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Authorities Weigh in on Facebook and their Stablecoin, Libra

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Authorities Weigh in on Facebook and their Stablecoin, Libra

Multiple Developments

In the past few days, there have been multiple developments pertaining to the anticipated Libra token – a to-be-released stablecoin by Facebook subsidiary, Calibra.

These developments surround, not only the actions of Calibra themselves, but how the token will be received in a variety of nations.

As suspected by many, not everyone intends to welcome the stablecoin with open arms.

Payment System

Although not surprising, it was recently confirmed that Calibra has, indeed, filed within Switzerland for the appropriate licensing, to be designated a payment system.

This filing prompted FINMA to release statements confirming the filing, and how exactly they view the project with regards to regulations through a new ‘stablecoin guideline’

This guideline, which builds upon similar ones previously released, which pertain to ICOs, can be found HERE.

French Fury and Scrutiny by the Swiss

The aforementioned filing by Calibra has prompted, not only statements from regulatory bodies, but from high profile individuals as well. Here are a few of those statements touching on the project.

The Swiss Financial Market Supervisory Authority (FINMA), stated,

“The highest international anti-money laundering standards would need to be ensured throughout the entire ecosystem of the project… For bank-like risks, for example, bank-like regulatory requirements would apply.”

The French Economy and Finance Minister, Bruno Le maire, was particularly blunt in his current views on the project. Speaking at a recent conference, discussing cryptocurrencies, he stated,

“I want to be absolutely clear: In these conditions, we cannot authorise the development of Libra on European soil.”

Commentary

Calibra has not sat idly by as authorities scrutinize their project. Representatives have been quick to defend their efforts, and placate the public at large with assurances of their dedication.

A statement made by David Marcus, Head of Calibra, in front of the U.S. Senate in July sums up their stance well. He stated,

The time between now and launch is designed to be an open process and subject to regulatory oversight and review…We know we need to take the time to get this right. And I want to be clear: Facebook will not offer the Libra digital currency until we have fully addressed regulatory concerns and received appropriate approvals.”

Calibra

Acting as a subsidiary of Facebook, Calibra was launched in 2019. This young company was created with the goal of establishing a new digital wallet meant to connect the world through the use of the Libra stablecoin.

We previously took a closer look at the stablecoin discussed here today, and along with the Libra Investment Token, which is to launch alongside it. To gain a better understanding each coin/token, and how they differ, make sure to peruse the following article.

Calibra – A Product of Facebook, Built on Two Tokens

In Other news

Due to its potential to disrupt various areas of finance, and the far reach of Facebook, it should come as no surprise that we have detailed events pertaining to Calibra on multiple occasions. The following articles discuss hurdles being faced by the project, along with views being taken by the Senate.

Will Facebook Subsidiary, Calibra, See the Light of Day?

Key Points from the Facebook Libra Senate Hearing

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Joshua Stoner is a multi-faceted working professional. He has a great interest in the revolutionary 'blockchain' technology. In addition to this, he is a licenced Paramedic in Nova Scotia, Canada. As such, he can provide emergency care/medicine to any situation necessitating it.

Regulation

Propine Accepted into MAS FinTech Sandbox

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Propine Accepted into MAS FinTech Sandbox

Acceptance Granted

It was recently announced that Propine has been accepted into the Monetary Authority of Singapore’s FinTech Sandbox.

This move sees Propine join iSTOX as a participant within the sandbox. While the iSTOX is working towards serving capital markets, Propine will be testing their custodial capabilities within the program.

Services Offered

Over time, Propine indicates that their goal is to develop a comprehensive suite of services, tailor built for the digital securities sector. The following are a few the capabilities expected to be offered through the platform.

  • Custody
  • Asset Servicing
  • Trade Settlement
  • Escrow
  • Analytics

Sandbox

A ‘FinTech Sandbox’ typically refers to a structured program, built to allow for the testing of new technologies and approaches towards the industry. The purpose of such programs is to allow for innovation to flourish, while ensuring that the public retains high levels of protection at all times.

