New Zealand’s Financial Markets Authority Warns Crypto Investors to Watch Out for Scams

New Zealand’s Financial Markets Authority Warns Crypto Investors to Watch Out for Scams

New Zealand’s Financial Markets Authority (FMA) has become the latest financial watchdog to issue cryptocurrency risk warnings to crypto holders and investors.

The warning is coming as the crypto market is witnessing a gradual contraction in market prices. The financial watchdog has warned citizens dealing with crypto assets to be wary of the risks since digital assets are not regulated in the country. FMA stated,

“Cryptocurrencies are not regulated in New Zealand and are often exploited by scammers and hackers.”

A rise in crypto scams

Based on NZ Herald’s report, the FMA has expressed worries about the increasing cryptocurrency scams in New Zealand, with several unregulated digital exchanges promising unusually high returns that are unrealistic.

This latest announcement from the FMA is coming barely 24 hours after the UK’s Financial Conduct Authority (FCA) issued a warning about the risk of cryptocurrency investments in the country.

Highly volatile market

The watchdog added that New Zealanders looking to invest in Bitcoin and cryptocurrencies should be very careful because they are highly volatile and risky investment vehicles.

The FMA said it shares the FCA concerns, and crypto holders and investors should be prepared to lose all their invested funds if they continue in the highly volatile crypto market.

Many cryptocurrency exchanges based overseas are not regulated, as they carry out their business exclusively online. As a result, investors of such exchanges are at high risk of losing their entire investments if something goes wrong in the market. The FMA noted that there is no assurance that their funds will be safe since it’s difficult to find out who is selling, buying, exchanging, or offering the cryptocurrencies.

In the past year, the crypto market has risen substantially, as almost all the digital assets added considerable gains. Now the overall market cap of crypto assets stands at over $1 trillion, with Bitcoin having about 70% of the share.

In 2020, the world’s most valuable cryptocurrency rose by more than 300%. But with the rise in the value of cryptocurrencies, more people became interested in the crypto market. As a result, crypto scams more than doubled as well.

Elliptic, a crypto assets risk management provider, reported recently that threat actors are hiding stolen Bitcoin in privacy wallets. Some criminals are also using pictures and details of famous people to deceive crypto holders on fake news websites.

The threat actors have used scam Bitcoin ads featuring unauthorized pictures of celebrities and personalities like Waleed Aly, Chris Hemsworth, and Andrew Forest to lure their victims to part ways with their cryptocurrencies. The report revealed that these cybercrimes are linked to threat groups from Moscow.

Verifying registration status of the exchange

New Zealand’s watchdog has also issued an advisory to crypto investors who deal with crypto exchanges. According to the regulator, users should verify whether the exchange holds their New Zealand dollars in a trust account. They should also ensure that the exchange is dully registered with the Financial Service Providers Register (FSPR), which is required in the case of a dispute resolution.

Read Original/a>
Author: Ali Raza

Bitwise Survey: Financial Advisors Expecting Bitcoin To Hit $100k By 2025 Increases By 275%

Bitwise Survey: Financial Advisors Expecting Bitcoin To Hit $100,000 By 2025 Increases By 275%

Over 17% of financial advisors with no crypto investments say their clients will definitely (2%) or probably (15%) invest in digital coins in the coming year.

According to a Bitwise Invest and ETF Trends report, “Benchmark Survey of Financial Advisor Attitudes Toward Crypto assets 2021,” there is a rising interest in cryptocurrencies this year from financial advisors and their clients. In December 2020, the survey was completed by nearly 1000 eligible respondents ranging from independent registered investment advisors (RIAs), broker-dealer representatives, financial planners, and wirehouse representatives.

The 300%+ spike in Bitcoin price to new all-time highs caused a spike in the number of retail and institutional investors willing to take up crypto in their portfolio. The current number of advisors allocating their clients’ funds in crypto rose over 49% in 2020, from 6.3% to 9.8% this year.

17% of financial advisors who have never invested in crypto before are looking at getting into digital assets – 15% of them “probably” and 2% “definitely” allocating funds to crypto in 2021.

The biggest motivation for financial advisors to add cryptocurrencies in their portfolio is the low correlation these digital assets have to other assets – helping in diversification. Over 54% of the advisors stated this as the main reason to invest in cryptocurrency. A further 25% chose hedging of inflation as their reason to invest in cryptocurrencies in 2021, up from 9% in 2020.

The surveyed financial advisors also said they were facing a significant uptick in client questions on the crypto space. Over 80% of the financial advisors stated they had received a question from clients on the crypto space in the past year, increasing from 76% last year.

