The Policy Pulse: 13 February 2023

SEC cracks down on Kraken’s staking program

The major story this week was the Securities and Exchange Commission (SEC) enforcement action against crypto exchange Kraken. Kraken was fined 30 million for failing to register its staking program with the SEC. As well as this, Kraken agreed to cease all staking services on the exchange. 

SEC Chair Gary Gensler stated that crypto intermediaries, including staking-as-a-service providers, must register and provide full, fair, and truthful disclosures, and investor protection in accordance with federal securities laws. Gensler added that the SEC’s action was meant to send a clear message to the marketplace that staking-as-a-service providers must comply with relevant securities laws.

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LCX launches tokenized bond with regulatory approval

On the other side of the Atlantic, European crypto exchange LCX launched a new tokenized bond. This is the first fixed-yield-earning product in the cryptocurrency industry that is based on an approved securities prospectus.

The tokenized bond was approved by the Liechtenstein regulator and will be available to retail customers in 29 additional European countries under EU passporting rules. Passporting allows regulated financial services firms to receive regulatory approval in one EU member state and subsequently provide the regulated services in other member states, without having to receive repeat approvals.

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Bank of England and Treasury publish digital pound consultation paper

Earlier in the week, the Bank of England and UK Treasury issued a consultation paper on the digital pound. While the paper concluded it is too early to determine whether to introduce the digital pound, the BoE and Treasury are “convinced” that preparatory work is needed.

In this respect, a”Technology Working Paper‘ was also published alongside the consultation paper. Here the BoE and Treasury explore in more detail the technical requirements that the digital pound should meet in order to be successful as a retail payment infrastructure.

The BoE estimates that the infrastructure for a digital pound would need to have a throughput of at least 30,000 transactions per second, which would support all retail transactions in the UK on any given day.

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Dubai’s new regulatory framework for digital assets

Also this week, Dubai launched the world’s first tailor-made Virtual Asset regulatory framework through the Virtual Asset Regulatory Authority (VARA). The Virtual Assets and Related Activities Regulations 2023 set out a comprehensive framework for the provision of virtual assets and services for customers and investors within Dubai.

See Also

Cardano Founder: SEC’s End Goal is “Control Over Every Aspect of Your Financial Life”

VARA’s aim appears to be to provide virtual asset service providers (VASPs) with a comprehensive set of rules and guidelines that apply to their operations.

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This is the web version of part of Ledgernomic’s weekly newsletter, The Policy Pulse, your go-to source for the latest developments in the crypto and blockchain industry, policy, and regulatory landscape. Every weekend, we’ll bring you an update on the most significant policy and regulatory changes affecting the industry, as well as analysis and commentary on the implications of these developments for the crypto and blockchain community. Whether you’re a crypto enthusiast, an investor, or a business leader, you’ll find valuable insights and information in every edition of The Policy Pulse.

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