ALGO, FLOW rebound from all-time lows, others rebuff SEC securities label

June 12, 2023 Coin Telegraph

algo

The SEC’s tagging of cryptocurrencies as securities has greatly affected the crypto market causing Algorand and Flow to hit historic lows on June 10.

The United States securities regulator designated a slate of cryptocurrencies as securities in recent lawsuits including Algorand (ALGO) and Flow (FLOW) which hit all-time price lows following the declaration.

On June 10, ALGO and FLOW hit their respective historic lows of $0.098 and $0.46, having dropped around 30% in the past seven days according to CoinGecko data.

Both have slightly rebounded since, with ALGO up over 12.5% and FLOW recovering just over 10.5% since June 10.

*ALGO's seven-day price chart shows a drop to its all-time low with a slight recovery after. Source: CoinGecko*

Last week the Securities and Exchange Commission (SEC) sued crypto exchanges Binance and Coinbase on June 5 and 6 respectively. In the process, it labeled 16 new cryptocurrencies as securities, including FLOW and Internet Computer (ICP).

ALGO was highlighted in the SEC’s case against Binance but was first singled out in its April lawsuit against Bittrex.

ICP has also seen a drop of about 25% in the past week and is currently trading around $3.65 — just 25 cents off its all-time low of $3.40 from December 2022.

Securities definition rebuffed

Solana (SOL), Cardano (ADA) and Polygon (MATIC) were also caught up in the SEC’s securities net and the creators of all three have staunchly rebuffed the regulator's claim.

On June 10, Polygon Labs tweeted in response to the SEC’s definition of MATIC without directly addressing the regulator.

It highlighted that Polygon was developed and deployed outside of the U.S. and MATIC was globally available “with actions that did not target the U.S. at any time.”

We are proud of the history of the Polygon network – developed outside the US, deployed outside the US, and focused to this day on the global community that supports the network. MATIC was a necessary part of the Polygon technology from Day 1, ensuring that the network would be…
— Polygon (Labs) (@0xPolygonLabs) June 10, 2023

The Solana Foundation similarly took to Twitter on June 10 saying it “disagrees with the characterization of SOL as a security.”

Cardano development company Input Output Global (IOG) said on June 7 it was “aware” of the SEC’s definition of ADA and claimed there were “numerous factual inaccuracies” by the regulator.

“Under no circumstances is ADA a security under U.S. securities laws. It never has been,” the firm wrote in a blog post.

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Aussie crypto exchange kicks off US expansion despite ‘regulatory risk’

May 2, 2023 Coin Telegraph

Coin Telegraph

“Where other exchanges see regulatory risk, we see opportunity,” said Coinjar CEO and co-founder Asher Tan in a recent interview.

Australian crypto exchange Coinjar is seeking to put its boots on the ground in the United States, with its CEO seemingly unfazed by the market's “regulatory risk."

In an interview with The Australian on May 1, Coinjar CEO and co-founder Asher Tan said he saw opportunity despite a recent wave of U.S. crypto firms sounding alarm bells over the government’s approach to regulation.

“Where other exchanges see regulatory risk, we see opportunity,” he said, adding:

“We’ve always understood that regulation has a key role to play in crypto’s future and we believe the American market will reward an exchange with our unparalleled compliance bona fides.”

Coinjar is based in Melbourne and was founded in late 2013. It was one of the earliest exchanges to hit the market in Australia and also secured a license to operate in the United Kingdom in September 2021. It is reported to have around 500,000 customers across the two countries.

*Coinjar CEO Asher Tan. Source: Twitter*

Coinjar kicked off its U.S. expansion plans in May by listing a single open role for an anti-money laundering (AML) compliance officer.

“CoinJar is expanding to the US, and we are seeking an AML Compliance Officer. The successful candidate will report to the Head of Legal & Compliance and the Board, take ownership of applicable programs and policies, including the AML/OFAC Program, and implement processes to ensure adherence to them,” the job listing reads.

Tan suggested that Coinjar’s focus on regulatory compliance will be key to thriving in a difficult environment like the United States.

“Licensing is done at a state level in the US, so we will be gradually adding states until we can get close to full coverage of states,” he said, adding that “while not every company is able or willing to satisfy this criteria, CoinJar believes we’re well suited to take on this challenge.”

