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Canada: Regulatory Bodies Call on Crypto Industry to Participate in Securities...

The CSA and IIROC say they wish to adapt rules to take into account the new cryptocurrency trading arena. Two national securities bodies in Canada have issued a joint consultation paper on March 14, aiming to gather industry feedback about cryptocurrency token regulation. In a summary press release about the paper, the Canadian Securities Administrators (CSA) and Investment Industry Regulatory Organization of Canada (IIROC) said it was necessary to adapt existing laws in order to cope with the emergence of new trading platforms specializing in crypto-assets. The CSA is a national standards group covering 57 different areas, while the IIROC is a self-regulatory body overseeing investment dealers and trading platforms. “This consultation outlines a proposed regulatory framework that provides clarity for platforms, greater market integrity and protection for investors,” CSA Chair Louis Morisset commented in the press release. Morisset also stated: “Platforms have told us that a tailored ..

German Bank Association: New Regulation for DLT-Based Securities May Be Necessary

The German private banking association foresees that the need for new regulation may arise from the emergence of DLT-based securities. The Association of German Private Banks (Bankenverband) foresees that a need for new regulation may arise from the emergence of distributed ledger technology (DLT)-based securities. The association expressed its concerns in a post on its official website on March 11, Cointelegraph auf Deutsche reported. Per the post, if securities are issued using new technologies, then there is a need for new safekeeping and settlements processes. According to Bankenverband, corporate actions and securities trading may also be subject to change because of DLT-based securities. The statement further explains that because of the changes that new technologies will create in business processes, “adaptations of civil and regulatory requirements at national and European level may be necessary.” Recently, the German Federal Ministry of Finance also published a key issues pap..

German Financial Regulator Issues Paper on Blockchain Securities Regulation

The German Ministry of Finance is pushing for the regulation of blockchain-based securities. The German Federal Ministry of Finance has published a key issues paper on the treatment and regulation of blockchain-based securities, according to a ministry announcement on March 8. In the paper initially released on March 7, the regulator discusses the introduction of regulations for electronic securities and the issuance of crypto tokens. The document stipulates that the regulation of electronic securities should be technology-neutral, which means that they could be based on blockchain, or distributed ledger technology (DLT). The issuance of crypto tokens purportedly will not be subject to existing market regulations since crypto tokens do not represent securities, investment or other financial instruments according to the Securities Trading Act. However, initial coin offering (ICO) of crypto tokens is put up for discussion in the paper as investing in crypto tokens purportedly poses risk..

Israel Securities Authority Publishes Final Recommendations on Crypto Regulation

Israeli securities regulators published their final recommendations for crypto regulation, offering to create a platform for trading cryptocurrencies. The Israel Securities Authority (ISA) has published its final report on cryptocurrency regulations, local financial newspaper Globes reports Thursday, March 7. A special committee formed in 2017 to develop proper regulations for cryptocurrencies has presented its report to ISA chairperson Anat Guetta. Commenting on the recommendations, Guetta said that they were designed both to develop the crypto sector and protect the rights of investors. She further added that the technology is “here to stay” despite the fact that excitement in the industry has cooled. The ISA recommends imposing disclosure requirements for crypto offerings that qualify as securities and states that such offerings should be controlled in a similar manner to crowdfunding. The final ISA report puts forth several main ideas for how to support the crypto industry in the ..

Securities Lawsuit Against Ripple to Stay in Federal Court

U.S. District Judge Phyllis Hamilton has ordered that the ongoing securities lawsuit against Ripple will stay in federal court. An ongoing securities lawsuit against payment startup Ripple will stay in federal court, per a recent ruling. The news was announced by lawyer Jake Chervinsky in a tweet on Mar. 1. “The Court has denied the plaintiffs' motions to remand. This means the case stays in federal court, a minor but meaningful victory for Ripple,” Chervinsky wrote in the post. The ruling reads that United States District Judge Phyllis J. Hamilton, of the Northern District of California, has ordered that the class action suit against Ripple Labs, its subsidiary XRP II, and Ripple CEO Brad Garlinghouse, for the sale of unregistered securities must stay in federal court. The document also mentions the court’s previous explanation that “[b]ecause interstate class actions typically involve more people, more money, and more interstate commerce ramifications than any other type of law..