According to the survey, nearly 75% of the financial advisors thought their clients could be investing in crypto outside of their relationship – 36% stating some or all of their clients were investing in crypto alone and 38% reporting they didn’t know if they were investing or not. Only 26% of the surveyed financial advisors stated they were confident that their clients were not investing in crypto, dropping from 28% in 2020 and 35% in 2019.

The financial advisors are also increasingly getting massively bullish on Bitcoin’s price in the coming year as 15% of them expect BTC to hit $100,000 in the next five years. This represents a 275% increase from the 4% recorded last year. Notwithstanding, the number of advisors that expect the price of Bitcoin to plummet to zero in the same timeframe has significantly dropped from 8% to 4% in the past year.

Read Original/a>
Author: Lujan Odera

FinCEN’s Crypto Rule Is The “Definition of Bad Regulation;” Market’s Don’t React

The Financial Crimes Enforcement Network (FinCEN) issued its new proposed rule extending anti-money laundering (AML) regulation to non-custodial wallets on Friday.

Under the latest proposed rules, banks and money service businesses that involve exchanges and custodians would be required to keep records and verify the identity of customers transacting greater than $3,000. For those above $10,000, they should report to FinCEN in the form of a currency transaction report.

The information to be collected includes the name and address of the sender and receiver, type and amount of wallet used in the transaction, time and value of the transaction, and any other payment instruction or related information.

These proposed rules, “which applies to financial institutions and is consistent with existing requirements, is intended to protect national security, assist law enforcement, and increase transparency while minimizing impact on responsible innovation,” said Secretary Steven T. Mnuchin, in the official announcement by FinCEN.

The bureau within the U.S. The Department of the Treasury is requesting comments on these proposed rules for which the public only has 15 days, that too right in the middle of the holiday season — “midnight rulemaking.”

Doesn’t Really Help Anyone

According to the crypto resident lawyer, Jake Chervinksy, General Counsel at Compound Finance, “It could’ve been worse (really), but it’s still a terrible rule in both process & substance.”

The proposal follows a global trend as already seen in Switzerland and France, where AML regulation is extended to transactions from virtual asset service providers (VASP) to wallet.

The “bright” side is it doesn’t require KYC for every transaction or outrightly bans self-custody or even prohibits the act of using a permissionless network, said Chervinksy.

Still, it is an awful rule because, first, it doesn’t accomplish its state goal of stopping bad actors or helping law enforcement with its job. Second, “it infringes on US citizens’ financial privacy rights.” Law enforcement has been required to subpoena VASPs to get information about customers; this rule would force them to hand it over automatically, explains Chervinksy.

Third, “the rule is vague & ambiguous,” in the way that who owns non-custodial smart contracts or how does one provide they own a private key.

It is simply the “definition of bad regulation,” he said.

Bullish, Not as Invasive as Feared

The rules followed Wyoming Senate-Elect, several US lawmakers, and Coinbase CEO sharing their concerns about the rumored regulations by the Treasury Secretary on self-hosted digital wallets.

It is expected that next week the regulator is going to release guidelines for self-hosted digital asset wallets as well.

Interestingly, the market remained unaffected by FinCEN’s midnight rule announcement. It could be attributed to the fact that the market knew that some form of rules were coming its way, and they had been expecting the worst-case scenario.

“Not as invasive as feared. Bullish,” tweeted trader and economist Alex Kruger who says, these proposed crypto regulatory changes would impact the likes of Coinbase and Circle and won’t be breaking DeFi or smart contracts.

“New proposed FinCEN rule breaks DeFi,” said Jeremy Allaire, CEO of Circle.

DeFi tokens actually pumped on the regulatory news. The rule likely broke DeFi integrations in custodial platforms, i.e., “a regulated exchange that provides their customers with access to a DeFi protocol.”

As Hayden Adams, creator of DEX Uniswap, noted, “Ethereum is the closest thing to a country that Uniswap has.”

The fact that the cryptocurrency markets, as a whole, didn’t react to the news is a bullish sign and when that happens, “the trend in the ensuing direction is usually violently enhanced.”

Read Original/a>
Author: AnTy

FinCEN Opens Job Positions for Crypto Policy Advisers Ahead of Proposed Wallet Regulation

The Financial Crimes Enforcement Network (FinCEN), a top policy enforcement arm of the Treasury Department, has been rumored to be in the process of developing crypto regulations for a while.

These rumors have now been given new life as the regulator recently posted two job listings for crypto advisers.

