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Danish Regulator To Ban Unhosted Bitcoin (BTC) Wallets

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8 months ago

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The Danish Financial Supervisory Authority (DFSA) is working towards abolishing unhosted Bitcoin (BTC) wallets as part of its Decentralized Finance (DeFi) guidance.

Denmark Bitcoin Wallet Ban Aligns With MiCA Regulation 

The regulator is concerned about the activities of unregulated platforms in the crypto space. Markedly, the DFSA emphasizes the need for all crypto platforms and service providers including interface providers and mobile app developers to be regulated.

Ordinarily, the use of unregulated interfaces violates the legislation embedded in the upcoming Market in Crypto Asset (MiCA) regulatory framework. The partial implementation of the rule is only a few days away. This necessitates that all crypto ventures in the European Union are put in order before then.

As a result of Denmark’s move, no crypto exchanges or trading platforms would be able to offer Bitcoin wallets, DEX interfaces or any other crypto-related products to Danish customers anymore. The only exemption would be for them to get regulated in Denmark.

Two weeks ago, the European Banking Authority (EBA) completed the draft of the technical standards for the prudential matters as per the MiCA regulation. This involved ensuring that all the firms in the EU adhere to the high financial standards.

Some of the amendments include change in own funds requirements, changes in liquidity provisions and very strict recovery plans for the issuers of the crypto assets. Notably, the MiCA regulation affects stablecoins especially those pegged to the United States Dollar.

Will MiCA Squeeze Crypto Out of Existence?

A few market observers and key crypto players opine that these rules are rather rigid.

Mikko Ohtamaa who reported Denmark’s ban on unhosted Bitcoin wallets on X, suggested that the rules in MiCA are outlined to squeeze digital assets out of existence, a sentiment that Gary Gensler, the Chairman of the Securities and Exchange Commission (SEC) holds. The DFSA’s intention may be good, but Ohtamaa does not think “overregulation” is the right approach.

“Trying to force everyone to be a regulated intermediate in a peer-to-peer world sounds cool, but you might as well be honest with your talking points and say “In reality we want to ban all cryptocurrencies, we are just sneaky about it” because this is the outcome,” Ohtamaa, known by his affiliation with the Trading Protocol wrote on X.

Read More: Kaspa Price Analysis: Is This the Beginning of Bullish Phase for KAS?

 

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Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture. Follow him on Twitter, Linkedin

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.





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Regulation

US SEC Faces Backlash as Bybit Hack Highlights Lack of Oversight

Published

6 hours ago

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February 22, 2025

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John Reed Stark has pointed out that one of the causes of a rising risk in crypto security is the US SEC cutting back on enforcement activities. This includes a latest attack on crypto trading platform Bybit which compromised and stole $1.5 billion belonging to customers.

The attack, which analysts describe as the largest crypto heist in history, has raised concerns about the lack of regulatory safeguards protecting investors.

US SEC Criticized as Bybit Hack Highlights Security Gaps

According to a recent post on X, Stark criticized the US SEC’s decision to roll back enforcement actions against cryptocurrency platforms. He pointed out that Bybit’s security breach is a direct consequence of weak regulatory oversight, leaving investors unprotected against sophisticated cyberattacks.

The attack on Bybit has been linked to North Korea’s Lazarus Group, a state-sponsored hacking collective known for targeting cryptocurrency exchanges. Analysts at blockchain forensics firm Elliptic reported that the group has stolen billions in crypto over the years, using complex laundering methods to fund North Korea’s missile programs. Without strict cybersecurity requirements enforced by the US SEC, exchanges remain vulnerable to such threats.

EX SEC John Reed Stark added,

“For crypto-exchanges, there’s no regulatory oversight; no consumer protections; no net capital requirements; no licensure of individuals; no US audits, inspections or examinations; no segregation of customer funds; no insurance, no cybersecurity requirements; no transparency; no accountability; no SEC/FDIC/OCC/etc. engagement and the list goes on”

Bybit’s $1.5 Billion Hack Exposes Risks

The Bybit hack has sparked concerns about the broader security risks in the crypto industry. Crypto exchanges lack oversight, unlike traditional financial institutions. They have no mandatory audits, capital reserves, or customer asset protection.

