Weekly report: Regulators are turning their attention to crypto exchanges

Weekly report: Regulators are turning their attention to crypto exchanges

By Hassan Maishera - min read

Binance is one of the major cryptocurrency exchanges to encounter regulatory challenges in recent weeks

Binance issued a warning in the Netherlands

It seems Binance is now in the news every week for grabbing the attention of regulatory agencies. This week, the Dutch central bank, De Nederlandsche Bank (DNB), issued a warning to citizens that Binance is operating without a licence in the country. The central bank further added that Binance is currently operating in the Netherlands without proper compliance with the Anti-Money Laundering and Anti-Terrorist Financing Act. As such, Dutch citizens have been advised to stay away from using the cryptocurrency exchanges.

The cryptocurrency exchange was also ordered by a UK court to track and freeze cryptocurrencies stolen from one of its user’s accounts. Fetch.ai reportedly lost $2.6 million held in USDT, Binance Coin (BNB), Bitcoin (BTC) and others. Binance is also in some legal trouble after some traders revealed that they are seeking damages for losing millions of dollars during the exchange’s major outage in May. The outage lasted for hours, with Binance users unable to execute trading activities, and some traders now claim that the event led to a loss of millions of dollars.

On its part, Binance has been making changes to some of its operations. After ending derivative services to European and Hong Kong traders, Binance announced earlier this week that the restrictions had been extended to Australian traders as well. Binance stated that it was making these moves to comply with local regulations in each country.

Regulators are turning their attentions to the crypto market

The crypto market is now worth $2 trillion, and it has grabbed the attention of regulators globally. Earlier this week, the Spanish regulator National Securities Market Commission issued a warning to 12 entities, including crypto exchanges Huobi and Bybit, for operating without a licence. The regulator didn’t reveal if there would be sanctions but had warned its citizens against trading with these platforms.

The Australian Securities and Investments Commission (ASIC) also issued a warning to its citizens for using unlicensed cryptocurrency trading platforms. According to the ASIC, Australians who use these services would not enjoy the investor protection available to users of the licensed platforms.

The US Securities and Exchange Commission (SEC) has focused its attention on the cryptocurrency market in recent weeks. The SEC chair told the Wall Street Journal in a recent interview that some decentralised finance (DeFi) platforms are within the jurisdictions of the SEC since they are offering securities. Gary Gensler has already asked the US Congress to grant the SEC more power and resources to increase its oversight of the cryptocurrency market to include exchanges, stablecoins and DeFi.

In India, cryptocurrencies would soon be recognised as a tradable asset class if the new bill is passed. The Indian government is working on a new bill that would recognise cryptocurrencies as a tradable asset class. However, they would not be considered legal tenders. The move is expected to clarify the government’s stance on cryptocurrencies in India.

Wells Fargo leads this week’s adoption efforts

Wells Fargo finally began granting its wealthy clients access to cryptocurrencies earlier this week. The Bitcoin Fund was launched by NYDIG and FS Investments, and it is now available to Wells Fargo’s wealthy clients.

The Dutch football team PSV Eindhoven set a record by becoming the first major European sports team to accept a complete sponsorship deal in Bitcoin. PSV Eindhoven partnered with Anycoin Direct, and the entire amount of the sponsorship would be paid in the leading cryptocurrency. The leading chip manufacturer Intel also bought Coinbase shares, indirectly gaining exposure to the cryptocurrency market.

PBC continues its crackdown on crypto trading

The Shenzhen branch of the People’s Bank of China (PBC) has stayed true to its desire to eliminate cryptocurrency trading activities in China. The PBC shut down 11 companies in the region for illegally trading cryptocurrencies. The apex bank investigated 46 companies operating in the area and said it would boost its efforts towards cracking down on crypto trading activities.

While most of the news in China on crypto is negative, the country continues to take kindly to blockchain technology. Earlier this week, Alibaba launched its nonfungible token (NFT) marketplace. The NFT platform is backed by the Sichuan government, and Alibaba intends to attract writers, artists, designers, game developers and musicians to the marketplace.

Coinbase to launch its Japan exchange with MUFJ

The leading US crypto exchange Coinbase intends to go big with its cryptocurrency exchange in Japan. Coinbase gained regulatory approval in Japan earlier this year and has now partnered with financial giant Mitsubishi UFJ to launch Coinbase Japan. As the largest bank in Japan, MUFJ will make it easy for Japanese customers to open a Coinbase account and trade cryptocurrencies. 

Also, in Japan, Liquid, a regulated crypto exchange in the country, was hacked earlier this week, losing $94 million to the attackers. As a result, the crypto exchange has suspended cryptocurrency deposits and withdrawals since the affected funds were on its hot wallet.

Galaxy Digitals seeks to launch a Bitcoin futures ETF

Digital asset management firm Galaxy Digitals has filed with the US SEC to launch a Bitcoin futures ETF. Unlike the other cryptocurrency ETFs, the Bitcoin futures ETF seeks to gain exposure to Bitcoin indirectly. The US SEC recently said that it was open to approving an ETF that doesn’t seek direct exposure to a cryptocurrency’s spot price. Hence, the reason why asset management firms are now filing to launch a Bitcoin futures ETF.