China’s Crypto Crackdown, CySEC Intensifies Regulation – Best of the Week

Catch up on last week’s top stories.

CFTC Chairman Bullish on Bitcoin

In a commencement of U.S. regulators before the Senate Committee, Christopher Giancarlo, the Chairman of the Commodity Futures Trading Commission (CFTC), joined SEC Head Jay Clayton, to discuss a regulatory framework for the cryptocurrency space.

Join the iFX EXPO Asia and discover your gateway to the Asian Markets

Discover credible partners and premium clients at China’s leading finance event! 

In a surprising turn of events, Mr. Giancarlo made bullish remarks over Bitcoin and crypto investing. He even referenced his three children, as examples of a younger generation’s enthusiasm for the industry. “It strikes me that we owe it to this new generation to respect their enthusiasm about virtual currencies with a thoughtful and balanced response, not a dismissive one.”

CySEC Requires Brokers to Divulge Operational Geography

The Cyprus Securities and Exchange Commission (CySEC) announced a major change to its regulatory confinements last Thursday. The new law requests that all CySEC regulated brokers are now required to send the regulator a letter, fully listing all countries from which each company is currently or intends to provide its services.

The requirement further specifies that additional licensing or permission must be obtained from each country of operation, and that verification must be supplied to CySEC, in order to prove that the services are permitted in that region.

Brokers who have expanded beyond the EU, in an effort to onboard more clients, will now have to either receive and relay the official permission of local regulators, or opt to stop offering services in their respective regions.

India Crypto Regulation

Subhash Chandra Garg, Secretary of the Department of Economic Affairs, said last week that the government of India is set to place regulations on cryptocurrencies by March 31. It appears that the main focus of regulations will address the lack of tracking that currently encompasses the industry, and their vulnerability to money laundering, and potential terror funding as well.

Indian regulators have voiced concerns over the current way in which exchanges are set up, unregulated or monitored, and provide an easy path toward money laundering. An underlying issue is the fact the transactions cannot be tracked, thereby opening the door for fraudulent activity.

Dow Drops 1,000 Points in 10 Minutes

Last Monday, the US stock market endured strong bearish downturn, as the Dow Jones Industrial Average saw its largest ever daily decline of 1,500 points. The strong volatility, coincided with very low liquidity levels. The VIX index also posted a 100 point rally, at some point during the day.

Suggested articles

$100,000 Battle: PrimeXBT Debuts New Contests ModuleGo to article >>

The swift decline of Dow index should signal alarms to brokers, who currently maintain high leverage capabilities for clients. Taking steps to demand greater margin requirements from traders can go a long way in protected Market Makers and STP Brokers alike.

China Cracks Down

The Chinese government highlighted several marquee events last week. First, the government announced its intentions to block access to all cryptocurrency websites from within China.

The government had already banned crypto exchanges and ICOs in 2017, but it appears that many investors are able to bypass the ban, through access to foreign website, from within Chinese mainland.

This promoted the government to reach the decision to block all crypto-related website. In response, practically the entire crypto market was in the red, as tremendous losses were incurred by many of the leading cryptocurrencies.

Moreover, the FX market did not completely evade the government’s backlash. Due to mounting pressures from Chinese authorities, the country’s search engine Baidu, has officially banned FX ads. As part of its efforts, Baidu has linked FX keywords to a disclaimer, that now informs users to seek “legal alternatives to leveraged FX trading.”

Growing Concerns over Tether

Convers over the legitimacy of Tether continue to mount, amid a recently collapsing cryptocurrency space, and a consequent flood of funds out of the market. The struggles incurred by crypto investors since the start of the year, has led many to wonder just how stable the US tether cryptocurrency really is.

As more investors begin to withdraw funds from the market, it has brought to question the true amount of US dollar reserves available to the company at any given time.

Aldo contributing to public concerns is the evidence of a (too) close relationship between Tether and the crypto exchange Bitfinex. In response to a hack on the exchange that saw $31 million in Tether Dollars stolen from investors, the US CFTC issued a subpoena to both Bitfinex and Tether, further elevating suspicions over both entities.

Moreover, the fact that it has been more than year since Tether has issued any transparent information or offered an audit of any kind, is the icing on the cake that has cause the chaotic whispers across the crypto industry.


Got a news tip? Let Us Know