While the idea sounds good in theory, U.S. exchanges such as Coinbase provide an example of the potential roadblocks that Coinjar could face.

Coinbase has claimed on several occasions that it has actively sought to engage in dialogues with the Securities and Exchange Commision (SEC) in the name of compliance, but has ultimately had those efforts thrown back in its face.

The SEC slapped Coinbase with a Wells notice on March 22, essentially threatening legal action over some of the firm’s offerings, which it asserts are violating securities law. Coinbase however, has argued that it already disclosed such an offering to the SEC prior to getting the greenlight to go public.

In response, Coinbase has since filed a petition in federal court requesting the SEC to propose and adopt clearer regulatory guidelines for the cryptocurrency industry in the U.S.

“We are literally sitting up here on stage asking for regulation, asking for rules, asking for a framework that makes sense for our particular technology so that we can be registered,” Coinbase Chief Legal Officer Paul Grewal said at Consensus 2023 on April 27.

Just In: Coinbase Chief Legal Officer Paul Grewal is an absolute boss. pic.twitter.com/bHA3sCNIet
— Dan Gambardello (@cryptorecruitr) April 27, 2023

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‘US has left a vacuum that other countries are eager to fill’: Coinbase

March 25, 2023 Coin Telegraph

Blockchain week

While the U.S. government opts for “regulation by enforcement,” other countries are fostering “vibrant” crypto ecosystems due to progressive regulation, argues Coinbase’s Daniel Seifert.

With Coinbase seemingly on the verge of a court battle with the Securities and Exchange Commission (SEC), the firm has emphasized that the U.S. government’s hawkish approach to crypto regulation has “left a vacuum that other countries are eager to fill.’

The SEC issued Coinbase a wells notice on March 22 outlining that SEC staff had recommended the agency take enforcement action over “possible violations of securities laws” concerning some of the firm’s asset listings, staking services and Coinbase Wallet.

In a March 23 blog post titled Europe is winning. Will the US catch up? Daniel Seifert, Coinbase’s Vice President and Regional Managing Director in Europe, stressed that the U.S.’s “regulatory approach to crypto has been marked by regulation by enforcement,” despite industry-wide calls for “comprehensive crypto regulation.”

“This approach has created an environment of uncertainty and instability in the crypto industry,” he wrote.

Coinbase’s top lawyer @iampaulgrewal says the SEC wants court fights instead of conversation.

In dozens of meetings with the SEC over the last 9 months, Grewal says the exchange was “given essentially no response” to key questions.

Listen:https://t.co/027slXaMhb pic.twitter.com/L0ikJwleyA
— Laura Shin (@laurashin) March 24, 2023

As such, Seifert argued that the U.S. is losing its status as the leading hub of the crypto sector, while France, the U.K. and the European Union, are now building “vibrant” ecosystems due to their friendlier approach to crypto regulation.

“The US has left a vacuum that other countries are eager to fill,” he wrote, adding: “we are proudly an American company. It’s hard to sit by and watch the US squander the opportunity it has been given.”

The SEC misses one of the biggest frauds in history - FTX/Alameda

Gary Gensler cozies up to the head of that fraud - SBF

And then the SEC goes after the most legitimate company in crypto - Coinbase

Yes yes very normal and totally rational
— sassal.eth (@sassal0x) March 23, 2023

In particular, Seifert highlighted the significance of the Blockchain Week event being hosted at the Louvre in Paris this month. He also pointed to the U.K.’s recent push to become a crypto hub, and the European Union’s Markets in Crypto-Assets (MiCA) regulation that is slated to come into effect in 2024.

“This year it’s being held in a private space at the Louvre, arguably the greatest national treasure in France and one of the world’s most respected museums,” he said, adding:

“To me this is a clear signal: France is rapidly recognizing the opportunity that crypto presents and is offering it space to flourish. The broader EU, the UK, UAE, Hong Kong, Singapore, Australia, and Japan are all following suit.”

The MiCA legislation has been in development for two years, and aims to establish a “harmonized set of rules for crypto-assets and related activities and services.”

It is generally expected to be a positive move for the European cryptocurrency ecosystem, as it will offer clear rules and guidelines for the sector.

