Crypto Product News: BTC/ETH ETN, Custody, Insurance, Tokenized Treasuries
by Robert A. Musiala Jr.
The London Stock Exchange (LSE) recently published a market notice regarding applications for Bitcoin and Ethereum cryptocurrencies ETNs (ETNs), stating that the LSE has announced that “applications for trading in Bitcoin and Ethereum crypto ETNs (ETNs) will be accepted from 8 April 2024”. I accept it.” ” According to the notice, the LSE “proposes that the commencement date of trading for these crypto ETN securities will be Tuesday, May 28, 2024.”
In a recent press release, WisdomTree “announced that it has been licensed by the New York State Department of Financial Services (DFS) to operate as a limited purpose trust company under New York Banking Law.” According to the press release, “[t]The Trust Company Charter provides that WisdomTree will provide fiduciary custody of digital assets, including digital wallet services, issue and exchange DFS-approved stablecoins, and will operate a newly formed entity, WisdomTree Digital Trust Company, LLC. It authorizes the management of stablecoin reserves under: ”
According to another recent press release, “Marsh, the world’s leading insurance broker and risk advisor, has announced the launch of a new insurance scheme for custodians of digital assets, including financial institutions.” The new product “offers up to $825 million in insurance capacity” and “helps organizations store digital assets offline, known as cold storage, and protect certain elements of asset risk.” “We will support the organizations we are trying to cover.” Multiparty Computation (MPC) or other management solutions that do not work completely offline. ”
According to recent reports, the market value of US Treasury securities tokenized on public blockchains such as Ethereum, Polygon, Avalanche, and Stellar is over $1 billion. According to a recent report by 21.co, “Projects like Ondo Finance, Backed Finance, Matrixdock, Maple Finance, etc.” [and] Swarm…successfully tokenized U.S. government bonds on-chain and amassed over $300 million in AUM. ” The report also states that “Franklin Templeton and WisdomTree have also tokenized U.S. Treasury products…” [I]Instead of using an EVM compatible blockchain, they are choosing Stellar. ”
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Lawmakers address ETH classification in letter to SEC Chair
by Robert A. Musiala Jr.
A group of Republicans on the House Financial Services Committee and the House Agriculture Committee sent a letter to the Securities and Exchange Commission in response to Promethium Capital’s announcement that it would provide custody services for ETH, according to a recent press release. . (SEC) Chairman Gary Gensler issued a statement to the SEC regarding the ability of special purpose broker-dealers (SPBDs) to store non-secure digital assets, the SEC’s stance on addressing SPBD non-compliance, and the SEC’s regulatory classification of ETH. “clarify their position.” , and the SEC’s position regarding the Promethium announcement. ” The press release further states, “The SEC and CFTC have an extensive record of identifying ETH as a non-security digital asset,” adding, “The SEC’s current regime, based on this precedent, does not allow SPBD to identify ETH as a non-security digital asset.” We do not permit the storage of Digital assets. ”
According to the letter to Chairman Gensler, “failure to clarify the treatment of ETH will only exacerbate the confusion and uncertainty surrounding ETH’s classification, as demonstrated by the Promethium announcement.” The letter further states, among other things, that “the regulatory treatment of ETH is not only an issue of concern to the SEC.”[;] It relates directly to the CFTC and the commodity futures market…. If the SEC determines that ETH is a digital asset security, CFTC-registered commodity derivatives exchanges may be unable to list and offer ETH futures for trading as a commodity futures product. ” According to the letter, “[t]The negative impact of the SEC’s implicit or direct classification of ETH as a digital asset security will ripple throughout the digital asset market in both the short and long term. ”
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FATF releases latest information on implementing cryptographic recommendations
by Robert A. Musiala Jr.
