US ‘the only country’ crypto startups should avoid, says Ripple CEO

September 13, 2023 Coin Telegraph

Brad Garlinghouse said Singapore, the U.K., the UAE and Switzerland are jurisdictions with “smart” crypto policies he thinks the U.S. should adopt.

The United States is one of — if not the worst — place to launch a cryptocurrency startup in the world right now, according to Ripple CEO Brad Garlinghouse whose firm is in a legal battle with the U.S. securities regulator.

“The only country I would not encourage you to start a company right now is in the U.S.,” Garlinghouse said on a Sept. 12 panel at Token 2049 in Singapore.

The Ripple boss wants the U.S. to take note from the likes of Singapore, the United Kingdom, the United Arab Emirates and Switzerland by enacting policies that encourage crypto innovation while protecting consumers.

*Bloomberg’s Annabelle Droulers (left) moderating a panel with Garlinghouse (center-left), OKX’s Hong Fang (center-right) and BitGo’s Mike Belshe (right). Source: Andrew Fenton/Cointelegraph*

Garlinghouse pointed the blame at the Securities and Exchange Commission claiming its engaging in a political war with the industry with its lawsuits.

That lawsuit strategy isn’t working, said Garlinghouse, and claimed Ripple and Grayscale’s court wins over the SEC may suggest the court’s mood is turning in the industry’s favor.

“I think you're seeing the momentum shift. I think that it used to be that a lot of judges were like: ‘Well the SEC is always right,’ and they weren't fighting that [but] I think you're starting to see the pattern change.”

While the outcomes in Ripple and Grayscale aren’t legally binding, Garlinghouse said the results provide more clarity to crypto exchanges and custody providers operating in the U.S. — at least for now.

OKX president Hong Fang acknowledged the politics at play but stressed for crypto firms to focus on what they can control.

“We can only control what we can control, which is to build the right product and to focus on the technology and to support responsible regulation.”

Despite the U.S. being a big market for Ripple, Garlinghouse said it’s expanding services to countries he claims are more progressive and better understand the potential benefits of blockchain technology.

We might not ready for a spot Bitcoin ETF

During the panel, Fang said he thinks investors may not be ready for custody solutions built around a prospective spot Bitcoin (BTC) exchange-traded fund because much of the new blockchain-based infrastructure hasn’t been battle tested by the masses.

“I think there's a huge implication on custody [...] The question I have on my mind is whether our industry is actually ready for it” he said.

Fang acknowledged a spot Bitcoin ETF will lead to more institutional inflows but isn’t convinced that investors can now stomach Bitcoin’s volatility and second guessed the readiness of continuing to build more applications on top of Bitcoin.

“We are actually creating something that is new, that we can build on top of, a new monetary system that hasn't come to fruition yet,” Fang said. “So I don't know whether we're ready for that yet from an industry infrastructure perspective.”

Magazine: Deposit risk: What do crypto exchanges really do with your money?

Binance.US cuts third of staff as CEO Brian Shroder leaves

September 13, 2023 Coin Telegraph

Binance

The staff cut and departure comes amid legal action from United States regulators.

Binance.US, the United States arm of the crypto exchange has cut around a third of its staff — or 100 positions — with its president and CEO Brian Shroder also departing the firm.

A Binance.US spokesperson confirmed the layoffs and Shroder's departue to Cointelegraph, adding it took the actions to give the exchange "more than seven years of financial runway" amid its move to a crypto-only exchange.

"The [Securities and Exchange Commission's] aggressive attempts to cripple our industry and the resulting impacts on our business have real world consequences for American jobs and innovation, and this is an unfortunate example of that.”

The spokesperson confirmed Shroder was replaced on an interim basis by chief legal officer Norman Reed.

Shroder joined Binance.US in September 2021 and his departure comes amid a slew of regulatory action taken against the firm in recent months.

Earlier this year, the SEC and the Commodity Futures Trading Commission sued Binance, Binance.US, and the exchange's co-founder Changpeng "CZ" Zhao alleging it operated an illegal exchange, sold unregistered securities, violated commodities laws and mishandled customer funds.

Update (Sep. 13, 12:30 am UTC): This article has been updated with a comment from a Binance.US spokesperson.

Magazine: Deposit risk: What do crypto exchanges really do with your money?

Don’t follow the US: Blockchain Aus CEO hammers ‘regulation by enforcement’

June 25, 2023 Coin Telegraph

appointment

Blockchain Australia, the country’s peak crypto industry body has announced a new CEO who wants to speed up the crypto regulatory process.

Blockchain Australia’s new CEO Simon Callaghan hopes the Federal Government will take its cues on crypto regulation from the United Kingdom, Hong Kong, and Singapore — and definitely not the United States.

In his new position, Callaghan aims to steer crypto rule-making in the country and avoid making similar moves to the U.S. Securities and Exchange Commission — which is suing the world’s two largest exchanges and has branded at least 68 tokens as securities.

“Regulation by enforcement is the equivalent of having a hammer and seeing everything as a nail. I don’t think that’s the right approach for Australia to be taking.”

*Callaghan gave a speech at Blockchain Week, announcing his tenure as Blockchain Australia's CEO.*

On June 26, Callaghan was announced as the industry peak body’s new CEO. He was most recently the digital assets program lead for Cambridge University and a co-founder of corporate service provider MOOPS Tech.

