many as 40 different startups seeking to trade tokenized securities have been stifled because they’ve been waiting for approval from U.S. authorities. According to reports, the Financial Industry Regulatory Authority (FINRA) which is a self-regulatory organisation (SRO), has been reluctant to approve more than a few startups for quite a while now. At the moment, there’s a lot of speculation but nobody is exactly sure why this is happening as some of these startups have been waiting for up to a year and some as long as 14 months.

Some people who are clearly unhappy with the state of things have opined that FINRA is doing this deliberately because they have placed a quiet and unofficial Embargo on the registration of some of these startups. There are also those who think that the reason for the hold-up is connected to the securities and exchange commission(SEC) believing that they are exploiting the fact the proper classification of some digital assets, especially as securities, haven’t been very straight forward. There are also others who think the FCC is directly making FINRA postpone all approvals until further notice.

However, as unpalatable as the situation is, not everyone is pessimistic. There are some who believe that the hold-up is a bit inevitable because this class of assets are relatively new and this has been corroborated by Ray Pellecchia, the director of Media relations for FINRA. Whatever the reason is, the affected startups are quite unhappy about the development.

According to Pellecchia:

“Membership applications from firms proposing to engage in digital asset businesses present new, complex issues and we are in the process of working through them.”

The Nascent Cryptocurrency Climate

Digital assets have been around for more than a few years now. However, especially when compared to other global financial markets, it still is relatively new. Some of the affected startups are looking for a way to become officially recognized broker-dealers so they can let the average customer join the cryptocurrency sphere using digital assets that are officially classified as securities. This is however not a walk in the park because before they can start, they have to submit to authorities for approval.

FINRA is one of the regulators these new firms must go through as one of its functions is to grant approvals to broker-dealers and also authorise official representatives. However, since FINRA is an SRO, it is still under the authority of the SEC.

FINRA Is also at the helm of affairs because before any firm can be qualified custodians or players in the alternative trading systems (ATS), it is compulsory that they must first be approved as broker-dealers.

Some cryptocurrency exchange firms are also interested in becoming qualified custodians so that they can serve as middlemen, keeping crypto assets for institutions who are unable to do this for themselves. Some exchanges that are authored as qualified custodians include Coinbase, Gemini and BitGo. With these three firms however, things were done a little differently as BitGo was authorized by the South Dakota division of banking while the New York Department of Financial Services was responsible for licensing both Coinbase and Gemini. FINRA was completely bypassed.

Is There Really An Unofficial Ban?

At the moment, it would seem that many people are sure that the hold-up might stem from deliberate actions against the rise of tokenized securities. A concerned attorney representing one of the affected firms has said that there have been a lot of conversations between FINRA and the SEC but it still doesn’t look like anything will happen soon. The attorney also said the SEC’s concern with manipulation and fraud in the cryptosphere is a big problem.

“On the one hand, you have the SEC complaining that there’s all this market manipulation and bad actors, but they won’t let good actors come in and clean things up.”

The lawyer also said that they don’t think there’s anything they haven’t tried.

“We’re at a stage where we’ve provided absolutely everything we can [and] they’re not requesting anything else from us. They’re just saying they can’t approve because they’re uncomfortable with this asset class.”

This situation has forced this particular client to consider continuing their business outside of the U.S as the attorney was quoted saying “…if we have to exclude U.S. citizens and U.S. companies and share our skills abroad, then that’s what we’ll do.”

This isn’t the first time the difficulty of regulations in the U.S has been pointed out. Last year, a Law and Technology Official at Consensys – Joyce Lai – specifically said that there would be a lot more related projects if the laws and regulations were a tad more lucid.

She has also said that:

“Regulatory clarification, or a lack thereof, is a huge hindrance that can weigh heavy on the minds (and potential purse strings) of founders.”

Is The SEC A Bigger Problem Than FINRA?

As stated earlier, no one is exactly sure what the problem is but many believe that even though FINRA might be a tough nut to crack, the major problem is the SEC itself. For the most part, the FINRA can conduct its business independently but the SEC is still legally allowed to override FINRA.

