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House Reps question FinCEN Director on Libra’s Potential for Illegal Usage

House Reps question FinCEN Director Kenneth Blanco on Libra’s potential usage in illegal activity.

Director of the Financial Crimes Enforcement Network (FinCEN) Kenneth Blanco briefed several members of the United States House on the potential for Libra’s use in money laundering, illicit financing, and other illegal activities, according to a press release from Representative Emanuel Cleaver II.

Leading the meeting were Reps. Cleaver, Trey Hollingsworth, Bill Foster, and French Hill, all members of the Committee on Financial Services. Rep. Cleaver, chairman of the Subcommittee on National Security, International Development, and Monetary Policy, said in his statement: 

“With the evolution of virtual currencies and new marketplaces, nefarious actors are continuously adapting to find new ways to engage in illegal financial activity. […] Now that we’re seeing a giant corporation like Facebook—which has already shown an inability to identify and impede these kinds of actors at an acceptable level—creating its own virtual currency called Libra, it cannot be understated the importance of Congress and financial transmitters to be proactive in utilizing the newest and most powerful technologies to ensure the financial system is not being used improperly.”

Blanco reportedly outlined current research into artificial intelligence and machine learning and their use in regulating cryptocurrencies.

Rep. Cleaver’s questioning was largely informed by concern over Facebook’s role in the 2016 US presidential elections, as well as alleged use of cryptocurrencies by Russian agents to fund election interference. Cleaver continued: 

“We’ve seen the significant damage that foreign adversaries and bad actors have wrought on our democracy through Facebook’s platform, and that was simply through messaging and advertising.”  

This briefing comes just days after the Financial Services Committee scheduled hearings with Facebook for July 17, which in turn followed Committee Chair Maxine Waters’ request for a moratorium on Libra’s development on June 18, as Cointelegraph reported at the time.

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Chainalysis Appoints Former FinCen Officer as Technical Counsel

Blockchain analysis firm Chainalysis has appointed former FinCen and U.S. DoJ official Michael Mosier as its new Chief Technical Counsel.

Blockchain analysis firm Chainalysis has hired a former official from the United States Financial Crimes Enforcement Network and the Department of Justice as Chief Technical Counsel, according to a press release published on June 26

Chainalysis has appointed Michael Mosier as its new Chief Technical Counsel. Mosier will now be responsible for legal expertise of Chainalysis products such as data privacy and global anti-money laundering, sanctions, policy, and government issues.

At Chainalysis, Mosier will work closely with Jesse Spiro, Global Head of Policy, who joined the firm from financial information services firm Refinitiv and Kristofer Doucette, Vice President of Government Affairs, who previously served at the U.S. Department of the Treasury in financial intelligence. Commenting on the appointment, Mosier said:

“I am thrilled to join the incredible team at Chainalysis as the Chief Technical Counsel. Having worked across emerging technology, financial integrity, and data privacy matters, the opportunity to bring technical-legal solutions to market to help advance Chainalysis’s mission to build trust in blockchains and help our customers meet their regulatory obligations is the perfect intersection at a seminal moment for all of those areas.”

Earlier this month, the leading cryptocurrency exchange Binance hired a former strategic executive at Dell and the National Basketball Association Gin Chao as its global strategy officer. Chao will reportedly advance the organization’s global strategy, heading initiatives in corporate development, venture investment and its legal departments.

Blockchain security and cryptocurrency custody firm BitGo appointed a veteran Wall Street trader Nick Carmi as its head of financial services. According to a statement from BitGo CEO Mike Belshe, the hire was spurred by an intent to forge a stronger connection between technologically innovative digital assets and the traditional financial sphere.

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US’s FinCEN and G20 Countries Could Adopt FATF’s Crypto Guidance

FAFT Crypto Guidance

The Financial Action Task Force (FATF)
has published guiding regulations on combating money laundering and financial
terrorism using ‘’virtual assets’’.

FATF is an intergovernmental organization that develops policies to essentially tackle international money laundering as well as financial terrorism. As such, the regulations will aim at ensuring these issues are mitigated. Notably, FATF has 37 member countries who share a common interest in having regulations to streamline this sector.

FATF’s new standards will require “virtual asset service providers” (VASPs), including crypto exchanges to pass information about customers between each other as they conduct transactions. Accordingly, this can empower all the exchanges with the ability to track and report suspicious transactions.

