Congress Members Request Treasury to Extend Comment Period on FinCEN’s Crypto Regulation

Congress Members Request Treasury to Extend Comment Period on FinCEN’s Latest Crypto Regulation

3,257 comments have been submitted so far to FinCEN’s midnight rulemaking.

Nine congress members have sent a letter to Treasury Secretary Mnuchin requesting an extension of the 15 day comment period on FinCEN’s proposed rulemaking related to “Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets.”

Tom Emmer, Tom Cotton, Bill Foster, David Schweikert, Darren Soto, Warren Davidson, Suzan K. DelBene, Ted Budd, and Tulsi Gabbard are the congress members who shared their concerns.

The letter states the concern that the midnight rulemaking does “not afford the American public a reasonable opportunity to respond” in what is “highly complex rulemaking.”

The members say while they do support the law enforcement in their efforts to combat criminals engaging in money laundering and illicit financing, “it would be impossible for the public to give meaningful comment with so little time.”

Not only a rushed process threatens the legitimacy of this rule but it would make the new regulations susceptible to legal challenges, reads the document.

They asked the department to extend the review period to 60 days and consider an extension of potentially six months to the proposed rule.

Meanwhile, the crypto community can submit their comments before the end of day on Jan. 4 on the government’s site. So far, 3,257 comments have been submitted.

“If we can get enough substantive comments in, they won’t have time to consider all of them adequately before Jan 20 and it will be out of Mnuchin’s hands,” advised Jerry Brito, executive director of CoinCenter while urging the community to comment no matter what part of the world they live in.

Joe Biden is to be sworn in as the President of the US on Jan. 20 and the Biden admin has announced that they will halt ongoing midnight rulemaking the day they get into office.

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Author: AnTy

Israeli Draft Bill Proposes Bitcoin be Defined as Currency to Cut Down the Hefty Capital Gain Tax

Four members of the Knesset, Israel’s legislative body, from the Yisrael Beiteinu faction, the secular nationalist political party, have submitted a private member’s bill seeking to amend the taxation of crypto-related activities so that the sale of bitcoin and crypto-assets isn’t subject to 25% capital gains tax, as per local media reports.

The private member’s bill, submitted by MKs Oded Forer, Yevgeny Soba, Yulia Malinowski Kunin, and Alex Kushnir, was tabled earlier this week on Tuesday that seeks to amend the way digital assets activities are taxed under the Income Tax Ordinance.

Under the ordinance, digital currency is considered an asset; as such, its sale and conversion in fiat currency are subject to capital gains tax. Currently, the tax on most capital gains in the country is 25%.

Section 91 of the Income Tax Ordinance, however, provides relief in the taxation of capital gains from short-term lenders or non-CPI linked bonds — they are taxed at only 15%.

“The regulatory reality in Israel is not adapted to the existing reality in the field,” claims the memorandum of the proposal.

The bill also seeks to add a section in the Ordinance, which deals with the “determination of distributed digital currency.” Under this proposed section, the Minister of Finance may prescribe provisions under which the digital assets shall be determined as a distributed digital currency.

The purpose of the bill is that Bitcoin and other digital assets are considered a currency for the taxation purpose.

“The State of Israel has the ability to be among the leaders in the field of digital currencies, if only it recognizes the use of the blockchain as a currency for everything. It is precisely in this period, when the economic future is unclear It is possible to promote digital payment options due to the social distance that has been forced on us,” said K Forer after the bill was submitted.

The same day another bill was tabled in the Knesset that seeks to allow reporting on digital asset trading once every six months or year.

Currently, those who sell digital currencies are required to submit a report to the tax authority within 30 days of the sale, along with paying an advance on the tax rate applicable to the capital gain arising from the transaction.

“The two bills passed last night by MKs Oded Forer and Sharan Hashakel are an infrastructure on which Israel can be developed as a global financial center and a leader in the field of digital currencies,” said Manny Rosenfeld, chairman of the Israeli Bitcoin Association.

