Several significant local and international financial regulators concurrently developed new decentralised assets standards last week. The European Securities and Markets Authority and the European Banking Authority have proposed guidelines for evaluating the suitability of management for a cryptocurrency company, offering standardised criteria for evaluating their knowledge, expertise, integrity, and capacity to devote enough time to the performance of their responsibilities.
The Basel Committee on Banking Supervision of the Bank for International Settlements (BIS) has recommended mandating banks to submit quantitative and qualitative data on the risk exposures to cryptoassets and the accompanying capital and liquidity needs. A standardised disclosure format, according to the Bank for International Settlements, would promote the use of market discipline and lessen informational disparities between banks and market players. Following the Hamas attack on Israel, the Financial Crimes Enforcement Network of the U.S. Treasury Department suggested classifying cryptocurrency mixing as a "major money laundering concern." It was advised to "impose certain recordkeeping and reporting requirements" on cryptocurrency mixer transactions on domestic financial institutions and institutions.
Only professional investors will be able to purchase specific digital currency products from Hong Kong's Securities and Futures Commission (SFC). According to the revised regulations, digital assets are classified as "complex products" by the Securities and Exchange Commission and must follow the same rules as related financial items. Cryptocurrency exchange-traded funds and other products distributed outside of Hong Kong are referred to as complicated goods by the committee. During his testimony at Sam Bankman-Fried's criminal prosecution, Can Sun, the former general counsel of FTX, claimed to the jury that he was not aware of the mixing of monies between the exchange and Alameda Research. According to Mr. Sun, other workers informed him about the Alameda exemption clearing engine system in August 2022. Losing trades are typically liquidated by the system, but Alameda reportedly evaded that method because
Peter Easton, an accounting professor, supplied information about the purported commingling of assets between FTX and Alameda Research starting in 2021. According to Easton's study, Alameda has made investments in Genesis Capital, K5 Global Holdings, Anthropic PBC, Dave Inc., Modulo Capital, and other companies using money from FTX clients. When compared to their combined liquid assets of $2.3 billion, Alameda and FTX had a negative balance of $11.3 billion in June 2022, indicating a $9 billion difference between the two sibling companies. Another important finding from the investigation was that just 57 of Alameda's FTX accounts may have negative balances, unlike some of its other clients. The study calls into question Bankman-Fried's claim that Alameda enjoys the same benefits as other market makers on FTX in his defence.
A two-year prohibition on cryptocurrency mining was withdrawn by Pennsylvania House legislators from a bill regulating the sector's energy consumption, according to claims made by unions. Democratic Rep. Greg Vitali, the committee's chair and the bill's sponsor, said that party leaders pushed him to withdraw the bill with the moratorium. Construction unions, according to Vitali, "have a long history of opposition" to environmental policies, and he claimed they supported his Democratic colleagues. The lawmaker argued that it would be better for the bill to pass quickly than not at all since voting against the union would endanger the Democratic majority in Pennsylvania's House of Representatives.
The Gemini Earn investment scheme was allegedly used to defraud investors, according to a lawsuit filed against Gemini, Genesis, and Digital Currency Group (DCG) by the attorney general of New York. The charges, which claim the companies defrauded more than 23,000 investors, including 29,000 New Yorkers, out of more than $1 billion, were officially announced by Attorney General Letitia James' office. According to a James' office investigation, Gemini misled investors regarding the Gemini Earn investment programme it ran in collaboration with Genesis. Although Gemini had assured investors the scheme was a low-risk investment, it was claimed that the investigation had shown Genesis' financial situation to be "risky" despite their assurances.
