Bitcoin and other cryptocurrencies (cryptoassets) have caused regulators many headaches in recent years.
In the latest twist in crypto’s regulation saga, the UK’s financial watchdog has launched a consultation on existing guidance around cryptoassets amid fears that companies could be putting consumers at risk by offering unauthorized services.
The Financial Conduct Authority (FCA), the US equivalent to the Securities and Exchange Commission (SEC), launched its consultation after the UK Cryptoasset Taskforce requested additional guidance and clarity on the current regulatory framework.
As there is uncertainty across jurisdictions , newbie blockchain startups are inevitably faced with legal quandaries – do I need to register my ICO with regulators? Can I sell my token and not be hunted down by the watchdogs?
In a bid to move things along, the FCA has established a framework for categorizing cryptoassets: exchange tokens (Bitcoin, Ethereum, Litecoin and any other cryptocurrencies); security tokens (tokens that amount to a specified investment’ and may provide rights such as ownership, repayment of money, or entitlement to share in future profits); and utility tokens (redeemed for access to a specific product or service that’s typically provided using decentralized ledger technology).
According to Marco Santori, a well-known figure in the cryptocurrency space as president and chief legal officer at Blockchain, the FCA doesn’t have jurisdiction over utility tokens because they don’t adhere to the criteria to be classified as security tokens.
In his Twitter thread , Santori notes that unlike the SEC statutes, the FAC consultation papers are not law, and this highlights how differently each side of the Atlantic approaches regulation.
As CoinDesk’s Noelle Acheson rightly points out, the SEC seems to be looking at the bigger picture, seeking to come up with sector-wide regulation and setting punitive fines – it handed cryptocurrency startup Tomahawk a lifetime ban and a $30,000 fine for using fraudulent marketing strategies to fundraise
Meanwhile, over in Europe, authorities are still trying to figure out how to assess the bigger picture.
The FCA has set a 10-week consultation period to and will publish feedback and the final text of the guidance this Summer.
Belgian watchdog adds 7 new scams to its cryptocurrency blacklist
The Belgian Financial Services and Markets Authority (FSMA) is continuing to warn citizens about the associated risks of dealing with cryptocurrencies after identifying seven new scam websites.
In today’s warning , FSMA says it has “continued to receive new complaints of consumers who have invested in cryptocurrencies through these trading platforms.”
The newly identified websites are as follows:
www.bearsmarketom
www.btckingdomom
www.directco-invesom
aisonducoinet
ovoplacemenom
ipae-homineom
ribelylimitedom
The regulator explains the modus operandi of many of these scams, noting how they typically offer prospective customers the opportunity to make “secure, easy, and very lucrative” investments.
“They [the scam operators] try to inspire confidence by assuring you that you don’t need to be an expert in cryptocurrencies in order to invest in them. They claim to have specialists who will manage your investments for you. You are told that your funds can be withdrawn at any time or that they are guaranteed,” the regulator’s node adds. “In the end, the result is always the same: the victims find themselves unable to recover their money!”
To date, FSMA has identified 120 websites that seemingly operate nefarious cryptocurrency schemes designed to dupe investors out of their funds.
It’s not the first time that FSMA issues a similar warning, though. In fact, it’s been updating its list of known scammers since the end of February last year, as complaints continue to roll in.
You may not need to be an expert in cryptocurrencies to invest in them, but one thing’s for sure: you do need to do your homework first, and if something sounds too good to be true, let’s face it, it probably is!
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HTC’s new $300 blockchain phone will double as a Bitcoin node
Taiwainese mobile phone manufacturer HTC is launching a more affordable blockchain phone with full Bitcoin node capabilities.
Originally announced last month, the Exodus 1S will be launching in Q3 this year and will have an extra SD card to support its blockchain capabilities. For what it’s worth, HTC was gunning to include node capabilities in the Exodus 1, but the company ultimately decided to drop the functionality for the device’s first iteration – perhaps due to Google’s updated Play store policy that forbids on-device mining .
The manufacturer has not shared a specific launch date but says the device will be priced at around $250-300.
Phil Chen, HTC’s Decentralized Chief Office, told Hard Fork he would not divulge details about Exodus 1, the S1’s precursor, sales performance but said the company was “happy and even excited by what we have seen so far in terms of sales … and they’re on track with internal targets.”
In terms of marked differences with the previous device, Exodus 1S is being priced at a lower mark in a bid to “broaden the reach and adoption of blockchain and crypto technology with a more value focused offering.”
HTC made headlines when it first announced the phone’s launch during a keynote speech at an investment forum held in Taipei in April.
Exodus 1S is the company’s second entry into blockchain-powered mobile devices. Its original offering, the Exodus 1, featured a cryptocurrency wallet alongside hardware designed to support decentralized applications (dapps).
The news comes amid increased controversy about security concerns of using smartphones as cryptocurrency wallets. Overall, researchers have actively advised users to opt for an actual hardware wallet.
