AshotMamoyan

Bob Ras, the co-founder of Sologenic, expressed his worries about the SEC’s approach to cryptocurrency regulation in a Twitter thread, noting he thinks the agency’s has a lack of knowledge and an inconsistency in its attitude. 

The SEC’s strong efforts have repercussions throughout the sector, affecting businesses like Ripple and perhaps weakening the United States’ position in the global crypto market.

Ras said that the SEC’s effort to label almost all digital assets as securities betray a fundamental ignorance of the unique characteristics of these cutting-edge innovations. He said the SEC’s regulation caused needless legal fights for businesses like Ripple.

2/7 The agency's attempt to classify almost all digital assets as securities reveals a lack of understanding about the unique nature of these new technologies. Companies like @Ripple are facing unnecessary legal battles due to this oversight.

— Bob Ras (@bobrasX) May 23, 2023

In addition, Ras states that the SEC’s unreasonable pursuit of crypto ventures has hampered innovation and driven many businesses to go abroad for better conditions. The U.S. stands to lose influence on the international crypto scene due to this trend towards outsourcing crypto-related activities.

Ras also believes that categorizing cryptocurrencies as securities fail to recognize their unique characteristics and potential benefits, highlighting the necessity for a regulatory framework to consider these factors.

He referenced recent court developments in the Ripple case as evidence that not all crypto-assets fit the requirements to be categorized as securities, illuminating on what he sees as the SEC’s contradictory approach. Coinbase and other businesses may be affected by this disparity.

The co-founder says that the SEC should abandon its current focus on regulating via enforcement in favor of a system that encourages innovation while protecting investors’ interests.

He cautioned that failing to do so may hurt the agency’s standing and make it harder for the U.S. to compete in the international crypto market.

It is unclear how the SEC will address these issues or whether it will modify its regulatory approach to crypto-assets to consider their distinctive features and possibilities.

Consider two projects created for the sports industry, STEM (STEMX) and Chiliz (CHZ). These projects offer different approaches to using tokens for the sports industry.

Let’s look at them in more detail.

Chiliz creates fan tokens for sports teams, the price of which is formed solely on market demand. In other words, the price of fan tokens of football clubs is included in supply and demand at auctions, i.e., interest from fans and traders at a particular time. These are classic crypto assets like many others. It’s just that each token is associated with a specific club. The cryptocurrency of the project is CHZ.

The STEM project offers a completely different approach and uses the STEMX cryptocurrency. It is an exchange of sports team statistics tokens, where the price of tokens depends on the performance indicators of the team’s games, not on market demand.

This distinguishes STEM from Chiliz because the price of tokens is tied to open and understandable data, such as game statistics and match results, ratings, and the cost of football club players. Users can analyze the statistical indicators of the team and predict the change in the value of its tokens.

Thus, STEM provides users with greater transparency and the ability to make decisions based on objective factors simply by tracking the key indicators of each team. This is a unique class of trading assets in the entire cryptocurrency market, which offers all traders and fans of football clubs around the world a new user experience.

Both projects have their unique features and advantages. In the Chiliz project, fans can participate in making some decisions about clubs. STEM, on the other hand, offers the opportunity to make money on the successes of these football clubs based on the analysis of statistics and match results.

As a result, the choice between STEM and Chiliz depends on the preferences and goals of each investor or fan. Both projects have their own set of unique features, which finds demand among users.

The US Bankruptcy Court for the District of Delaware has given Bittrex crypto exchange the go-ahead to borrow an initial 250 BTC ($6.8 million at current prices) to fuel its bankruptcy proceedings. Bittrex filed for bankruptcy in the US on May 8.

Having successfully filed a Chapter 11 bankruptcy in the US earlier this week, the Bittrex crypto exchange has been approved by US Bankruptcy Judge Brendan Shannon to obtain bitcoin (BTC) loans from its parent company, Aquila Holdings, to kickstart its bankruptcy proceedings.

According to sources, the embattled exchange can borrow an initial 250 BTC (roughly $6.8m). It could seek permission to obtain an additional 450 BTC later in June.

The bankruptcy court has also granted the exchange temporary privacy protection, allowing it to remove the personal information of its customers from court documents. Sources say Bittrex has since stopped accepting deposits from its US customers and had asked them to withdraw their crypto from its platform before filing for bankruptcy.