*A recent post from Simon Callaghan regarding leaving his Cambridge role. Source: Linkedin*

Callaghan’s previous roles include a year as the Asia lead for crypto lender Celsius as, but he left several months before the firm’s collapse. He has also had a brief stint at crypto lender Vauld.

His appointment comes after nearly a year of limbo following the departure of former CEO and industry advocate Steve Vallas in July 2022. The CEO role was briefly filled by Laura Mercurio in September last year, but she parted ways with the organization just weeks later over a difference of vision, effectively leaving Australia’s blockchain industry without an advocate for the better part of a year.

In his new role, Callaghan will represent the association’s 112 members, including Binance Australia, Circle, Ripple, and Mastercard, all of who are calling for clearer regulation, adding:

“Everyone wants to know where the goalposts are so people can operate their businesses, build their technologies and create jobs."

The Australian government has not taken a hardline stance on crypto, unlike American regulators and the Biden administration, Callaghan told Cointelegraph.

The Treasury has a “token mapping exercise” underway to determine how to classify various digital assets ahead of any legislation, which isn’t expected until at least 2024.

“We haven’t seen a strong position really one way or the other from this current government. That could be because they’re looking to take a considered approach, which I would argue is a good approach,” he said.

Consultation open! Today we released the token mapping consultation paper. This consultation is part of a multi step reform agenda to develop an appropriate regulatory setting for the #crypto sector. Read paper & submit views @ https://t.co/4W2msjhP9B @ASIC_Connect @AUSTRAC pic.twitter.com/OGHuZEGvDp
— Australian Treasury (@Treasury_AU) February 2, 2023

He hopes legislators take inspiration from Singapore, Hong Kong and the U.K. which are all developing regulatory schemes that aim to balance innovation with consumer protection.

“They see the benefit from the technology, the innovation, and the jobs it creates, as well as benefits to the broader financial sector.”

Reports earlier in June suggest the Hong Kong central bank has been putting pressure on major banks to accept crypto exchanges as clients, amid moves from the city to attract international crypto firms and investors.

“The fact that the Hong Kong monetary authorities are encouraging banks to work with the sector, I think that's the right approach,” Callaghan remarked.

In 2021, an Australian Senate committee report on digital assets recommended that crypto firms should be able to challenge debanking decisions and that banks should be required to conduct due diligence on firms rather than adopt blanket bans on the sector.

Two major Australian banks however recently imposed pauses, limits and outright blocks on certain payments to local crypto exchanges, both citing the growing threat of financial scams.

“I don't think you can just blanket everything in crypto as a scam, you actually need to look at the data,” said Callaghan, who revealed he’s already scheduled meetings “in the coming weeks” with the banks to further understand their position.

Opinion: GOP crypto maxis almost as bad as Dems’ ‘anti-crypto army’

Coinbase CEO responds to SEC suit, says team is ‘confidant’ in facts and law

June 6, 2023 Coin Telegraph

Brian Armstrong

In a social media post, Brian Armstrong said he thinks the SEC’s rules are unclear and that the courts need to make rulings to clarify them.

Coinbase CEO Brian Armstrong has responded publicly to the United States Securities and Exchange Commission (SEC) lawsuit against his company, stating in a tweet that the team is “confident in our facts and the law” and that it welcomes the chance “to finally get some clarity around crypto rules” in court.

Regarding the SEC complaint against us today, we're proud to represent the industry in court to finally get some clarity around crypto rules.

Remember:
1. The SEC reviewed our business and allowed us to become a public company in 2021.
2. There is no path to "come in and…
— Brian Armstrong ️ (@brian_armstrong) June 6, 2023

The SEC filed suit against crypto exchange Coinbase on June 6, alleging that the company has been operating a securities exchange, broker-dealership and clearing house without registering with the commission. In its filing, it argued that 13 different cryptocurrencies sold by Coinbase fit the definition of securities, including Cardano (ADA), Solana (SOL), Polygon (MATIC), Filecoin (FIL) and others.

In his Twitter response, Armstrong claimed that the lawsuit against Coinbase is “very different from others out there,” as it is “exclusively focused on what is or is not a security.” This makes the team “confident in our facts and the law.” He claimed that the U.S. government can’t even agree with itself as to which cryptocurrencies are securities, as “the SEC and CFTC [Commodity Futures Trading Commission] have made conflicting statements.”

Armstrong expressed hope that court proceedings will allow crypto exchanges to “finally” get clarity on how to comply with securities laws. He also praised recent attempts by Congress to pass crypto legislation, stating that “this is why the US congress is introducing new legislation to fix the situation."

The response from Armstrong is the latest in a series of legal filings and public statements between the exchange and the SEC since March.

Coinbase received a Wells notice from the SEC on March 22 stating that the regulator may pursue enforcement actions. In response, the exchange issued a statement from its legal team on April 19 claiming that the SEC’s possible enforcement was not “supported by law or within the bounds of the Commission’s authority.”

A Wells notice does not begin legal proceedings. It only serves to notify a firm of a potential lawsuit.

On April 25, Coinbase’s legal team went on the offensive by preemptively filing suit against the securities regulator. In the lawsuit, it alleged that the SEC had failed to provide clear rules for crypto exchanges in a timely manner, including rules that distinguish between cryptocurrencies that are or are not securities. The SEC responded by arguing for dismissal on May 5, and Coinbase filed a mandamus reply in support of its suit against the SEC on May 23.

Because Coinbase filed its suit against the SEC on April 25 and the SEC filed suit against Coinbase on June 6, both organizations are now embroiled in two separate legal proceedings against each other.