Even people who aren’t directly affected by the hold-up believe that the SEC is the problem. According to one of such persons:

“A lot of times FINRA are the people in the system that are slowing things down but in this case, what I’ve heard is that FINRA is waiting for clarity from the SEC so they can move some of these things forward and they’re actually being quite cooperative on working with people.”

Other Plausible Opinions

There are many who believe that the idea that there is some embargo is unlikely because there are a few firms who have successfully been approved by FINRA. These people think that the current problem might be attributed to the specific features of the digital assets submitted to FINRA.

Some of the Alternative Trading Systems (ATS) which received approval include OpenFinance, SharesPost, tZERO, and Templum Markets. These firms were approved last year causing a few people to believe that there is no real embargo.

No Resolve Anytime Soon

Even with all the complaints, it’s still very unlikely that the problem will see a resolution any time soon. One of the arguments in support of FINRA is that its responsibility, before it gives any approval, requires that it does a thorough scrutiny of all the firms including the owners and management, its proposed client base, its experience in the sector, financing and how it intends to source for funds and also what funds it currently has.

Because these things involve cryptocurrency and an audience that is on the internet (which means there can’t really be any fixed description), it might not be surprising that the process is taking a lot of time.

Under normal circumstances, FINRA has a deadline for either approval or disapproval which is six months. However, FINRA is still legally allowed to lengthen this deadline if it needs to.

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Author: Tolu

Delphi Digital: Bitcoin Reigns Supreme in 2019, is the King of the Asset Class Hill

When it comes to any and all kinds of assets available to investors across the world, Bitcoin has managed to surpass in performance, any other kind of asset. according to the financial performance of BTC over the course of May, its value rose more than 60 percent – making for the highest monthly return in more than a year.

This increase of 60 percent represents the single greatest performance from the world of assets in the world over 2019 so far.

These statistics come from the speciality analytics firm – Delphi Digital – which went on to give the Bitcoin the honorary title as ‘the king of Asset Class Hill,’ a fitting description for a digital asset class which is constantly maligned by more mainstream individuals within the marketing world. Made even more of an apt description thanks to its consecutive months of solid returns.

Graph and Bitcoin performance relative to other asset classes and stocks courtesy of Delphi Digital. According to the team responsible for this research within Delphi Digital:

“The acceleration in BTC’s performance comes at a time when conventional risk assets, notably global equity markets, continue to see selling pressure […],” the team continues on to explain.

“May’s outperformance has been especially important given the broader weakness across many other asset classes.”

Investment Flight Takes Shape From Riskier Assets While Bitcoin is Unperturbed

The current landscape for mainstream investment markets as well as public equity are undergoing a phase of anxiety amid some continually bad news internationally. It’s because of this that it, the team concludes, is “riddled with concerns.” One of the more prominent examples that we have for this would be the New York Stock Exchange.

The ‘concerns’ and bad news in question is pretty ubiquitous whether you’re paying attention on the radio, TV or newspapers – with earnings expectations for workers remaining relatively stagnant, continuing macroeconomic concerns relating to the ongoing trade disputes between China and the United States as well as a broader discontent over the rate of economic growth has since resulted in investors retreating from more ‘risky’ assets in exchange for what we refer to as ‘safe haven assets’ such as US Treasuries, government bonds and Precious Metals.

Even with this investment ‘flight’ which takes place in a bearish climate, even against ‘safe’ assets like Gold, Japanese Yen, and WTI Crude, Bitcoin still managed to more than trounce these tenfold over May along.

Courtesy of Delphi Digital

Within the body of its research, Delphi Digital went on to explain that, while Bitcoin had managed to take some serious ground compared to its conventional rivals, investors cannot rest on these digital laurels.

“Contrary to its recent history, Bitcoin has remained largely unaffected by the sell-off in risk assets, though expectations for market volatility are trending higher,” its analysts continued. “It is still too early to claim victory yet, but BTC’s uncorrelated nature has so far proved true.”

The analysts of the team have since determined that, even if investors were to allocate small volumes of BTC within their more conventional investment portfolios – such as one made up of 60 percent stock assets and 40 percent fixed income) over the course of three years, served to dramatically boost the kinds of annual returns obtained by the investor.

