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South Korea Is Set to Review its Blockchain and Cryptocurrency Regulations

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At the Deconomy conference which was held in Seoul between April 4 and April 5, 2019, a resolution was made by a government representative which would enable the government of South Korea to review its digital currency regulations with a view to making them more favorable for the development of digital currency in the country.[tps_footer][/tps_footer]

The 4th Industry Forum was formed by the Koran government to look into innovative technologies like machine learning, Internet of Things (IoT), and Blockchain.

As known, South Korea is one of the countries that has accepted digital currency and all that it entails. As a positive landmark then, the country’s regulators introduced firm cryptocurrency regulations in order to protect residents from certain risks which are  said to be associated with cryptocurrency, the country’s regulators introduced firm cryptocurrency regulations. One of such firm regulations which indeed hindered the development of digital currency in the country is the requirement of digital currency exchanges to partner with local banks which would open corresponding fiat-based bank accounts for its cryptocurrency customers.

Song Hee-Kyong, the co-president of the 4th Industry Forum of the National Assembly, at the Deconomy conference, pointed  at softer regulations for the cryptocurrency hinting that the government “misunderstood” digital currency at the time the laws were made. He made it clear when he said that:

“The government has misunderstood the virtual currency and tried to meet the real currency standards, so there are various problems. The industry does not stand still while waiting for the regulatory sandbox authorization, so it is just like keeping it in the box.”

In addition to what Song Hee-Kyong, the chairman of Korea’s National Policy Committee, , Min Byung-doo,said that the  initial regulations were forced by the risks linked with digital currency as at the time it was still new. In accordance with what he said, “the idea was to protect the economy of the nation by ‘vaccinating’ it against the first major run-up of cryptocurrencies.” Hence in defense to the need for re-evaluation of South Korea’s stringent cryptocurrency regulations, he explains that the crypto market has grown and does not need the kind of regulations it was forced to in its infancy.  He also admonished against limiting Blockchain and cryptocurrency when other emerging technologies were enjoying policies that created a regulatory sandbox to ensure their growth.

In reaction to the words of Song Hee-Kyong, the chairman of the Special Committee on the 4th Industrial Revolution of the National Assembly, Choung Byoung-gug, assured the people that some changes would be made to the current regulations very soon. He noted, however, that the government is hesitant to make wholesale change as so as not to negatively impact the cryptocurrency market.

 

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ICO Rating To Pay Settlement Charges to US SEC of $268,998 For Undisclosed Paid Reviews

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The Securities and Exchange Commission of the United States has announced that ICORating an ICO ratings provider firm has agreed to pay a settlement charge of $268,998.

In an investigation carried out by SEC’s Ashley Ebersole and Louis Gicale supervised by Melissa Robertson, the rating organization was found to have received payments for giving ratings to cryptocurrency projects. A violation of the securities law.

The Russian organization had decided to pay the sum because it failed to disclose payments received from issuers for publicizing their digital asset securities offerings.

According to SEC, between the period of December, 2017 and July 2019 the organization produced research reports and ratings of “blokchain-based digital assets” coins/tokens that were securities. These research were published on the organization’s website and social media.

 

Based on securities law, promoters are expected to disclose compensation received for publishing investments so that potential investors will be know what they are seeing is a well paid promoted offering.

 

According to SEC, ICO Rating violated the anti-touting provisions of Section 17(b) of the Securities Act of 1933. The organization has agreed to cease and desist from committing or causing any future violations of these provisions though it did not admit or denied the SEC findings.

 

The settlement of $268,998 is made up of prejudgment interest of $106,998 and civil penalty of $162,000

 

According to its website, ICO Rating addresses itself as “a rating agency that issues independent analytical research” with the mission “to help the market achieve the necessary standards of quality, transparency and reliability”

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We Will Regulate Cryptocurrencies Using Electronic Financial Transactions Framework -Mike Pompeo

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Image: Yahoo

The US Secretary of State Mike Pompeo has said that, to regulate cryptocurrencies, the same framework that was used for other electronic financial transactions today should be adopted.

 

This he made known in an interview with CNBC where he also talked about the ongoing trade war with China and the administration’s position on the issue.

 

Mike Pompeo’s position on cryptocurrency regulations came as a response to a question raised by the CNBC interviewer when he asked “so how do you regulate these things like Libra or a Bitcoin?  What do you do?  It’s – Bitcoin’s going to be tough to regulate.  It’s already out of the bag, isn’t it?”

 

 

Answering, Mike submitted that “The same set of requirements that apply to things flowing through SWIFT or flowing though our financial institutions ought to apply to those transactions as well.   I concede it will be difficult to do, but the theory, the regulatory theory, that we ought to apply is that one.”.

 

 

Responding to a question about cryptocurrency as a tool for financing terrorism and the fact that prior cryptocurrencies, nefarious activities had been sponsored with cash – dollar, Pompeo gave an affirmation that indeed crime has been perpetuated with the USD in time past, so it is not peculiar to cryptocurrencies only.