Related Reading:

Breaking: European Commission Proposes Legislation to Turn Crypto-Assets into Regulated Financial Instruments

More Reading: US Lawmakers Propose Two New Bills to Streamline Digital Asset And Crypto Exchange Regulation

Also Read: Russia’s Ministry of Finance Tells Traders to Disclose Crypto Wallets Or Face Fines And Jail

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Author: AnTy

Coinbase and Circle Launch Major Upgrade in USDC 2.0; Stablecoin Sees ‘Unprecedented Adoption’

Coinbase and Circle, the members of the Centre Consortium, has announced a major upgrade to the stablecoin USD Coin (USDC) protocol and smart contract.

Launched in September 2018, this regulated stablecoin saw an “unprecedented adoption” during the pandemic, surpassing $1.4 billion, up from about $450 million at the beginning of March, and recording more than $90 billion in on-chain transaction volume.

With the latest upgrade, USDC will become “significantly easier for people to use USDC in payments, commerce, and peer-to-peer transactions,” besides adding additional security to the smart contract.

More importantly, Centre says USDC 2.0 is introducing “gasless sends.” Transaction on the Ethereum network involves “gas fees” and in order to pay this, most digital wallets are required to purchase and hold a balance of Ether (ETH).

Now, with the latest upgrade, the idea is to remove the barrier to “mainstream adoption and broad usage of digital dollar stablecoins for internet payments.”

The official announcement states USDC 2.0 enables users to delegate the payment of the gas fees to another address, giving the developers the option to either pay the fee on behalf of the customer or deduct the fees in USDC.

As such, customers will be able to send and receive USDC payments on a peer-to-peer basis using only USDC.

“These simplified and improved user experience flows will accelerate the virality of making and receiving payments using USDC on the internet.”

Another thing USDC 2.0 introduces is a new set of on-chain multiple signature contracts which means administrative operations can be managed on-chain, in a result, improving the “security, auditability and in turn resilience.”

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Author: AnTy

Anheuser-Busch InBev, ING Bank, & Rolls Royce Join Mousebelt’s Blockchain Education Alliance

Blockchain Education Alliance, an initiative by Mousebelt, has gained four new significant members according to an announcement by the blockchain accelerator on August 17. They include margin crypto trading platform, Rolls Royce, Belgium brewing firm Anheuser-Busch InBev and Dutch-based ING bank.

The project whose fundamental goal is to accelerate blockchain education and research now has 26 members following this addition. Having launched in October 2019, pioneer members included ETC Labs, Nem, LTO Network, Harmony One, Wanchain, ICON, Tron, and the Stellar Development Foundation. It was not long before the initiative attracted the likes of Binance, Mastercard, KuCoin crypto exchange, and Constellation Labs onboard as well.

With such players already approving the Blockchain Education Alliance strategy, some of its milestones include a 72-hour live blockchain education event that was held in May. This virtual conference was dubbed ‘REIMAGINE 2020’ and featured networking events, panel and debates, and a continuous livestream of the keynotes.

Given the prevailing lockdowns at the height of the COVID-19 pandemic, REIMAGINE 2020 attracted students from various universities, giving them exposure to cutting edge tech like blockchain as well as an opportunity to meet with the industry veterans. Mousebelt’s head of Education, Ashlie Meredith, further pointed out that they are looking to nature skills given the looming uncertainty in the global economy,

“In a time when many students will not be returning to campus, increasing opportunities for educational experiences, jobs and internships is of utmost importance.”

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Author: Edwin Munyui

G20 Set to Accept Digital Currencies; Green Lights Policy Changes for Regulatory Framework

The G20 members are set to accept digital payments as soon as November 2020, according to the Japanese media outlet, Kyodo News. This shift in attitude towards crypto assets coincides with increasing interest by oversight bodies.

Last year, the G20 was skeptical on digital assets’ ability to impact current financial ecosystems, this now seems to have changed as the members prepare for the annual summit to be held in Riyadh, Saudi Arabia.

Kyodo News detailed that the change in tact towards crypto ecosystems has been influenced by Facebook’s Libra proposal and China’s digital yuan. These two projects hit the crypto scene with a bang, fueling discussions across the board.

