China’s Central Bank says Crypto Crackdown Completed and Now Back to Normal Supervision

China’s Central Bank says Crypto Crackdown Completed and Now Back to Normal Supervision

“The battle to prevent and resolve major financial risks has achieved important phased results,” reads the translated version of the China Financial Stability Report 2021 from the country’s central bank.

As part of its financial stability measures, the central bank cracked down on several activities, including crypto mining and derivatives trading, earlier this year.

This crackdown in China led to the shutdown of crypto mining operations in the country, leading to a crash in the hash rate of the Bitcoin network. After fleeing China, these miners are now coming back online overseas, as seen in the recovery in the hash rate, which is up 55% from early July, when it hit an almost two-year low.

This crackdown also led to a more than 50% drop in Bitcoin price, which went under $28k in June. Since July low, BTC/USD is now back above $50,500, up 73% YTD.

In its report, the People’s Bank of China (PBOC) noted that the crackdown on virtual currency transactions has been completed and has now been transferred to normalized supervision, shared Chinese publication Wu Blockchain.

“Bids filled, crackdown completed?” quipped Su Zhu, the CEO, and co-founder of Three Arrows Capital.

“FYI when BTC is in the 400-800k range, I think we will see a ton of govt crackdown psyops as they attempt to fill bids, similar to the jawboning we see in FX markets.”

Meanwhile, the report noted that the central bank’s measure to mitigate internet financial risks had achieved good results with all P2P online lending institutions in operation closed down, including internet asset management, equity crowdfunding, internet insurance, virtual currency trading, internet foreign exchange trading, and other fields.

The rectification work is “basically completed; it has been transferred to normalized supervision,” it added.

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Author: AnTy

FCA’s Crackdown Hits Another One After Binance, Which Has ‘Not’ Seen Institutional Activity Slowdown

FCA’s Crackdown Hits Another One After Binance, Which Has ‘Not’ Seen Institutional Activity Slowdown

Rather, this continued interest from institutional investors is coming not only from crypto native firms but also from traditional finance institutions. Meanwhile, in the US, DeFi is on regulators’ radar where with no intermediary, the question is, “who do we put this on?”

Britain’s Financial Conduct Authority (FCA) said that crypto broker CoinBurp is not fully authorized to have its initial token offering and the launch of its BURP token planned for Monday.

However, the company can start a business under its temporary registration, the FCA added, as long as it has the controls in place.

Last week, the project raised $6 million to build a non-fungible tokens (NFTs) marketplace. Last week, in a press statement, CoinBurp claimed to be a “regulated broker” and said that all the NFTs listed on its market could be sold to investors.

Although CoinBurp is listed on the watchdog’s temporary registration register, this status only allows them to trade. The watchdog said the company isn’t yet assessed as “fit and proper” or entitled to claim to be authorized by the FCA as the regular has yet to determine their application for the money laundering regulations. The UK regulator said in its statement,

“The firm does not yet hold full FCA registration under the money laundering, terrorist financing, and transfer of funds (information on the payer) regulations … but has submitted an application for the FCA for registration.”

For some time now, FCA’s crackdown has been going on with Binance, which has no headquarters, particularly bearing the brunt of it. This has resulted in several big UK banks such as Barclays, Santander, and NatWest banning retail customers from sending money to the exchange.

Due to this, several hedge funds, according to the Financial Times, have also curbed trading on Binance as a regulatory crackdown on it continues to grow.

However, Binance told FTX that it has “not seen a slowdown in institutional activity. On the contrary, we have seen continued interest in our institutional offering from not only crypto native firms but also traditional financial institutions that have entered the crypto space.”

Amidst this, on Monday, Binance reduced the leverage from previously 125x to now 20x.

Meanwhile, DeFi is on US regulators’ radar, with CFTC Commissioner Dan Berkovitz saying in an interview,

“I’m very concerned there’s none of the reporting, none of the normal pricing and regulatory limits. The bottom line is there’s no free lunch anywhere in the economic system.”