As a matter of fact, FATF views the
issue of misuse of crypto for illegal ends as an “urgent and serious” issue.
Therefore, FATF has given countries a year to review and possibly adopt these
new measures before the next review in June 2020.

Moreover, the rules require individuals who have crypto wallets on exchanges be subject to licensing requirements. This is if they run the wallet as a business. As such, member countries will be free to develop licensing requirements in line with jurisdiction-specific rules.

Individuals who use crypto to buy and
sell goods and services or make on-off transfers will be exempt. Member
countries should, therefore, register business wallets as VASPs. The regulations
state that the overall aim of the measures as follows:

“Competent authorities should take the necessary legal or regulatory measures to prevent criminals or their associates from holding, or being the beneficial owner of, a significant or controlling interest, or holding a management function in, a VASP.’’

Impact of The Measures

First of all, it is important to note that
the FATF regulations are not binding. These are essentially proposals
that member countries choose whether to adopt or not. This means that
enforcement is not automatic and uniform.

As such, an entity like FinCEN in the United States has more direct impact on crypto regulation than FATF.  FATF provides an oversight and policy framework but it is definitely up to agencies like FINCEN or the G20 to enforce the measures. The Anti-Money laundering and CFT regulations from FINCEN have a direct impact on exchanges in that institution.

Some crypto enthusiasts will be up in
arms over this. This is because any attempt to regulate crypto, to some, is
another example of “regulatory overreach and attempts at centralization”.  Others will look at the importance of keeping
crypto elements from tarnishing crypto forever.

Either way, the measures can
significantly shape crypto in the short and long-term. There will certainly be
a drop in crypto-services if the rules come into effect soon. Nonetheless, the
remaining ones will attain a higher level of transparency and lawful operation.

Adoption by The G20

The G20 group of nations has already signaled that it will align with the FATF regulations in due course. This is in the form of a communique on the Japanese Ministry of Finance. Notably, this comes after a meeting over the weekend in Fukuoka, Japan.

The adoption by the G20 will certainly signal a fundamental transformation of the crypto landscape. Regulations on KYC and more effective monitoring in the world’s most powerful economies will certainly have wide impact. Accordingly, the balance between crypto regulation and nurturing innovation will remain an important debate for years to come.

The post US’s FinCEN and G20 Countries Could Adopt FATF’s Crypto Guidance appeared first on Ethereum World News.

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Federal Preemption or States’ Rights? Crypto Advocates Clash Over Regulatory Approaches

Caitlin Long and Peter Van Valkenburgh find themselves on the opposite sides of the federal-versus-state regulation divide.

It is easy to think of the most prominent blockchain advocates as a united front, whose ranks are tightly closed in the face of the common enemy — a horde of fierce crypto critics, unwieldy regulators, anti-money laundering zealots, “bitcoin is a scam”-ers, and the stakeholders of the old, centralized financial system. On this battlefield, the crypto camp’s fundamental positions are aligned, and its strategic goals are clear. However, in the times of armistice, blockchain champions get together by the campfire to ponder the important details of their common cause, and — astonishingly — at times, they disagree.

This time around, the metaphorical campfire was lit at the MIT Technology Review’s Business of Blockchain 2019 conference, which took place on May 2 on the premises of the Massachusetts Institute of Technology’s Media Lab. One of the panels saw Caitlin Long — the woman who is spearheading Wyoming’s transformation into what she herself called the “Delaware of crypto law” — have a deferential yet rather intense exchange with Coin Center’s director of research, Peter Van Valkenburgh, one of the industry’s most eloquent speakers who is known for many notable deeds — for example, standing up for crypto to a bully last October.

The panel, which also featured MIT professor and former Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler, was on crypto regulation, and the main point of contention was whether it is better done on the federal or state level. While they were ultimately concerned about the same thing — i.e., the backwardness of the United States’ regulatory environment that can chase promising startups away to more friendly jurisdictions — Long and Van Valkenburgh offered two drastically different visions of the best way to go about the issue.

Hurdles on all levels

The tension over the boundaries of federal vs. state authority has informed American politics since the foundation of the republic. In the realms of commerce and finance, a relative balance was achieved when the states assumed jurisdiction over the “consumer-facing” commercial law while the agencies of federal government came to oversee operations with more specialized, “institutional” financial instruments — such as securities (Securities and Exchange Commission, SEC), futures and options (Commodity Futures Trading Commission, CFTC), and broad financial crimes (Financial Crimes Enforcement Network, FinCEN).

