Headlines

▌FTX US May Prohibit the Listing of Tokens Defined as Securities

The U.S. branch of cryptocurrency exchange FTX intends to start analyzing the tokens to determine if they qualify as securities. According to SBF, if the team considers the token to be a security, it will not be listed on FTX US unless there is a clear path to registration. If the legal team says after analysis that a token is not a security, it will be considered a commodity. Unless a court or SEC intervenes, otherwise.

▌FDIC Chief Calls for Restricting Stablecoins to Permissioned Blockchains

The acting head of the Federal Deposit Insurance Corporation (FDIC), the U.S. banking regulator, has called for more restrictions on the issuance of stablecoins. Banking regulators recommend restricting stablecoins to permissioned blockchains. Martin Gruenberg, acting chairman of the FDIC, said that payments in stablecoins are safer if transactions are conducted on a permissioned ledger system with strong governance and compliance mechanisms. Understanding the capabilities of all parties involved in paying for stablecoins, including nodes and validators, is critical to ensuring compliance with anti-money laundering and combating the financing of terrorism regulations and deterring evasion of sanctions. Innovation can be a double-edged sword, Gruenberg added.

Policies

▌South African Regulator: Crypto Financial Companies Must Obtain Operating Licenses in 2023

Crypto financial firms in South Africa need to apply for a license between June 1 and November 20, 2023, in order to operate legally, South Africa’s financial industry conduct regulator said on Thursday. The announcement on Wednesday that cryptoassets are financial products does not mean they are legal tender, Eugene Du Toit, head of the Financial Industry Conduct Authority’s regulatory framework department, said in a news release. As previously reported, the country’s Financial Advisory and Intermediary Services Act 2002 (FAIS) has been updated to cover the definition of cryptoassets and classify them as financial product. The notification takes effect immediately, meaning that for the first time, crypto assets will be regulated in South Africa.

▌Over 20% of U.S. Cftc’s 2022 Enforcement Actions Are Related to Cryptocurrencies

The U.S. Commodity Futures Trading Commission (CFTC) filed 82 enforcement actions in fiscal 2022, with a whopping 22% of them related to cryptocurrency entities. The CFTC cited enforcement actions in fiscal 2022 in a report, including charges against Tether and Bitfinex, which were settled last October for a total of $42.5 million. In a press statement, CFTC Chairman Rostin Behnam wrote: "In the face of unprecedented financial market conditions directly impacting American consumers, emerging technological disruption and growing retail investor participation, the CFTC continues its unwavering commitment to a robust enforcement program ensuring the markets we oversee are open, transparent, fair and competitive."

Cryptocurrency

▌Crypto Custodian Prime Trust Agrees to Return Celsius $17M in Tokens

In a bankruptcy court hearing on Thursday, crypto custodian Prime Trust agreed to return nearly $17 million in tokens to bankrupt lender Celsius Network. Prime Trust said the assets will be sent to designated Celsius wallets, pending a court order to distribute the funds. Celsius sued Prime Trust in August, accusing Prime Trust of improperly withholding the tokens when both terminated their contract in June 2021. The assets consisted of 398BTC, 196,268CEL, 3,740ETH, and 2.2 million USDC, worth about $17 million. Celsius filed for Chapter 11 bankruptcy protection in July.

▌Chainalysis: Crypto Adoption Slowed but Remains Above Pre-2021 Levels

Cryptocurrency adoption has slowed sharply since the onset of the bear market this year but still remains above pre-2021 levels, according to a new study by blockchain analytics firm Chainalysis. Based on Chainalysis' global index score, cryptocurrency adoption has slowed in the first two quarters of 2022 compared to the highs seen in the second and fourth quarters of 2021. However, adoption rates are still higher than in the pre-bull market, including the first quarter of 2021. Chainalysis' "2022 Geography of Cryptocurrency" also found that 18 of the 20 countries with the highest crypto adoption rates are low- to middle-income countries, where cryptocurrencies are used for remittances and protect savings from high inflation. In contrast, decentralized finance (DeFi) adoption is most prevalent in North America and Western Europe, accounting for 37% and 31% of all crypto trading volume respectively.