As we saw last week, Uniswap Labs delisted several tokens from the exchange. With no intermediaries in decentralized finance, which has grown to become $110 billion in total value locked (TVL) and $85 billion in total market cap, the question is, “who do we put this on?” said Alabama Securities Commission Director Joseph Borg.

While Sen. Elizabeth Warren is urging regulators to rein in DeFi activities, Borg said, SEC and CFTC would have to come together to assess the potential possibilities and potential risks. OCC spokesperson Bryan Hubbard said,

“While DeFi, by definition, is decentralized and does not necessarily rely on the banking system, there are linkages, which are part of our review through the lens of responsible innovation, cognizant of the potential benefits of new technologies while focused on understanding the potential risks and use cases.”

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Author: AnTy

The Global Crackdown on Binance which Accounts for Nearly 70% Spot Exchange Volume Market Share

The Global Crackdown on Binance which Accounts for Nearly 70% Spot Exchange Volume Market Share

The leading cryptocurrency exchange Binance is now being targeted by Thailand’s watchdog, which filed a criminal complaint against them on Friday for operating a digital asset business without a license.

Binance was actually warned by the SEC over its activities in a letter in April, but when they received no response, the Commission filed a criminal complaint with the police, it said.

This is just the latest in a string of crackdowns on the platform by regulators from all over the world.

This week, Cayman Islands’ financial regulator also said Binance wasn’t authorized to operate in the territory.

The Monetary Authority of Singapore (MAS) joined in, saying it would follow up with the local unit of Binance because of scrutiny from authorities elsewhere.

Before this, last week, Britain’s financial watchdog barred the company from carrying out regulated activities in the country, and before that, Japan’s regulator said the exchange was operating in the country illegally.

Binance has already restricted its services for Ontario, Canada users citing “compliance efforts,” after the Ontario Securities Commission (OSC) published a Statement of Allegations against other crypto exchanges viz. Bybit, Poloniex, and KuCoin, for failing to comply with its regulations.

In the US, it is under investigation by the Justice Department and Internal Revenue Service. Back in April, Germany’s watchdog also said it risked being fined for offering tokens connected to stocks.

Binance meanwhile maintains that it takes a collaborative approach to work with regulators and takes its compliance obligations seriously.

The concerns seem to be about Binance’s lack of a headquarters, with the UK’s Financial Conduct Authority (FCA) calling it a “huge issue.”

“Everybody’s definition of a headquarters of a company is slightly different,” reiterated Binance CEO Changpeng “CZ” Zhao at Ethereal Virtual Summit earlier this year. “Our leadership team are not sitting in one office, we don’t have a clear place where we can go.”

Launched in 2017, Binance has grown tremendously over this short period and now accounts for 69.7% of legitimate centralized spot exchange volume. Coinbase only accounts for 8%, followed by FTX at 4.3%, and Kraken at 4.1%.

While trading volumes at the exchange have fallen to $662 billion in June, they are still up 10x from a year earlier. Overall volumes in the market are also down 65% from the late-May peak to be at early February level but still up 15x from July 2020.

Amidst this crackdown, Binance’s native token BNB, the 5th largest coin with a market cap of $46.5 billion, has experienced a drawdown of 68% in line with the broad crypto market sell-off.

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Author: AnTy

China’s Regulatory Crackdown Focused on High Leverage Derivatives Trading

China’s Regulatory Crackdown Focused on High Leverage Derivatives Trading

Buying, selling, and holding of cryptocurrencies is not affected; rather, derivatives trading is targeted as crypto exchanges suspend related services for Chinese users.

Ahead of the politically sensitive 100th anniversary of the ruling Communist Party on July 1, China recently took a strong stance against Bitcoin and crypto mining, which sent the prices of the cryptocurrencies crashing.

However, things seem to be leaning towards derivatives trading rather than the spot market.

One of the biggest Chinese cryptocurrency exchanges, OKEx, recently clarified that while the regulators are going to be more strict on exchanges and mining operations, people can still hold cryptos.

