Category Archives: BTC News

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SEC Chairman Doesn’t Believe Every ICO is a Scam; Japan and South Korea Charge Ahead Toward Regulation

Jay Clayton, the Chairman of the US Securities and Exchange Commission (SEC), gave a speech at a Princeton University event that provided fascinating insight into his evolving views on how to approach initial coin offerings (ICOs) as well as how to classify and regulate cryptocurrencies.

Not every ICO is a scam

Essential discussions that delve deeper into blockchain technologies, ICOs and cryptocurrencies are taking place all over the world. Perhaps now that the markets are cooling off, the topic of how to legitimize the lucrative technology is finally on the table.

During the event, the SEC chairman disregarded that all ICOs were fraudulent scams, bearing contrast to his position in February. At a Senate hearing, Clayton declared he was “unhappy” with how ICOs were conducted, based on the fact that they did not follow private placement rules, and that there were some fraudulent ICO operators.

Clayton made a potent remark that brought to light a solution for a lesser-mentioned problem: what happens if the technology continues to have fraudulent actors? He said:

“I think if we don’t stop the fraudsters, there is a serious risk that the regulatory pendulum – the regulatory actions will be so severe that they will restrict the capacity of this new security.”

Overseas efforts

The United States isn’t the only country wrestling with the ICO debate; in Japan, a recent government-backed study revealed that it now is looking to bring forth the proper legal and regulatory frameworks to give the go-ahead on the popular capital-raising method.

The report included guidelines that will identify investors, which will prevent money laundering, which acts as a protection for existing shareholders and debt holders, making “unfair” trading practices such as insider trading a thing of the past for cryptocurrencies.

The report also goes on to classify three types of ICOs:

The “venture company type” is the typical fundraising method and is defined as “fund-raising by venture companies through high-risk, high return investments”.

The second is the slightly lesser known “ecosystem type” which is described as “fund-raising for collaborative efforts in which multiple corporations such as companies and local governments are engaged”.

The third and probably least known of them all is the “large company type”, which is for “fund-raising by companies for certain in-house projects with high risk”.

Advancements in the United States and Japan are steering the future of cryptocurrency in the right direction; BitcoinNews recently reported that South Korea is making preparations to tax cryptocurrencies, which may come off as alarming, but can be a vital spoke in the regulatory wheel.

Rallying support

What makes it even less alarming is that the third largest fiat-to-Bitcoin market in the world is also preparing to have a cryptocurrency for its capital city, and in fact, the United States and Japan are above South Korea in the fiat-to-Bitcoin market listing.

It is evident that despite the constant negative press, cryptocurrencies are part of very progressive discussions taking place in the largest markets in the world. It is these serious pioneering efforts that will make blockchain technologies and cryptocurrencies validated as part of the economy.


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Arizona Lawmakers Gearing Up to Pioneer State-Wide Regulated Blockchain Industry

The state of Arizona has officially signed into law a bill that allows for corporations to hold and share data on a blockchain. First introduced in February by state representative Jeff Weninger, the bill is intended “to open the door for emerging technologies in Arizona”.

Over the past two months, Arizona has been making headlines following numerous blockchain-related reports. Firstly in early March, the Arizona House of Representatives gave passage to a bill which was initially introduced in January. It has not yet been voted into law, however, if passed, it would make Arizona the first US state to accept payment for taxes in “Bitcoin or other cryptocurrency”.

A brief timeline of events

Jeff Weninger also sponsored House Bill 2602, which in February was passed. The bill would provide protection against any form or local regulation for users who are running blockchain nodes; the bill states: “a city or town may not prohibit or otherwise restrict an individual from running a node on blockchain technology in a residence.”

Weninger was also at the helm of two more blockchain bills. In February, the Arizona state representative began paving the regulatory framework for initial coin offerings (ICOs) in the state. The first bill defined “virtual coins” as “a digital representation of value that can be digitally traded and that functions as a medium of exchange, unit of account and store of value”.  The second bill made amendments to the Arizona Revised Statutes, which is to account for data that is written and stored on a blockchain.

By the end of March, controversy struck when an Arizona Bitcoin trader was convicted for five accounts of money laundering. On 28 March, Thomas Mario Costanzo was jailed for accumulating over USD 164,000 in cash made from narcotics, exchanging it into Bitcoin and further selling and distributing illegal substances using Bitcoin as a preferred method of payment via internet purchases.

The efforts made were not stifled by the Bitcoin controversy; typically a Bitcoin scam/scare can cause regulators and lawmakers to come down hard on the technology, but not in Arizona.

A year after, the state began accepting smart contracts as legal documentation and recognizing signatures recorded on a blockchain. Arizona is finalizing proceedings with the HB2603, HB2602, and HB2601 bill package that together can demonstrate to the rest of the United States that it is possible to integrate and regulate blockchain technology state-wide.

Arizona leading the way

Other states have not been so fortunate. Both New Hampshire and the state of Georgia failed to pass a bill that was to require the state to accept cryptocurrencies for payment of taxes and license fees. In Georgia, it was supposedly held back by a lack of understanding and education on the benefits that blockchain technology could bring.

Though that is not to say that new legislation and regulations are entirely off the cards for any of the states; Arizona has the opportunity to set the standard for the rest of the nation and demonstrate the beneficial potency of a regulated blockchain industry.


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