“Already we are seeing that Europe now matches the US in its share of crypto developers ( 29% apiece globally). The US used to lead the charge with 40%,” he said, adding that:

“This level of growth does not happen by chance. Concerted efforts have to be made, such as developing a regulatory framework that will provide clarity and stability for businesses operating in the space.”

In a lengthy March 23 Twitter thread, the Crypto Council for Innovation also highlighted similar points to Seifert, noting that “crypto is global, and nobody is waiting around for the US to land the plane.”

1/ Crypto is global, and nobody is waiting around for the US to land the plane. Here, our roundup of global activity ():
— Crypto Council for Innovation (@crypto_council) March 24, 2023

The thread explored positive developments across the globe, including examples such as the National Australia Bank’s work with non-USD pegged stablecoins, Hong Kong’s efforts to become a digital asset hub, and the Canadian Securities Administration recently imposing "enhanced investor protection commitments" on domestic crypto exchanges.

Stablecoins and Ether are ‘going to be commodities,’ reaffirms CFTC chair

March 9, 2023 Coin Telegraph

agriculture hearing

In the tug-of-war between the US regulators over control of crypto assets, the CFTC chair has triple-downed his stance — that Ether and stablecoins are commodities.

Stablecoins and Ether (ETH) are commodities and should come under the purview of the United States Commodity Futures Trading Commission (CFTC), its chairman has again asserted at a recent Senate hearing.

At the Mar. 8 Senate Agricultural hearing, CFTC chair, Rostin Behnam, was asked by Senator Kirsten Gillibrand about the differing views held by the regulator and the Securities and Exchange Commission (SEC) following the CFTC’s 2021 settlement with stablecoin issuer Tether, Behnam said:

“Notwithstanding a regulatory framework around stablecoins, they’re going to be commodities in my view.”

“It was clear to our enforcement team and the commission that Tether, a stablecoin, was a commodity,” he added.

In the past, the CFTC has asserted that certain digital assets such as Ether, Bitcoin (BTC) and Tether (USDT) were commodities — such as in its lawsuit against FTX founder Sam Bankman-Fried in mid-December.

This is a pretty stark (almost impassioned?) rebuke of the ‘everything except BTC is a security’ and ‘stablecoins are securities’ positions. Would be great if the CFTC released the legal analysis on these issues Chairman Behnam says it did. https://t.co/RIeTgUxTFd pic.twitter.com/LGtuEPs4X3
— Lawtoshi (@lawtoshi) March 8, 2023

Asked what evidence the CFTC would put forward to win regulatory influence over Ether during the Senate hearing, Behnam said it “would not have allowed” Ether futures products to be listed on CFTC exchanges if it “did not feel strongly that it was a commodity asset,” and added:

“We have litigation risk, we have agency credibility risk if we do something like that without serious legal defenses to support our argument that [the] asset is a commodity.”

The comment has seemingly cemented Behnam's sometimes wavering opinion on the classification of Ether. During an invite-only event at Princeton University in November last year he said Bitcoin was the only cryptocurrency that could be viewed as a commodity, leaving out Ether. Only a month before that, he suggested Ether could be viewed as a commodity too.

Behnam’s most recent comments oppose a view held by SEC chair, Gary Gensler, who claimed in a Feb. 23 New York Magazine interview that “everything other than Bitcoin” is a security, a claim that was rebuffed by multiple crypto lawyers.

The differing viewpoints of the market regulators could set the stage for a conflict as each vies for regulatory control of the crypto industry.

In mid-Febuary, the SEC flexed its authority against stablecoin issuer Paxos saying it may sue the firm for violating investor protection laws alleging its Binance USD (BUSD) stablecoin is an unregistered security.

Around the same time, the regulator similarly targeted Terraform Labs and called its algorithmic stablecoin TerraUSD Classic (USTC) a security, a move Delphi Labs general counsel, Gabriel Shapiro, said could be a “roadmap” for how the SEC could structure future suits against other stablecoin issuers.

The SEC’s crypto clampdowns have seen pushback front he industry, Circle founder and CEO, Jeremy Allaire said he doesn’t believe “the SEC is the regulator for stablecoins” saying they should be overseen by a banking regulator.

us crypto regulation