Rhode Island Bill Would Exclude Some Tokens From Securities Laws

A bill introduced in the Rhode Island State Assembly would allow some “blockchain tokens” to avoid state securities laws. A bill in the state legislature of the United States state of Rhode Island would exclude “blockchain tokens” from state securities laws. The bill was introduced in the legislature on Feb. 27. The bipartisan bill H5595 proposes a series of amendments to the Rhode Island Securities Act, under which “a developer or seller of an open blockchain token shall not be deemed the issuer of a security,” should certain conditions be met. The token must be used for a “consumptive purpose” that is exclusively exchangeable for “the receipt of, goods, services or content, including rights of access to goods, services or content.” Tokens cannot be marketed as an investment, and if they are not usable for a “consumptive purpose” when sold, buyers must be prevented from reselling them. H5595 also excludes entities that facilitate the exchange of a token from broker-dealer status shou..

Thai Parliament Approves Amendments Allowing Issuance of Tokenized Securities

Thailand’s National Legislative Assembly allows for the issuance of tokenized securities on blockchain with new amendments. Thailand’s National Legislative Assembly has officially allowed the issuance of tokenized securities on blockchain, major newspaper The Bangkok Post reports on Friday, Feb. 22. The government will amend the Securities and Exchange Act, according to the article. As soon as the changes come into effect later in 2019, tokenized securities such as stocks and bonds can be officially issued on blockchain. The Thai Securities and Exchange Commission (Thai SEC) will issue additional rules so that crypto platforms can seek a securities depository license. According to Thai SEC deputy secretary Tipsuda Thavaramara, the regulator will also allow businesses that operate as depositories of securities and digital tokens to apply for such licenses. Previously, the aforementioned act defined Thailand Securities Depository Co Ltd, a subsidiary of the Stock Exchange of Thailand (S..

SEC Charges ICO With Selling Unregistered Securities After Startup Self-Reports

The U.S. Securities and Exchange Commission has charged crypto firm Gladius Network with selling unregistered securities after the company self-reported. The United States Securities and Exchange Commission (SEC) has charged crypto firm Gladius Network with selling unregistered securities after the company self-reported to the commission, an SEC press release reveals on Feb. 20. Gladius reportedly raised approximately $12.7 million in cryptocurrency during its initial coin offering (ICO) in late 2017, after the SEC had warned that tokens offered in such sales can be classified as securities under U.S. law. The commission specifies that the startup did not register its tokens with the agency and its “ICO did not qualify for an exemption from registration requirements.” According to the press release, however, Gladius self-reported to the securities regulator in the summer of last year. The report also specifies: “The SEC did not impose a penalty because the company self-reported the..

Japan’s Second-Largest Securities Brokerage Daiwa Completes Blockchain Pilot

The major Japanese investment bank has published the results of a pilot project, aimed at implementing blockchain tech for securities post-trade processing. Daiwa Securities Group, Japan’s second largest securities brokerage, has announced the completion of a blockchain proof-of-concept (PoC) in a press release shared with Cointelegraph on Feb. 19. The PoC implemented blockchain in the trade matching of post-trade processing. The blockchain pilot project, dubbed “JPX Proof-of-Concept Testing for Utilization of Blockchain / DLT in Capital Market Infrastructure,” involved 26 companies, including financial institutions, system providers and institutional investors. The reported goal of the pilot — which just completed the second of two phases — was to increase the efficiency of blockchain tech in the post-trade process. According to the results of the pilot, the implementation of standardized specifications and workflow processes for the blockchain system is expected to reduce operationa..

Cyprus Securities Regulator Calls for Adoption of EU Anti-Money Laundering Framework

Cyprus’ securities regulator is calling for the transposition of an extended version of the European Union’s Fifth Anti-Money Laundering Directive into national law. The Cyprus Securities and Exchange Commission (CySEC) is calling for the transposition of the European Union (EU)’s Fifth Anti-Money Laundering (AML) Directive (AMLD5) into national law — bringing local regulation of cryptocurrencies under its provisions. CySEC’s announcement and consultation paper on the matter were published on Feb. 19. Тhe directive, which came into force on July 9, 2018, sets a new legal framework for European financial regulators to monitor crypto-related businesses and service providers in order to protect against money laundering and terrorism financing. Specifically, the directive extends the scope of regulatory oversight to crypto exchanges and wallet providers, enforcing stricter transparency requirements directed at anonymous payments — whether made via exchanges or prepaid cards. EU member sta..
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