Bybit Updates Trading Platform With New KYC Rules As Global Regulators Clamp Down

Bybit Updates Trading Platform With New KYC Rules As Global Regulators Clamp Down

Major crypto derivatives exchange Bybit has updated its know-your-customer (KYC) rules.

The new KYC policies would improve security compliance for traders while also helping to protect users’ funds.

New KYC Policies Start July 12

Bybit revealed that the new policies would be implemented from July 12, 2021. Documents containing proof of origin (passport/ID), full name, date of birth, and others would now be mandatory as part of the individual KYC requirements.

According to its updated FAQ, Bybit users withdrawing more than 2 BTC in a day will have to undergo facial recognition and share an identity document.

Users who take out more than 50 BTC will also have to show proof of address.

Bybit is revamping its KYC procedures ahead of its planned introduction of Spot trading, Options, and the upgrade of its cold wallet.

The firm plans to roll out trading pairs and assets for its crypto spot trading in the third quarter of this year (Q3), while the options would come much later before the end of the year.

Founded in 2018 by Ben Zhou, Bybit is headquartered in Singapore. The crypto derivatives exchange claims to have about 2.5 million global trading clients in more than 200 countries around the world.

The platform has grown significantly since the beginning of this year. Bybit claims to have recorded more than $1 trillion in total overall trading volume in Q1 2021.The platform also claims to facilitate about $76 billion in daily trading volume.

Bybit Under Regulatory Clampdown

Similar to exchanges like Binance, Bybit has also received warnings from regulators. In May, Japanese financial regulator, the Financial Services Agency (FSA), issued a warning to Bybit for operating without registration.

The FSA had claimed that Bybit allowed residents of Japan access to the exchange without getting permission from authorities.

Bybit has also faced regulatory action in the United Kingdom. Earlier this year, the UK’s Financial Conduct Authority (FCA) issued a warning against Bybit. The regulator also alerted the public that the firm had been operating in the country without authorization. Subsequently, Bybit suspended its services to UK residents from March 31.

In Canada, Bybit also faced scrutiny over accusations surrounding the violations of Ontario securities law. The Ontario Securities Commission filed a statement of allegations against the exchange last month, accusing it of operating an unregistered cryptocurrency trading platform.

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Author: Jimmy Aki

FinCEN to Amend FBAR Rules Regarding Foreign Accounts Holding Crypto

FinCEN Intends to Amend the FBAR Rules Regarding Foreign Accounts Holding Cryptocurrencies

The Financial Crimes Enforcement Network (FinCEN), a bureau of the United States Department of the Treasury shared its intent to amend the FBAR for cryptocurrencies.

The official document “Report of Foreign Bank and Financial Accounts (FBAR) Filing Requirement for Virtual Currency” notes that currently, FBAR regulations do not define a foreign account holding virtual currency as a type of reportable account.

This means, at the time, a foreign account holding cryptocurrencies is not reportable on the FBAR.

But now, FinCEN is sharing its intention to propose to amend the regulations implementing the Bank Secrecy Act (BSA) regarding reports of foreign financial accounts (FBAR) to include virtual currency as a type of reportable account under 31 CFR 1010.350, it states.

“This seems targeted at users of non-US exchanges & shouldn’t apply to assets in self-custody,” said Jake Chervinksy, General Counsel at Compound Finance.

According to him, it could be primarily about tax evasion and bringing non-US crypto companies into compliance with the BSA.

“Anyone claiming to have blocked US citizens (as BitMEX claimed) will have a tough time if/when hundreds of FBARs come flooding in.”

Jake Chervinksy General Counsel at Compound Finance

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Author: AnTy

Chinese Court Legally Classifies Ethereum As A “Property” In ETH Theft Case

Chinese court rules Ethereum (ETH) is legal “property” in a case of theft published on April 22, 2020, on Chinese media outlet, 8BTC. According to the report, the Shenzhen-based court ruled that Ethereum’s ‘economic value’ as a medium of exchange and mining effectively makes the second largest cryptocurrency legally a property in the largest population in the world.

Chinese Court Rules: “ETH is a property”

In a ruling made by Shenzhen based court earlier this week, ETH was classified as property which legally gives the Chinese citizens power to own and distribute the crypto across the country. The case involves Li (defendant), who jointly built a project named ‘Haode Star’ with Xinyijia Company and Haode Trade Co., Ltd. (plaintiffs) launched last year April.

According to the plaintiffs, Li mastered the private key and password of the Haode Star blockchain just before resigning from Xinyijia Company in May 2019. In June 2019, Li used the password and private key to steal Ethereum tokens from a Haode subsidiary, imToken transferring them to OKEx exchange.

Li transferred 3 ETH and 4 million Haode tokens (total combining to about 6000 CYN) from the company’s wallet into his personal wallets. The court found him guilty requiring him to refund the full amount stolen charging him to seven months in prison and a fine of 2000 CYN.

This is one of cryptocurrencies largest wins in China’s courts as the ‘identification method of property’ rules showed that ETH is a property.

