Regulation
Standard Chartered, Animoca Brands Enter Hong Kong Stablecoin Sandbox
On Thursday, July 18, the Hong Kong Monetary Authority (HKMA) announced the list of participants for its stablecoin issuer sandbox. This initiative, launched in March 2024, aims to boost a sustainable and responsible development of the stablecoin ecosystem in Hong Kong. Key sandbox participants include Standard Chartered Bank and Animoca Brands.
Hong Kong’s Stablecoin Sandbox Details
The other participants include Jingdong Coinlink Technology, RD InnoTech, and Hong Kong Telecommunications. HKMA selected these institutions based on their genuine interest and impressive business plans for development of stablecoins in Hong Kong. Hence, they will start participating in the sandbox effective immediately.
Moreover, the HKMA emphasized that these operations will be conducted within a limited scope and under a risk-controllable framework. The sandbox is part of the HKMA’s broader effort to establish a regulatory regime for fiat-referenced stablecoin (FRS) issuers.
On July 17, the Financial Services and the Treasury Bureau (FSTB) and the HKMA jointly released the consultation conclusions on the legislative proposal for this regime. The consultation, conducted over two months and concluded in February, received 108 submissions from various market participants, industry associations, and other stakeholders.
Binance and Circle also participated in the Hong Kong regulatory consultation. A vast majority of respondents supported the introduction of a regulatory framework for FRS issuers. This support is rooted in the increasing prevalence and evolving nature of virtual assets.
It also reflects the need to manage potential monetary and financial stability risks effectively. Hence, the proposed regulatory requirements and implementation arrangements received broad support. Meanwhile, the respondents also suggested some changes to the regime.
Also Read: USDT and USDC at Risk as BIS Endorses Only Permissioned Stablecoins
Official Statements By HK Authorities
The Secretary for Financial Services and the Treasury, Mr. Christopher Hui weighed in the development. He stated, “In addition to the existing regulatory regime for VA trading platforms, the establishment of a licensing regime for FRS issuers will further strengthen the VA regulatory framework in Hong Kong in line with international standards and effectively mitigate possible financial stability risks associated with FRS issuance activities.”
The Chief Executive of the HKMA, Mr. Eddie Yue, expressed gratitude for the valuable feedback received during the consultation period. He noted, “We are grateful for the respondents’ valuable comments and are encouraged by the general support for the proposed regulatory regime. We believe that a well-regulated environment is conducive to the sustainable and responsible development of the stablecoin ecosystem in Hong Kong.”
Sandbox Operations And Safeguards
Hong Kong Monetary Authority’s sandbox allows selected institutions to test their stablecoin issuance operational plans within a controlled environment. This initiative facilitates two-way communication on proposed regulatory requirements. Hence, it aids in the formulation of a fit-for-purpose and risk-based regulatory regime.
Thus, participants are expected to comply with stringent sandbox requirements. Initially, they will not handle the general public’s funds or solicit funding from the public. The HKMA has cautioned the public to remain vigilant against potential scams related to the sandbox and promised timely announcements if sandbox participants are allowed to handle public funds under limited scope adjustments.
The sandbox is designed to enable participants to develop and refine their stablecoin issuance models while ensuring risks are minimized. This step-by-step approach aims to balance innovation with the need for robust regulatory oversight. This enables a secure and dynamic environment for virtual asset development in Hong Kong.
Also Read: Breaking: State Street Eyes Stablecoin & Token Launch
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Roger Ver, recognized in the crypto community as “Bitcoin Jesus,” is contesting an eight-count indictment brought by the U.S. Attorney for the Central District of California. Ver, known for his early investments in Bitcoin and advocacy for digital assets, is accused of failing to report $50 million in taxes on Bitcoin transactions valued at $240 million in 2017.
Additional charges allege that Ver underrepresented the value of his businesses during his 2014 renunciation of U.S. citizenship to avoid higher exit taxes.
Roger Ver Fights Tax Evasion Charges
According to FOX Business, Roger Ver is challenging allegations that he evaded paying $50 million in taxes on substantial Bitcoin sales in 2017. Prosecutors claim Ver also underreported the value of two companies he owned, MemoryDealers US and Agilestar, when he expatriated in 2014.
Allegedly, the underreporting allowed him to avoid a higher exit tax, a levy imposed on unrealized capital gains for individuals relinquishing U.S. citizenship.
Ver’s legal team, comprising attorneys from prominent law firms Steptoe LLP and Kimura London & White, filed a motion to dismiss the indictment. The motion argues that the Justice Department engaged in unconstitutional government overreach and selectively withheld key evidence. It also claims the actions violated Ver’s right to due process.
The filing includes correspondence between Ver and his attorneys, indicating his efforts to ensure compliance with crypto tax regulations at the time.
Allegations of Government Overreach and Communication Misuse
Roger Ver’s legal representatives contend that prosecutors improperly obtained privileged attorney-client communications and used them to build their case. These communications include detailed emails in which Ver sought professional advice to meet his tax obligations, even under ambiguous guidelines.
The legal team also claims that the indictment reflects selective enforcement against Roger Ver, a vocal critic of U.S. cryptocurrency regulations. The motion claims crypto tax rules during Ver’s expatriation were unclear, making criminal charges unwarranted.
Furthermore, the attorneys assert that the government’s actions violate core constitutional protections for individuals seeking to renounce citizenship.
More so, Ver’s defense argue that crypto tax regulations were insufficiently defined at the time of his alleged offenses. The IRS began issuing guidance on virtual assets as property in late 2014, after Ver had renounced his U.S. citizenship.
