As 2020 nears an end, regulators and authorities around the world remain hard at work. Whether enforcing or amending laws, the following are a few examples of progress from around the world this week.
In early August, German regulators caught our attention when news broke that a draft bill was put forth in an attempt to accommodate digital securities. As of December 16th, this draft was officially legislated per Reuters.
More specifically, this legislation will allow for companies to issue digital securities on a blockchain, without the need for accompanying paper-certificates. This transition was made as nations around the world continue to prepare for an increasingly connected, and digital, world.
“The paper certificate may be dear to some for nostalgic reasons, but the future belongs to its electronic version,” – German Finance Minister Olaf Scholz
With digital securities being built upon blockchain technology, they will be represented on a digital ledger. It is expected that this will be monitored and maintained by the Federal Financial Supervisory Authority.
Not even regulators have been immune to the COVID-19 pandemic. When the Financial Conduct Authority took responsibility for AML and KYC measures among companies dealing with digital assets in early 2020, companies were required to register with the regulator.
Unfortunately, the ongoing pandemic has led to a backlog of registrations, resulting in a new temporary measure, announced December 16th by the FCA. This will allow for companies – which have registered but not had their applications processed – to continue operations unhindered until July 9th, 2021.
News of this deadline extension will no doubt be welcomed by the young companies of which the blockchain sector is comprised.
While a plethora of ICOs have caught the attention of the SEC for unsavoury reasons, one of the more high-profile instances would be Centra Tech – an ICO which saw investors victimized to the tune of $25 million. This particular ICO is noteworthy because it involved athletes and entertainers such as Floyd Mayweather and DJ Khalid.
Although the aforementioned individuals have long since settled with the SEC, co-founder Robert Farkas, was only now sentenced on December 15th. The result? 1 year and 1 day in prison.
In a statement from the Department of Justice, prosecutor Ilan T. Graff, states,
“Farkas and his co-conspirators created fictitious executives and fabricated business relationships with legitimate institutions to dupe investors into handing over millions of dollars for a fraudulent ICO. We will continue to aggressively pursue frauds like this one, whether they involve traditional securities or newer financial instruments and crypto-assets.”