It has become a truism that, for crypto enterprises in the U.S., navigating the regulatory landscape is about as easy as making it blindfolded through a minefield. All the agencies mentioned above are interested in some subset of digital assets: The CFTC is eyeing smart contract-powered futures options; the SEC is struggling to decide whether all initial token offerings are under its purview, or just some of them; and FinCEN, facing the need to investigate money laundering schemes and shady transactions, understands crypto assets as something it is used to dealing with (i.e., money). In addition, the Internal Revenue Service (IRS) is treating crypto as property for the taxing purposes, which means that capital gains and losses come into play.

To top it all off, individual states have begun to institute guidelines and regulations of their own, with Wyoming blazing the trail by establishing its own classification of tokens. This is not a small deal, either, since companies operating online automatically fall under jurisdiction of every state whose residents they serve — meaning that now they have to comply with state regulations, too.

This chaos is due to the fact that there is no universally agreed-upon, federally enforced definition of a digital asset. While it would come in handy if one existed — for the purposes of delineating the boundaries of different national regulatory bodies’ jurisdiction over different types of tokens — it is also an arduous task to formulate such a definition, let alone to steamroll such a bill through Congress. The last few months saw continuous attempts on behalf of a group of blockchain-conscious members of Congress to introduce more clarity with a bill known as the Token Taxonomy Act.

The crypto community, though, seems to be divided over not just the bill itself but the very idea of a Congress-enacted, binding definition of a digital token with a claim of federal preemption. Some critics point out that, absent a clear understanding of terms and a sufficient corpus of case law on the matter, it is nearly impossible for a bill to define central concepts around crypto assets in a way that would eliminate dreadful ambiguity when enforced. Others, including Caitlin Long, argue that it is not the federal government’s business altogether, and an attempt by Congress to introduce such a taxonomy would amount to an infringement on states’ rights. Long’s talk at the MIT Technology Review event, her polemic with Van Valkenburgh at the panel, and a subsequent interview to Cointelegraph provide a closer look at the “states’ rights” argument that she stands by.

Financializing crypto assets

Put very simply, there are two major elements in regulations that bind financial firms: those related to consumer protection and prudential regulations, which are rules that dictate the need for such firms to be able to handle risks and hold sufficient assets. One of the central theses that Long advanced throughout the conference is that the inadequacy of current U.S. crypto regulation stems from overemphasizing the consumer protection side while ignoring the solvency issues.

In her talk, entitled “The Financialization of Cryptoassets,” Long explained that many digital assets do not qualify as securities, hence they should be treated as property. Commercial law related to property was mainly formulated in the age when all possessions were tangible, which warrants the need for updating this legal area so as to define digital assets — or to “financialize” them.

The key difference between the traditional financial system and blockchain-based systems is the way custody and settlement work. Normally, people do not own the shares in their brokerage accounts. Instead, they own IOUs (“I owe you”) from their brokers, who own IOUs from custodians, etc. With this murky chain of ownership, it is not uncommon that several entities have claims on one asset; it is often impossible to tell where exactly the asset is at the moment; and finally, settlement can take days.

None of these are an issue with digital assets: You can own them directly, they are easily traceable and settlement takes minutes. All that this novel type of property needs is to be treated as such, and to have sound regulation of custody. In Long’s opinion, not only are states in a better position than the federal government to ensure both, but they have the priority to do so.

The panel: state vs. federal

The regulatory panel ensued, now featuring Peter Van Valkenburgh and Gary Gensler alongside Caitlin Long. The Wyoming native kicked off the discussion with the same sentiment that permeated her talk:

“States control commercial law.”

Coin Center’s Van Valkenburgh responded that his uneasiness with state-level crypto regulation comes from the fact that, in many cases, it boils down to states applying archaic money transmitter laws and licensing requirements to crypto businesses. As a result, instead of having just one federal authority to deal with, successful fintech companies that maintain presence in all of the United States have to “have 54 awkward conversations” with regulators instead of just one. And because money transmitter laws are outdated, they also do not do much to protect the customers.

