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Digital Assets Platform Gets SEC License

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Digital Assets Platform Gets SEC License
Digital Assets Platform Gets SEC License

Harbor, the digital platform for alternative assets, has received a transfer agent license from the United States Securities and Exchange Commission (SEC). On Oct. 31, Harbor CEO Joshua Stein told the Block that his blockchain-enabled platform is “now the first blockchain company to receive both a transfer agent license and a broker-dealer license.”

The transfer agent license will enable Harbor to maintain financial records of security token ownership, track account balances and payout dividends while attracting blockchain companies that are looking to conduct Reg A+ offerings. The SEC requires companies to engage with transfer agents for Reg A+ offerings. Regulation A+ is an initial public offering alternative geared towards startups in need of early funding. Regulation A+ funding was introduced in 2012 via the “Jumpstart Our Business Startups Act.” Stein added that both the transfer agent license and the broker-deal license will compliment each other, as they will enable the company to facilitate the full life cycle of security token issuance as well as regulated trading. Stein said:

“Think of the entire life cycle of this, there is… selling the investors into the investment, maintaining the investment while they are in, and controlling how they are traded. The broker-dealer is mostly involved in gaining the investors into the investment. The transfer agent maintains the records while they are in and pays out dividends, and the transfer agent controls when they payout.”

Stein recently said that securities regulations “do not work” in regard to utility tokens in decentralized apps, adding that current securities laws are only appropriate for traditional securities, and that “they are not a good fit” for the ICO industry.

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The blockchain-based startup Blockstack was the first-ever digital token offering to receive the go-ahead from the SEC to run a $23 million investment round under Regulation A+. Founders of Blockstack Muneeb Ali and Ryan Shea reportedly spent 10 months and approximately $2 million to get the green light from the SEC for a Reg A+ offering.

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Maylasian Cash Transaction Limit Set to $6K – Will This Push People Into Crypto?

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Maylasian Cash Transaction Limit Set to $6K - Will This Push People Into Crypto
Maylasian Cash Transaction Limit Set to $6K - Will This Push People Into Crypto?

Malaysia is planning to impose a $6,000 limit on cash transactions in 2020, according to a deputy governor at the country’s central bank. The new restrictions aim to prevent the use of cash in illicit activities, and won’t affect regulated financial institutions or other entities transacting for humanitarian aid purposes.

Abdul Rasheed, the deputy governor in question who works for Bank Negara Malaysia (BNM), claimed that the measures will apply to all transactions involving physical cash, including payments for goods and services, reports local English-language newspaper The Star. The limit of 25,000 Malaysian ringgits ($6,048) will also apply to donations and transfers between entities like people and businesses, the report notes. According to Rasheed, who also serves as chairman at the National Coordination Committee to Counter Money Laundering, most Malaysian households spend around 8,000 ringgits ($1,935) per month. Rasheed also noted that the fines for violating the proposed measures will not exceed three times the amount of the committed offense.

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Rasheed highlighted the need for a cash transaction limit in the country, given the anonymous nature of cash transactions. In a report by local publication The Edge Media Group, Rasheed said:

“Cash remains widely exposed to abuse by illegal activities. As such, this measure targets large cash transactions that are at higher risk of being abused. This is also not to hinder legitimate cash payments for goods and services — most of which are for small ticket items.”

Citing similar practices adopted by Indonesia, Rasheed expressed his willingness to collect public feedback on the matter. He noted that a public policy usually takes about six months before being imposed. In August 2019, the Australian government introduced a bill that proposed to ban cash transactions over $6,900, including those transactions involving digital currencies. More than 7,000 people subsequently signed a petition against the proposal.

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Australian Home Affairs Minister Says Terrorists Use Crypto In Crimes

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Australian Home Affairs Minister Says Terrorists Use Crypto In Crimes
Australian Home Affairs Minister Says Terrorists Use Crypto In Crimes

The Australian Minister of Home Affairs Peter Dutton warned that terrorists are exploiting cryptocurrencies to “fund their deadly missions.”

During a counter-terror conference in Melbourne on Nov. 7, Dutton said that the anonymity of cryptocurrencies allow extremists to avoid scrutiny. He stated that the increased use of digital currencies, stored-value cards, online payment systems and crowd-funding platforms may provide new channels through which terrorism can be financed, adding:

“The anonymity afforded by such technologies enables terrorist financiers to obfuscate their activities.”

Dutton, who leads the Department of Home Affairs, which is responsible for immigration, border control, domestic security and law enforcement, further said that nations across the globe need to stay ahead of modern financing measures and embrace expertise from outside governments. 

The Minister also turned his scrutiny toward charities and not-for-profits, claiming they had become popular terror financing conduits and that often these organizations are not even aware that they are being manipulated for such use. Dutton has recently been the target of criticism in his home country, after claiming that climate activists should pay for the cost of police response to protests, and opposing a bill that would streamline medevac laws.

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In September, during the 19th Annual International Conference on Counter-Terrorism, United States Treasury Undersecretary Sigal Mandelker stated that cryptocurrencies could become “the next frontier” in the war on terrorism. She said:

“Terrorist organizations and their supporters and sympathizers are constantly looking for new ways to raise and transfer funds without detection or tracking by law enforcement.  While most terrorist groups still primarily rely on the traditional financial system and cash to transfer funds, without the appropriate strong safeguards cryptocurrencies could become the next frontier.”

Earlier in June, the governor of the Philippines’ central bank, Benjamin Diokno, made similar warnings against the potential use of cryptocurrencies for terrorism financing and underscored that the Bangko Sentral ng Pilipinas (BSP) will continue to closely monitor their use in the country. Since the beginning of 2017, BSP has required domestic crypto exchanges to register as remittance and transfer companies and implement specific safeguards — covering anti-money laundering, risk management and consumer protection.

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Russia Introduces A New Law Where Police Can Confiscate Bitcoin

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Russia Introduces A New Law Where Police Can Confiscate Bitcoin

Russia is planning on creating legal statutes allowing the government to achieve the impossible: confiscation of Bitcoin (BTC). As local financial news outlet RBC reported on Nov. 7 citing sources familiar with the matter, Russia’s interior ministry will work with various state organs to draw up the plans, which could enter into law in 2021.

The push does not single out Bitcoin, but instead refers to “digital assets” as a general phenomenon, chief among which are cryptocurrencies, says RBC. The publication quoted Nikita Kulikov, head of a dedicated committee at the Russian parliament, as explaining:

“The constant growth trend in crimes using virtual assets, and the lack of consumer protection in the face of this kind of criminal onslaught, naturally dictate the need to develop mechanisms for legal regulation and control of virtual asset exchange.”

Among the options under consideration is the creation of a government cryptocurrency wallet for transferring funds.

Russia has yet to implement its long-awaited package of laws regarding cryptocurrency, which has seen multiple delays. According to various parties speaking to RBC, crypto would need legal recognition before the government could justify legal grounds to confiscate it as part of judicial proceedings. 

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As with other countries’ attempts, however, the way authorities would take control of investors’ holdings remains unclear. In theory, RBC notes, crypto held on exchanges could be accessed if the exchange in question complies. 

For coins held in wallets to which the investor holds the private keys, the method of acquisition is a mystery. The plans thus speak to a potential lack of understanding of how decentralized cryptocurrencies such as Bitcoin operate. India’s recent recommendation to ban them faces similar difficulties: effectively attempting to control the uncontrollable. 

At the same time, Russia appears permissive to other facets of cryptocurrency. One of President Vladimir Putin’s aides has revealed he wants to control 20% of Bitcoin mining production from a new farm located in the country’s northwest.

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