His legal team maintains that Roger Ver relied on attorneys and accountants to comply with all applicable laws. In an email correspondence dated April 2013 and included in the filing, Ver expressed to his lawyer,
“I want to make sure that my exit tax payments are as clean as possible, with no room to have trouble from the IRS in the future.”
Moreover, emails reveal that Ver’s advisors recommended obtaining third-party appraisals to address the difficulty of valuing Bitcoin accurately, given the low market liquidity in 2014. The defense further argues that any discrepancies were unintentional and do not warrant criminal prosecution.
The motion to dismiss is being reviewed by the U.S. District Court for the Central District of California. Ver’s attorneys express optimism that the incoming Trump administration, may influence the case’s outcome.
Ronny Mugendi
Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Alex Mashinsky, the founder and former CEO of Celsius Network, has agreed to plead guilty to two fraud charges following an indictment filed in July 2023. His defense attorney announced this during a court hearing in a Manhattan federal court. The charges relate to allegations of fraud, conspiracy, and market manipulation concerning Celsius Network’s operations and its proprietary token, Cel.
This decision follows a legal battle that started earlier in 2023 when Mashinsky was initially charged with seven counts related to the collapse of Celsius.
Celsius Founder Alex Mashinsky Faces Guilty Plea for Fraud and Market Manipulation
In a recent development, Celsius Network founder Alex Mashinsky intends to plead guilty to two counts of fraud after being indicted in 2023. These charges stem from accusations that Mashinsky misled Celsius customers, prompting them to invest in the company’s crypto services under pretenses. Prosecutors claim that Mashinsky artificially inflated the value of the company’s proprietary token, Cel, to mislead investors and customers.
Moreover, Celsius founder is also accused of personally profiting from his actions. Federal prosecutors allege that he reaped approximately $42 million in proceeds from the sale of Cel tokens, further exacerbating the damage caused to investors.
Earlier this year, Celsius former chief revenue officer, Roni Cohen-Pavon, pleaded guilty to similar charges and agreed to cooperate with prosecutors’ ongoing investigation.
More so, in September 2024, Mashinsky sought the testimony of six former employees to support his defense in his ongoing fraud trial. Mashinsky blamed his team for misleading investors and misrepresenting the company’s financial condition.
Celsius Network’s Bankruptcy and the Fall
The criminal charges against Celsius founder come after the collapse of Celsius Network in 2022. The company filed for Chapter 11 bankruptcy protection in July 2022, following a rush of withdrawals by customers fearing insolvency. As a result, many customers were unable to access their funds. The bankruptcy was one of the first major events in a series of failures within the crypto lending sector during the 2022 market crash.
Similarly, this period also saw the collapse of other entities like FTX and Three Arrows Capital. However, in recent reports, after almost two years, the FTX reorganization plan is set to resume in January 2025. The plan will allow creditors to begin receiving payments, though users must create accounts with designated agents to be eligible.
The Celsius Network bankruptcy revealed financial mismanagement and fraud within the company, with customers accusing Mashinsky of misleading them. This financial instability ultimately led to the downfall and the legal charges against its former CEO.
Mashinsky’s legal team is continuing to navigate the fraud charges in preparation for his upcoming court appearances. Although he initially pleaded not guilty to the charges, Mashinsky has now agreed to plead guilty.
However, despite the Celsius founder guilty plea, at press time, CEL price remained relatively stable. The token, which has faced volatility since the collapse, has rallied by 17% over the past 24 hours. This recent uptick comes after a period of sharp declines, with CEL price dropping over 96% from its all-time high.
Ronny Mugendi
Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
- Trump picks Paul Atkins, a pro-crypto libertarian, for the SEC chair role.
- Atkins is expected to provide clearer crypto regulations.
- Senate confirmation is needed, although Trump could pursue a recess appointment.
President-elect Donald Trump has selected Paul Atkins, a staunch advocate for the crypto industry, to serve as the next chair of the US Securities and Exchange Commission (SEC) once Gary Gensler steps down in January 2025.
This move marks a significant step in fulfilling Trump’s campaign promises to reshape the regulatory landscape for digital finance and bring clarity to cryptocurrency rules.
Atkins’s pro-crypto stance
Atkins, who served as an SEC commissioner under President George W. Bush, is well-known for his libertarian views and has earned respect within conservative legal circles.
Since leaving the SEC, Atkins has been an outspoken supporter of the crypto industry, particularly in his role as co-chair of the Token Alliance at the Digital Chamber of Commerce. In addition, Atkins has advised digital finance companies on regulatory compliance as the founder of Potomak Global Partners, a consultancy he established in 2009.
The crypto market expects a turnaround under Trump’s leadership
The selection of Atkins comes as Trump aims to provide clearer guidelines for the cryptocurrency market, which has long been frustrated by SEC chair Gary Gensler’s approach.
Under Gensler’s leadership, the SEC was criticized for pursuing enforcement actions against crypto companies without establishing clear regulatory frameworks. This led to widespread discontent within the crypto industry, with many calling for a more transparent and collaborative approach.
Gensler has, however, announced his resignation, effective January 20, when Trump is set to take office, creating room for fresh leadership at the SEC.
During his campaign rallies, Trump promised to make the US a “world capital” for crypto and has committed to replacing Gensler to help establish clearer rules for the industry. He also proposed the creation of an advisory council to focus on crypto policy and suggested a national Bitcoin strategic reserve.
The selection of Atkins signals a strong push towards crypto-friendly regulations, a move that is likely to be welcomed by the industry, especially after years of uncertainty.
Although there are reports that Atkins is reportedly reluctant to accept the role, attention now shifts to The Senate, which will be responsible for confirming or declining Atkins’ appointment, though Trump could choose to make a recess appointment if necessary.
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