The Identification Method

Ethereum is a property due to two main reasons; first, property includes property, goods and “property-related interests such as virtual tokens. Secondly, ETH satisfies an economic value as it is exchanged for cash and mined showing it derives value.

Furthermore, ETH has value in the markets and can be traded publicly within China. Hence, when Li stole the ETH tokens from his former employers, the courts had a right to claim the theft as theft under criminal law applying to virtual currencies. The report from 8BTC reads,

“[This] can be interpreted as the property will not exceed the prediction possibility of the notional.”

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Author: Lujan Odera

Hong Kong Securities and Futures Commission Regulates Crypto Exchanges, Bitcoin Futures Not Allowed

  • Hong Kong’s Securities and Futures Commission (SFC) publishes new rules for crypto exchanges to operate under license
  • Some crypto exchanges to be treated like securities brokers
  • No need for a license if the digital asset is not a security
  • Allowing trading of Bitcoin futures “may well be conducting an illegal activity”.

New rules for cryptocurrency exchanges are here.

A potential step was taken by Hong Kong’s financial regulator to improve the regulation and standards within the cryptocurrency market. As it publishes new rules for crypto exchanges can now apply for an operating license.

Market watchdogs around the world are still trying to decide the best way to regulate cryptocurrencies. Should they take a ‘hands-off’ approach or apply stern regulations. These efforts have ramped up since Facebook’s plan to launch its stablecoin Libra.

Hong Kong, not only home to dozens of crypto exchanges but some of the world’s largest, is now trying to provide regulatory clarity.

These virtual asset trading platforms have been largely escaping regulation until now. Because most virtual assets traded on the platform were technically not securities. Ashley Alder, chief executive of Hong Kong’s SFC Chief Exec said in a speech:

“After an in-depth examination of their unique technical and operational features, we concluded that some could be regulated by us.”

Some Crypto Exchanges to be Treated like Securities Brokers

While some of these platforms welcome regulators to give them oversight, others prefer to work in the shadows. Operating under regulatory scrutiny will help bring trust to the marketplace.

These rules will cover know-your-customer (KYC) requirements, anti-money laundering (AML), market manipulation, and aspects of custody.

The initiative was first announced a year ago at the 2018 Fintech Week in Hong Kong, including a “sandbox” for crypto exchanges.

Since then, the head of the SFC said, they have met with several operators to see whether they are capable of operating in a regulated environment. And after an in-depth examination, they found some can be regulated by the agency.

Exchanges can now apply for an operating license to be fully regulated starting today. These new rules draw on the standards the agency has always come to expect of conventional securities brokers.

No Need for License if the Digital Asset Not a Security

Hugh Madden, chief executive of BC Group, a digital asset trading company said this is a “seminal moment for financial services” and “points to increased acceptance of digital assets as new types of financial instruments.”

According to SFC, if an exchange wants to be licensed, then it must provide services to professional investors only and further have an insurance policy to protect its clients in the event of digital assets getting stolen or lost. Such exchanges also have to use an external market surveillance mechanism.

However, if the assets are not security like Bitcoin, crypto exchanges do not need licenses to operate.

In a separate statement, the SEC warns investors from investing in Bitcoin futures in Hong Kong as then they “may well be conducting an illegal activity”.

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Author: AnTy

Bank Of England Spells Out UK’s Requirements for the Libra Coin Launch

United Kingdom’s central bank, Bank of England, has announced a raft of rules that Facebook’s Libra crypto must adhere to if it wishes to launch in UK.

In its October Financial Policy and Summary released by the bank’s Financial Policy Committee, BoE stated that it discussed innovative explorations within the financial and payment sector. As per the release, the bank noted that Libra has the capability of becoming ‘a systemically important payment system’ in the future.

According to the FPC, a system like Libra should comply with the highest standards of resilience and fall under the relevant supervisory oversight. In addition, the FPC called on regulators to come up with terms of engagements for various innovative payment systems before they can be introduced in the market.

A key aspect of the policy summary is that BoE stated it would require access to allow for monitoring of the payment chain information as a key condition. However, the FPC urged regulators to utilize their powers accordingly as per the published principles.

The document also explained that the Libra Association, as well as the Libra Reserve of different fiat monies, are of high importance. The FPC continued to explain that the platform participants, wallet providers as well as validators will also need to be regulated and scrutinized thoroughly.

CoinDesk reports a similar form of measures and conditions were discussed by Olaf Scholz who was earlier this week nominated as the EU Commission’s finance minister. During the discussion, Scholz stated that EU should come up with a regulatory framework for such payment networks like Libra.

The Libra project has come under intense scrutiny and skepticism with both German and French finance ministers saying that Libra cryptocurrency should never be allowed to launch on European soil since it will undermine the sovereignty of their nations, Cointelegraph reports. The two ministers argued that it was the work of the government to issue currency and that mandate should never be left on private entities.

The UK seems to be open to a discussion on the prospect of Libra being launched in the country as it positions itself as Europe’s financial hub in the wake of Brexit.

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Author: Joseph Kibe