United States Securities and Exchange Commission (SEC) Commissioner Hester Peirce has taken another swipe at her agency, criticizing the regulator’s guidance on crypto custody while calling for more interaction with the public.
Speaking at the annual SEC Speaks conference, Peirce said that a “particularly pernicious weed” had sprung up in the SEC’s “secret garden” of policy guidelines.
Her comments came in response to the Staff Accounting Bulletin 121 (SAB 121), which prevents banks from custodying crypto assets on behalf of clients.
Meanwhile, Gurbir Grewal, the director of the Division of Enforcement at the SEC, has pushed back against criticism that the regulator is making up rules on crypto as it goes along.
At the same SEC Speaks event, Grewal claimed that companies in the crypto industry had made “many creative attempts” to avoid the commission’s jurisdiction by continuing to operate in the United States.
Grewal reiterated that the SEC’s standard for determining security under the Howey test had been “clearly and consistently applied.”
He did not specifically address reports that the SEC had been exploring whether to classify Ether (ETH) as a security rather than a commodity under the U.S. Commodity Future Trading Commission’s purview.
The SEC is currently soliciting comments from the public on proposed rule changes allowing the listing and trading of shares of three spot Ether exchange-traded funds (ETFs) on exchanges.
Upon publication in the Federal Register, the public has 21 days to respond to spot ETH ETF applications from asset managers Bitwise, Fidelity and Grayscale.
Bitwise and Grayscale propose listing their ETH ETFs on NYSE Arca, and Fidelity will launch its ETF on the Cboe BZX Exchange. The latest proposals came ahead of the commission’s final decision on the investment vehicle, which is expected in May.
European Union could ban non-decentralized protocols
According to the Markets in Crypto-Assets Regulation (MiCA) — the regulatory framework that governs digital assets within the European Union — the European Commission must prepare a report by Dec. 30 evaluating the decentralized finance market and the feasibility of specific regulations for the sector.
The report explores how decentralized systems should be regulated, particularly those without a clear issuer or service provider.
“A significant aspect of this assessment will be to explore the regulation of crypto-asset lending and borrowing, a core activity within the DeFi space,” Maxim Galash, CEO of CoinChange Financials, explained in an analysis.
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Argentina obliges crypto firms to register
Argentina’s Comisión Nacional de Valores (CNV) — the country’s equivalent of a securities regulator — said virtual asset service providers would be operating in accordance with recommendations from the Financial Action Task Force.
Certain companies offering crypto-related services must register with Argentina’s government as part of reforms to the country’s Anti-Money Laundering and Combating the Financing of Terrorism laws.
CNV President Roberto Silva said virtual asset service providers that are not registered “will not be able to operate in the country.”
Many users on Strike, a platform popular in Argentina for facilitating Bitcoin (BTC) payments via the Lightning Network, reported the app no longer allows locals to send fiat to bank accounts.
It’s unclear how the requirements may affect businesses operating in Argentina or customers seeking to use their services. In December 2023, Argentina’s minister of foreign affairs said contracts could be settled in Bitcoin and other cryptocurrencies.
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Singapore changes token custody and transfers regulations
The Monetary Authority of Singapore (MAS) has announced that it will implement amendments to the country’s Payment Services Act (P.S. Act) to expand the scope of regulated services related to digital payment token (DPT) service providers.
Singapore’s central bank said it would bring several activities within the scope of the P.S. Act. This includes providing custodial services for DPTs, facilitating token transfers and exchange and the facilitation of cross-border money transfers.
The regulator also clarified that the law even covers cases where the service provider does not come into possession of the funds or where the money is not accepted or received in Singapore. MAS also said that the new updates would allow it to include additional requirements for DPT service providers.
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