Tokenization of assets could be the answer to the risky complexities of settling the movement of funds and securities, said Michael Hsu, the acting head of the U.S. Office of the Comptroller of the Currency.
‘Home’ regulator could solve crypto’s ‘fragmented supervision’ issue: Comptroller
During a speech at a banking conference in DC, acting comptroller Michael Hsu said FTX was an example of why a “consolidated home country supervisor” is needed.
U.S. Banking Watchdog: You Can’t Trust Crypto Firms Until They Get Federal Oversight
As it stands, there’s no way for people to know which crypto firms they can rely on, said Michael Hsu, the acting head of the U.S. Office of the Comptroller of the Currency (OCC), in a speech Monday.
US lawmakers argue SEC accounting policy places crypto customers at risk
While the bulletin was intended to provide clarity regarding the accounting treatment for digital assets, it has been criticized by both lawmakers and regulators.
Regulators are ‘spending too much time’ on crypto: Comptroller
Michael Hsu stated that it is starting to worry him that “we’re not spending that time and attention on some other things,” like fintech, which he described as the “future.”
Acting OCC comptroller calls for standards on stablecoins
According to Michael Hsu, representatives from the crypto industry as well as within the U.S. government could work toward setting standards on stablecoins.
Acting OCC head warns that ‘fools gold’ in DeFi reminds him of lead-up to GFC
While crypto has been mostly weathered past hacks, scams, and crashes, acting OCC head Michael Hsu warns the risks may be multiplying as the technology goes mainstream.
Commercial Paper Reserves Of Tether Under Heavy Regulatory Scrutiny
Tether has been facing a lot of pressure from regulatory authorities. Now, the attention of the watchdogs has shifted to its commercial paper reserve. As a result, this week has been very hot for the company. The regulators focus their attention on what makes up the Tether reserves.
Related Reading | Cardano Aims To Facilitate Users With Smart Contracts
A report disclosed that Tether’s Michael Hsu said that the US regulators focus their attention on the paper to know if every Tether Token is actually backed by $1 as the company claims.
US Regulators Scrutinize Tether
From what we learned, the regulators investigating Tether are led by Janet Yellen, the US Treasury Secretary. Before now, Yellen has held some meetings about the possible risks of stablecoins.
Now, the ” President’s Working Group on Financial Market” aims to know if Tether really holds large amounts of commercial papers as it claims. Commercial papers usually represent debt instruments that companies issue to investors for short-term funds.
However, the Working Group does not believe the claims as it compares it to a mutual fund that can lose its investors in one day. Presently, the total USDT in circulation is 62 billion. So, there seems to be a legitimate cause for alarm.
The crypto market is back in the bullish mode as BTC climbs above the $40k mark | Source: Crypto Total Market Cap on TradingView.com
Last two months, Tether had revealed the composition of its total reserves. According to the stablecoin, it had more instruments that were not just cash or cash equivalents, such as bonds, secured loans, bitcoin, and a larger portion comprising of commercial papers.
Related Reading | Tether To Conduct An Audit To Negate Claims Concerning Transparency
While talking with sources, Stuart Hoegner, the Tether general counsel, revealed that the company is planning a thorough audit in some months to come. Let’s recall that Tether hasn’t carried out such audits before now, and the announcement helped a lot of investors to breathe easier.
However, on July 19, Yellen was heard asking lawmakers to establish rules that will guide stablecoins in the financial market.
More Calls on Crypto regulations
After calling for regulations on stablecoins, Yellen received a letter nine days later from Senator Elizabeth Warren asking her to push for greater regulation for the cryptocurrency industry as a whole.
During a hearing of the “Senate Banking Committee,” Warren also stated her negative position about the crypto industry. According to her, it was better to hand over the financial systems to giants banks than some nameless and faceless, shadowy miners and super-coders.
Related Reading | Anthony Di Lorio To Leave Cryptocurrency Space For Philanthropic Initiatives
However, during the hearing, an Anderson Kill Law partner, Preston Byrne, stated that the most frightening of all is that Elizabeth Warren is in control of the financial system. Elizabeth is a democrat who has been serving as a United States Senator since 2013.
Featured image from Pixabay, chart from TradingView.com
US regulators must collaborate on ‘regulatory perimeter’ for crypto: OCC head
Acting OCC head, Michael Hsu, wants greater inter-agency cooperation in establishing regulatory guidelines for the crypto sector.
Reliving The FUD That Led To This Week’s Bitcoin Crash
It is the worst of times. It is the best of times. It is the age of fear, uncertainty, and doubt. Nevertheless, Bitcoin’s fundamentals remain intact. The project’s value is still there, despite the disastrous drop in price. It was all going so well. How did we get here? Actually, there are a lot of valid reasons. Let’s review all of the causes that lead to this FUD.