Qualified Applicants Only

Published last week, the listings showed openings for Strategic Policy officers. These professionals will primarily assist the agency in developing policy responses to cryptocurrencies. They will also issue advisories to liaise with financial institutions and engage in crypto policy collaborations with private and public sectors.

The details of the job listings show that FinCEN wants to improve its crypto policy acumen. Both positions will receive top clearance, and they are full-time positions. Candidates are to have experience in strategizing, drafting, and researching crypto policy.

These requirements show that FinCEN is looking to get more than just washed-down regulatory policies that will do no good for the crypto space.

Talks of policy developments from the FinCEN have swirled throughout the year. In February, Treasury Secretary Steve Mnuchin alluded that the agency was working on drafting regulations for cryptocurrencies across the countries.

Many Talks, Little Action

Speaking to Congress on the President’s $4.8 trillion budget proposal, the Treasury Secretary explained that the budget was also set to address effective cryptocurrency monitoring and enforcement against criminals. He said in part:

“We’re about to roll out some significant new requirements at FinCEN [Financial Crimes Enforcement Network]. We want to make sure that technology moves forward but on the other hand, we want to make sure that cryptocurrencies aren’t used for the equivalent of old Swiss secret number bank accounts.”

The Treasury Secretary revealed that his department would collaborate with several other regulators, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

So far, there hasn’t been much in terms of regulatory oversight from the agency. In September, it issued an announcement stating that it would seek public comments on forthcoming proposals that would strengthen rules on monitoring and reporting financial institutions’ requirements.

The announcement claimed that the proposals would address terrorist financing, money laundering, and others, suggesting that crypto-related firs would also be in the regulator’s crosshairs.

Last week, Coinbase CEO Brian Armstrong revealed on Twitter that the FinCEN was most likely looking to rush through crypto regulations with the current administration on its way out. Mnuchin is set to be replaced by Janet Yellen at Treasury, and according to Armstrong, the current administration will be looking to make one last mark.

The CEO accused the FinCEN of trying to track self-hosted wallets. This move could essentially break down a significant anonymity barrier on which the crypto industry stands.

Read Original/a>
Author: Jimmy Aki

Canada’s Largest Fund Group Partners with Galaxy Digital, Completes $72M IPO of a Bitcoin Fund

Amidst Bitcoin’s crazy rally, Canadian mutual fund manager CI Financial Corp. raised $72 million in an initial public offering of a Bitcoin fund.

Founded in 1965, CI Financial is Canada’s largest independent mutual-fund manager with C$215.6 billion in assets under management as of Nov. 30.

While Toronto-based CI Financial will be managing the fund, Mike Novogratz’s Galaxy Digital will be the sub-advisor and execute the Bitcoin trading on behalf of the fund. On this collaboration, Novogratz commented,

“Fuel to the fire. So excited to partner with Canada’s largest fund group.”

The IPO attracted interest from a wide range of investors, including individuals, institutions, high-net-worth investors, and financial advisers.

Each share of the CI galaxy Bitcoin Fund was sold at C$12.88 ($10). It will be listed on the Toronto Stock Exchange to trade in U.S. and Canadian dollars.

The fund enables the company’s clients to hold the largest cryptocurrency through existing investment channels without going on new platforms. CI Financial Chief Executive Officer Kurt MacAlpine in an interview said,

“Having a product that can be bought directly — it can be bought through their financial adviser on behalf of them — it just makes their life a lot simpler than having to address their desire for Bitcoin via different structures and wallets.”

The closed-end fund will invest directly in Bitcoin, which will be held in segregated cold storage.

Read Original/a>
Author: AnTy

UK’s Financial Conduct Authority (FCA), Extends Temporary Registration For Crypto Exchanges

  • UK’s top financial regulator extends “temporary registration regime to July 2021.
  • Customers are warned to withdraw assets from exchanges that are not in the registration process.

U.K. regulator, the Financial Conduct Authority (FCA) launched its ‘Temporary Registration Regime’ to allow cryptocurrency service providers who are in the process of registration to continue offering their services. The registration deadline to crypto firms in the U.K is being extended to July 10th next year for every firm that applied for registration before December 16th, 2020 – previously set on January 10th, 2021.

The temporary registration regime is set to allow the regulators additional time to check and approve licenses “due to the complexity and standard of the applications received” and the effects of the global pandemic on their operations.

Earlier in January, FCA took on the lead supervisory role of the cryptocurrency ecosystem in the U.K. The regulator enforces anti-money laundering and counter-terrorism financing (AML/CFT) compliance across the country to safeguard the consumers. The regulator introduced several stringent laws in crypto, including every crypto service provider acquiring a license to operate a business in the country.