When MIT’s Gensler attempted to dwell on the consumer protection side for a little longer, Van Valkenburgh retorted that state-level regulation is not the sharpest tool to combat things like money laundering, either: When it comes to financial crimes, states cooperate with the federal regulator, FinCEN, who applies federal legislation — i.e., the Bank Secrecy Act. Coin Center’s Van Valkenburgh also argued that managing custodial risks on the state level is not a great idea, since such processes are better handled by specialized federal authorities, such as the SEC or CFTC. In sum, Van Valkenburgh contended that it is better to have a clear-cut, uniform federal regulation than a host of disparate, state-specific regulatory regimes.

Caitlin Long came back, criticizing some hard-regulating jurisdictions like New York that spend extensive resources on consumer protection and anti-fraud regulation of crypto while caring much less about solvency and allowing established financial institutions like Merrill Lynch to get away with trading assets that they do not hold. She described the forthcoming Wyoming crypto custody rules, which she sees as a way to maintain direct ownership of digital assets and preserve the powerful advantage of blockchain-powered systems over traditional finance.

Grounded in the common law notion of bailment, this type of custody will entail handing the keeper possession of the asset, but not the title. Long likened this type of arrangement to valet parking, where the only thing the custodian can do is to take the vehicle to a safe storage space.

Both Van Valkenburgh and Gensler didn’t sound convinced that solving the custody part of the puzzle would automatically resolve all the consumer protection issues. However, Van Valkenburgh begrudgingly conceded that state-level regulation could make sense, but only if every state adopted a “rational approach.” In turn, Long suggested that, “if we do it on federal level through Congress, we will get the worst-case scenario,” to which Van Valkenburgh responded that there seem to be enough reasonable policymakers on the Hill, and that the situation might not be all that grim.

In an interview with Cointelegraph after the panel, Long doubled down on how the egregious Merrill Lynch situation demonstrated New York authorities’ application of double standards: The firm was able to walk away from doing essentially the same that Bitfinex has been recently accused of doing, but with a much harsher potential fallout. The fact that regulators are going much harder on Bitfinex suggests that they might be picking on crypto enterprises. She also drew a line within the crypto industry itself, distinguishing between highly leveraged exchanges, which would be unable to comply with the new Wyoming statutes, and those that are “truly solvent,” and which will likely end up in the state.

Finally, Long commented on Van Valkenburgh’s pro-federal regulation approach, suggesting that:

“That is putting the convenience of large financial institutions in this sector ahead of reality that property laws are purview of the state. It is very unlikely, to be honest, that there’s going to be a federal money transmission statute, because states are going to fight it. It usurps their long-established supremacy over property law and long-established supremacy over commercial law.”

As it is visible in this discussion, sometimes debates over blockchain regulation invoke matters more fundamental than simply the best way to organize socioeconomic relations enabled by new technology. At times these disputes spill over to the contested ground of federal-state government jurisdiction, or to judgments on whether Congress is better equipped to handle certain matters than state legislatures — the issues as deeply ingrained in the political fabric of the U.S. as the antagonism between the democratic and republican principles in its constitution. At this point, it becomes a matter of deep ideological convictions.

On the more practical side, Long’s fresh focus on the balance between consumer protection and prudential regulations with regard to crypto could be a new way for the industry to articulate and frame its policy woes. Another thing to watch for is if, as Wyoming proceeds with its groundbreaking legislation, progressive digital custody lives up to the hopes that the state’s crypto pioneers have set on it.

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Hodler’s Digest, April 15–21: Top Stories, Price Movements, Quotes and FUD of the Week

FinCEN’s enforcement against a p2p crypto exchanger could set a precedent, and French instant mashed potatoes go blockchain.

Top Stories This Week

FinCEN Takes First Enforcement Action Against Peer-to-Peer Cryptocurrency Exchanger

In an apparent first, the United States Financial Crimes Enforcement Network (FinCEN) has given a penalty to a California resident who has been accused of wilfully violating money transmission laws as a peer-to-peer virtual currency exchanger. The department noted that the move marks its first such enforcement action, thus setting a precedent. The defendant — Eric Powers of Kern County, California — has been fined $35,000 and debarred from future work that qualifies as a money services business. The fine came from the determination that Powers violated his reporting obligations under the U.S. Bank Secrecy Act.

