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SEC will tighten requirements for cryptocurrency companies. Gram token is not integrated into the messenger. China once again boosts interest in crypto yuan.
OCIE, SEC verification department, entered cryptocurrency projects on the priority control list for 2020. Agency officials say that this financial instrument is able to pose an increased risk to investors who are not sufficiently informed about the differences between securities, commodity assets and digital instruments. The regulator has developed a list of items according to which control actions will be carried out.
The document noted that during the checks, the suitability of a particular asset for investment, as well as working practice of the management team and its trading strategies, and options for ensuring the safety of client accounts will be explored. It was mentioned that close monitoring of compliance with the regulator’s requirements will be also carried out.
However, such supervision will be maintained only over those companies that are directly controlled by SEC. These rules almost completely duplicate the regulator’s requirements introduced back in 2019; although experts note the emergence of an important innovation. Now SEC wants to control the activity of reporting organizations’ employees even after hours. It is difficult to imagine how this combines with guarantee of the personal information inviolability, but in their fight against cryptocurrencies, the US authorities are not shy about resorting to tough measures.
The situation is heated by financial experts who predict that cryptocurrencies will replace dollar. A study by Deutsche Bank showed that by 2030 alternative currencies would significantly squeeze dollar in the global settlement system. According to Jim Reid, the representative of the bank, new financial instruments are now experiencing great difficulties due to the authorities’ actions. This is exactly what prevents them from actively developing. However, it is unlikely that administrative methods will be able to completely stop the progress.
Telegram developers said that they do not plan to integrate TON cryptocurrency wallet into their messenger. They decided to create an independent TON Wallet solution that can compete with projects of other developers. However, Pavel Durov’s team declared that integration will become possible in the future. It depends on customers’ requests and compliance with the regulatory requirements. In addition to that, it was stated that Telegram cryptocurrency does not bring any dividends to the owners, and investors can make money from the growth of exchange rate difference only. This was done in order for the asset not to be considered as a security.
Telegram developers say that at the moment, Gram tokens are not in free float. Prior to the launch of the project, any sale of this asset is not possible, so the appearance of any proposals for the sale of the project’s cryptocurrencies on the Internet is fraud. Until blockchain is launched, tokens potentially cannot exist. Even investors who have received foreclosures on the initial offering don’t have these tokens.
The company is currently in litigation with SEC, which requires the provision of data on banking transactions. The company provided the authorities with information on expenses for 2019, but the Commission demanded access to full banking documentation. We are talking about the amount of $ 1.7 billion collected from investors during ICO, as well as its use and percentage of commission payments. Telegram lawyers appealed this claim to a court in the Southern District of New York. Judge P. Kevin Castel delivered a judgment that SEC claims are redundant. He rejected the regulator’s petition on January 6, 2020.
The company itself is confident that the authorities did not find anything criminal in its work, so they are trying to get additional information. Although the attacks of the authorities hinder the development of the project, they were not able to completely stop it. Blockchain beta testing is already underway, and independent developers are also involved in cooperation. The published declaration states that Telegram will not control the project and it is planned to be built on the principles of decentralization.
The People’s Bank of China declared creating of the national cryptocurrency of China to be in a state of “smooth process”. This will be a fully banking product that will be initially received by commercial banks. Then they will begin to distribute the asset among the end users, namely their own customers. At the same time, the regulator has once again declared that it was not going to force the process. Chinese officials have repeatedly stated that they have all the necessary resources to launch the project, but they are not bustle around doing this.
The Chinese authorities have been working on cryptocurrency yuan for more than 5 years. However, never a word was said about a specific date for launching this project. Now the Central Bank offers commercial banks to develop wallet management applications. Those who can provide an effective solution will be able to play a significant role in the project implementation.
It seems that PBC maintains an artificial interest in its cryptocurrency. At the same time, it puts pressure on the authorities of other countries, demonstrating its own capabilities, and distracts attention from other projects. Moreover, these actions have a significant response. For example, Christine Lagarde, the President of the European Central Bank, has already announced the launch of the process to study the potential of ECB cryptocurrency projects. At the same time, Jens Weidmann, the President of the German Central Bank, called on representatives of the banking system to develop a cheaper and faster payment solution.
However, China has an advantage that competitors do not have yet. On January 1, 2020, the Cryptography Law came into effect in the country. It describes the mechanism for using the digital yuan, while in other countries authorities have to adapt the existing rules and regulations.