US Treasury Secretary Mnuchin: New Cryptocurrency Regulations Coming

… for crypto tokens regarding security token status is one of its main justification for applying the Howey Test to initial coin offering (ICO) tokens.

U.S. Treasury Secretary Steve Mnuchin says regulatory agencies in the country will have to work together to create new cryptocurrency laws.

Crypto-businesses in the country say the patchwork of state and federal laws create a confusing and contradictory environment that stifles digital innovation.

Meanwhile, Mnuchin continues his assault on the crypto industry saying he won’t be a bitcoin investor in the near future.

Mnuchin

Mnuchin Promises Unified Approach to Cryptocurrency Regulations

According to Bloomberg, Mnuchin told CNBC that regulatory agencies in the U.S. will work together to create a new crypto governance paradigm for the country. Commenting on the matter, the Treasury Secretary declared:

“We’re looking at all of the crypto assets. We’re going to make sure we have a unified approach and my guess is that there are going to be more regulations that come out from all these agencies.”

For Mnuchin, the focus is to create a legal framework that checkmates cryptocurrencies so as to not to affect the mainstream financial system negatively. The Treasury Secretary has consistently maintained that criminals are using bitcoin for illegal purposes.

Meanwhile, there is overwhelming evidence to show that fiat is still the main driver for criminal activity across the globe. Perhaps banks and financial institutions need even more robust regulations.

An End to the Patchwork of Crypto Rules in the US?

Crypto stakeholders will be hoping that the efforts of these agencies will yield a more clearly defined regulatory space for virtual assets in the U.S. Many commentators say the current patchwork of state and federal laws are hampering digital innovation in the country.

Recently, Circle moved the Poloniex cryptocurrency exchange offshore. Many platforms even geofence certain crypto tokens from American traders.

One example of the mismatch between state and federal laws for crypto and blockchain in the U.S. can be seen in the application of the Uniform Commercial Code (UCC). States like Wyoming and Missouri even rejected the UCC as prescribed the Uniform Law Commission (ULC) in favor of their own laws.

As reported by Blockonomi, the ULC is taking time to develop a better UCC for cryptocurrency and blockchain technology.

What About the US Congress?

While Mnuchin’s latest comments identify regulatory bodies like the Securities and Exchange Commission (SEC) as the main drivers for new laws, some of these agencies have previously declared that they wouldn’t change existing financial rules to accommodate cryptos unless passed by Congress.

For the SEC, in particular, the absence of any new laws by Congress creating a new framework for crypto tokens regarding security token status is one of its main justification for applying the Howey Test to initial coin offering (ICO) tokens.

There are a few bills like the Token Taxonomy Act before lawmakers in the U.S. which might change the crypto regulatory paradigm in the country.

Meanwhile, the SEC, the Commodity Futures Trading Commission (CFTC), and the Internal Revenue Service (IRS) to name a few have seemed content to focus on calling jurisdictional authority over certain aspects of the industry.

Mnuchin Still A Bitcoin Skeptic

In a related development, Sec. Mnuchin continues to tow the anti-crypto line. Speaking also to CNBC, the Treasury Secretary said he wouldn’t invest in bitcoin.

Mnuchin even dismissed bitcoin as an interesting proposition for the future saying he’d be busy with other more important things in the next 10 years.

Mnuchin’s comments put him firmly in the “bitcoin hating” hall of fame with others like Warren Buffett and Nouriel Roubini. Despite the negative comments espoused by these individuals, bitcoin continues to be the focus of a lot of attention from institutional investors.


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US Treasury Secretary Mnuchin Envisions Bleak Future For Bitcoin

However, CEO and founder of the Digital Currency Group Barry Silbert opined that the comments of the Treasury Secretary were were “complete and …
Bitcoin NewsJuly 25, 2019 by Kelly Cromley

U.S. Treasury Secretary Steven Mnuchin expressed new bearish thoughts on Bitcoin, saying he presumably won’t talk about the numero uno cryptocurrency by market capitalization in five years.

Mnuchin, in an interview with CNBC, said the following about Bitcoin:

“I won’t be talking about Bitcoin in 10 years, I can assure you that […] I would bet even in 5 or 6 years I’m no longer talking about Bitcoin as Treasury Secretary. I’ll have other priorities […] I can assure you I will personally not be loaded up on Bitcoin.”

Mnuchin’s latest comments pursue a recent claim about how cryptocurrencies mainly operate as a tool for fraud and speculative investment, stating, “I believe to a large extent, these cryptocurrencies were dominated by unlawful operations and conjecture.”

However, CEO and founder of the Digital Currency Group Barry Silbert opined that the comments of the Treasury Secretary were were “complete and total validation of Bitcoin.”

Recently, Mnuchin also argued that that fiat money is relatively little used for money laundering compared to Bitcoin. In another interview with CNBC, Mnuchin said that the US has the world’s robust anti-money laundering system.