Self-Proclaimed Satoshi, Craig Wright, Sues Podcaster Peter McCormack for Alleged Libel

Craig Wright, the chief scientist at nChain and founder of bitcoin SV (BSV), filed a libel claim in the United Kingdom against cryptocurrency podcaster Peter McCormack. McCormack had previously accused Wright of fraud and falsely claiming to be Satoshi Nakamoto, the creator of bitcoin (BTC). In response, Wright’s claim allegedly requests over $130,000 in damages, as well as legal costs and court fees. Earlier this week, Binance, ShapeShift and Kraken decided to delist BSV amid Wright’s continued claims to be Satoshi, as well as his bounty offering in the search for the identity of the anonymous Twitter user behind the Lightning Torch.

French Gov’t Minister Open to Enabling Crypto Donations for Notre Dame

Cédric O, France’s Minister of State for the Digital Sector, said this week that he is open to accepting cryptocurrency donations for the reconstruction of the Notre Dame Cathedral, which experienced a debilitating fire last week. The donations for the medieval cathedral’s reconstruction have already reached over $1 billion, while not yet allowing for donations in crypto. The official fundraising site is linked to four approved organizations, with Cédric O noting that the government is open to discussion on how to accept crypto to drive up the fundraising.  

Both BlockShow, an international blockchain event powered by Cointelegraph, and major crypto exchange Binance have launched crypto donation campaigns for the renovations.

Forbes Releases List of Billion Dollar Companies Using Blockchain

Financial news outlet Forbes released their “Blockchain’s Billion Dollar Babies,” a list of companies implementing blockchain technology that have minimum revenues or valuations of $1 billion. The list includes both companies in the crypto and blockchain development spaces, as well as larger companies in the traditional markets, such as banks and clearing houses, food companies and supply chain management firms. The list contains such household names as Amazon, Walmart, Facebook, ING, Mastercard, Microsoft and Nestle, as well as U.S.-based cryptocurrency exchange Coinbase, European mining and hardware firm Bitfury, and blockchain-based financial services network and XRP token creator Ripple.

Nestlé, Carrefour Work With IBM to Track Mashed Potato Brand With Blockchain

Switzerland-based food giant Nestlé, French supermarket chain Carrefour and IBM have partnered in order to use IBM’s blockchain tech to track French instant mashed potatoes. Shoppers will be able to use their smartphones in Carrefour stores to scan the packs of Mousline instant mashed potatoes with a QR code and be able to see data on the potatoes, including the varieties of potatoes used, the date and place of manufacture, and their journey to the store. In general, around 5 million different food items already employ blockchain in their supply chain in some form.

Winners and Losers

At the end of the week, bitcoin is up, trading at around $5,348, ether at around $173 and XRP at $0.32. Total market cap is around $180 billion.

The top three altcoin gainers of the week are fivebalance, atlantis blue digital token and segwit2x. The top three altcoin losers of the week are cointogo, ezoow and robocalls.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

“We have no idea what the extent of the malfeasance is on centralized exchanges. If we extrapolate from what we’ve seen on DEXes, it could well be on the order of billions of dollars.”

Ariel Juels, professor at Cornell Tech

“We should let investors, companies, and individuals know what the landscape and treatment will be moving forward to support innovation and development. The blockchain has vast potential.”

Andrew Yang, U.S. presidential candidate

“From day one, I’ve maintained the allegations are bogus, and they are of course. After their attorney was sanctioned and they were ordered to pay my legal fees twice, we recently reached a confidential resolution, and I’m dismissed from the case.”

Charlie Shrem, in regard to the court case with the Winklevoss twins

“The digitalization will also create much needed synergies among the government organizations for ensuring friction-less service delivery and improving ease of doing business in the country.”

Pakistani Prime Minister Imran Khan

FUD of the Week

ShapeShift to Delist Bitcoin SV, Kraken Considers Following Suit

This week, following crypto exchange Binance’s announcement that they were delisting bitcoin SV, anonymous exchange ShapeShift has also delisted the currency, as well as Kraken. ShapeShift CEO Erik Voorhees posted on Twitter that the exchange stands with the sentiments of Binance and CZ, the CEO, in their decision to delist BSV following controversial claims from BSV founder Craig Wright over his alleged identity as Satoshi Nakamoto, as well as his public bounty to unveil the identity of anonymous Twitter user @hodlonaut. Shortly after, a community poll from Kraken led the exchange to also delist the altcoin.

