Crypto Week In Review: China, Japan, U.S. Regulators Approve Crypto
Declining volatility in crypto markets has allowed startups, investors, and industry leaders to slow down, and postulate about the future of this nascent industry, catalyzing a series of positive developments. For one, in the past week, certain crypto-centric entities were awarded wheelbarrows of regulatory traction, with leading governmental agencies from Japan and the U.S. expressing their approval for this innovation, subsequently striking a chord with investors worldwide. Per a report from Reuters, the Japan Virtual Currency Exchange Association (JVCEA), a collective of Japan’s foremost cryptocurrency platforms, is now legally permitted to regulate industry players. This unexpected approval, which came from Japan’s Financial Services Agency (FSA), will allow the JVCEA to police and punish local exchanges that are in violation with the body’s regulations, which include caps on margin/leverage trading features. The self-regulating consortium, which consists of BitFlyer, Tech Bureau, Quoine, and a dozen other local startups, will also be responsible for fending off money launders, policing regulatory compliance, and providing operational guidelines for Japanese platforms. Most importantly, however, the group will manage how exchanges safeguard consumer-owned digital assets, which has become a pertinent concern for Japanese traders. Discussing this regulatory green light, an unnamed FSA authority issued the following comment, which was short and to the point: “It’s a very fast moving industry. It’s better for experts to make rules in a timely manner than bureaucrats do.” Interestingly, Yuri Suzuki of Astumi & Sakai, a local law company, explained that the self-regulating body’s restrictions are stricter than the laws currently imposed by the FSA, indicating that local startups see all-encompassing guidelines as the optimal path forward. Still, the lawyer explained that the consortium’s proposed ruleset will likely improve the public’s image of the Japanese crypto economy, which has been beaten to hell and back in 2018. When it comes to financial capitals of the world, there isn’t any location that is as prominent as New York City, which is where hundreds of institutional hotshots are situated. Keeping this in mind, many were over the moon, so to speak, as Coinbase secured a license from the New York Department of Financial Services (NYDFS) on Tuesday afternoon. An NYDFS press release indicates that the San Francisco-based startup can lawfully establish the Coinbase Custody Trust Company (CCTC), a subsidiary focused on offering crypto asset custodian solutions for New York-based clients. Coupled with the announcement of this license, the NYDFS also noted that CCTC will now be classified as a fiduciary under New York State’s banking laws, further solidifying the firm’s legitimacy in this emerging industry. Commenting on the development, the NYDFS’ Maria T. Vullo, the superintendent behind Coinbase’s new license, revealed the subsidiary can now offer custodial support for Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), XRP, and Litecoin (LTC). Along with offering custody for the aforementioned crypto assets, as pointed out by Coinbase Custody’s Sam Mcingvale, the licenses authorizes the startup to “compliantly store more assets and add new features like staking.” This news comes hot on the heels of the establishment of Fidelity Digital Asset Services, a Boston-based Fidelity Investment’s offshoot, which intends to offer top-notch cryptocurrency custody for upwards of 13,000 institutional clients. Just days after the unexpected Fidelity development, Novogratz’s Galaxy Digital, along with Wall Street legend Goldman Sachs, invested $15 million in BitGo to fund the startup’s ambition to create a “$1 trillion crypto wallet.” While it isn’t clear which crypto custodian will garner the lion’s share of clients, competition in the ever-competitive crypto industry will likely parent some game-changing products in the near future. As reported by NewsBTC previously, recently-released documents from the U.S. Securities and Exchange Commission (SEC) indicate that a paramount closed-door meeting occurred. On Tuesday, the financial regulator released VanEck’s slide deck, coupled with a memorandum of the event, giving the public some insight on regarding this rendezvous. The memorandum revealed that the meeting, which occurred on October 9th, was attended by Commissioner Roisman, who has been classified as “pro-crypto” by some, four legal counsels, and five representatives from the three aforementioned finance-focused firms. In the 11-part slide deck, New York-based VanEck, which has been working on a Bitcoin ETF with SolidX Partners since 2017, has claimed that the SEC’s issues of yesteryear, which were outlined in historical Bitcoin ETF disapproval orders, “have been resolved.” More specifically, in a slide titled “VanEck SolidX Bitcoin Trust Should Be Approved,” ETF advocates noted that monumental progress has been made towards solving regulatory qualms. Most notably, VanEck claimed that there now “exists a significant regulated derivatives market for Bitcoin,” adding that CBOE’s rules dictate that market surveillance will be a priority in the proposed fund. No comments from the SEC were issued on VanEck’s slide decks, but many investors are hopeful that the attendees of the forum were pleased with what was presented. Following months of anti-crypto crackdowns, the Shenzhen Court of International Arbitration has reportedly ruled in favor of cryptocurrencies, specifically Bitcoin. Citing a document posted on WeChat, China-based insider CnLedger claimed that the court’s verdict vindicates the use of Bitcoin in consumer-to-business transactions. The local source added that the Shenzhen body has ruled Bitcoin legal due to its inherent nature as “property” and its ability to procure and produce “economic value.” However, it is important to note that this case underwent proceedings in Shenzhen, one of China’s special economic zones, which may have skewed the results of the case in favor of digital assets. Moreover, the decision was only that of one of Shenzhen’s arbitrators, meaning that it won’t likely alter China’s overarching laws in any way shape or form. Regardless, there are many that are still hopeful for crypto’s future within China, even if restrictions and guidelines regarding Bitcoin and other digital assets aren’t consistent throughout the nation.Japan’s FSA Green Lights Crypto Consortium’s Self-Regulating Status
Coinbase Awarded Custodian License By New York Regulator
Bitcoin ETF Hype Grows As VanEck, CBOE, SolidX Speak With SEC
Chinese Court Validates Bitcoin, Transactions And Holding Allowed
Crypto Tidbits
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