On the contrary, he thinks that Bitcoin is susceptible to money laundering. Economist and anti-cryptocurrency advocate Nouriel Roubini lately published a highly critical essay of the BitMEX crypto exchange, suggesting that the exchange launders cash for insurgents and criminals deliberately:

“BitMEX insiders revealed to me that this exchange is also used daily for money laundering on a massive scale by terrorists and other criminals from Russia, Iran, and elsewhere; the exchange does nothing to stop this, as it profits from these transactions.”

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Facebook’s Libra Gets a Timely ‘Like’ From Japan

US President Trump declared that Libra, Facebook’s proposed virtual currency, “will have little standing or dependability.” The Twitter-troll-in-chief …

Facebook just did the unthinkable in the Donald Trump era: give America’s Republicans and Democrats something on which to agree. Same with the Group of Seven nations taking a dim view of the social media giant minting its own money.

US President Trump declared that Libra, Facebook’s proposed virtual currency, “will have little standing or dependability.” The Twitter-troll-in-chief didn’t stop there, saying he’s “not a fan” of Bitcoin and the cryptoworld in general, assets he argues are “not money, and whose value is highly volatile and based on thin air.”

Many members of US Congress said as much in a raucous July 17 hearing on Libra. New York Democratic Congresswoman Alexandria Ocasio-Cortez spoke for many by questioning the “public good” of a “currency controlled by an undemocratically selected coalition of largely massive corporations,” one that doesn’t include any banks. Added Senator John Neely Kennedy, a Louisiana Republican: “Facebook now wants to control the money supply. What could go wrong?”

There are, of course, more supportive voices. For example, David Lipton, acting chief of the International Monetary Fund, warns that financial innovation might be the biggest casualty if lawmakers “squelched” Libra out of hand. Such views, significantly, have support from a vital, if unlikely, global power: Japan.

In Chantilly, France last week, G7 officials tripped over themselves to head off Mark Zuckerberg at the pass – none more acerbically than Steven Mnuchin, Trump’s Treasury secretary. Mnuchin has voiced “grave concerns” about Libra, saying it “could be misused by money launderers and terrorist financiers.” When a US finance czar calls your big project a “national security issue,” you know you’re is courting trouble.

That’s doubly so when the likes of Bruno Le Maire, France’s finance minister, says “I fully share the concerns expressed by Mnuchin. We cannot accept any exchange currencies with the same kind of power and same kind of role as a sovereign currency.” Nor is German Finance Minister Olaf Scholz exaggerating when he says “Libra is on everyone’s mind.”

The good news: that includes Taro Aso in Tokyo. In Chantilly, the Japanese finance minister countered that “users would find [Libra] useful in making international money transfers because it would be cheaper than the current system. But whether it will be reliable is another issue.” In other words, let’s talk about how to make a private unit of exchange like Libra work.

Here, Japan is again proving itself to be the major economy most open to cultivating a crypto revolution that most of its peers are keen to squelch, and fast. In 2017, Tokyo was the first government of a developed nation to recognize Bitcoin as legal tender. Since then, Tokyo has made significant strides in regulating and licensing crypto assets.

In June, when Japan hosted the annual Group of 20 summit, it put crypto-assets on the discussion table – a first for the grouping. Along with circulating a guide for cryptocurrency regulation, based on its own experiences, Japan insisted the topic be included in the formal communique. And using language that played up how “technological innovations can deliver significant benefits” over the panicky verbiage used in Trump’s Washington.

There’s great irony in this push. Typically, risk-averse, aging Japan seems the last place that might welcome blockchain innovators disrupting the system faster than Aso, 78, and his team can grasp. The crypto game, meanwhile, has covered the city in crime tape enough times to warrant a “CSI: Tokyo” series.

The mystery surrounding the 2014 Mt. Gox heist, where hackers made off with US$450 million of tokens, still has sleuths entranced. Ditto for the more than US$500 million of coins that vanished from the Coincheck exchange in 2018. Another episode earlier this month saw roughly half the 110,000 customers at the Bitpoint exchange become victims.

But Tokyo is right to keep an open mind on two fronts. One, it positions Tokyo as a global hub for crypto-trading and issuance. This, of course, is part of a broader goal of Prime Minister Shinzo Abe’s government. Tokyo has looked on with alarm as Hong Kong, Singapore and Shanghai and Shenzhen became premier financial centers. It also hopes to nurture more tech “unicorns” since Japan trails even Indonesia in producing US$1 billion-plus startups. While crypto-asset growing pains are numerous, Japan will be front and center when Bitcoin and the blockchain boom grow up.

Two, Japan is bowing to the inevitable. Today, it’s Facebook turning heads at government offices and central banks. It would be naïve, though, to think Alibaba’s Jack Ma, Amazon’s Jeff Bezos, SoftBank’s Masayoshi Son, Tesla’s Elon Musk and others aren’t scrambling to create Libra competitors. Or, for that matter, the People’s Bank of China. What better way to dent America’s global clout than eclipsing the dollar?

Facebook, arguably, may have been the wrong messenger. In Washington, it’s the target of bipartisan anger and suspicion. Democrats blame its anything-goes news feed for helping elect Trump; Republicans believe Zuckerberg’s platform is biased against conservatives. What if, for example, Apple’s Tim Cook had been the Silicon Valley mogul to unveil Libra? Might there have been less of a backlash?