While China’s digital yuan is at its sunrise phase, Libra is still facing regulatory challenges. Nonetheless, the G20, which comprises 20 members, including the EU, has seen it fit to lay a framework for digital assets as well.

The changes in policy are scheduled to take effect as of October, just before the G20 annual summit. Discussions will revolve around digital currency use, money-laundering risks, and the challenges of using crypto as a form of payment. With such groundwork in place, G20 is optimistic about spreading the risk attributed to stablecoins as per an October 2019 report.

Global Progress in Digital Asset Frameworks

China continues to lead the way in CBDC progress, having recently piloted a digital yuan. The Asian superpower is now looking to integrate this PBoC backed digital currency with its existing financial ecosystem. Going by China’s active use of mobile payments via Alipay and WeChat, stakeholders are optimistic about a seamless integration in a move that will enhance the CCP oversight in digital payment networks.

The EU has made some fundamental progress in this field, especially in regulation. Currently, crypto-oriented businesses operating within its jurisdiction have to comply with the 5AMLD, which came into play earlier this year.

However, this framework has not been very friendly to all crypto-based entities as some had to relocate shops in search of more accommodating digital asset laws. Finally, the U.S, which has long been skeptical, are also looking into digital assets. CFTC Chairman, Heath Tarbert, recently said that they are waiting on the SEC guidance to go ahead with listing more crypto derivatives in the U.S market.

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Author: Edwin Munyui

Chicago DeFi Alliance Welcomes New Members To Prop Up Liquidity in Decentralized Finance Startups

Chicago DeFi Alliance welcomes 11 new members, including a decentralized lending platform, Aave, Three Arrows Capital, and ParaFi. The Alliance now focused on forming a network of partnerships between the traditional finance institutions and DeFi startups to provide solutions to liquidity sourcing problems within the decentralized finance market.

The high profile additions to the Alliance comes at a time that the DeFi space is expanding rapidly with the total locked value in DeFi apps recently crossing the $2 billion mark according to DeFi Pulse.

DeFi lending platform, Aave, joins Chicago DeFi Alliance

According to the official statement on Medium, the new members in CDA include Aave, Three Arrow Capital, Gauntlet, QCP Capital, Framework Ventures, Ledger Prime, Jon Kol, Manna Research, Autonomy, Fractal Wealth and Silicon Valley VC ParaFi.

The fast rise of CDA is evident with the addition of these top tier firms into its ranks. Aave is a fast-growing lending platform that allows the user to earn interest on their deposits and place collateral to receive decentralized loans. The DeFi platform is currently the fifth-largest DeFi app, according to DeFi Pulse, with a total value of $170 million in assets locked.

Asset liquidity plays a significant role in Aave’s business structure, and joining CDA will allow the protocol to align and learn from traditional finance liquidity providers and creating its liquidity base. Earlier in the month, BEG reported the firm is partnering with OpenLaw to offer under-collateralized loans to borrowers in a bid to boost liquidity on the platform.

The first cohort of CDA a success!

The Chicago DeFi Alliance is the brainchild of Volt Capital alongside Jump Capital, TD Ameritrade, Cumberland DRW, and CMT Digital, who aim at providing solutions to help DeFi platforms in complex digital asset trading operations, liquidity sourcing and navigating regulation issues.

Since launch in April, the firm has hosted several startups with the first cohort of companies recently completing their six-week program. The first companies to join CDA include trading exchanges such as dYdX, 0x, IDEX, Opyn, Token Sets, Synthetix, and Kyber Network.

The program was a success hosting one-one and roundtable discussions between each DeFi start-up and liquidity providers/trading firms. This allows the startups to build a network connection with industry-leading players in liquidity providence.

So far, CDA has over 70 members from different areas of finance, including “trading firms, and service providers in the legal, tax, accounting, and audit areas.”

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Author: Lujan Odera

Stablecoins Yet Again Under Regulatory Scrutiny In Revised FATF Report

In a Tuesday report, the Financial Action Task Force, with members from about 200 countries, said stablecoins need to comply with standards to guard against money laundering and terrorism financing.