Bybit has responded by securing bridge loans to cover losses and working to recover the stolen assets. However, experts remain skeptical about the likelihood of successful recovery. This incident underscores how the absence of SEC enforcement leaves crypto investors exposed to large-scale losses with no regulatory safeguards.

With the US SEC pulling back from crypto-related investigations and enforcement, investors are left without key protections. The lack of insurance, consumer safeguards, and oversight mechanisms means that customers impacted by breaches like the Bybit hack have limited options for recovering their funds.

As the US SEC changes its regulatory stance, critics raise concerns. They argue that offshore crypto exchanges may still operate with weak security. This regulatory gap increases the risk of further large-scale hacks, placing investors at continued financial risk.

The US SEC decision to halt enforcement actions has sparked debates on crypto regulation. Ongoing cases against major exchanges are now on hold. Some industry participants see reduced oversight as a way to promote innovation. Others warn it increases risks of fraud, security breaches, and financial instability.

Following the recent crypto hack, Bybit has launched a $140 million recovery bounty to track and reclaim stolen funds. The exchange is offering rewards to individuals or organizations that provide information leading to the identification of hackers.

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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.





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Regulation

Ripple Vs SEC Lawsuit May Take Longer To Settle Than Coinbase, Expert Warns

Published

1 day ago

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February 21, 2025

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Ripple vs SEC lawsuit: The legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) may take more time to resolve than the ongoing case involving Coinbase, legal experts suggest.

With a ruling already in place and other procedural complexities, experts believe that Ripple’s case faces a different set of challenges compared to Coinbase’s recent settlement.

Ripple Vs SEC Lawsuit May Take Longer To Settle

After the US SEC disclosed plans to drop the Coinbase lawsuit, speculations and debate have taken a turn on the potential of the Ripple vs SEC lawsuit outcome and when. However, legal experts have noted the Ripple lawsuit may not be as smooth as Coinbase case. One major factor making the Ripple vs SEC lawsuit more complicated is the ruling already handed down by Judge Torres. According to the filings, Ripple had been ordered to pay a $125 million penalty as part of the settlement with the SEC.

Subsequently, according to experts, the firm’s options now include the possibility of requesting a penalty reduction, which would require both parties to reach an agreement. Legal expert Sherrie, in a recent conversation on X, noted that while a settlement may be reached, it is unlikely that the separation of sales, as stipulated by Judge Torres, would be altered.

Any request to reduce the penalty, she said, would need to be carefully considered by both Ripple and the SEC. Additionally, a request to dismiss the appeal would mean that the original ruling by Judge Torres remains in effect.

“It’s more complicated for Ripple, given the existing ruling. The penalty would still stand unless both parties agree to a reduction,” Sherrie stated.

Ripple Cross-Appeal and Timing Considerations

Ripple vs SEC lawsuit involves more layers due to its cross-appeal, which must also be taken into account. Legal analysts suggest that the timing of Ripple’s upcoming filing—scheduled for April—may be pivotal in determining the case’s trajectory.

Ripple’s request to extend the filing deadline to April 16, 2025, gives further credence to the idea that a resolution may take longer than anticipated. As Ripple’s legal team moves forward with the appeal, both Ripple and the SEC will have to consider how to approach the next steps. As Ripple works toward securing an agreement or a potential settlement, it may continue to assess the possibility of lowering the penalty.

“Ripple’s next filing deadline is in April, which gives both parties more time to negotiate,” said legal expert Bill Morgan.

Ripple lawsuit Appellate Court’s Role

The involvement of the Appellate Court could also extend the timeline for resolving the Ripple vs SEC lawsuit. The court has a panel of three judges who will review and hear the case, a process that takes additional time compared to the procedures of a District Court. This contrasts with the process seen in the Coinbase case, where a settlement was reached more quickly, possibly due to the absence of such complications.

