Author: Staff

European lawmakers voted on Tuesday and decided to make banks holding cryptocurrencies follow more stringent measures. The Parliament’s Economic and Monetary Affairs Committee has reportedly tightened the capital requirement to hold digital assets.

According to Markus Ferber, a member of the European parliament, banks will have to hold a euro of their own capital for every euro they hold in cryptocurrency. The regulator further stressed that crypto assets are high-risk investments.

Explicitly elaborating on why such a measure was the need of the hour, Ferber said,

“Such prohibitive capital requirements will help prevent instability in the crypto world from spilling over into the financial system.”

This implies that the action will limit the number of unbacked assets, such as Bitcoin and Ethereum, that the lenders can hold prior to the European Commission proposing additional regulations.

Reuters reportedly shed light on a clause that was revealed before the voting took place. 

“One amendment states that banks would have to apply a risk-weighting of 1,250% of capital to crypt assets exposures, meaning enough to cover a complete loss in their value,” Reuters stated.

According to Reuters, the final deal will come into effect in 2025. Furthermore, the EU is keen to build up strategic autonomy in capital markets as it faces a competing financial centre on its doorstep after Brexit.

South Africa’s  Advertising Regulatory Board (ARB) has added a new provision for the cryptocurrency sector to shield consumers from unethical advertising.

Companies and individuals in South Africa must abide by certain advertising standards pertaining to the provision of cryptocurrency products and services in a new clause introduced to Section III of the country’s advertising code.

According to Cointelegraph, the first clause requires that adverts, including cryptocurrency offerings, must expressly and clearly state that investments may result in the loss of capital as the value is variable and can go up as well as down. Furthermore, adverts must not contradict warnings about potential investment losses.

Additionally, advertising for particular services and products must be explained in an easily understandable manner for intended audiences. Adverts must also give balanced messages around returns, features, benefits, and risks associated with the associated product or service.

Rates of returns, projections, or forecasts must also be sufficiently substantiated, including how they were achieved and the conditions in which the proclaimed returns were made.  Any information relating to past performance cannot be used to promise future performance or returns, and should not be presented in a way that creates a favorable impression of the advertised product or service.

Advertisements for cryptocurrency services from companies that are not authorized credit providers shouldn’t promote buying cryptocurrencies using credit. However, this does not prohibit service providers from advertising the associated payment options they offer.

Social media influencers and brand ambassadors will also be expected to comply with certain advertising standards. This includes being required to share factual information while being prohibited from offering advice on trading or investing in crypto assets and the prohibition of promises of benefits or returns.

Cointelegraph also reported that cryptocurrency exchange Luno, a prominent service provider in South Africa, spearheaded the project with the ARB. Luno’s General Manager for Africa Marius Reitz stated that the exchange approached the regulatory body to develop new rules alongside major players in the local crypto industry.

Reitz emphasized that the industry is looking to take a self-regulatory approach and that consumers should be cognizant of the risks involved in cryptocurrency investing. Scams and frauds have preyed on unsuspecting investors in the country, necessitating an effort to ‘clean up the industry by making it more difficult for scammers to operate

“Media platforms are understandably looking for advertisers, but we were concerned that they weren’t doing sufficient due diligence on whether advertisers were above board,” Reitz stated.

A 15-person committee has recently been established in the Central African Republic (CAR), to draft legislation on the usage of cryptocurrencies and tokenization in the country.

According to Faustin-Archange Touadéra, the president of CAR, cryptocurrencies can potentially help eradicate the country’s financial barriers. He also believes in creating a business-friendly environment supported by a legal framework for cryptocurrency usage. 

A rough translation of the official press release reads:

“With access to cryptocurrencies, the monetary barriers existing until now will disappear, the main objective of the measures adopted by the Government being the development of the national economy.” 

The press briefing also noted that the committee responsible for drafting the crypto bill comprises 15 experts from five ministries of CAR including the Ministry of Mines and Geology, the Ministry of Waters, Forest, Hunting and Fishing, the Ministry of Agriculture ad Rural Development, Ministry of Town Planning, Land Reform, Towns and Housing and Ministry of Justice, Promotion of Human Rights and Good Governance.

Through collaboration, the members are tasked with working on a legal framework that will allow cryptocurrencies to operate in the Central African Republic and expedite the development of the national economy.

According to court records viewed by CNBC, the US Government has taken nearly $700 million from Sam Bankman-Fried (SBF), the former FTX CEO and co-founder. The majority of the money came from Bankman-Fried’s 56,273,269 shares of Robinhood Markets Inc. (Nasdaq: HOOD). The value of the Hood shares on Jan. 20, 2023, at current exchange rates, is $526 million or more.

Furthermore, nearly $56 million held in four bank accounts was also seized, according to CNBC reporters Rohan Goswami and MacKenzie Sigalos. Three accounts allegedly held $6 million each at Silvergate Bank, and one account allegedly held $50 million at Moonstone Bank. In total, $171 million in cash was taken by the federal government from Bankman-Fried. On Jan. 19, 2023, Moonstone Bank announced that it would formally leave the cryptocurrency industry.

Through FBH, Moonstone Bank’s holding company, Alameda Research made a $11.5 million investment in Moonstone Bank, also known as Farmington State Bank. The $697 million in assets, which primarily consist of Robinhood shares, were allegedly purchased with money taken from FTX customers, according to federal prosecutors. Sigalos stated on Friday that Bankman-Fried maintains his innocence and has “denied misappropriating customer assets.”

Federal agents also seized SBF funds that were stored on the cryptocurrency exchanges Binance and Binance US. The U.S. Department of Justice (DOJ) started the process after the U.S. government announced plans to seize the Robinhood shares during the first week of January 2023.

Bankman-Fried made an effort to reclaim ownership of the shares, stating that he required the funds to cover legal costs. The U.S. government has the authority to seize money from both charged suspects awaiting trial and from citizens suspected of wrongdoing but not necessarily charged with a crime. The assets that were seized are not, in the opinion of federal prosecutors, part of the bankruptcy estate.