Crypto Wire: G20’s crypto consensus Crypto could threaten financial stability, regulators say.Crypto markets are in the doldrums, with bitcoin still just over $26,000.While regulators and financial stability watchdogs are talking about how best to control the market, some companies fail to comply with existing rules.Here’s what you need to know: This week’s most read G20 summit avoids condemning Russia for Ukraine war, calls for peace Former Bankman-Freud lieutenant Salame pleads guilty to illegal campaign contributions Fed’s Barr says central bank ‘a long way’ from any decision on issuing digital currency Crypto was on the agenda at the G20 summit in New Delhi over the weekend as world leaders look for ways to rein in the sector.The Financial Stability Board – the G20 risk-monitoring body – and the IMF had put forward a plan for how to stop cryptoassets undermining the world’s financial stability.
They said that many of crypto’s vaunted benefits – from improved payment systems and financial inclusiveness – have not materialised, echoing a point raised by the Bank for International Settlements last month.
The FSB and IMF also said that the risks to financial stability have been worsened by some instances of “non-compliance with existing laws” and that fraud and manipulation were “prevalent” in cryptoasset markets.The IMF and FSB also recommended that countries should co-operate and share information as they regulate cryptoassets, rather than make crypto activities illegal – which could be difficult to enforce.
The G20 agreed to back the FSB’s recommendations for crypto regulation.Finance ministers and central governors will then discuss their plans for crypto regulations at a meeting in October.(For more Reuters G20 coverage, check out what else the leaders agreed on and why the summit was mostly disappointing .) In other regulatory news, last week saw the global securities watchdog set out its plan to make DeFi participants accountable for what goes on there.It’s tricky because there’s not much standardised data about DeFi and people in the market use multiple pseudonymous addresses to hide their activity, the regulator said.Important context: the DeFi market has shrunk to about $40 billion, down from its $170 billion at its peak in November 2021, according to CoinGecko data.Meanwhile, the UK’s new rules about how crypto can be marketed are due to come into force in early October, but the financial regulator said that companies can ask for more time to comply.
The Financial Conduct Authority’s director of consumer investments, Lucy Castledine, said that the FCA is “concerned” by many overseas and unregulated crypto firms failing to engage with it on the new rules.The past week has also seen some updates on countries’ central bank digital currency plans.
The Federal Reserve’s top regulatory official said that the Fed is a “long way” from any decision on whether it would issue its own digital currency, while Israel’s central bank governor said it was still an “open question” whether it would issue one.Six sources said India’s central bank is planning more features for its digital currency (such as offline spending and linking it to an existing payment system) to get more people to use it.
The digital currency is averaging 18,000 retail transactions per day, far below the central bank’s one million per day target for the end of 2023.In Europe, the European Union’s financial services chief, Mairead McGuinness, said that the draft law for a digital euro should not be rushed out ahead of European elections next June, but instead should be examined “quietly and slowly” after that.McGuinness said that the idea behind a digital euro is that, if cash becomes diminished in future, then people still need to have a form of “central bank public money”.
Crypto essentials SBF in jail: Sam Bankman-Fried lost his bid to be released from jail before his trial.Another former FTX exec has pleaded guilty to charges.Binance departures: Binance’s U.S.
arm is cutting more than 100 jobs and its CEO is leaving.Lots of executives have left Binance recently.DCG investigation: U.S.authorities are investigating the claims that Cameron Winklevoss has made against Digital Currency Group and its founder Barry Silbert.
Genesis vs DCG: Now-bankrupt Genesis Global Capital is suing DCG, trying to recoup more than $610 million in loans.OneCoin: The co-founder of the OneCoin pyramid scheme has been sentenced to 20 years in prison.
The other founder, Ruja Ignatova is still at large, prosecutors said.Mirror Trading: The company behind a crypto fraud must pay more than $1.7 billion in restitution to victims, a U.S.
court ordered.Fraud database: There should be a searchable database of financial misconduct so that the public can look up potential fraudsters, a CFTC regulator proposed.What I’m reading Would you discuss your investments with an AI chatbot? Morgan Stanley hopes its wealthy clients will.
The IPO of British chipmaker Arm Holdings has been hotly anticipated.But retail investors should be careful.Apple has avoided using the words “artificial intelligence,” but it is using the technology to change products behind the scenes.Here’s how..