The Financial Action Task Force (FATF) recently released a report titled: Status of implementation of Recommendation 15 by FATF Member States and Jurisdictions with Critical VASP Activities. According to the report, “[f]Following a 12-month information gathering and evaluation process, the FATF has published a table summarizing the implementation of the FATF Standards on Virtual Assets and VASPs by FATF Members and jurisdictions with significant Virtual Asset Service Provider (VASP) activities. is being announced. (Recommendation 15). The report states:[v]Because virtual assets are inherently international and borderless, the failure to regulate VASPs in one jurisdiction could lead to significant global consequences related to financing the proliferation of weapons of mass destruction, ransomware, and terrorist financing. This means that it may have an effect on
The report’s table “includes all FATF member states and 20 jurisdictions with significant VASP activity” identified based on virtual asset trading volume and user base. The table “represents the steps taken by FATF Member States and jurisdictions with…critical VASP activities to implement FATF standards in relation to the regulation and supervision of VASPs.” According to a FATF press release. and,”[m]No country has yet fully implemented the FATF requirements regarding virtual assets. [VASPs] This is to prevent illegal financial abuse. ”
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OFAC announces sanctions against cryptocurrency activities, adds public keys to OFAC list
by Robert A. Musiala Jr.
In two separate press releases issued on March 25 and 26, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions against various individuals and entities related in part to activities related to virtual currencies. announced. The initial press release states that “13 entities active in the financial services and technology sector of the economy of the Russian Federation, including persons developing or providing virtual asset services that enable the evasion of U.S. sanctions; Sanctions against “individuals” are listed. A second press release states sanctions against “six entities, one individual, and two tankers engaged in facilitating the transportation of goods and financial transactions for the Islamic Revolutionary Guard Corps-Quds Force (IRGC-QF), the Houthis, and Hezbollah.” is explained. A “Syrian money exchanger based in Lebanon” “provided Hezbollah with digital wallets to receive funds from IRGC-QF product sales and to make cryptocurrency transfers” and “provided Hezbollah with sanctioned Hezbollah officials.” I made a cryptocurrency remittance.” As part of the second action, OFAC added new cryptocurrency public keys to OFAC’s list of specially designated nationals.
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Department of Justice and CFTC file lawsuit against KuCoin cryptocurrency exchange
by Christopher Lamb
A recent press release from the U.S. Department of Justice (DOJ) announced the publication of an indictment against global cryptocurrency exchange KuCoin and its two founders, Chun Gan aka “Michael” and Ke Tang aka “Eric.” Announced. The indictment alleges that KuCoin conspired to operate an unlicensed money transfer business and “maintain appropriate anti-money laundering (“AML”) programs designed to prevent KuCoin from being used for money laundering or money laundering. “By intentionally failing to do so, they conspired to violate the Bank Secrecy Act.” terrorist financing, failure to maintain reasonable procedures for customer identification, and failure to file suspicious activity reports. ” According to the release, “KuCoin solicited business from U.S. customers through its spot trading platform and then its futures trading platform” and that KuCoin and its founders were aware of U.S. AML obligations but “intentionally avoided these “They chose to ignore this requirement.”
According to another recent press release, the Commodity Futures Trading Commission filed a civil enforcement action against Mek Global Limited, PhoenixFin PTE Ltd, Flashdot Limited, and Peken Global Limited (collectively KuCoin) in the United States District Court for the Southern District of New York. announced a lawsuit. Violation of the Commodity Exchange Act and CFTC regulations. According to the release, “KuCoin illegally traded off-exchange commodity futures and retail commodity transactions using leverage, margin, or financing. Violations included “soliciting and accepting orders for retail commodity transactions through swaps, leverage, margin, or financing.” The CFTC is seeking “disgorgement, civil monetary penalties, permanent trading and registration bans, and permanent injunctions” against the accused.
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Ethereum layer 2 protocol gets hacked
by Robert A. Musiala Jr.
Munchables, a non-fungible token game built on Ethereum’s Layer 2 Blast protocol, was the victim of a hack in which attackers stole $62 million worth of ETH, according to a recent report. did. The hack was reportedly carried out by the developers of Munchables, who subsequently returned the ETH without demanding a ransom.
In another recent incident, hackers stole $16 million in digital assets from Ethereum’s Layer 2 protocol Curio. The hack reportedly involved a smart contract exploit in which hackers exploited vulnerabilities related to voting privileges to compromise MakerDAO-based smart contracts.
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