Investment Education

According to Odaily, a spokesperson for the European Banking Authority (EBA) has indicated that standards governing how stablecoin issuers like Tether and Circle operate within the European Union (EU) are likely to be finalized by the end of the year. These standards are part of 15 technical standards submitted by the EBA to the European Commission, developed in collaboration with the European Securities and Markets Authority (ESMA). The Commission is currently reviewing these standards and will decide whether to adopt the text as is or request modifications. The standards address issues such as authorization, stress testing, and methods for estimating transaction volume and value.

According to Odaily, the United Arab Emirates' Securities and Commodities Authority (SCA) and Dubai's Virtual Assets Regulatory Authority (VARA) have announced an agreement that will enable mutual supervision of virtual asset service providers (VASPs) within the country. Under this agreement, VASPs operating in Dubai and seeking VARA licensing will automatically be registered with the SCA, allowing them to serve the broader UAE market. However, the SCA clarified that VASPs wishing to operate in emirates outside of Dubai must still obtain permission from the respective regulatory authorities.

According to Odaily, multinational bank Standard Chartered has announced the launch of cryptocurrency custody services in the United Arab Emirates. The bank will initially support the custody of Bitcoin (BTC) and Ethereum (ETH). This service is being introduced in collaboration with Brevan Howard Digital, the cryptocurrency division of hedge fund Brevan Howard. The custody solution has received approval from the Dubai Financial Services Authority (DFSA), the dedicated financial regulator of the Dubai International Financial Centre (DIFC).

According to Odaily, a federal judge in Texas has dismissed a securities class action lawsuit against the DeFi project Bancor Protocol operators. Judge Robert Pitman agreed with the opinion that the plaintiffs failed to demonstrate that U.S. courts have jurisdiction over the foreign defendants. This ruling indicates that Bancor's foreign operations are not subject to U.S. securities laws, and the plaintiffs cannot sue Bancor in the U.S. for suspending its investment protection feature. The judge also noted that Bancor and its founders do not have sufficient ties to the U.S., suggesting that the plaintiffs could pursue their case in an Israeli court.

According to Odaily, Federal Reserve Chair Jerome Powell is likely to seek consensus for at least a 25 basis point rate cut at the upcoming meeting later this month. However, due to recent weaknesses in the labor market, Powell and others may advocate for a more substantial rate reduction.Kathy Bostjancic, Senior Vice President and Chief Economist at Nationwide, mentioned in an email that Powell does not necessarily need unanimous agreement to initiate rate cuts at the forthcoming September meeting, but he may prefer to do so, especially for the first rate cut. Former Labor Department economist Betsey Stevenson noted on social media that consensus has traditionally been a way to prevent the politicization of the Federal Reserve. She added that if she were a member of the Federal Open Market Committee (FOMC), she would prioritize achieving consensus.Dan North, Senior Economist at Allianz Trade Americas, commented on the difficulty Powell might face in garnering consensus for a larger rate cut, stating that there would be significant opposition, which could appear unfavorable. Diane Swonk, Chief Economist at KPMG, expressed on social media that Powell might be willing to take this risk. Swonk wrote that Powell is more concerned about the labor market than his colleagues and aims for a soft landing. The question remains whether he will push for a 50 basis point rate cut and how much opposition he is willing to face to achieve this goal.

According to Cointelegraph, the United States Securities and Exchange Commission (SEC) has reaffirmed its position on a rule that would limit crypto custody services for regulated financial firms. In a speech on September 9 at a banking conference, SEC chief accountant Paul Munter discussed the agency’s regulatory stance on accounting for crypto assets, particularly focusing on SEC Staff Accounting Bulletin No. 121 (SAB 121) and its applications.Munter stated that the SEC staff’s views on SAB 121 remain unchanged. He emphasized that, in the absence of specific mitigating facts and circumstances, the staff believes an entity should record a liability on its balance sheet to reflect its obligation to safeguard crypto assets held for others. This stance was echoed by ETF Store President Nate Geraci, who noted in a September 10 post that the SEC appears firm on SAB 121, suggesting that the agency does not want to allow regulated financial institutions to custody crypto.Introduced in March 2022, SAB 121 outlines the SEC’s accounting guidelines for institutions looking to custody crypto assets. The rule has been contentious in political circles as it effectively prevents banks and regulated financial institutions from custodying crypto assets on behalf of clients. The SEC maintains that entities with such safeguarding arrangements should record a liability on their balance sheets for digital assets.Munter acknowledged that the SEC had reviewed various accounting scenarios involving blockchain and crypto assets, noting that not all arrangements fit the proposed guidelines set out in SAB 121. For instance, bank-holding companies that safeguard crypto with bankruptcy protection may not need to record a liability on their balance sheets. Additionally, broker-dealers that facilitate crypto transactions but do not control the cryptographic keys may also not be required to record liabilities.Meanwhile, SEC Commissioner Hester Peirce has been vocally against the rule. She expressed her continued concern about the substance and process of SAB 121 in a recent post. The US House of Representatives voted to overturn the controversial SEC guidance in May, but President Biden vetoed the repeal the following month.

According to BlockBeats, on September 10, Franz Bergmüller, CEO of Swiss-based crypto bank Amina, announced that the company is applying for a Virtual Asset Service Provider (VASP) license from the Austrian Financial Market Authority. Bergmüller emphasized that before Amina can operate or generate revenue in Austria, a new team must be established.Bergmüller stated, 'As a bank, we are approaching breakeven, but we have deliberately decided to prioritize investment growth at this stage.' Amina, formerly known as SEBA Bank, was headquartered in Zug, Switzerland, in April 2022.

