Amid ongoing regulatory efforts, the U.S. Securities and Exchange Commission (SEC) is poised to contest Ripple’s recent victory. Binance captures attention with ambitious growth moves, while PayPal introduces its very own stablecoin.
Greater scrutiny in the U.S.
This week, government agencies sought to establish clarity. The Federal Reserve introduced an innovative endeavor aimed at overseeing cryptocurrency operations within banking institutions.
The Novel Activities Supervision program will diligently track activities pertaining to cryptocurrencies, encompassing trading and lending, with a particular emphasis on enhancing the security of stablecoins.
The SEC deferred its decision on the Bitcoin ETF proposal put forth by Ark Invest and 21Shares, with the intention to gather insights from the general populace. The agency chose not to approve nor reject the proposal.
The recent actions undertaken by the SEC garnered considerable public interest, as the commission initiated formal procedures for a definitive verdict. Furthermore, the solicited public input could contribute to the extension of the duration of the ongoing deliberative phase.
Bitstamp and Bittrex reach distinct compromises
Amid the sustained regulatory efforts, crypto exchanges Bitstamp and Bittrex had to reach certain compromises with the SEC.
Luxembourg-based Bitstamp revealed plans to cease trading for seven prominent altcoins in the U.S., effective from Aug. 29.
The altcoins affected by this measure include Axie Infinity (AXS), Chiliz (CHZ), Decentraland (MANA), Polygon (MATIC), Near (NEAR), Sandbox (SAND), and Solana (SOL).
While trading activities are set to undergo temporary suspension, users will still be able to hold and withdraw these assets on Bitstamp. This move is in response to recent assertions raised by the SEC regarding the unregistered securities status attributed to these tokens.
Bittrex and its former CEO William Shihara agreed to pay a $24 million settlement in response to a case with the SEC. The SEC claimed that Bittrex and Shihara violated securities laws by delivering crypto trading services to US investors without registering as a national securities exchange from 2014 to 2019.
In addition, some of the cryptocurrencies traded on Bittrex were considered securities by the SEC.
Additionally, Shihara was accused by the SEC of instructing asset issuers to eliminate “problematic statements” from their public platforms to avoid SEC oversight. Bittrex and Shihara agreed to pay the fine without confirming or denying the allegations.
SEC to appeal Ripple’s victory
Despite the victories secured in other lawsuits, the U.S. SEC is not prepared to concede partial defeat in the legal battle with Ripple. Following hints of an appeal, the agency finally made its next move this week.
In a bid to contest Judge Analisa Torres’ ruling, the SEC filed an appeal against Ripple’s legal victory regarding the status of XRP. The court’s previous decision had categorized Ripple’s programmatic sales and other distributions as non-securities.
The SEC has taken steps to address the perceived discrepancy and has commenced an interlocutory appeal. The focus of this challenge is on the assertion that the judge did not designate XRP as a security.
Stuart Alderoty, Ripple’s chief legal officer, conveyed through a Twitter post that the SEC’s appeal might lack legitimacy. He went on to mention that Ripple intends to present its response in the upcoming week.
Coinbase gets an unexpected ally
In a decisive maneuver, Senator Cynthia Lummis threw her weight behind Coinbase’s endeavor to have a lawsuit brought by the U.S. SEC dismissed. The Republican senator submitted an amicus brief, reinforcing her unwavering support for the cryptocurrency industry.
Senator Lummis contends that the actions of the SEC impinge upon the fundamental separation of powers enshrined in the U.S. Constitution.
She believes that the agency’s conduct encroaches upon the legislative prerogatives of Congress, effectively attempting to establish regulations through regulatory means.
Furthermore, she casts allegations against the SEC for circumventing the ongoing political processes designed to formulate comprehensive cryptocurrency regulations, thus exceeding its intended authority.
France amends rules to align with MiCA
The Autorité des marchés financiers (AMF), the financial regulatory body of France, revealed updated directives for digital asset service providers (DASPs) operating within the nation. These rules align with the forthcoming provisions of MiCA.
Scheduled to be enforced starting January 2024, the modifications include more rigorous prerequisites for registration, including the compulsory integration of cybersecurity protocols and internal monitoring mechanisms.
