FT Cryptofinance: US supervisory authorities compete for crypto control

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US supervisory authorities in the fight for authority about crypto combat lines

The crypto industry is still shaken by the accusations for insider trade last week, which were submitted by the Federal Prosecutor's Office in New York and the Securities and Exchange Commission against a former employee of Coinbase and his employees.

The obvious point first: These accusations have made people talk about how prosecutors and supervisory authorities educate them equally and act against alleged financial crimes in crypto.

The less obvious, but still very important second point is that the civil complaints of the SEC also support the land robbery of the Wall Street regulatory authority for jurisdiction on cryptocurrencies. As the name suggests, the SEC is responsible for securities, while the Commodity Futures Trading Commission is derivatives (things like futures that pursue oil and interest rates).

"The case plays a very important role and has much less to do with insider trade in itself than with the fact that the fees for insider trade are based on a factual determination that several tokens were traded at Coinbase.

Coinbase confirmed his long -represented position that it "does not list any securities on its platform". Period ”. Although the perspective of Coinbase is seriously questioned when the SEC wins its insider trade.

"If this aspect of the case is maintained, there will be a case law that, at least at the level of the court proceedings, determines that nine tokens are traded on coin base. If Coinbase facilitates trading in securities, you must probably register with the SEC, probably added as a national securities exchange," added Fox.

The Pro-CFTC advance, on the other hand,-one that is favored by many crypto companies-is already in full swing in the congress. The supervisory authority would make a non -partisan law that was introduced in June by the Senators Kirsten Gillibrand and Cynthia Lummis, the supervisory authority would make the leading company for digital assets for derivatives.

The CFTC also takes steps to strengthen its ability to test the markets for digital assets. A new Office of Technology Innovation replaces an old fintech team-Labcftc.

If the CFTC is the most important US cryptor regulator, this would be a welcome message for companies such as Coinbase, which have resisted the SEC due to "regulation through enforcement" and in their view inappropriate description of crypto tokens as securities.

"The thing about regulation through enforcement comes all the time. I think the narrative in the industry is that the SEC does not create any clarity, and I think this view is justified," said Nick Losurdo, partner of the Goodwin Procter and former advisor to the Sec.

I would like to hear from you. If the SEC claims exist, what does that mean for Coinbase? What does this mean for the rest of the crypto industry and for competing regulatory authorities that struggle for their own piece of cryptocake? Send me an email to scott.chipolina@ft.com.

The Highlights this week

  • The stable coin emittent Tether is faced with an $ 840 million loan, which has now been reclaimed by the now bankrupt Celsius Network.

  • The Signature Bank, an unobtrusive US loan, has tacitly advertised deposits of companies for digital assets. The share price rose sharply during the crypto bull run, but has now carried out a sharp course turn after this year's pullback.

  • Ark Invest, an investment company led by crypto gospel Cathie Wood, increased the pressure on Coinbase after she had sold stocks of $ 75 million this week, since it was a reliable buyer since Coinbase was directly noticed in 2021.

  • The crypto market shows the first sign of relaxation after a dark start to 2022. Bitcoin rose by 28 percent this month, while his smaller rival ether rose by 70 percent. Overall, the value of the top 500 crypto tokens, according to the Digital Assets dashboard, rose from a low of around $ 930 billion to $ 1.2 trillion in mid-June.

If you have made it to this point, you will know that the United States is still ordering when it comes to regulating crypto. In contrast, the EU is progressing with a block-wide legislative package for digital assets-Markets in Crypto-Assets Regulation (Mica). This was noticed by the law professor of Georgetown, Christopher Brummer:

"The fact that the EU has issued regulations for an entire investment class before the United States is remarkable and in a way remarkable. In one way or another, they will influence the political discussions far beyond Brussels."

PS: Here you can read Mica in the newsletter of the past week.

data-mining

A growing form of cryptoco still flies under the radar. Governments and law enforcement agencies focus on ransomware attacks in which Hacker computer systems require capers and payments-often in crypto.

But the cyber security company Sonicwall raises the alarm for "cryptojacking", which is about penetrating another one in the computer in order to secretly mine cryptocurrencies.

Sonicwall found that the total volume of cryptojacking has increased steadily every year since 2018. The 66 million cases of cryptojacking, which were discovered in the first half of 2022, already account for around 70 percent of the total volume of the past year.

The researchers said that cryptojacking was by nature less known than ransomware. "In contrast to ransomware, which announces her presence and relying heavily on communication with the victims, cryptojacking can be successful without the victim ever noticing it," said Sonicwall.

"It is still financial crime, but it certainly does not attract the attention of the law enforcement authorities," said Bill Conner, President of Sonicwall, and added that cryptojacking is "as serious as ransomware" and that "law enforcement must begin to concentrate on it". .

Source: Financial Times