Unocoin Reduces Staff by 50% Ahead of Indian Supreme Court Cryptocurrency Ruling

Unocoin, an Indian cryptocurrency exchange, has reportedly let go of half its staff, leaving the company with 14 workers. Unocoin cited regulatory uncertainty in the industry, noting that it made the decision concerning staff reduction ahead of an Indian Supreme Court hearing on cryptocurrency’s legal status in India, set for July. Since the peak of the business, Unocoin has allegedly fired 80% of its staff, and the business operations are reportedly running off of capital reserves as executives await news about the future. The crypto industry in India is in the process of fighting the country’s previous negative ruling on crypto dealings, in the form of a lengthy Supreme Court process.

U.S. District Attorney Indicts Three for Laundering Millions With Bitcoin

A group of individuals have been indicted by the Manhattan district attorney for allegedly selling drugs and laundering millions of dollars with bitcoin (BTC). According to Manhattan District Attorney Cyrus R. Vance Jr., with help from the U.S. Secret Service, the U.S. Postal Inspection Service and U.S. Homeland Security Investigations, Chester Anderson and his criminal accomplices, Jarrette Codd and Ronald Maccarty, allegedly operated dark web stores that sold and shipped hundreds of thousands of tablets of counterfeit drugs. According to the press release, the defendants laundered a reported $2.3 million in bitcoin by using preloaded debit cards and withdrawing cash at automated teller machines.

Best Cointelegraph Features

Young Africa Looks to Crypto for Payment

After noting that Lagos, Nigeria, is the number one city in terms of the volume of online searches for bitcoin, Cointelegraph checks out how Nigerians actually interact with the top cryptocurrency.

Craig Wright Continues to Chase His Critics as Major Crypto Platforms Boycott His Cryptocurrency, BSV

After this week saw a mass deslisting of Craig Wright’s bitcoin SV, Cointelegraph examines what caused the crypto community’s anger toward the self-proclaimed Satoshi Nakamoto.

Crypto Movie Review

In Cointelegraph’s first-ever movie review, Emmy-award winning screenwriter Edward Zuckerman takes a look at the “Crypto” movie, finding (spoiler!) little to do with cryptocurrencies and a lot more to do with the Russian mob.

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US Federal Government: Confusing Regulation For Crypto, Full Clearance For Blockchain

With more influential voices in academia and politics speaking out against burdensome federal regulations, is change imminent?

Individual US states seem to be in competition for the title of the most crypto-friendly in the Union – Ohio’s recent announcement of imminent crypto tax payments being the latest example. Meanwhile, federal authorities remain in disarray with regard to how to define, let alone consistently regulate digital assets.

It is not just stakeholders and crypto buffs who bemoan the disorderly state of federal policies: their usual talking points have been recently validated by academics. In an article forthcoming in a Journal of Financial Transformation, University of Arkansas Law School professor Carol Goforth weighed in with an opinion that essentially summarizes what experts have been airing all along. Goforth notes that there are at least four distinct federal regulators that oversee various aspects of digital assets’ issuance and, each with a different interpretation of their nature.

While the Commodity Futures Trading Commission (CFTC) treats crypto as commodities, the Securities and Exchange Commission (SEC) insists they are securities, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) applies currency rules, and the Internal Revenue Service treats digital money as property.

Skeptical of the possibility that these regulatory powers get consolidated anytime soon, Prof. Goforth calls for increased coordination between the agencies in an effort to introduce a more nuanced, rather than ‘monolithic,’ approach to various crypto assets. In other words, her proposed remedy is to treat such assets on a case-by-case basis, contingent upon their functionality and their users’ motivations. But have there been any signs of such change of heart in the US regulators and policymakers as of late?

At least in one instance, yes. On December 11, CFTC issued a public request for input, seeking in-depth comments on multiple aspects of how Ether and the Ethereum Network operate. The document, which will generate feedback to fuel the work of the Commission’s LabCFTC initiative, includes a list of 25 items pertinent to Ethereum’s purpose, functionality, scalability, security, and even the details of the system’s imminent shift to proof-of-stake consensus mechanism.

While the news got the community agitated, it’s not immediately clear what will come out of the regulator’s renewed interest in Ethereum’s fundamentals. Some observers, like MIT Technology Review’s Mike Orcutt, suggested that the development might endanger the prospects of the long-anticipated ETH futures.

What appears to be the CFTC’s effort to rethink the status of a single asset might not be indicative of broader concerted push towards “a more nuanced approach.” Other US regulators haven’t made similar moves, while some produced signals are indicating that they are still very much in line with the good old catch-all approach. For instance, consonant with their usual trope, recent remarks by a Department of the Treasury official stressed the need for crypto industry players to strengthen anti-money laundering (AML) and Combating the Financing of Terrorism (CFT) infrastructure.