Commentary

Tuhina Singh, the Chief Executive Officer and Co-founder of Propine, commented on acceptance into MAS’s Fintech Sandbox:

“We are extremely glad that we are going to be a part of the Fintech sandbox. Singapore is one of the most progressive economies in terms of support and in providing a platform for innovative solutions such as ours to experiment, build and thrive. The regulatory sandbox is a great step for us as we move into a more organized and regulated world for blockchain. A supportive initiative like this will propel the country’s rich history of innovation to much greater heights along with growing companies such as ours”

Propine

Founded in 2018, Propine is a Singaporean company, which operates within the digital securities sector. Building off of a specialty in custody services, Propine is actively developing a comprehensive suite of services surrounding digital securities.

CEO, Tuhina Singh, currently oversees company operations.

MAS

The Monetary Authority of Singapore is a regulatory body which wears multiple hats. Their roles include acting as, not only the nation’s central bank, but as the financial sectors regulator.

These roles mean that the MAS is responsible for, not only the economic growth of Singapore, but for ensuring the protection of investors through compliance measures enforced within banking, insurance, capital markets, and more.

In Other News

Over the past two years, Singapore has managed to establish themselves as a leader within digital securities. They have managed to do so through the use of programs such as the FinTech Sandbox described here today. The following articles are examples of forward thinking steps involving Singapore and the MAS.

MAS Awards Sygnum ‘Capital Markets Services (CMS)’, Licence

SGX and MAS Jointly Developed Settlement Platform

MAS FinTech Sandbox Welcomes Capital Markets Platform ‘iSTOX’

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Blockstation Joins the IIROC

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Blockstation Joins the IIROC

The tokenization platform, Blockstation announced on Oct 31, that it will accept a leadership role in the Investment Industry Regulatory Organization of Canada – IIROC. The news showcases a push for more regulations in the Canadian security token sector, as well as, stronger positioning of Blockstation in the market.

The IIROC is a Canadian self-regulatory body created to help further development in the security token sector. The group’s primary focuses include broker-dealers, trading, and the institution of Universal Market Integrity Rules (UMIR).

IIROC Members

The IIROC includes a huge variety of professionals from various parts of the industry. As such, the group provides a rare opportunity for regulators to collaborate with leading financial, legal, and technological institutions across Canada.

Blockstation via Twitter

Blockstation via Twitter

Currently, the group includes regulators, crypto firms, law firms, and three of the largest banks in the country. Specifically, the Crypto-Asset Working Group members are:

  • Stephen Allcock (Questrade Financial Group)
  • Pam Draper (Bitvo)
  • Robin Ford (Robin Ford Consulting)
  • Andrew Grovestine (Canadian Securities Exchange)
  • François Lavallée (National Bank Financial)
  • Julie Mansi (Borden Ladner Gervais LLP)
  • Felix Mazer (Coinsquare)
  • Linda Montgomery (Coinchange Financial/Blockstation)
  • Brian Mosoff (Ether Capital Corp.)
  • Souvik Mukherjee (Scotia Wealth Management)
  • Laurence Rose (Omega Securities Inc./ 4C Clearing Corporation)
  • Duncan Rule (CIBC)
  • Phil Sham (Aquanow)
  • Sean Shore (Canadian Compliance & Regulatory Law)
  • Paul Stapleton (Fidelity Clearing Canada)
  • Dino Verbrugge (DV Trading LLC)
  • Joseph Weinberg (Paycase Financial)
  • Robert Whitaker (Blockchain Intelligence Group)
  • Lara Wojahn (Dominion Bitcoin Mining Company Ltd.)

Robust Development

One of the main goals of IIROC is to develop a regulatory framework that supports a robust, thriving digital asset marketplace to further drive innovation in the space. Additionally, the body seeks to integrate more consumer and investor protections in the market.

Blockstation Joins the Team

Blockstation received an invitation to participate in the IIROC after the group recognized the firm as an industry leader in the region. Importantly, Blockstation has experience working with regulators in other jurisdictions to develop its platform.