Current DASPs holding valid registrations will remain governed by the preceding regulations. The synchronization of AMF’s licensure criteria with the impending MiCA framework will facilitate seamless adherence for authorized French DASPs to transition into the role of service providers under MiCA.
The objective is to streamline the transition into the forthcoming unified European regulatory structure while simultaneously nurturing innovation within the standardized European milieu.
PayPal launches stablecoin
Amid the sustained regulatory efforts, institutional adoption remained high. In a noteworthy advancement, PayPal entered the arena on Aug. 7 with a partnership with Paxos which led to the launch of its newly-minted stablecoin, dubbed PayPal USD (PYUSD) on Ethereum.
This significant move distinguishes PayPal as the first major financial institution to venture into the stablecoin domain. PYUSD is inherently secured by U.S. dollar deposits, short-term Treasuries, and equivalent cash reserves.
Shortly after the launch, Justin Sun’s Huobi announced plans to introduce a new trading pair encompassing PayPal’s stablecoin and USDT. The listing of the pair will be contingent on several factors, including liquidity and market conditions.
Sun, who is also the founder of TRON, extended a gracious invitation to PayPal, encouraging them to explore the prospects of integrating their stablecoin project with the TRON network.
Drawing attention to TRON’s attributes of speed, security, and economic efficiency, Sun accentuated the potential for symbiotic collaboration between the two entities.
Commendations and condemnations
After PayPal introduced the stablecoin, North Carolina Representative Patrick McHenry, who chairs the U.S. House Financial Services Committee, expressed his endorsement for the asset, viewing it as a crucial foundation of modern payment systems.
McHenry, a Republican, highlighted the potential impact of PayPal’s stablecoin in the context of the U.S. financial sector. He stressed the importance of establishing a clear regulatory framework for the stablecoin, which could lead to significant advantages.
This statement came as the Financial Services Committee continues its efforts to enact the Clarity for Payment Stablecoins Act, a bipartisan proposal that recently received committee approval and now awaits further steps for implementation.
While Congressman McHenry lauded PayPal’s stable digital currency pegged to the U.S. dollar, Democratic Representative Maxine Waters conveyed deep concerns over the launch without a firmly established federal regulatory framework.
Waters emphasized the indispensability of unambiguous regulatory guidelines before making substantial progress within the cryptocurrency sphere. She highlighted the precedence of regulatory laws preceding noteworthy advancements in the digital asset industry.
Binance secures licenses in El Salvador
Meanwhile, prominent crypto exchange Binance continued to make waves this week, showcasing remarkable advancements despite its ongoing legal clash with the SEC.
During this week, the exchange attained a significant landmark by securing dual licenses within El Salvador, thereby fortifying its operational framework on the international stage.
The Central Reserve Bank of El Salvador, in a significant move, conferred upon Binance the license to offer Bitcoin services, while concurrently, the National Commission of Digital Assets issued a license for services pertaining to digital assets.
With this accomplishment, Binance extends its global regulatory influence, presenting authorizations and registrations in 18 markets worldwide — a feat that places it ahead of all other cryptocurrency exchanges.
Binance seeks to satisfy regulatory provisions
Upon re-entering the Japanese market, Binance Japan partnered with Know Your Customer (KYC) provider Liquid for streamlined verifications. Liquid offers a facial authentication tool employing AI-driven image processing, ensuring identity verifications that align with local Japanese KYC regulations.
While biometric data collection is vital for KYC processes, it has drawn regulatory scrutiny due to privacy concerns. Takeshi Chino, Binance Japan’s General Manager, assures that Binance has implemented thorough safety measures.
Binance is reportedly engaging in the pursuit of anti-money laundering (AML) compliance in the Taiwan region, signifying intentions to establish a foothold in the region. This move comes after Binance’s re-entry into Japan.
The reports revealed that Binance is among the entities currently seeking AML approval through a regulatory draft meeting.
Binance has already formally submitted its registration application under the oversight of the Financial Supervisory Commission (FSC) as well as the Money Laundering Control Act.
With the AML declaration exclusively pertinent to entities registered in Taiwan, it is anticipated that Binance will establish its presence through a Taiwan-registered entity named Binance International Limited Taiwan Branch.
Source: https://crypto.news/sec-to-appeal-ripples-victory-binance-aims-for-growth-paypal-launches-stablecoin-weekly-recap/