OTC crypto trade returns to China

OTC cryptocurrency trade in China appears to be very much alive despite the regulations
26 September 2017   1244

It’s been quite a tough time for the cryptocurrency community due to the whole China-against-Bitcoin thing, as a result of which the top cryptocurrency price has fallen. On top of that, according to undisclosed sources, the Chinese government has officially decided to crack down on all Bitcoin and cryptocurrency trading, not just commercial exchanges. However, this was not the end of the restrictions. Beijing News reported that executives of Chinese Bitcoin trading platforms may not leave the country, per industry insiders. 

Yet, it seems like cryptocurrency is here to stay. This week, as reported by ethnews.com, over-the-counter (OTC) trade in Chinese yuan reached an all-time high on LocalBitcoins, demonstrating how peer-to-peer economies continue to overcome heavy-handed institutions.

For now, OTC cryptocurrency trade remains legal and unrestricted. The peer-to-peer platform is emblematic of Bitcoin itself, as citizens have bypassed government to transact with one another directly.

Weekly LocalBitcoins volume on coin.dance Weekly LocalBitcoins volume on coin.dance

During the week, the volume of Chinese yuan exchanged on LocalBitcoins reached an all-time high. According to coin.dance, last week on LocalBitcoins, the exchange of more than 115 million yuan (approximately $17.4 million USD) could be seen. On top of that, over the last two weeks, global volume on LocalBitcoins has also reached all-time highs. 

Bitcoin price charts on coinmarketcap.comBitcoin price charts on coinmarketcap.com

Meanwhile, at the time of writing, Bitcoin price is about $3908.84, its market capitalization is $64,841,890,061, which allows the cryptocurrency to hold the first place in the list.

SEC May Signal Some Flexibility on ICOs

Looks like senior advisor for digital assets and innovation at SEC is not 100% against ICOs
14 December 2018   41

Some blockchain projects may be able to circumvent the requirements of US securities laws by contacting the Securities and Exchange Commission (SEC) for a so-called non-action letter. As SEC consultant on digital assets and innovations Valerie A. Szczepanik explained, such letters will not be issued often, but this does not mean that they cannot be received at all.

I think that’s a way forward for a lot of people who want to implement some of these things that may not exactly fit in the format of the rules that we want. 
 

Valerie A. Szczepanik

Senior advisor for digital assets and innovation, SEC

According to advisor, issuers of tokens have three ways to comply with the requirements of the laws: register an offer of securities, declare an exceptional case, or "make sure they're not a security."

In certain cases, the SEC may decide that “maybe this doesn’t fit the letter of our law or regulation but it fits the spirit and we can accomplish all the goals of investor protection”. In this scenario, the SEC may indeed issue such a letter, which will indicate that its employees do not recommend taking legal measures against a particular issuer.

The letters set forth exactly what the person plans to do or the entity plans to do and if it’s something that the SEC feels comfortable with we can release a no-action letter for exemptive relief saying ‘we can recommend no enforcement action.
 

Valerie A. Szczepanik

Senior advisor for digital assets and innovation, SEC

As reported, her remarks signaling a modicum of flexibility are notable in light of SEC Chairman Jay Clayton’s advice last month to anyone raising money by selling a token that they should “start with the assumption that it is a security.”

Speaking about the principles of recognition of tokens as securities, Valerie recommended to take into account the structure of sales. According to her, only in rare cases the token will not be recognized as a security. Most often, investors expect to profit from investments in such proposals, which is enough to recognize them as the spread of securities.