FATF is an inter-government body that sets international standards to prevent illegal activities related to money laundering and terrorist financing watchdog. It was after a 12-month review completion that the report was prepared for the G-20 finance minister and central bank governors.

Lately, regulators are taking a strong stance against fiat-begged stablecoins like Tether (USDT). With the latest step by the FATF, the exchanges and other entities supporting stablecoins will likely have to verify the identities and comply with different policies.

“My assumption would be that FATF will update guidance in relations to stablecoins in the near future,” said Jesse Spiro, global head of policy and regulatory affairs for compliance technology provider Chainalysis.

Potential to be mass-adopted on a global scale

The total supply of stablecoins has doubled this year and is now quickly approaching the 12 billion mark.

Interestingly, USDT issued on Ethereum accounts for more than half of the total stablecoins supply. Also, the market cap of Tether has surpassed $10 billion.

Amidst this surge of stablecoins, the new rules would impose anti-money laundering (AML) and know-your-customer (KYC) requirements on stablecoins like Tether and also the new endeavors like Facebook’s upcoming Libra.

Stablecoin providers and exchanges that support coins would have to set up processes for monitoring transactions, investigations, and regulatory filings, Spiro said. Also, they would have to make sure that OTC trading desks are compliant. Tether uses Chainalysis for a part of its compliance process; Spiro told Bloomberg.

“OTC desks, there’s been a lot of illicit activity that we’ve been able to follow through,” said Spiro. “It’s something that regulators are going to be taking a long hard look at.”

The fiat-pegged digital currencies were an attempt to mitigate the extreme volatility in the cryptocurrency market. Tether, a popular stablecoin is especially used in China for fiat on- and off-ramp, since the country banned direct fiat channels in 2017. It is also used by export-import businesses in Asia.

According to FATF, “stablecoins appear better placed to achieve mass-adoption than many virtual assets.” For instance, Facebook wants its Libra to be used by 1.7 billion of the world’s unbanked.

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Author: AnTy

Maker Governance Vote Approves Kyber Network (KNC) and 0x (ZRX) As New Collateral Assets

KNC (Kyber Network) and ZRX (0x) have become the latest members of the Maker family. MKR holders, through a community vote, approved both KNC and ZRX tokens to be the two new collateral assets that now allow the opening of Maker Vaults in a goal to create Dai tokens. The addition and advantages of these two new tokens as collateral assets went through extensive discussions among community members, before the executive vote on the official Maker forum.

The popularity of defi is soaring with each passing day, and many other tokens that cannot be collateralized are converting its value in ERC-20 tokens to gain access to defi—for example, the Wrapped Bitcoin, an ERC-20 token based on Bitcoin. Thus, the addition of new tokens would only expand the Maker ecosystem.

Both KNC and ZRX tokens went through rigorous risk assessment and risk parameters with the results listed below:

KNC Risk Parameters

  • Liquidation Ratio: 175%
  • Liquidation Penalty: 13%
  • Dust: 20 Dai
  • Bid Duration: 6 hours
  • Auction Lot Size: 50,000
  • Risk Premium: 4%
  • Minimum Bid Increment: 3%
  • Debt Ceiling: 5 million
  • Max Auction Duration: 6 hours

ZRX Risk Parameters:

  • Risk Premium: 4%
  • Max Auction Duration: 6 hours
  • Bid Duration: 6 hours
  • Dust: 20 Dai
  • Liquidation Ratio: 175%
  • Liquidation Penalty: 13%
  • Debt Ceiling: 5 million
  • Auction Lot Size: 100,000
  • Minimum Bid Increment: 3%

The addition of these two tokens would only help in progressing the already growing adoption of defi. It also proves that the defi ecosystem can put any asset as collateral as long they can become tokenized. The Maker governance comprising of members in possession of MKR governance token also plays a significant role in approving any particular token that can be collateralized.

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Author: Rebecca Asseh

Walmart and 7 Other Companies Join Collaborative Blockchain Group Hyperledger

Walmart has become the latest company to be added to the open-source blockchain Hyperledger, being one of the 8 new members to join the platform today.