Today, Blockstation operates a fully compliant tokenization platform. The services provided by the firm include an end-to-end solution for listing, tokenizing, trading, custodianship, clearing and settlement, and lifecycle management of tokenized assets. Specifically, the firm’s Marketing Advisor Linda Montgomery will lend her experience to the IIROC.

Blockstation Makes Headlines

Notably, Blockstation made headlines this week after the announcement that the firm will host a compliant digital securities ecosystem via the Jamaica Stock Exchange (JSE). This limited pilot will test the trading of Bitcoin (BTC) and Ethereum (ETH) according to an April 3, press release.

Jamaica Stock Exchange

The JSE first announced its crypto aspirations back in August. At that time, the JSE signed a master agreement with Blockstation. For its part, Blockstation would develop the tools for the trading of digital assets and security tokens on the JSE.

Blockstation Making Waves

Blockstation is a true pioneer in the Canadian crypto space. Now the firm seeks to help develop the fledgling STO sector into a major FinTech market. You can expect to hear more from these exciting developers as their JSE project continues. For now, Canada looks to be ready to take the next steps in blockchain adoption.

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Veritaseum Hit with $8 Million in SEC Fines

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Veritaseum Hit with $8 Million in SEC Fines

In another example of the SEC turning up the heat on firms, the regulatory body hit Veritaseum and its CEO with hefty fines. Veritaseum had been embroiled in an SEC trial since earlier in the year. The SEC alleged the firm illegally sold securities to investors. Now the company must pay $8 million in fines and judgments as part of its retribution.

As previously reported, Veritaseum LLC, its CEO Reggie Middleton, and a sister firm, registered in NY, Veritaseum Inc. faced serious scrutiny from the SEC for its 2017 – 2018 ICO. During the unregistered coin offering, the firm secured $14.8 million in funding from investors.

Veritaseum Complaints

By mid-2018, the SEC received numerous complaints of fraudulent activity on the part of Mr. Middleton. For example, the SEC report alleged Middleton downplayed the risks involved in the investment. Additionally, he misrepresented the tokens his company offered.

Tokens are not Coupons

On multiple occasions, he referred to the tokens as securities or software. The report states that at least on one occasion, he told investors the tokens were similar to gift cards.

Hacking Incident

On top of the troubling miss information campaign, Veritaseum had other shady incidents occur during its now controversial ICO. According to Middleton, the company was the victim of a hacker that stole $8 million from funds raised. Of course, these funds were never recovered. Consequently, the incident added to the black cloud accumulating over the Veritaseum camp.

Veritaseum via CoinMarketCap

Veritaseum via CoinMarketCap

SEC Responds

In August of this year, the SEC responded to investor complaints. The regulatory body sent Middleton a cease-and-desist. As part of the complaint, Middleton’s ability to host an ICO or operate his firms was put on freeze.

SEC Enters Talks

The SEC entered official settlement talks with Veritaseum on OCT 9. This decision followed a postponement of the original trial date until Nov. 14, 2019, by the New York Eastern District Court.

According to reports, Veritaseum must now pay $8.4 million in disgorgement fines. Of these fines, $7,891,600.00 goes to defendant liabilities. Additionally, the company is liable for a civil penalty of up to $1 million and a prejudgment interest amount of $582,535.

Veritaseum Hit Hard

The news hit Veritaseum’s market value hard. Since the start of the trial, Veritaseum lost around 35% of its value. The token fell from around $25 per coin to $15, before rebounding slightly to $18.71.

SEC on the War Path

The SEC has been on a mission to crack down on ICOs from the 2017 crypto craze. Regulators already hit Sia with a $225,000 for its 2017 ICO in which the firm raised $120,000. EOS is another example of the SEC crackdown. The company must pay $24 million for its $4.1 billion 2017 ICO. While both firms faced charges for illegally selling securities, neither had such significant misrepresentation claims put against them as Veritaseum.

Veritaseum is Unique

In this manner, Veritaseum is significant. The firm is still operating but Middleton is no longer able to conduct blockchain crowdfunding ventures. It’s hard to say exactly what the long term effects of the settlement will be. For now, the crypto community must watch and wait patiently to see the results.

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