US Congress

There is always hope that legislators on the Capitol Hill will lead the charge towards a better regulatory framework. Indeed, in the last few weeks, the blockchain-minded members of Congress have been on the move, making waves in the media and announcing proposed bills.

On Dec. 6, US Representatives Darren Soto and Ted Budd introduced two bills aimed at preventing crypto price manipulation and optimizing regulatory framework: The Virtual Currency Consumer Protection Act of 2018 and the U.S. Virtual Currency Market and Regulatory Competitiveness Act of 2018, respectively.

Both include recommendations to the CFTC that prescribe a set of regulatory changes. The first bill outlines possible scenarios of price manipulation in the crypto markets and advances remedies, whereas the second one calls for a comparative study of regulatory arrangements in other national contexts, with the view to improve the current domestic ‘burdensome regulations that may inhibit innovation.’

The last few weeks have also seen the rise of a new star of crypto legislation, at least in terms of generated publicity. Even though not a formal member of the Congressional Blockchain Caucus, Representative Warren Davidson of Ohio came into the spotlight at least twice in the month of December so far. First, speaking at the Blockland Solutions conference in Cleveland, Davidson announced that he was planning to introduce a bipartisan bill that would create a new asset class for tokens, thus enabling the feds to regulate initial coin offerings (ICOs) more efficiently.

A week later, during an interview to NPR, Davidson said that the border wall between the US and Mexico could be crowdfunded, suggesting that one of the mechanisms for that could be blockchain and issuance of ‘wall coins.’

The executive

While financial regulators and lawmakers are taking time to figure out ways to better handle the realm of digital assets, many federal agencies that are not concerned with monetary matters are exploring the uses of blockchain technology to aid their day-to-day operations.

With increasing interest to supply chain logistics as one of the most widely discussed non-financial blockchain applications, the news emerged that the feds are eyeing DLT-powered provenance tracing tools to increase food safety.

Amid the outbreak of E. coli associated with romaine lettuce originating from a California farm that took a while to trace and had the authorities introduce a blanket warning, the US Food and Drug Administration (FDA) took steps towards improving its tracking tools. The agency hired Frank Yiannas, formerly Walmart’s food safety boss, as its foods and veterinary medicine deputy commissioner. Just a few months ago Yiannas oversaw first trials of Walmart’s blockchain-powered tracking system, and he is now expected to introduce a similar solution with the FDA.

The United States Department of Homeland Security (DHS) took an interest in two blockchain applications relevant to the scope of its activities. One is related to forensic analysis of transactions: apparently concerned about the potential of ‘privacy coins’ like Monero and Zcash to help criminals escape the same level of scrutiny that is already available for bitcoin transactions, the DHS kicked off pre-solicitation process for parties potentially interested in supplying solutions capable of dealing with such “newer blockchain implementations.”

Another matter of the agency’s interest is germane to the licensing and certification functions performed by its three subsidiaries: the US Customs and Border Protection (CBP), US Citizenship and Immigration Services (USCIS), and Transportation Security Administration (TSA). In an effort to improve the documentation flow, the DHS calls for startups to offer blockchain-powered solutions that will help combat fraud, counterfeiting, and forgery of digital documents.

In the defense field, the US Air Force Institute of Technology (AFIT) unveiled an app designed to train members of the armed forces to develop and run blockchain-based supply-chain solutions. Recognizing that such supply chains will most likely be prevalent in the future military logistics, the Air Force partnered with several private contractors to build a system preparing personnel for their new functionality. Among the decisions that they will learn to make is what incentive structure best suits a given task, or whether a system should be permissionless or permissioned.

Meanwhile, the research arm of the US military, the Defense Advanced Research Projects Agency (DARPA), is looking to explore potential uses of permissionless distributed ledgers. In preparation for a workshop scheduled for February 2019, the agency solicits information on a range of blockchain-related topics, including security and centrality of distributed consensus protocols.

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Cryptos See Widespread Green, But Total Market Cap Remains Close to 3-Month Low

August 12: Crypto markets are seeing solid gains today in a fresh attempt at recovery following recent losses.