 

Mike believes a world where financial transactions are harder to trace would be less secure. The solution to this is the protection/preservation of a global financial system. He cited the lack of financial tracking capabilities as at 9/11 and 15years prior

 

Recall that US Secretary of Treasury, Steve Mnuchin had in a press conference held in the White House in July, expressed concerns over the Libra saying it could be used for money laundering or financing terrorism.

 

He said the US will not allow digital assets service providers to operate in the shadows and using cryptocurrencies for illicit activities will invite the full effort of the US Treasury and regulators. He maintained that the United States has been at the forefront of regulating entities that provide cryptocurrencies.

 

According to him, while the government welcomes innovation that may improve the efficiency of the financial system and expand access to financial services, Libra poses a threat to the financial stability and integrity of the US financial system since cryptocurrencies has been exploited by many players to facilitate illegal activities such as cybercrime, tax evasion illicit drugs, human trafficking etc.

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Libra: Big Tech shouldn’t be given more Power over Public infrastructure like the Financial System.- Senator Sherrod Brown

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Facebook doesn’t Understand Powerful Tools Like Monetary Policy.

Facebook has come under criticism over the years it has commenced operation. It has also been caused appear before Regulators in time past and today sets another in the history of the social media giant.

The Facebook Libra hearing is currently ongoing in Washington DC with many questions being thrown at the representative of Facebook and Libra David Marcus.

As the US senators put forth their concerns to the Libra representative, opinions are being expressed by stakeholders to the integrity of the US government financial system stability of the US Economy.

Commenting on the Libra, a Senator from Ohio, Senator Sherrod Brown has said that big tech (firms) should be given more power over public infrastructure like the financial system. This is gave reason by saying the big tech and big banks aren’t accountable to the public.

The concern is coming as a result of the firm (Facebook) history with user’s data. The social media giant already enjoys a dominating presence globally with its product platforms such as the Messenger, Instagram, WhatsApp apart from the Facebook site itself.

Senator Sherrod opined that:  it would be crazy to give Facebook a chance to experiment with people’s bank account and use powerful tools they don’t understand like monetary policy, to jeopardize hardworking Americans ability to meet their needs.

Secretary of the US Treasury had earlier expressed his concerns over the Libra that it could be used for money laundering financing terrorism. These are valid reasons why Congress had to request to halt the LIbra and Facebook appear before it else it will risk the creation of a new Swiss based financial system that is too big to fail.

On being Swiss based, David Marcus of representing Libra in the hearing, had early confirmed that they Libra will comply with FinCEN. Libra will be subject to KYC/AML regulations.

When asked about the dominance of Facebook in the Libra association, Marcus replied that Facebook will have same rights as others in the Libra association.

Senator Sherrod Brown maintains that Libra is a recipe for more corporate power over markets and consumers, and fewer and fewer protections for ordinary people

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US Treasury believes Libra could be used for Money Laundering or Financing Terrorism

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The 77th Secretary of the US Treasury had in a Press Conference held in the White House made known government position on the Facebook attempt into cryptocurrency. In the Conference, the Secretary expressed the concerns over Facebook Libra and Calibra saying it could be used for money laundering or financing of terrorism.

Facebook has since last year 2018 been preparing for its move into cryptocurrency by hiring engineers, a move after it had place a ban on crypto ads a year before. In June 2019, the social media giant released its white paper outline its goal to build a new financial system using the blockchain with massive corporations ranging acting as validators.

The attempt to create its “globalcoin” attracted backlash from the crypto community and as well as countries of the world which say the move as a threat to their local currency. Chiefly amongst the latest move by a foreign nation is the India’s decision to have nothing to do with Libra within its sovereign borders.

Facebook upon releasing the Libra white paper received a correspondence from the US Congress signed by Maxine Waters amongst others asking it to halt Libra or risk the emergence of a new Swiss financial system that is too big to fail. Congress requested Facebook to appear before it. The date is set for July 16, however, and top US officials are expressing their position on the Libra and its fate appears hanging.

The 45th Leader of the free world has few days ago said the Facebook Libra will have “little standing”. A comment which US Treasury Secretary Mnuchin credited as the President’s personal opinion and not that of the State. However, in the Press Conference today, the Secretary said the Treasury has very serious concerns Libra could be used for money laundering or financing terrorism.

“……..the overall goal is to maintain the integrity of the financial system and protect it from abuse.” – Steve Mnuchin

And as cryptocurrencies has been exploited by many players to facilitate illegal activities such as cybercrime, tax evasion, illicit drugs, human trafficking, While the US government welcomes innovations that may improve the efficiency of the financial system and expand access to financial services, Libra poses a threat to the financial stability and integrity of the US financial system.

Facebook is currently trading as at press time at $203 showing a closing loss of 0.47% after opening at $204 and reaching a height of $205.53 today.

 

 

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