When we take this into consideration, it makes a great deal of sense, especially when looking at the kind of Bullish charge that Bitcoin underwent over the course of 2017.

“Just a 3-percent allocation (which we acknowledge is still a sizable position for most conservative investors) would have generated a compound annual growth rate of 12 percent over the last 36 months, without raising the portfolio‘s volatility or maximum drawdown by much,” said the firm.

Bitcoin’s price is $8,193.17 BTC/USD exchange rate today. The real-time BTC market cap of $145.34 Billion currently ranks #1 with a chart dominance at 55.91%, daily trading volume of $6.62 Billion and live coin value change of BTC -6.56 in the last 24 hours.

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Author: James F

Susquehanna’s Bart Smith Discusses Bitcoin Price Rally, Defending Its Volatility and Its Inherent Risk

Susquehanna's Bart Smith Discusses Bitcoin Price Rally, Defending Its Volatility and Its Inherent Risk

Bart Smith, a crypto analyst and the Head of Digital Assets at financial services firm, Susquehanna, has said that even though there are quite a few factors that contributed to the recent Bitcoin price rally, the asset is still significantly speculative.

Speaking during an interview on CNBC’s Squawk Box, Smith discussed a few issues surrounding the world’s largest cryptocurrency.

On Why Bitcoin Surged

According to Smith, there are a few reasons why Bitcoin was able to shoot as high as it did and these reasons are considerably interconnected.

A factor which has been corroborated quite a few times by some leading industry analysts is the ongoing trade war currently being fought between the United States and China. It is said that people began predicting that the Yuan will be negatively affected and decided to shift base to Bitcoin. This shift, among other things, caused Bitcoin to rise.

Smith also believes that the recently held Consensus conference might also be a factor to be considered with Bitcoin’s surge. According to him, all the publicity, promotion and advertising done in anticipation of the conference did a lot to keep Bitcoin and crypto in general, on the lips of many people. This, unsurprisingly, may also have helped the coin to shoot up as press was quite favourable.

There is also the news that Fidelity Investment, a key asset management firm, is also making serious plans to begin Bitcoin trading very soon. Reports have it that when it begins, the firm will allow financial institutions exclusively and will not allow individual clients just yet.

The decision made by Fidelity could be a direct action from a recently concluded survey where the firm found that about half of all institutions view cryptocurrency as a viable financial invention to be used sometime in the future.

On Bitcoin’s Volatility

It has been said times without number, that the fact that Bitcoin is very unstable and volatile would affect its future as a widely accepted form of payment. This opinion has been supported by the Congressional Research Service (CRS) as well Richard Fisher, a contributor for CNBC.

Smith however defended the asset without completely dismissing its volatility, arguing that the market still has a lot of room to develop and possibly grow out of it high volatility. According to him:

“People who are bearish on that would say it’s too volatile. I would argue that it’s kind of in a nascent phase and if a broader adoption occurred, the volatility would damper.”

Smith also believes that the recent Bitcoin surge and its generally impressive trajectory that has been upheld so far this year, will definitely help its chances as the atmosphere is generally a bullish one. Smith explained this by pointing out that

“there is a lot of optimism from people within the Bitcoin community over the things that happened in recent months. And I think that is reflective in the price.”

Bitcoin, according to most analysts and experts is still expected to rise and do better numbers. Many people are looking forward to the Bitcoin halving that is expected to happen in May next year, as a major push for a price surge.

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Author: Tolu

New Digital Fiat Currency System in Development by the Central Bank of the Bahamas (CBOB)

New Digital Fiat Currency System in Development by the Central Bank of the Bahamas (CBOB)
  • New payment system for digital assets to be introduced by Central Bank of the Bahamas.
  • The initiative, Project Sand Dollar, includes a collaboration between Zynesis and NZIA.io.

The Bahamas is known as a place of luxury to tourists, and a recent announcement from the Nassau Guardian indicates that the Central Bank of the Bahamas is making the environment more friendly. Reported on May 29th, the CBOB will be starting the development of a digital fiat currency system, starting with an official agreement with NZIA.io.