Eleanor Terrett, a FOX journalist, noted that the SEC may also choose to seek an agreement with Ripple at the district court level. The judge overseeing the case, Torres, retains jurisdiction until August 2025, and any changes to the terms of the ruling would require her approval.

“There’s a lot of uncertainty with the Ripple case. The SEC’s next steps are unclear, and any decisions may need Torres’s approval,” said Terrett.

Jeremy Hogan also suggested that Ripple vs SEC lawsuit might take longer to resolve due to the multiple steps involved in the appeal process.

“This isn’t just a straightforward case of settlement or dismissal,” Hogan remarked

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Kelvin Munene Murithi

Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.

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.





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Regulation

ConsenSys Submits Letter to SEC on DeFi Rule Amendment Concerns

Published

1 day ago

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February 21, 2025

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ConsenSys has submitted a letter to the U.S. Securities and Exchange Commission (SEC) expressing concerns about the proposed amendments to the definition of “exchange” under U.S. securities laws. The letter, addressed to Commissioner Hester Peirce and the SEC’s Crypto Task Force, requests the removal of the rulemaking from the regulatory agenda.

ConsenSys Challenges US SEC Proposed DeFi Rule Change

According to a recent submission, ConsenSys has urged the SEC to withdraw its proposed rule that expands the definition of an “exchange” to include decentralized finance (DeFi) platforms. The company argues that the amendments exceed the SEC’s legal authority.

ConsenSys asserts that the proposed rule violates the Administrative Procedure Act (APA) by improperly broadening the regulatory scope. Additionally, the company claims that the rule conflicts with the U.S. Constitution by imposing regulatory obligations on decentralized protocols that do not fit the traditional definition of an exchange.

SEC’s proposed amendments on DeFi exchanges received substantial opposition during the 2022 comment period. ConsenSys referenced prior submissions made in April 2022 and June 2023, reinforcing its position that blockchain-based systems should not be categorized as traditional financial intermediaries.

The submission to Hester Peirce’s task force comes just weeks after the launch of a dedicated website outlining its role in establishing clear crypto regulations. The new platform provides a way for industry participants, including ConsenSys, to submit input and engage with regulators.

Concerns Over US SEC’s Statutory Authority

Moreover, ConsenSys maintains that the SEC lacks the statutory authority to extend the definition of an exchange to blockchain-based systems. The company argues that the Securities Exchange Act of 1934 defines an exchange as an entity that provides a centralized market for securities transactions. The proposed rule, according to ConsenSys, improperly expands this definition to cover decentralized protocols.

The submission points out that DeFi platforms operate differently from traditional financial exchanges. Rather than facilitating transactions in a centralized manner, these platforms rely on smart contracts and peer-to-peer networks. ConsenSys warns that regulating these decentralized technologies as securities exchanges would create compliance burdens that are incompatible with their structure.

Consequences On Blockchain Innovation

The letter also warns that the amendments could negatively affect blockchain development and DeFi adoption. ConsenSys states that the proposed rule could discourage innovation by imposing regulatory uncertainty on blockchain developers and users.

The crypto company contends that the amendments could force decentralized platforms out of the U.S. market. By treating DeFi protocols as regulated exchanges, developers may face increased legal risks, reducing the incentive to create blockchain-based financial services within the country.

In its submission,  the crypto company has expressed willingness to discuss the issue further with the SEC’s Crypto Task Force. The company emphasized the importance of ensuring that blockchain regulations align with technological realities and legal constraints.

ConsenSys reaffirmed its stance that the SEC’s proposed rule should be removed from the regulatory agenda. With the new Hester Peirce Crypto Task Force, there is hope for ConsenSys and other blockchain firms facing regulatory scrutiny. 

Most recently, the pro-crypto task force influenced the decision to pause the SEC’s lawsuit against Binance for 60 days. The review of cryptocurrency regulations may lead to clearer guidelines, potentially benefiting DeFi platforms.

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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.





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