In recent news pertaining to cryptocurrency regulations, industry leaders have urged U.S. lawmakers to provide regulatory clarity or risk a crypto firm exodus, a Greek representative to the European Parliament has advocated for a lightweight cryptocurrency apparatus to avoid stifling innovation across the distributed ledger technologies industries, and the Swiss Financial Market Supervisory Authority has issued a warning regarding purported cryptocurrency company, Alliance Capitals.
Industry Leaders Warn U.S. Lawmakers to Provide Clarity or Risk Crypto Exodus
At a recent regulatory round-table held at Capitol Hill and hosted by congressman Warren Davidson, a number of cryptocurrency industry leaders warned lawmakers that a continued lack of regulatory clarity could lead to an exodus of firms seeking clear legislative guidelines in other jurisdictions.
Kraken co-founder and CEO Jesse Powell emphasized the disadvantaged position U.S.-based cryptocurrency firms and investors are in as a result of the current regulatory ambiguity, stating “Foreign companies are able to outraise their U.S. competitors and often whoever raises the most money is who wins. Not only are U.S. companies not able to raise enough to compete globally, U.S. investors are not able to invest in these global companies.”
Joyce Lai, a lawyer for Consensys, stated: “The competition around the world is real. But there is still time and opportunity for the U.S. to be a leader here.”
Congressman Davidson echoed the call for regulators to work toward providing clarity as quickly as possible, stating: “Legitimate players in the industry have a desire for some sort of certainty so we can prevent and prosecute fraud. I’m confident we can move forward and make this a flourishing market in the U.S. It’s an imperative for us to do, we did it well with the internet.”
Eva Kaili Advocates Minimal Regulation for DLT Industries
Eva Kaili, a member of the European Council representing the Greek Panhellenic Socialist Movement, recently argued in favor of light regulation of the distributed ledger (DLT) industries at last week’s Concordia Summit in New York.
Mrs. Kaili insisted that regulations are a barrier to the speed of innovation that the DLT industries are capable of producing, stating: “One thing that we have in the E.U. and the U.K. — we have too many regulations that can at least delay the innovation. In blockchain, we tend to move very fast.”
“If it’s a fraud, it’s a fraud. If it’s not a fraud but it’s not following the rules, we gotta change the rules […] we don’t have an excuse not to explore the opportunities this technology gives us to solve global problems,” she added.
FINMA Issues Public Warning Regarding Alliance Capitals
Switzerland’s financial regulatory body, the Swiss Financial Market Supervisory Authority (FINMA), has added Alliance Capitals, a firm purporting to offer a number of cryptocurrency services, to its warning list of “companies and individuals who may be carrying out unauthorized services and are not supervised by FINMA.”
Despite claiming to offer a trading platform, binary options, a venture investment fund focused on initial coin offerings, and a mining investment scheme, the services offered are hosted on third-party websites that prompt malicious content warnings.
Do you think that U.S. regulators will soon act to provide clear legislative guidelines for the cryptocurrency and DLT industries? Share your thoughts in the comments section below!
Images courtesy of Shutterstock, Wikipedia, finma.ch,
The Swiss Financial Market Supervisory Authority (FINMA) has launched enforcement proceedings against crypto mining firm Envion AG over its potentially unauthorized token sale, according to a FINMA press release today, July 26.
Swiss-based Envion AG is an off-grid mining company that claims to use decentralized, clean energy to power its mobile mining units, and completed its month-long Initial Coin Offering (ICO) for the EVN token in mid-January this year.
FINMA’s investigation into the case to date suggests that in the context of its ICO, Envion AG accepted approximately 100 million francs (around $100.01 million at the time) from over 30,000 investors in return for issuing EVN tokens “in a bond-like form.”
The regulator clarifies that the proceedings are focused on “possible breaches of banking law resulting from the potentially unauthorized acceptance of public deposits” during the token sale.
While FINMA declines to comment any further on the case until it concludes its proceedings, the Swiss context provides a robust and differentiated framework for ICOs, the most recent version of which was released by FINMA in mid-February of this year –– a month after the conclusion of Envion’s fundraising.
Earlier guidance for domestic ICOs had been published by the regulator in September 2017, which set the precedent that token sale conduct would be considered “case-by-case” –– but notably already indicated that an ICO “generally necessitates” a banking license for accepting public deposits.
Earlier this month, Switzerland was ranked second “most favorable” country worldwide for ICOs, with the U.S. sealing the top spot and Singapore third. The research was based on publicly available data for the number of ICO projects per country which made it onto the ‘Top 100 ICOs’ global list by funds raised.