The bank and the transaction provider, respectively, will be responsible for creating and implementing “Project Sand Dollar,” which will be the first time a digital currency has been created in the Bahamas. The collaboration with NZIA.io was first announced in March by the central bank, joining the Zynesis software development firm in the project.

As described by the central bank, Project Sand Dollar will be working on an electronic payment system for “integrated, affordable” remittance, which will be geared towards the local businesses and residents. To be integrated seamlessly into the current financial infrastructure, the team behind the project will ensure that this payment system falls in line with the local financial regulations.

All residents of the island country will now have equal access to digital payments, which reduces the service delivery costs associated with performing transactions with cash.

At this point, there has not been an island selected to pilot the new payment system. However, John Rolle, the bank governor, said that the Family Islands should be ready to completely adopt the initiative by the end of next year. The original plan to bring in a digital currency with government support was announced by CBOB in June last year.

Not all countries are taking such a progressive stance. In fact, the president of Deutsche Bundesbank in Germany warned banks that the volatility of the crypto market could put central banks at risk in the country. The official added that the integration of crypto assets could also create instability of the financial system, specifically in crisis situations.

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Author: Krystle M

Bitcoin’s Ten Years Young and Is Already Taking Conventional Investments to School in 2019


2019 has been the year of crypto assets where it has outperformed most of the traditional assets such as oil, gold, and popular stocks. While 2018 was the year of the bearish trends, 2019 is highly bullish. The crypto market was expected to spring back and rise in value with an impending bull run on the cards. However, analysts were predicting the rise of the crypto market towards the end of 2019, but bulls arrived as early as April which has doubled the market cap of cryptocurrencies by double since the start of the year.

The total market cap of crypto space stands at a quarter of a trillion dollars and the daily trading volumes of the digital assets are touching as high as $80 billion. In comparison, traditional assets like oil are up by 29% in 2019, which is followed by popular stocks such as Nasdaq up by 15%, S&P up by 13%, Dow Jones up by 10%, and the Nikkei is up by 6%. While Gold has seen a mere surge of 0.46%.

While it is unfair to compare the traditional assets with the digital ones since cryptocurrencies are known to be volatile, where both the dips and highs are equally massive. During the recent surge in the crypto space starting in April, some assets such as Bitcoin Cash made 50% gains on a single day, which tells a lot about the volatility of these assets.

The 2017 rise of Bitcoin was surely phenomenal which took its prices from $750 to near $20,000 in December. Similarly, the downfall throughout 2018 saw Bitcoin, as well as the crypto space, lose more than 80% of their overall market cap.

The Changing Landscape of Digital Assets

2018 might have been a forgettable year for the crypto investors, however, the bearish trends of 2018 cut down the high-volatility of the crypto space, paving the way for traditional and institutional investors to make a foray into the digital asset arena. In 2019, the cryptocurrency market is stronger than ever before as more people have shown interest and are dumping traditional assets for the digital ones.

If we look at the gains made by some of the crypto assets it comes out to be more than most of the traditional assets combined. The biggest gainer in the digital arena is Binance Coin (BNB), which has surpassed its all-time-high record twice in the last month itself. BNB started the year at $6.19 and currently trading at $33.68. Litecoin has added around 265.85% to its value from the start of the year. Bitcoin Cash (BCH) the forked sibling of Bitcoin has also risen 186% taking its value from $150 at the start of the year to the current price of around $432.

Cryptocurrency Market Is Thriving and Prices May Go Further Up

2019 has been predicted to be the year of bulls, after bears dominated throughout 2018. The overall market cap of the cryptocurrency market stood at $125 billion at the start of the year, and currently, it is at $273 billion, seeing an increase of 118%. The daily trading volumes have risen a massive 500% from the start of the year as well. On January 1st the crypto space traded $12.6 billion worth of crypto assets and that trading volume jumped to 83 billion by 28th of May seeing a massive surge of 558%.

Bitcoin, the pioneer of the cryptocurrency space was only the sixth largest gainer with a 132% rise in value from the start of the year. Bitcoin started the year at $3,746 and currently trading at around $8638 after seeing a minor price correction earlier today.

