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Regulation

India Drafting New Cryptocurrency Regulations After Controversial (and Unfounded) Banking Ban

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An Indian sub-committee tasked with exploring cryptocurrency regulations has drafted a new bill that will be presented to lawmakers next month, one of the nation’s top economic advisers confirmed. The news is the latest positive sign that the world’s fastest growing economy will loosen the clamp on digital currencies after a controversial ban was announced earlier this year.

Draft Crypto Bill Finalized

Department of Economic Affairs secretary Subash Chandra Garg has confirmed that a draft cryptocurrency bill will be presented to government officials in the first week of July.

“We are fairly close to developing a template that we think is in the best interests of the country,” Garg told the nation’s largest financial media outlet in reference to new crypto regulations.

He added:

“We’ve actually moved quite a lot [in drafting regulations] in that, what part of the [cryptocurrency] business should be banned, what should be preserved and what not. That kind of detailed work has happened. Now should be in a position to wrap this up in the first fortnight of July.”

As Hacked previously reported, the Indian government has appointed a special panel to evaluate crypto regulations, including the RBI’s recent action. The group has already said it opposes the central bank’s edict preventing regulated financial institutions from serving digital currency exchanges and its users.

Curiously, the RBI has admitted that the blanket ban on digital currency activity was done arbitrarily. This was confirmed by an information request submitted under India’s Right to Information directive.

In that request, New Delhi lawyer Varun Sethi asked the RBI to provide rationale for its decision – namely, whether it conducted research, sought consultation or received recommendation for the banking ban. The central bank answered “no” to all three questions.

Crypto to the Supreme Court

Several Indian firms have challenged the central bank’s ban on grounds that it does not take their views into account. They’ve hired a slew of attorneys who are trying to convince the courts that a blanket ruling on digital currencies is not appropriate given the complexity and diversity of the marketplace.

A Supreme Court hearing on the matter was scheduled for July 20 but has since been expedited to July 3, according to one of the firms challenging the RBI’s edict.

It was previously reported that the High Court was not accepting further petitions against the RBI past the July 20 date. Shortly after the ruling was announced, the High Court of Delhi issued a notice to the central bank and other government agencies that the banking ban was unconstitutional.

India’s digital currency market has bet that trading will survive the central-bank ban, with investors and exchange operators using the three-month window to convert rupees into cryptocurrencies. At the time of writing, the new measures are scheduled to come into force next week after they were announced in early April.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 771 rated postsChief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi




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Regulation

SEC Releases ICO Guidelines; Too Little, Too Late for Cryptocurrency Investors?

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The U.S Securities and Exchange Commission has released a guide for would-be cryptocurrency creators and investors; but a over a year on from the heady peak of the ICO craze, is it too little, too late?

SEC Offers ICO Guide

The SEC’s newly released guide to initial coin offerings features five main points, many of which will already be familiar to anyone keeping up with the SEC saga.

  • ICOs Can Be Securities Offerings

This one is hardly a surprise, however, it may be the first time that it has been stated officially by the SEC. Up until now all we had to go by were the ‘unofficial’ utterings of SEC figures at various talks and conferences.

“ICOs, based on specific facts, may be securities offerings, and fall under the SEC’s jurisdiction of enforcing federal securities laws.”

  • They May Need to Be Registered

ICOs that are securities most likely need to be registered with the SEC or fall under an exemption to registration.”

Another somewhat obvious statement, however, the vague wording present here suggests the SEC might not be completely sure on what qualifies as a security and what doesn’t.

  • Tokens Sold in ICOs Can Be Called Many Things

This is one aimed specifically at the ‘utility’ tokens out there, such as the recently reviewed Bitcoiin (B2G). When the New Jersey Securities Bureau slapped a cease and desist order on the B2G team, they responded by claiming they had no obligation to the Bureau due to the B2G token being a utility token, and not a security.

“ICOs, or more specifically tokens, can be called a variety of names, but merely calling a token a “utility” token or structuring it to provide some utility does not prevent the token from being a security.”

  • ICOs May Pose Substantial Risks

“While some ICOs may be attempts at honest investment opportunities, many may be frauds, separating you from your hard-earned money with promises of guaranteed returns and future fortunes. They may also present substantial risks for loss or manipulation, including through hacking, with little recourse for victims after-the-fact.”

  • Ask Questions Before Investing

The final point suggested by the SEC perhaps shows just how nebulous the entire space is right now. If 20% of the SEC’s big ICO guide is dedicated to ‘ask questions’, then maybe they don’t actually have much to say on the matter to begin with.

“If you choose to invest in these products, please ask questions and demand clear answers.”

Too Little, Too Late?

The difference between the cryptocurrency space this year compared to last year is night and day. In January of 2018 over $1.5 billion was raised via ICOs within the space of thirty days.

Fast forward to 2019, and that number stands at $30 million – a 98% drop off in twelve months. As is often the case with regulators, the SEC appears to be closing the stable door after the horse has bolted. That said, the process of reigning those horses back in (by ordering mass refunds, for example) could yet prove to be a messy one.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 146 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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ETFs

As Race for Bitcoin ETF Heats Up, SEC Identifies Cryptocurrency as a Top Priority in 2019

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The crypto boom of 2017 caught federal regulators by surprise. The subsequent crash of 2018 forced them to closely examine the market, including the sale, trading and management of cryptoassets. Now, the U.S. Securities and Exchange Commission (SEC) is prepared to take a proactive approach to monitoring the nascent asset class at a time when more issuers are throwing their weight behind a crypto-backed exchange-traded fund (ETF).

