FSA to Propose Rules for Crypto Service Providers

Rules relate to such areas as burglary incidents, cryptocurrency listing on exchanges, financial and price disclosures, margin trading and custodial services
29 December 2018   749

The Financial Services Agency of Japan (FCA) has published a final report, which sets out the proposed rules for cryptocurrency service providers to follow. This is reported by Bitcoin.com.

The rules relate to such areas as burglary incidents, cryptocurrency listing on exchanges, financial and price disclosures, margin trading and custodial services.

The report is based on last week’s meeting of a working group on the study of cryptocurrencies, and details the requirements “as a precondition of the proper principle of self-responsibility”.

In particular, the Agency expects that crypto service providers will follow these rules either by themselves or under the guidance of a self-regulatory organization (SRO). Currently, FCA has approved the work of only one SRO - the Japan Association for the Exchange of Virtual Currencies.

The report identifies nine areas that should be considered in connection with the activities of cryptocurrency exchanges and other service providers in this area.

Where private keys of customers’ deposited virtual currency are managed online … service providers [are required] to maintain net assets and funds for reimbursement of the same or greater amount. The funds must consist of the same types as the deposited virtual currency.

Financial Services Agency of Japan

In addition, the exchanges must "develop [a] framework to entitle customers to [a] statutory lien that secures their claim to deposited virtual currency", and also disclose their financial statements.

The report explains that cryptocurrency providers need to disclose information regarding trade prices in order to ensure proper business conduct. They are also forbidden to advertise, promote or promote speculative trading. In addition, they must follow the rules established by the SRO. The agency noted that registration of non-SRO members who did not establish internal rules, equivalent to the rules of SROs, may be rejected or canceled.

Cryptocurrency service providers are also prohibited from “making transactions in virtual currencies that may interfere with user protection or proper and reliable business transactions.” The last requirement in this category is for service providers to notify the FSA “about every change in the virtual currency line” in advance.

The first proposed condition in this category states that the registration requirement for “trading on the foreign exchange market (Forex trading)” will be imposed on cryptocurrency service providers offering margin trading.

There will also be restrictions on the leverage of each cryptocurrency “based on [actual] price fluctuations of the virtual currency.”

In addition, service providers will have to explain the risks specific to cryptocurrencies, and establish minimum amounts of margin. Finally, cryptocurrency loans will follow the same rules as margin trading, since they have similar functions and risks, the report says.

The FSA report also outlines the rules for crypto-depositary services and “dishonest actions” in spot trading. In particular, “inappropriate behavior, spreading rumors and price manipulation” are prohibited to all individuals and legal entities.

Virtual currency exchange service providers [are] to monitor transactions and prohibit transactions aimed at profiting based on nonpublic information.

Financial Services Agency of Japan

Status of "certified business association in the field of financial settlements" Japanese Association of Virtual Currency Exchanges (JVCEA) received in October 2018.

Robinhood to Raise $323M During Financial Round

So, the company's capitalization reached $ 7.6 billion
23 July 2019   77

The operator of the mobile application for trading stocks and cryptocurrency Robinhood company Robinhood Markets Inc. announced the closure of a round of financing for the E-Series, which resulted in an impressive $ 323 million. The company's capitalization reached $ 7.6 billion.

The financing round was led by investment company DST Global, and Ribbit Capital, NEA, Sequoia and Thrive Capital also contributed.

The company intends to direct the raised funds to business expansion and the creation of new financial services, calling this process "democratization of finance for all."

Recall that the ability to trade cryptocurrencies through the Robinhood app was first implemented in February 2018. Today, the company supports leading assets such as Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Dogecoin and Ethereum Classic.

In January of this year, Robinhood received BitLicense - a license to work with virtual currencies from the Financial Services Authority of New York (NYDFS), and the official launch of the application in the state took place on May 23.

It is noteworthy that in 2017 Robinhood was estimated at only $ 1.3 billion. The introduction of cryptocurrency, however, accelerated the growth of the user base and fueled interest from venture investors. So, last year, the Robinhood managed to attract $ 363 million, with which the company's capitalization was $ 5.6 billion.