The cryptocurrency space has not just made tremendous gains in terms of the value, but also as the preferred investment option over traditional assets. Various trust management and hedging firms have confirmed that new and upcoming traders want to swap their gold reserves for Bitcoin.

The current price movement in the crypto space is speculated to rise further throughout 2019, as the price charts, and key metrics suggest that Bitcoin and other altcoins are mimicking the patterns of 2017 rise. While there have been several speculations about the crypto market seeing another bottom before a full-fledged bull run takes charge, there are many who believe that the market has already passed the bottom, and prices would only go further up.

The best part about the current surge is that most of the naysayers and long term critiques have come around to join on the crypto bandwagon, having realized that the crypto space is thriving and here to stay.

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Author: Bitcoin Exchange Guide News Team

Vague, Contradictory Crypto Asset Regulations in the United States Risk Top-Tier Innovation to Faulter


The unclear and conflicting regulations on crypto assets are causing great dissension amongst the cryptocurrency companies operating in the United States. It is feared that unless these financial laws are amended and updated, there will be an exodus of highly talented individuals to countries where the regulations offer a friendlier climate to operate in.

Whilst always on the forefront of technology which has seen the setups by Silicon Valley being extremely successful whilst operating within the constituted climate, the same cannot be said of the introduction of blockchain technology in the US.

The SEC (US Securities Exchange) and CFTC (US Commodity Futures Trading Commission) are extremely vigilant of these platforms, which include unlicensed monetary dealings and unregistered securities trading. This added to the conflicting regulations, results in the cryptocurrency issuers, services provided and P2P traders are conflicting with the law without any just cause.

The government has been asked by Poloniex exchange owners, Circle, for US regulators to act with reason failing which people may tend to move towards areas where regulations are clearer. It is believed that this would not be beneficial to US trading.

The online crypto trading markets and digital crypto platforms have made a plea to the US to regulate in such a way to allow creativity amongst technologists and to allow operations on blockchains as opposed to the antiquated laws that were written for guarantees offered by companies and corporations.

The outcome of these regulations has seen cryptocurrency exchanges taking a precautionary view, knowing that any smallest transgression may result in a hefty fine or even closure from trading.

The Rest of The World Makes Hay Whilst America Sleeps

With the uncertainty abounding as to what makes a project’s token a utility, exchanges such as Poloniex have removed coins like DCR (Decred coin) – a digital currency – resulting in other countries taking advantage and seizing the opportunity to tokenize.

Advice From An Expert

Jose Mario Macedo who serves on numerous advisory boards, is a token economics expert and who has helped to develop the blockchain policy, pointed out that the SEC has an obligation to remove glaring financial misdemeanors incurred by the ICO (Initial Coin Offering) and not acting in the same manner towards the tokenized projects that are acting with the goodwill of the people in mind.

It is again the unclear definition in the US of what comprises a security token that has resulted in exchanges no longer operating on crypto assets to avoid being convicted by the SEC. Jose Maria Macedo went on to give the definition of crypto capital as a token which offers entry to something of worth. Crypto assets are described as tokens that do not offer a continuous flow of value. These descriptions, whilst appearing easy to understand, are not totally clear cut and US crypto companies are forced to tread wearily.

Crypto Leaders Address This Problem With The SEC

Fred Wilson, CEO of Union Square Ventures, highlighted that the policy of the SEC is going to have a detrimental effect and force trading and the crypto sector to move to Asia resulting in the technology sector having their headquarters in this region and not in the US.

Late in May, KIN founder Ted Living stated that his operation has launched Defendcryto.org and was setting aside an amount of $5 m with Coinbase to take on the SEC which he believes are stifling innovation. He has implored other crypto agencies to contribute to the cause as he believes that this amount is not sufficient to take on this huge challenge with the SEC. His wish is for the crypto industry to stand together rather than fight the cause silently.

The recent history of Kin which saw the company raise $100 million via an ICO, could result in a lack of support for this campaign but it is a general feeling that the crypto asset regulation needs to change before the US is left in the wake of those countries who have taken advantage of the evolution of digital currencies and it would take the US many years to catch up if not addressed immediately.

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Author: Ali Raza