The exchange noted that the clampdown has been “mainly due to potential risks for consumers and society in China.”

Before the State Council’s notice, the China Internet Finance Association also warned the public about the risks of investing in cryptocurrencies, which focused on the fact that institutions should understand the nature of crypto assets, financial institutions shouldn’t engage with them and must abide the existing regulations, and that China does not offer legal protection for crypto-related investment.

Amidst this, China’s largest altcoin exchange MXC announced that new users in China are prohibited from trading futures.

“Due to recent dynamic changes in the market, MXC will be suspending some of our services such as Margin Trading and Futures to new users from a few specified countries & regions. Most users will be unaffected by this change,” said the exchange.


Another exchange BitMart also reported a change in policy as per which it will suspend contract trading services for all Chinese users. While the positions already opened can be closed, no new positions are allowed.

“Chinese state media are severely criticizing high-leverage futures trading,” noted local media, Wu Blockchain.

Binance, Huobi, Bybit, and OKEx are the top four global exchanges, and Huobi, which is most sensitive to China’s policy, has also announced that it has banned new Chinese users from using futures, it added.

Recently, in an interview, Binance CEO Changpeng Zhao revealed that its Chinese market comprises 80% to 90% of retail, unlike the US, where it’s exactly the opposite with institutions accounting for this much share.

Wu Blockchain also noted that Binance has also changed all Chinese related to contracts and leverage to traditional Chinese because it is “worried about mainland China’s crackdown on leverage and derivatives trading.”

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Author: AnTy

Regulatory Crackdown Continues: SEC Commissioner Calls for More Regulation Around Crypto Exchanges

Regulatory Crackdown Continues: SEC Commissioner Calls for More Regulation Around Crypto Exchanges

Users would benefit from investor protection on the crypto exchanges as cryptocurrencies are “highly volatile,” said Gary Gensler.

US Securities and Exchange Commission (SEC) Chairman Gary Gensler reiterated that he would like to see more regulation around cryptocurrency exchanges.

“This is quite volatile, one might say highly volatile, asset class, and the investing public would benefit from more investor protection on the crypto exchanges,” he said at the Financial Industry Regulatory Authority’s annual conference.

Gensler said he had asked Congress to consider the issue.

He shared how the regulator has taken many enforcement actions against the crypto tokens that are issued much like classic investment tokens and fall under the SEC’s jurisdiction but aren’t registered with the agency.

“And there are hundreds of tokens out there, so we’ll continue through examination and enforcement doing what we can in that space.”

Gensler then went on to say that the SEC needs to refresh its rules and regulations around crypto marketing and being offered by retail brokerages, robo-advisors, and wealth management firms.

“We all know that there’s greater access and some real enhancement that can come from these mobile applications, but at the same time, we have to freshen up and ensure that our rule sets address it properly around the communications with the public.”

This week, the US Treasury also called for stricter crypto compliance with the IRS, while Federal Reserve Chair Jerome Powell talked about stablecoin carrying potential risks.

“It’s clear a US crypto regulatory crackdown is starting, but I’m optimistic because most of the major players/agencies have spoken already & the policy is taking shape: its pay taxes, comply w/ laws & don’t take shortcuts, & we’ll enable innovation,” said Caitlin Long, founder, and CEO of digital asset bank Avanti Bank & Trust.

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Author: AnTy

Kraken CEO Jesse Powell: You Can’t Rule Out A Crackdown On Cryptocurrencies

Kraken CEO Jesse Powell: You Can’t Rule Out A Crackdown On Cryptocurrencies

Kraken CEO Jesse Powell believes the crypto industry could be subject to regulatory crackdowns from governments around the world soon.

Governments Clamping Down On Cryptocurrency

With the rate at which cryptocurrencies have surged lately, the Bitcoin exchange CEO said there could be some crackdown. According to him, regulatory uncertainty around crypto isn’t going away anytime soon.