Far from going away, though, this global game of Whack-A-Mole will only intensify. Officials in Tokyo are, for better or worse, resigning themselves to a coming bull market in both proposed private currencies and financial innovation in general.

Libra, and its yet-to-be-announced rivals, might not happen. The virulence of the push-back in G7 circles speaks to the level of skepticism. As France’s Le Maire puts it: “We won’t allow private states to emerge that would have the same privileges of a state but without the controls that go with it.”

G7 officials get that cryptocurrencies could lower transaction costs, improve efficiency and make life easier for the unbanked masses. But the lack of transparency and reporting norms, they argue, would make money laundering, terror financing and tax evasion great again. If officials from Washington to Brussels to Tokyo worry about North Korea, Iran and other rogue actors now, just wait until they can spirit money around via social media.

Yet Japan’s pragmatism is a welcome voice in the debate. Bank of Japan Governor Haruhiko Kuroda views Libra as a useful test case to “see if cryptocurrencies can gain people’s confidence as a means of payment.” Key to that confidence taking hold, though, is Kuroda and fellow policymakers helping build a credible market infrastructure.

Money laundering and terror capital concerns mean governments will demand to play a central role. This, Aso says, requires a balancing act among crypto issuers, punters and governments. “Applying existing regulations alone may not be enough,” he says. “A comprehensive examination is needed to see if Libra poses new challenges that existing rules don’t take into account.”

Again, it’s entirely possible that Facebook’s currency won’t fly. Yet Zuckerberg is hardly alone in his desire to devise a new business model that harnesses the crypto boom. And if following the proverbial money is any guide, Tokyo will have a pivotal role in how that model develops. As Tokyo keeps the door open, no less than 110 crypto exchanges are lining up to launch in the Japanese capital. The “likes” Facebook and others are getting from Japan could be a game-changer.

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Cryptocurrencies will disappear a few years later, and no one is going to talk about it anymore …

The Treasury minister gave an interview to a program in CNBC the other day and spoke of his personal views on the future of crypto-coins. During this …

The Treasury minister gave an interview to a program in CNBC the other day and spoke of his personal views on the future of crypto-coins. During this interview, Minister Mnuchin made quite a negative statement about the future of crypto-currency:

“10 years from now, you can be sure that I won’t explain about Bitcoin. Even after 5-6 years from now, I would say I won’t comment on Bitcoin as Treasury secretary. I’ll have different priorities. I assure you; I will not personally deal with Bitcoin. “

US Treasury Secretary Steven Mnuchin says that cryptocurrencies will disappear a few years later, and no one is going to talk about it anymore.

During his interview, Minister Mnuchin said that cryptocurrencies were used “largely for illegal transactions and manipulation”.

A recent study shows that at least the majority of people who want to launder money in Darkweb are using a reputation for money.

About Post Author

Miu Lin

Miu is a journalism major and has been writing as a business journalist for various dailies before joining OBN. She currently writes about blockchain, cryptocurrencies and business news.

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Facebook approached the regulatory scene brazenly, says Ripple’s Brad Garlinghouse

Garlinghouse spoke to CNBC and gave his views on how Libra has helped the cryptocurrency ecosystem gain more traction by trying to fast-forward …

Ripple CEO, Brad Garlinghouse, explained how there should be a level playing field when it comes to cryptos, adding that Secretary Mnuchin was right with his points during the hearing.

Garlinghouse spoke to CNBC and gave his views on how Libra has helped the cryptocurrency ecosystem gain more traction by trying to fast-forward discussions and by extension, regulations.

“I think there’s a little bit of, perhaps, arrogance and maybe Silicon Valley arrogance, with how Facebook approached this and just kind of somewhat brazenly running into some things without checking some of the boxes. I agree with the secretary Mnuchin that in order for these technologies to be used well and taken advantage of it has to be done in a regulatory compliant way we can’t expose more risk”, said Garlinghouse

Ripple has been focused on being regulatory-compliant since the start; be it Anti-Money Laundering [AML], Know-Your-Customer [KYC], or terrorism financing, said Garlinghouse. Speaking about a better way as to how Facebook should have gone about it, Garlinghouse said that Facebook didn’t take the time to address some of the reservations regulators had been talking about before the launch of the whitepaper.

Garlinghouse further pointed out that out of the 28 companies that are backing Libra, there wasn’t a single bank. Considering the potential impact Libra will have on so many sectors, David Marcus’ “this spells the end of Western Union” announcement was a call-to-action, the CEO said.

Touching on the regulatory requirement which is much-needed for the crypto-industry, Garlinghouse said that it was true about opportunities being washed away to other countries. He added that this situation is similar to the time when the U.S. took steps to regulate the internet in its nascent stage.

Garlinghouse said,

“I think there’s no question that there are elements that are relevant to US national policy here. Technologies like Bitcoin are really controlled by Chinese miners, technologies like ether are controlled by Chinese miners; for Ripple, it’s been that we develop on top of an ecosystem called, the XRP ledger, which is decentralized and open and really much more of a democracy in terms of how it works as compared with those technologies.”

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