Wednesday, June 16, 2021
Trading Crypto Firm Initiatives in CBDCs and Custody, GSA Auctions Bitcoin, Marketing Campaigns...

Crypto Firm Initiatives in CBDCs and Custody, GSA Auctions Bitcoin, Marketing Campaigns Integrate Crypto, ETFs Seek Approval, Enforcement Actions Continue | BakerHostetler

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Crypto Firms Expand CBDC and Custody Initiatives, GSA Auctions Bitcoin

By: Jordan R. Silversmith

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Ripple Labs recently released a white paper describing its XRP cryptocurrency as a way to link different central bank digital currencies (CBDCs). The white paper argues that XRP could be a “neutral bridge” between different cryptocurrencies and enable interoperable CBDCs and cross-border payments.

A major global technology firm recently issued a press release announcing a partnership with METACO, “a provider of security-critical infrastructure that helps large banks manage digital assets,” to integrate the technology firm’s “confidential computing capabilities” and cloud computing platform. The initiative is reportedly aimed at further enabling “large financial institutions to securely integrate cryptocurrencies, tokens, and distributed ledger use-cases into their core infrastructure.”

Officials at the General Services Administration (GSA) recently placed a 0.7501 share of bitcoin for auction at a two-day bidding event, and bidders for the bitcoin ran prices up well above market rate. At the close of the auction, the highest bidder won the bitcoin share at a price of $53,104, about 21 percent higher than market value. According to a GSA press release, the agency intends to hold another bitcoin auction from March 29 to 31, when it will sell a total of 6.79 bitcoin, with 10 lots up for bid.

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A recent survey polled U.S. adults seeking their opinions on cryptocurrency. Among other results, 39 percent of respondents said they “don’t know anything about cryptocurrency,” while 38 percent believe “cryptocurrency is the future of money.”

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Token-Focused Marketing Campaigns Signal Rising Interest in Cryptocurrencies

By: Veronica Reynolds

Decrypt, a cryptocurrency-focused publication, launched its “Reader Token” (DCPT) to the public last week, allowing readers to accrue tokens in return for content consumption. The program provides a fresh take on the traditional advertising model, with Decrypt releasing a limited supply of Decrypt Tokens in periods called “seasons,” in partnership with sponsors, to be redeemed by consumers for digital rewards. The program’s first sponsor is Protocol Lab’s Filecoin, with 21 million tokens available during its first season.

In bitcoin news, a well-known alcoholic beverage company recently offered social media users who participate in its online marketing campaign the opportunity to receive bitcoin in exchange for a tweet. Consumers who participate will be entered in a sweepstakes for a chance to win one bitcoin.

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ETFs Seek SEC Approval as Brazil Approves First ETF, FATF Updates Guidance

By: Teresa Goody Guillén

An affiliate of a large American multinational financial services corporation sought approval from the U.S. Securities and Exchange Commission (SEC) this week to offer a bitcoin exchange-traded fund (ETF) in the U.S. market. The fund, Wise Origin Bitcoin Trust, would reportedly track the performance of the financial services corporation’s bitcoin index. A New York-based investment firm also recently filed for a bitcoin ETF with the SEC. The filing reportedly states that the ETF will seek to list its shares on the New York Stock Exchange Arca. Meanwhile, the Brazilian Securities and Exchange Commission announced that it has approved a plan for Latin America’s first bitcoin ETF. According to the announcement, Brazil’s B3 is the second exchange in the world to have a fully bitcoin-based ETF, after Canada’s Toronto Stock Exchange.

The Financial Action Task Force (FATF) is updating its Guidance on the risk-based approach to virtual assets (VAs) and virtual asset service providers (VASPs). The revised Guidance focuses on six main areas in order to (1) clarify the definitions of VA and VASP to make clear that these definitions are expansive, (2) provide guidance on how the FATF Standards apply to so-called stablecoins, (3) provide additional guidance on the risks and potential risk mitigants for peer-to-peer transactions, (4) provide updated guidance on the licensing and registration of VASPs, (5) provide additional guidance for the public and private sectors on the implementation of the Travel Rule, and (6) include Principles of Information-Sharing and Co-operation Amongst VASP Supervisors. FATF is consulting private-sector stakeholders before finalizing the revisions to the Guidance and welcomes feedback, to be submitted by April 20, 2021.

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CFTC, Canadian Tax Agency and DOJ Continue Crypto Enforcement Activities

By: Joanna F. Wasick

Late last week, the Commodity Futures Trading Commission (CFTC) issued an order filing and settling charges against a major California-based cryptocurrency exchange. Charges included reckless, false, misleading or inaccurate reporting and “wash trading” (using transactions to give the appearance that purchases and sales were made, without incurring market risk or changing the trader’s market position), which created the misleading appearance of liquidity and trading interest in a particular cryptocurrency. The order requires the exchange to pay a civil monetary penalty of $6.5 million and cease and desist from any further violations of the Commodity Exchange Act or CFTC regulations. The CFTC stated that its order exemplifies the CFTC’s commitment to safeguarding the integrity and transparency of digital asset pricing.

Also last week, a Canadian federal court authorized the Canadian Minister of National Revenue to seek certain documents and information from Coinsquare, a Canadian cryptocurrency exchange. Requested information includes a list of all customer accounts, identifying information of account holders, transfer data and other trading activity. The action is similar to that of the United States Internal Revenue Service (IRS) against a U.S. exchange, which began five years ago to aid the IRS in recovering taxes from account holders.

The United States Department of Justice (DOJ) recently released a statement that a Russian national, Egor Kriuchkov, pleaded guilty of conspiring to travel to the U.S. to recruit an employee of a Nevada company into a criminal hacking scheme that involved installing malware on the company’s computer network. Kriuchkov allegedly met with the employee and offered him a payout in bitcoin in return for abetting the hack. However, the employee reported the meeting to his employer company, the FBI was promptly contacted and the hack was thwarted. The DOJ stated, “This case highlights the importance of companies coming forward to law enforcement, and the positive results when they do so.”

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