Not only did Bitcoin just hit a record high price of more than $63,000 today, BTC 5.98% Bitcoin / USD BTCUSD $ 63,647.18
Volume 70.07 b Change $3,806.10 Open $63,647.18 Circulating 18.68 m Market Cap 1.19 t
4 h Kraken CEO Jesse Powell: You Can’t Rule Out A Crackdown On Cryptocurrencies 6 h Riot Blockchain Now Holds 1,565 BTC on Balance Sheet After Mining 104 BTC in March 6 h House Republican Leader Urges Govt. to ‘Better Start Understanding’ Bitcoin
but there has also been an explosion of the NFT market, and the DeFi space has seen massive growth in recent times.

The total market cap of all crypto assets also expanded by 600% to well over $2 trillion this year.

In this vein, Powell said there was a probability that governments would lay out tougher rules.

Speaking in a recent CNBC interview, Powell also noted that the US has only considered immediate consequences when it comes to the crypto industry.

“I hope that the US and international regulators don’t take too much of a narrow view on this. Some other countries, China especially, are taking crypto very seriously and taking a very long-term view.”

However, even though the US is treading carefully, Powell does not think the country would ban cryptocurrency. He said that banning cryptocurrency at this stage would only make more people interested in investing in it, and it would also mean that the government sees the asset as superior to its currency.

Apart from the US, another country taking a tough stance against crypto is the Asian nation, India. India is one of the strictest countries when it comes to cryptocurrencies. Rumors have been spreading about how the government is considering banning digital currencies and penalizing anyone who holds or trades them.

Regulators Sounding The Alarm About Crypto

For a long time, cryptocurrencies have often been associated with illicit activities. One reason for this is that transactions with it are usually pseudonymous, and another reason is its high volatility.

In March, the European Securities and Markets Authority (ESMA) warned investors about the increasing risks associated with crypto investing. The warning was published in its latest report on Trends, Risks, and Vulnerabilities.

US Treasury Secretary Janet Yellen has also previously warned about the use of Bitcoin for money laundering, terrorist financing, and other illegal activities.

Meanwhile, a new crypto council called the Crypto Council for Innovation had been formed by crypto firms Fidelity, Coinbase, Square, and Paradigm to lobby for fair regulations surrounding cryptocurrency in the U.S.

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Author: Jimmy Aki

Binance Buyout Brings Hope to Investors in India of Enhanced Regulation

Back in April 2018, India’s central bank instigated a massive crackdown on purchasing and trading cryptocurrency like Bitcoin. Bibhu Kanungo, who is the Deputy Governor for Reserve Bank of India, declared that all the firms regulated by the RBI should “stop having business relationships with entities dealing with virtual currencies forthwith and unwind the existing relationships in three months time.”

Crypto exchanges were therefore shut down as a result of regulatory pressure. But in not more than 18 months, Binance decided to purchase WazirX. It is the most influential crypto exchange in India.

Regulatory Qualm

Even before implementing the ban, the bank had already issued statements whereby it warned users of perils associated with digital currencies. In 2017, India’s finance ministry announced that cryptocurrency was a significant threat, and it was kind of an investment bubble. If it crashed in any way, whether prolonged or sudden death, it would significantly affect investors.

Things got even worse after the bank failed to assess the issues surrounding cryptocurrency and imposed a ban on all cryptocurrency activities. The bank ought to have formed new regulations to govern the crypto activities and shield consumers from malicious companies and organizations.

The ban led to the creation of a bill commonly referred to as “Banning Cryptocurrencies and Regulation of Official Digital Currency Bill 2019.” Lawmakers proposed a jail term for not less than ten years to the citizens who engaged in cryptocurrencies.

The bill, however, suggested that India Reserve Bank’s Digital Rupee could be approved as a legal tender by the government. But all other currencies that are otherwise cryptocurrency would be prohibited. The CEO Crebaco, Sidharth Sogani, explained meticulously why the government of India took this stun action saying that there is no way you can regulate something that you are not in direct control of. He described Bitcoin as an open-source network and borderless hence cannot be controlled.

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Author: Daniel W