The deadline for registration of crypto firms was set for January 10th, 2021.

However, the regulator announced an extension of the registration period – a “Temporary Registration Regime” – to 10th July 2021 as applications are still being assessed. The regime allows crypto service firms, those who had registered before December 16th, to continue offering their services as the regulator works on the licenses. The statement from FCA reads,

“This [The Temporary Registration Regime] is to enable those existing businesses to continue to trade after 9 January 2021 until 9 July 2021, pending the FCA’s determination of their application.”

The registration delay is blamed on the “complexity and standards of the applications received” by the regulator.  The Coronavirus pandemic also hindered the authorities as their visits to the crypto exchanges themselves was limited.

The statement warns both crypto trading services providers and customers on the consequences of leaving assets on a trading platform not registered before December 15th –as the waiver does not apply to them. Exchanges that weren’t registered by Wednesday, Dec 15, will need to ask their customers to withdraw their funds by January 10th, 2021, or risk “being subject to the FCA’s criminal and civil enforcement powers.”

According to FCA’s website, only three companies have received approval to start trading crypto, with a list of 90 crypto firms waiting in line. So far, Kraken exchange subsidiary, Crypto Facilities, received a crypto futures trading license earlier in the year, and Binance announced its plans to launch FCA regulated exchange in the U.K. However, only the U.K fintech firm Ziglu, Archax, and Gemini are regulated by the FCA.

Read Original/a>
Author: Lujan Odera

SBI Holdings Acquires Crypto Trading Platform B2C2 After Taking Minority Stake in July

Japanese financial group SBI Holdings subsidiary SBI Financial Services has acquired the UK-based crypto trading firm B2C2.

The deal’s financial terms were not disclosed, but with this acquisition, which was announced by the companies on Tuesday, it will make SBI the first major financial group to run a digital asset dealing desk.

Founded in 2015, B2C2 helps exchanges, brokerages, and fund managers make large trades in digital assets.

SBI first acquired a minority stake in the crypto firm in July, and its clients have already been using the platform to trade crypto assets. With the latest deal, the companies want to help the mainstream financial firms invest in cryptocurrencies. Yoshitaka Kitao, president and CEO of SBI Holdings said,

“Their (B2C2’s) vision, expertise and offering complement SBI’s, and we look forward to working in partnership as we expand our footprint across the global markets.”

B2C2’s team in Japan will now move into the SBI’s offices as part of the acquisition. Max Boonen, the founder of B2C2, expects the team to grow from the current 50 to 70 people over the coming months.

This is no surprise for the crypto market; in 2020, everyone wants a piece of digital assets as Bitcoin soars to new all-time highs, breaking the crucial $20,000 price; Altcoins are rallying as well.

S&P Dow Jones Indices and Cboe Global Markets have announced the launch of their crypto index in 2021 while several mainstream financial and insurance firms, hedge fund managers, high net worth individuals have been investing in Bitcoin as a hedge against inflation and devaluing fiat currencies around the world.

“A lot of people have been dismissive for a long time,” Boonen said in an interview.

“Bitcoin’s price at an all-time high has put concerns to rest.”

Read Original/a>
Author: AnTy

FATF Needs to Narrow Down on DeFi Oversight; Not A One Size Fits All

The Financial Action Task Force (FATF) will need a new approach in crypto policing, according to XReg consulting senior partner, Siân Jones, who was speaking during the second V20 Virtual Asset Providers Conference. She particularly noted the emerging trends in Decentralized Finance (DeFi), a niche that Jones recommended FATF pay closer attention to to understand the nitty-gritty that would form part of future policy oversight.

So far, the FATF Travel Rule is the most advanced piece of oversight that governs Virtual Asset Service Providers (VASPs). The initiative, which came into action last year, requires service providers in the crypto sector to share personally identifiable information (PII) for transactions above $1,000 from one platform to another. To comply with the Travel Rule, stakeholders have some solutions, with the most popular being the InterVASP Messaging Standard (IVMS 101).

FATF Should Narrow Down on DeFi

While the Travel Rule has done it for most regulators, Jones brought FATF to pace with the developments in DeFi. She explained that DeFi removes intermediaries who would eventually make it hard for the AML watchdog to implement oversight on crypto activity within this space. Jones believed that FATF must consider new approaches to curb AML and terror-financing within this nascent industry. She said that,

“The tried and tested methods work, after a fashion, in the traditional world of money. Arguably, they can be made sort of fit the intermediated crypto world. They do not necessarily fit a DeFi world where they are not fit for purpose.”

