Regulation comes for crypto staking: Law Decoded, Feb. 6–13

Last week, the US Securities and Exchange Commission (SEC) reached an agreement with the Kraken cryptocurrency exchange. The latter will stop offering cryptocurrency staking services to US customers and will pay $30 million in debt fines, pre-judgment interest and civil penalties.

While the amount of penalties is unlikely to throw an organization like Kraken off balance, the future of staking is about the crypto market. The court settlement angered not only the entire crypto community, but also investors, politicians and industry executives, with Cinneamhain Ventures partner Adam Cochran calling SEC Chairman Gary Gensler an “anti-crypto program agent” and not a regulator. Blockchain Association CEO Christine Smith urged Congress to take such important matters under its direct control.

Brian Armstrong, CEO and co-founder of cryptocurrency exchange Coinbase, believes that a ban on retail staking of cryptocurrencies in the US would be a “terrible” move by the country’s regulators. Armstrong also criticized the current lack of regulatory clarity in the US and the subsequent “enforcement regulation” that he says is forcing companies like FTX to go offshore.

Even SEC Commissioner Hester Pierce has publicly rebuked her agency for shutting down the Kraken crypto staking program. commissioner blown up her agency, arguing that forced regulation “is not an effective or fair way to regulate” an emerging industry. Pierce implied that the regulator was “lazy and paternalistic,” suggesting that the SEC should have initiated “a public process to develop a workable registration process that provides investors with valuable information.”

South Korean Regulator Makes Recommendations on Security Tokens

South Korea has developed guidelines outlining which digital assets will be treated and regulated as securities in the country. The law treats securities as financial investments for which investors are not required to make additional payments after the initial investment. The Financial Services Commission (FSC) also provided examples of which digital assets are most likely to be classified as securities. According to the FSC, these can be tokens that provide a stake in business operations, entitle holders to dividends or residual assets, or generate returns for investors.

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Dubai Issues Cryptocurrency Rules for Virtual Asset Service Providers

The Virtual Assets Regulatory Authority (VARA), the regulator responsible for overseeing crypto laws in Dubai, has released new rules for virtual asset service providers (VASPs) operating in the emirate. All market participants, regardless of whether they have a VARA license or not, must comply with the rules of marketing, advertising and promotions. Violators will be fined between $5,500 (AED20,000) to $55,000 (AED200,000) and repeat offenders can be fined up to $135,000 (AED500,000). However, the rules only apply to market participants in Dubai, with the exception of those who work in the Dubai International Financial Centre.

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Interpol wants to investigate crimes in the metaverse

The International Criminal Police Organization, or Interpol, is investigating how it can control crime in the metaverse. According to Interpol Secretary General Jurgen Stock, as the number of users of the metaverse grows and technology continues to develop, the list of possible crimes will only expand and potentially include crimes against children, data theft, money laundering, financial fraud, money counterfeiting, ransomware, phishing. . and sexual assault and harassment. The transition to guarding the Metaverse comes nearly four months after Interpol launched its own Metaverse in October 2022 at the 90th Interpol General Assembly in New Delhi, India.

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