Bitcoin (BTC) dominance –– or the percentage of total crypto market cap that is Bitcoin’s –– is continuing to see a 2018 record-high percentage, at close to 50.9 percent. After the leading coin decoupled from the wider market yesterday –– holding its gains while other cryptos floundered –– healthy growth has today been distributed across virtually all of the major cryptocurrencies, as Coin360 data shows.

Market visualization from Coin360

Market visualization from Coin360

Bitcoin (BTC) is trading at around $6,310 at press time, up a strong 3.45 percent on the day, according to Cointelegraph’s Bitcoin price index. The top coin has seen a 24-hour high of $6,455, but has failed to break through $6,500 resistance, trading sideways within the $6,300-400 range for most of today. Having dipped briefly down to a low around $6,209, Bitcoin has recovered in the couple of hours before press time to hold just above the $6,300 price point. Weekly losses remain at about 10 percent, while on the month Bitcoin is up around 1.42  percent.

Bitcoin’s 24-hour price chart

Bitcoin’s 24-hour price chart. Source: Cointelegraph Bitcoin Price Index

Ethereum (ETH) is currently trading around $322, up  a solid 5.31 percent on the day. After plummeting as low as $306 in evening trading hours yesterday, the altcoin saw a strong push upwards to test the $330 mark. These fleeting attempts to break to a higher price point failed to hold, and the altcoin has since retraced towards the $320 mark. Ethereum’s losses on its weekly chart are at a little over 20 percent, with monthly losses heftier still, at almost 25 percent.

Ethereum’s 24-hour price chart

Ethereum’s 24-hour price chart. Source: Cointelegraph Ethereum Price Index

On CoinMarketCap’s listings, all of the top 25 crypto assets by market cap are seeing a healthy flush of green, with gains on the day pushing as high as around 5-6 percent.

Among the top ten coins by market cap, Stellar (XLM) and  Litecoin (LTC) are up the most, both seeing almost 6 percent growth on the day.

Although a Facebook spokesperson yesterday denied  rumors that the social media giant had been considering a potential partnership to build a Facebook variant of a Stellar blockchain, the asset is nonetheless riding positive momentum, which has been particularly strong on the XLM/USD chart.

Stellar’s 24-hour price chart

Stellar’s 24-hour price chart. Source: CoinMarketCap

Another leading performer among the top ten coins is anonymity-oriented altcoin Monero (XMR), in 10th place by market cap, up almost 4 percent and valued around $93.66 at press time.

Among the top twenty coins by market cap, IOTA (MIOTA), number 11th, is up 4.44 percent and is trading at $0.54 at press time. As seen across the crypto markets, the altcoin is still down on its weekly chart, but has seen a burst of upwards momentum as of evening trading hours August 11.

IOTA’s 24-hour price chart

IOTA’s 24-hour price chart. Source: CoinMarketCap

Still within the context of the top twenty ranked coins, NEO and Tezos (XTZ) are seeing stronger-than-average growth, both up around 4 percent.

As noted, for the second day running, Bitcoin’s share of the total market cap is above 50 percent and is pushing 51 percent at press time. BTC dominance has been consistently on the rise as of mid-May, while the second-ranked crypto, Ethereum, has seen a downtrend on the month in terms of its total market cap share, down to around 15 percent today.

3-month chart of cryptocurrencies by dominance

3-month chart of cryptocurrencies by dominance. Source CoinMarketcap

Total market capitalization of all cryptocurrencies is around $214.7 billion at press time, close to its lowest levels on the three-month chart, only hitting lower points in the past two days, and up slightly from yesterday’s low around $207 billion. As compared with $410.6 billion in mid-May, the market is coming bearishly close to a 50 percent decline.

3-month chart of the total market capitalization

3-month chart of the total market capitalization of all cryptocurrencies from CoinMarketCap

Alongside retail and institutional HODLers, crypto miners are feeling the pinch of the protracted bear market. Analysts have this week forecast that graphic processing units (GPU) manufacturing giant Nvidia will see a decline in its revenue from sales of crypto mining hardware, which had accounted for over 9 percent of overall revenue in its 2018 Q1 report.

Meanwhile, the director of the U.S. Financial Crimes Enforcement Network (FinCEN) this week revealed that the agency has seen a surge in filings of crypto-related Suspicious Activity Reports (SARs), which now reportedly exceed 1,500 in number per month.

This rising figure was presented as a positive indicator, with the director emphasizing that compliance with regulatory obligations is increasingly important given that “harm can be done with devastatingly increasing speed, breadth, and obscurity in the digital world.”