The loan will make it easier for Bittrx to fully reimburse all its US customers and finalize its Chapter 11 bankruptcy.

US regulatory bottlenecks are stifling innovation 

The lack of regulatory clarity for crypto in the US makes life quite difficult for market participants.

 The dreaded US Securities and Exchange Commission (SEC) sent a Wells Notice to Bittrex last month, alleging that the exchange failed to come under its purview as a clearinghouse, broker-dealer, or business.

At the time, the exchange condemned an SC’s enforcement action against it, with Oliver Lich, CO of Bittrex Global, publicly voicing his displeasure over the exchange’s lack of communication with market participants.

With no solution to the SEC’s draconian enforcement-style regulation in sight, top crypto businesses in the US are increasingly securing licenses abroad, If the regulatory onslaught continues, it won’t be a surprise to see most of these innovative businesses abandoning the country.

Major bitcoin (BTC) mining company Marathon Digital Holdings received a fresh subpoena from the US Securities and Exchange Commission (SEC) concerning the company’s data center in Montana, which the regulator is investigating for possible securities laws violation. 

Marathon Digital revealed the receipt of the subpoena in a recent filing with the SEC. According to the company, the subpoena was issued on April 10 to its data facility center in Hardin, Montana. 

“The Company received an additional subpoena from the SEC on April 10, 2023, relating to, among other things, transactions with related parties. We understand that the SEC may be investigating whether or not there may have been any violations of the federal securities law. We are cooperating with the SEC.

Marathon Digital SEC filing

The bitcoin miner and some of its executives received a similar subpoena two years ago in September 2021, with the SEC demanding documents and communications for the same data center facility. Marathon Digital first inked an agreement deal with multiple parties in October 2020 to set up the facility in Hardin, Montana. 

No plans to increase BTC holdings via the open market 

Meanwhile, the filing, which detailed Marathon Digital’s first quarter 2023 report, showed that the company’s revenue for Q1 2023 was $51,132, slightly lower than the $51,723 generated in Q1 2022. 

The quarterly report also stated that the firm’s entire bitcoin stash as of March 31, 2023, was 11,466 BTC, worth over $314 million at bitcoin’s current price, and produced a total of 2,195 BTC in the first quarter of 2023. 

Furthermore, Marathon Digital said it plans to increase its stash via production and not through BTC purchases on the open market, while stating that the firm “may buy and sell bitcoin from time-to-time (separately from what is outlined above) for treasury management purposes.” 

As previously reported by crypto.news, the bitcoin miner sold 1,500 BTC for the first time since 2019, to cater to operational costs. 

Standard Chartered Bank has revealed plans to offer institutional-grade digital assets custody services in Dubai via its subsidiary, Zodia Custody, pending regulatory approval.

Barely three months after reaching a definitive agreement with Japan’s SBI Digital Asset Holdings to set up a crypto custody platform in the region, Standard Chartered, a British multinational banking giant, is set to roll out the same service in crypto-friendly Dubai for institutional investors.

According to sources, Standard Chartered aims to start offering crypto custody services in the Dubai International Financial Centre (DIFC) once it secures regulatory approval from regional regulators.

The 54-year-old financial institution has reportedly signed a memorandum of understanding (MoU) with the DIFC. If all goes as planned, Zodia Custody, a subsidiary of Standard Chartered which announced plans to roll out its earn product for institutional crypto holders last year, will be in charge of the proposed custody platform.

A well-balanced regulatory approach 

Unlike jurisdictions such as the United States, where the major regulatory watchdogs are yet to formulate clear-cut and amenable digital assets regulation, authorities in the United Arab Emirates have taken a more relaxed and liberal approach towards crypto and blockchain regulation. 

The UAE’s warm embrace of innovative technologies like web3 is fast, making it a hotbed for crypto market participants. So far, many bitcoin (BTC)-linked businesses, including Crypto.com, ByBit, Binance, and others, have obtained regulatory licenses from Dubai’s Virtual Asset Regulatory Authority (VARA) to operate in the city.

Commenting on the bank’s decision to launch a digital asset custody solution in Dubai, Standard Chartered CEO Bill Winters stated that the bank sees digital assets as the future of financial services and the UAE is putting itself at the forefront of the web3 revolution through its “well-balanced approach” to crypto adoption and financial regulation, making the region the ideal destination for the bank’s crypto custody product.