Crypto Becomes a Priority

In the newly released 2019 Examination Priorities, the SEC’s Office of Compliance Inspections and Examinations (OCIE) has identified cryptocurrencies as one of six regulatory focal points this year. More attention and resources will be directed at the digital asset market due to its its rapid growth and perceived risks to retail investors.

“Given the significant growth and risks presented in this market, OCIE will continue to monitor the offer and sale, trading, and management of digital assets, and where the products are securities, examine for regulatory compliance,” the report said.

The regulator added that it will conduct high-level inquiries on market participants “offering, selling, trading, and managing these products…” Market participants include broker-dealers, trading platforms and investment advisers.

The report was released less than six weeks before the SEC is set to make a decision on a highly regarded bitcoin ETF. Although the agency has rejected more than a dozen crypto ETF applications, a joint proposal put forward by VanEck and SolidX is believed to have the best shot of being approved.

That’s because the proposed product includes safeguards to protect retail investors against fraud and manipulation. It also proposes to hold a repository of physical bitcoin as opposed to futures contracts and other derivative-based products. More on this story can be found here: SEC Delays Decision on VanEck SolidX Bitcoin ETF Until Next Year.

A crypto startup by the name of Bitwise Asset Management has also applied for bitcoin ETF product with the SEC. Like the VanEck-SolidX product, the Bitwise application is attempting to address the myriad of regulatory concerns put forth by the SEC in its previous rulings on crypto-backed ETFs.

If Bitcoin ETF Doesn’t Happen by February, How Will it Affect the Market?

Japan Not Considering Bitcoin ETF: FSA

Reports that Japan was considering approving a bitcoin ETF were quickly shot down this weekend by a spokesperson from the country’s Financial Services Agency (FSA). As Bitcoin.com and CCN report, the FSA representative said, “There is no such fact that we are considering approving ETFs which track crypto-assets at present. We are not currently considering approving them.”

Last week, Bloomberg and several other sources reported that Tokyo’s financial regulators were exploring the possibility of a crypto ETF tied to bitcoin futures. The speculation put the regulator in the same boat as the SEC, which has been reluctant to approve a bitcoin fund but has nevertheless invited public dialogue on the matter.

At present, Japan does not believe there is “constructive and social significant of trading cryptoassets derivatives,” the spokesperson said.

Japan was one of the first countries to approve and regulate cryptocurrency markets, but a series of high-profile attacks on domestic exchanges forced regulators to adopt more stringent measures. Exchanges have also come together to develop a self-regulatory group to prevent further attacks from undermining the market.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 771 rated postsChief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi




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Altcoins

EOS Price Analysis: Cardano Founder Charles Hoskinson Warns of Regulatory Action Against EOS

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  • Charles Hoskinson projects some form of action from the SEC on EOS.
  • EOS/USD enjoys a relief rally on Wednesday, as price moves further north following recent bounce.

The EOS price hasn’t done much but decline of late. Back in August, EOS/USD entered into a very stubborn narrowing range. The price had been confined within this mode of trading right up until November. The range was seen from the $6 territory down $4 area. On the 19th November, EOS/USD bears had finally pushed for a breakout to the downside, from this mentioned range-block. Following this fall, the price plummeted over 60%, over the course of 3 weeks.

Cardano Founder Hoskinson Expresses EOS Regulatory Concerns

The Cardano (ADA) founder, Charles Hoskinson, has beliefs that EOS chief developer of the network is likely to face strong action from regulatory bodies. The SEC would be a potential regulator that investigates their $4bln ICO, as he has described as “egregious.”

Speaking at a press conference in Edinburgh, Charles Hoskinson has made a projection that the Securities and Exchange Commission will look at taking firm measures against Block.One. He believes that this would be done due to the way it had run and hosted the EOS ICO.  Hoskinson further detailed how the EOS token sale sits within the remit of the regulators for them to review the potential for harm of retail investors in the United States.

Charles Hoskinson Anticipating SEC Action on EOS

Hoskinson predicted that the SEC will likely bring punitive measures against Block.One for the way it ran the EOS Initial Coin Offering. The IOHK leader explained that EOS’ token sale falls well within the regulator’s remit to take action against any financial activity which harms US retail investors.

There were several fundamental issues with the EOS ICO, which clearly raise red flags, from Hoskinson’s view. He expressed for particular focus on the amount they had raised over the course of a year, in addition to their “utter lack of respect” for investors. Hoskinson said, the SEC “needed” to take action.

Technical Review – EOS/USD

EOS/USD daily chart

Most recently, the price has managed to stabilize, which could be due to sellers exhaustion. A bounce was seen on 7th December, after falling to a low of around $1.55. The bulls are attempting to make a convincing push back into the $2 territory. Demand in the near-term should now be observed from that recent low, $1.55 up to $1.80.

It is interesting to note the area of which EOS/USD received some comfort on 7th December (this is a known acting support). Back in November 2017 during the big bull run, the price consolidated within the mentioned demand zone for a brief period. This came before continuing its strong move to the north.

Downside Observations

EOS/USD daily chart

Should the near-term area of support fail to hold, then there could be some devastating moves to the downside. A breach of the $1 mark could very well be seen. The next major demand area will be within the depths of $0.90 region. EOS/USD had last traded down here again within the early part of Nov 2017 bull run.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 124 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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