As you know, everything started through Elon Musk’s fingertips…
Tesla’s “Environmental Concerns”
When Bitcoin was on its way up, Elon’s company gave it the push it needed. Tesla announced ownership of $1.5B worth of Bitcoin that, apparently, remain on its balance sheet. The crypto community celebrated the move, profits followed. The coin’s legitimization seemed to take a step forward. And then…
Inexplicably, Tesla announced they were not accepting BTC as a form of payment anymore. Despite wild speculation, no one knows what happened. In his tweeted announcement, Elon cited “rapidly increasing use of fossil fuels for Bitcoin mining” as the reason. Few people inside the crypto community believed it. Everyone outside of it did. And even though Tesla clarifies they didn’t sell any of their Bitcoin, the FUD set in. And retail investors started selling.
If you want to learn about Elon’s real views on the matter and about everything the crypto mining industry is doing regarding green energy, head over to Bitcoinist, our sister site.
Related Reading | Bitcoin TA: Here’s What Could Trigger A Bullish Reversal Above $40K
China’s Tightening Up Its Bitcoin Policies
This generated lots of FUD. The People’s Bank of China seemed to announce clear and unfavorable rules regarding cryptocurrencies. Yahoo Finance reports:
“This is the latest chapter of China tightening the noose around crypto,” said Antoni Trenchev, managing partner and co-founder of Nexo in London, a crypto lender.
Virtual currencies should not and cannot be used in the market because they’re not real currencies, according to a notice posted on the PBOC’s official WeChat account. Financial and payments institutions are not allowed to price products or services with virtual currency, the notice said.
Nevertheless, as with most things on this list, the announcement didn’t amount to anything specific yet.
BTC price chart on Bitstamp | Source: BTC/USD on TradingView.com
The US OCC Turns Its Eye To Cryptocurrencies
The newly announced Acting Comptroller of the Currency, Michael Hsu, revealed that the agency he presides, the Federal Reserve, and the FDIC are reviewing their policies on cryptocurrencies. This isn’t necessarily a bad thing, it might lead to clearer laws and stronger governmental support. Nevertheless, the FUD doesn’t mind that fact.
Hsu’s statement to the Committee Of Financial Services reads:
Shortly after I started, I requested a review of key regulatory standards and matters pending before the agency. Those items include the 2020 Community Reinvestment Act (CRA) final rule and associated NPR related to performance benchmarks, interpretative letters and guidance regarding cryptocurrencies and digital assets, and pending licensing decisions. For each, the review is considering a full range of internal and external views, the impact of changed circumstances, and a range of alternatives.
Binance Under Investigation
The US government turned its eye towards Binance. Apparently, blockchain investigator firm Chainalysis found a pattern. It showed a considerably higher percentage of funds from criminal enterprises flowed through Binance, compared to other exchanges. Bitcoin Magazine reports:
The world’s largest cryptocurrency exchange, Binance, is under investigation by the U.S. Department of Justice and Internal Revenue Service (IRS), according to a report from Bloomberg.
“As part of the inquiry, officials who probe money laundering and tax offenses have sought information from individuals with insight into Binance’s business.”
Even though it’s just an inquiry and nothing might come of it, the FUD it generated within the community cannot be ignored.
Related Reading | Market Sentiment Hits Low As Binance Has Largest Bitcoin Inflow Ever
India almost bans cryptocurrencies
A total crypto prohibition was on the table once again, but India’s lawmakers turned the ship at the last minute. Word on the street is that they’ll pass clearer regulatory laws instead. The Economic Times reports:
The central government may form a fresh panel of experts to study the possibility of regulating cryptocurrency in India, three sources privy of the discussions told ET. This comes amid the prevailing view that the recommendations by a committee headed by former finance secretary Subhash Garg in 2019 for a blanket ban on these assets had become outdated.
This new rumor arrived yesterday, but the FUD that a total ban inspires was around for a while.
Is This A Coordinated Attack? Or Is The World Just Going Nuts?
We can’t confirm or deny this was a coordinated attack on Bitcoin and cryptocurrencies in general. Maybe the upper class, transnational corporations, and high rollers of all kinds want to buy your BTC at a discount. Market manipulation is as old as markets. But, maybe, this perfect storm of bad news is what happens when the best performing asset that the world has ever seen takes over the world’s headlines. All eyes turn to it, and all fingers start poking.
However…
crypto vets pic.twitter.com/nsDzzLzMtv
— CMS Intern (@cmsintern) May 19, 2021
Featured Image by Jasmin Sessler on Unsplash - Charts by TradingView