These new members were announced in Phoenix, Arizona, at the 2020 Hyperledger Global Forum on March 3. Walmart Global Tech’s vice president Sanjay Radhakrishnan had this to say about his company becoming a Hyperledger member:

“We’ve seen strong results through our various deployments of blockchain, and believe staying involved in open source communities will further transform the future of our business.”

New Service Providers Announced by Hyperledger

Launched back in 2016, Hyperledger is hosted by the Linux Foundation. Its platform has the purpose to advance blockchain technologies. It has received contributions from Intel and IBM. At the Forum’s opening day, 8 Hyperledger new members were announced, Aiou Technology included.

Aiou Technology is a subsidiary of IOST, a popular blockchain network. The business-to-business smart contracts company Clear and Tangem, the Swiss blockchain services firm, were announced to be new members as well. Hyperledger seems to have 6 new Certified Service Providers too. These include: Kompitech, Beijing Proinsight Technology, Xoaa, LimeChain, Mindtree, and Zhigui. Here’s what Hyperledger’s executive director, Brian Behlendorf, had to say about the new members:

“Adding this great mix of new members and HCSPs is a great opening act for Hyperledger Global Forum.”

Walmart Is a Supporter of Blockchain Technology

Walmart decided to become a Hyperledger member 10 years after it had first experimented with DLT. In 2016, the retail giant closed a partnership with China’s Tsinghua University and IBM to run a pilot program that uses Hyperledger and tracks the pork market in China. The pilot’s aim was to bring improvements in the food safety sector by identifying supply chain potential contaminators at the source.

Walmart filed patents related to blockchain technology and even filed to patent a blockchain-based system that traces drone-delivered packages in 2017. All through 2018, Walmart files numerous patents with the US Patent and Trademark Office, targeting shipping, supply chain, and payments systems. In 2019, it joined MediLedger, the blockchain-based pharmaceutical consortium.

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Author: Oana Ularu

Japan Lawmakers Proposes Close Coordination with the US over Digital Currency

Politicians in Japan are appealing to the G7 members to collaborate and perform research on digital currency as a response to China’s schedule to launch the digital Yuan.

Some Japanese lawmakers believe China’s Digital Currency Electronic Payment (DCEP) could spread widely among the emerging economies and threaten the dollar’s dominance. This won’t bode well for Japan which relies heavily on dollar-based settlements.

On February 7, senior Liberal Democratic Party (LDP) members informed reporters that Japan should share information with the US and the other G7 members on digital currencies because the digital Yuan is a serious threat to the greenback’s global supremacy. Akira Amari, LDP leader, and the former economy minister said,

“We live in a stable world led by dollar settlement. How should we respond if such a foundation collapses and if [China’s move] gives rise to a struggle for currency supremacy? As this year’s G-7 chair, the U.S. should include digital currency on the agenda for the next meeting of the group.”

Formal Proposal for More Cooperation to Be Officially Presented to the Government

The formal proposal that calls G7 members to cooperate on the digital currencies matter is going to be next week officially presented to the government. Just like numerous other countries, Japan relies on a US dollar-denominated system of settlement when it comes to business and transactions, which means the digital Yuan would indeed be a serious threat to the country’s economy.

Japan to Issue Its Own Digital Currency?

The lawmakers in LDP said at the end of January they will propose for Japan to issue its digital currency in a project between the private sector and the government. Also in January, the Bank of Japan (BoJ) started conducting joint research with 5 other central banks among which the EU and the UK’s were included, coordinated research into what digital currencies would involve.

The central banks’ group’s first meeting is scheduled to take place in mid-April, at the International Monetary Fund (IMF) conference from Washington D.C. At the press conference from Friday, lawmakers talked about Japan issuing its digital currencies, but no announcements have been made about the initiative. Taking into consideration the legal and technical barriers involved, it’s unlikely this will happen too soon. But with both private, like Facebook-led Libra, and governments, Chinese DCEP, pushing for their own digital currency that decision may come faster than they would have liked.

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Author: Oana Ularu