Crypto Community More Effective in One Voice

Jones, who told DeFi stakeholders they need to ‘wake up and smell the coffee’ in matters regulation, also had some suggestions for the crypto community to enhance the cooperation in forming policies. She noted that FATF ought to double down its efforts in engaging the crypto community, including the DeFi developers. Likewise, the crypto community needs to work closer with FATF and present its opinion in a unified voice.

“Equally, the industry needs to work more closely together to present a unified voice and its engagement with the FATF and regulators.”

Read Original/a>
Author: Edwin Munyui

Pakistan Regulators Look to Build Friendly Framework for Digital Assets

Pakistan seems to realize the potential of digital assets in the financial future as the country seems geared up for formulating a new framework to regulate cryptocurrencies such as bitcoin. This is highly bullish since Pakistan was among the very few countries that in mid-2018 blanket banned digital assets in any form. It wasn’t until April of 2019 that regulators started to change their minds.

The Securities and Exchange Commission of Pakistan (SECP), on November 6th, released a consultation paper about regulating digital assets. The paper mentioned that the finance ministry is looking to make new laws as they look at the regulatory frameworks set by other countries.

SECP believe digital assets is a “start of a new era of digital finance.” The consultation paper further noted that to propel this new digital finance era, a new set of frameworks would be required to drive its adoption.

“Digital assets also known as Virtual Assets, and Crypto Assets are the start of a new era of Digital Finance, and demand innovative regulatory measures and approaches by the regulators across the world.

This could only be possible by initiation of a new era that re-invents regulatory regime/measures as they are known to the regulators globally today.”

It is also important to note that many developed countries in the West are currently discussing launching a Central Bank-issued Digital Currency (CBDC); however, the consultation paper makes no mention of any such plans by Pakistani financial watchdog. At present, they are only focusing on regulating private digital assets such as bitcoin.

The paper made a note of two types of tokens, namely security tokens and utility tokens, where the regulatory body sees a security token as an important tool that might help in fractionalizing real-world assets and digitize them.

The paper mentions that they have 2 choices as regulators; restrict digital assets due to current rules or take a ‘let-things-happen’ approach. Which they mention that they are heavily leaning towards the do-no-harm approach.

The paper also welcomed feedback from the stakeholders of the decentralized space in developing the new framework.

Read Original/a>
Author: James W

DoJ Challenges Visa’s Proposed $5.3B Acquisition of Plaid in a North California Court

The U.S Department of Justice (DoJ) has challenged Visa’s acquisition of financial data aggregation firm, Plaid. According to the filing on Nov 5, Visa’s move to initiate a transaction process for purchasing Plaid at $5.3 billion is a monopolistic approach. It deprives the American people of cheaper and better debit-focused innovations. The filing reads,

“By acquiring Plaid, Visa would eliminate a nascent competitive threat that would likely result in substantial savings and more innovative online debit services for merchants and consumers.”

It goes on to term Visa as a ‘monopolist in online business transactions’ given that it enjoys a market share of around 70% in the online debit transactions industry. The DoJ claims that Visa will be violating Section 7 of the Clayton Act and Section 2 of the Sherman Act as per the filing made in a North California based federal court. Both Visa and Plaid are defendants in this case, whereas the DoJ is the complainant.

While Plaid’s focus area is not the distribution of debit cards, this Fintech startup proposes a significant value in today’s world where data is the new gold. In fact, the firm received a strategic investment from both Visa and Master card back in 2019. This platform is designed to harmonize interaction between different databases held by financial service providers, including banks. Apparently, the firm was on its way to disrupt Visa’s fort in the online debit service before the ‘monopoly’ swung in to acquire them.

Per the DoJ filing, Visa’s senior executives, including the firm’s CEO, have previously hinted at the move to acquire Plaid as a strategy to neutralize competition. This strategic decision was particularly triggered by information that Plaid had plans to launch a parallel competition to Visa’s money movement business by the end of 2021.

At the time, Visa’s downside risk estimation for the next four years stood at $300-500 million, should Plaid have been acquired by a rival. This prompted them to act swiftly with the CEO noting that ‘Visa seeks to buy Plaid as an “insurance policy” to neutralize a “threat to our important US debit business.’ A statement that appears to have rattled the DoJ is now a focal point in its filing against Visa and Plaid.

Nonetheless, Visa has indicated through a spokesperson who shared with the Wall Street Journal that they intend to defend the Plaid transaction,

“Visa intends to defend the transaction vigorously … Visa’s business faces intense competition from a variety of players — but Plaid is not one of them.”

Read Original/a>
Author: Edwin Munyui