Cryptocurrencies continued to dip on the heels of various regulatory actions focused on trading activities and exchanges.
Same alarms, different week.
On the global stage, bitcoin fell below $7,000 to just above $6,800, and Ripple slipped to its lowest price since the end of 2017. One catalyst: Reuters reported that China’s central bank is eyeing a “crackdown” on virtual currencies. The central bank will also bring R&D efforts to bear on developing its own currency this year, according to Fan Yifei, deputy governor of the bank, as cited by the newswire.
Here in the United States, tax season looms, of course, which may put additional pressure on cryptos.
Domestically, the horizon may be darkening a bit for virtual currencies. The secretary of the Commonwealth in Massachusetts has put the brakes on five initial coin offerings in that state.
The specific directive from William Galvin, the state’s head securities regulator, commands that those firms abandon the sale of what have been termed “unregistered securities.” The firms named include Mattervest, Inc., 18 Moons, Across Platforms, Inc., Pink Ribbon ICO, and SparkCo, Inc. As of the end of the week, at least one firm, Mattervest, said it had shuttered operations. Although the firms had advertised across social media, none of them had registered to offer or sell securities.
As has been widely reported, some of those social media sites have been limiting access for cryptocurrency firms. Notable to those efforts in the past week: Twitter is instituting policies that will prohibit ads geared toward ICO sales or token sales, and Facebook has already banned similar ads from Instagram and on third-party applications.
Sandboxes, Taking Shape
Sandboxes are finding their way into the FinTech arena in the United States. Last week, Arizona took its place as the first state in the United States to unveil a regulatory sandbox to bring blockchain and cryptocurrency-driven new products into that state. Under the parameters of that sandbox, companies will be able to test their new offerings for up to two years, and reaching 10,000 customers, before needing formal licensing. The sandbox takes effect this year and will be overseen by Arizona Attorney General Mark Brnovich’s office.
International Innovation, With a UK Focus
Across the waters, UK Finance, an industry trade association, has started an investigation into how the U.K.’s banks deal with small to mid-sized businesses. The review will focus on how those same banks deal with complaints from small businesses in disputes that are relatively small – namely, not substantial enough to head to court.
Said the group in a statement: “All banks have robust complaint arrangements, which attempt to put things right quickly, apologize and, if appropriate, offer some compensation for costs incurred and payment in recognition of distress and inconvenience. However, in some cases, complaints go unresolved to the satisfaction of the customer or cannot be dealt with by this internal procedure.” UK Finance will look for alternative solutions focused on resolving those disputes.
In other news from the U.K., the Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC) reached an Enhanced Cooperation Agreement, broadening a pact between their Innovation Hubs.
As part of the expansion, licensing processes will be accelerated, with an eye on cross-pollination. In one example, a FinTech with roots in the U.K. regulatory sandbox will find it easier to establish itself in the Australian sandbox. Said ASIC Commissioner John Price in a statement: “ASIC and the FCA have developed an immensely beneficial relationship on FinTech, including through our quarterly information sharing calls. We are delighted this extension will offer FinTechs the opportunity to spread good ideas across borders.”