According to Cointelegraph, the United States Securities and Exchange Commission (SEC) has imposed nearly $4.7 billion in enforcement actions against cryptocurrency firms and executives in 2024, marking an over 3,000% increase from the previous year. This significant rise is largely attributed to a $4.47 billion settlement with Terraform Labs and its former CEO Do Kwon in June, which is the SEC's largest enforcement action to date.The SEC's 11 enforcement actions in 2024 have resulted in a 3,018% increase from the $150.3 million in fines collected in 2023, despite having 19 fewer actions against crypto firms. The total monetary enforcement amount this year surpasses the combined total from 2013 to 2023. The fines include forfeiture amounts, disgorgement, civil penalties, settlement amounts, and prejudgment interest, counted from the initiation of the enforcement action.This year's increase in fines indicates a strategic shift by the SEC towards targeting more influential cases. The report suggests that the SEC is focusing on fewer but larger fines to make high-impact enforcement actions that set precedents for the entire industry. In 2019, the SEC imposed a $1.24 billion action against social messaging network Telegram, which included $18.5 million in civil penalties and $1.2 billion in disgorgement paid back to investors. This case significantly contributed to the average fine rising nearly 2,000% year-on-year to over $70 million in 2019.From 2019 to 2023, the average fine ranged between $5 million and $35.2 million, but the Terraform Labs case has brought the 2024 average fine above $420 million. Other notable enforcement actions include those against GTV Media Group, Ripple Labs, and fraudsters John and Tina Barksdale, each exceeding $100 million. Despite these large fines, 46% of the fines imposed since 2020 have been below $1 million, while 30% fell between the $1 million and $10 million range.

According to Cointelegraph, North Carolina’s General Assembly has passed a bill prohibiting the state from implementing a United States Federal Reserve-issued central bank digital currency (CBDC). The Senate overrode a veto by Governor Roy Cooper, with a 27-17 vote on September 9, narrowly surpassing the 60% majority needed to pass House Bill 690 into law.The bill forbids North Carolina from accepting CBDCs as a form of payment and prohibits participation in future CBDC tests conducted by any Federal Reserve branch. This legislative move follows a 73-41 vote in the House to overturn Cooper’s veto in early August. Cooper’s initial veto on July 5 came after a lopsided 109-4 vote in the House and a 39-5 vote in the Senate a month earlier. The latest Senate vote saw 12 Democrats who initially supported the bill flipping to support Cooper’s veto, resulting in no Senate Democrats voting to pass the bill this time.Mitchell Askew, head analyst at Blockware Solutions, expressed his amazement at seeing CBDCs officially banned in his native state but was displeased with the Senate vote outcome. He suggested that the 12 Democrats flipping their position confirmed his hypothesis that the veto was due to partisan politics. Dan Spuller, head of industry affairs at the Blockchain Association, stated in a September 9 post that Cooper’s veto missed an opportunity to send a united message against CBDCs to the Federal Reserve.Governor Cooper’s office did not immediately respond to a request for comment on the bill’s passing. While the Federal Reserve has researched CBDCs, Chair Jerome Powell stated on July 31 that there is no significant progress on a US-issued CBDC. At a federal Senate Banking Committee hearing in March, Powell mentioned that the US was far from recommending or adopting a central bank digital currency in any form. Despite these assurances, the US House passed the CBDC Anti-Surveillance State Act in May, and a companion bill has been introduced to the Senate by Senator Ted Cruz.

According to Cointelegraph, securities regulators in 12 US states have secured reimbursement for investors who lost money in an investment scheme involving the Lydian.World metaverse, cryptocurrency, and tokenized partial ownership of a metaverse skyscraper. The North American Securities Administrators Association (NASAA) announced that regulators reached a settlement with a group of German companies associated with Josip Heit, known collectively as the GSB Group, for the return of all money and cryptocurrency deposited with GSB Group for any purpose.The settlement involves US investors in the states of Alabama, Arizona, Arkansas, Georgia, and Texas, who will receive compensation. These states will withdraw all prior allegations of fraud or dishonest practices against Heit and his companies. Under the settlement, Heit and his companies will not pay any penalties. The NASAA stated that regulators from Alabama, Arizona, Arkansas, California, Georgia, Kentucky, Mississippi, New Hampshire, Texas, Utah, Washington, and Wisconsin participated in the settlement. Additionally, the British Columbia Securities Commission in Canada was involved in the enforcement actions against the German group, which began in November. The regulators described the GSB Group offering as a multilevel marketing (MLM) scheme.Bloomberg reports that GSB Group began freezing withdrawals in October. Joe Rotunda, Texas State Securities Board enforcement director and NASAA vice chairman, stated, "We have negotiated a settlement that will ensure that all clients in any state or province that join the settlement receive 100% of their deposits, less any withdrawals. This is really a North American settlement." According to Bloomberg, "hundreds of millions of dollars" will be returned to investors, and "hundreds of thousands of investors in the US and Canada" were affected by the scheme. Investors will have 90 days to file a claim against the group. The German group claims to have more than 800,000 investors from over 170 countries and transactions worth close to $1 billion.