Paxos Gets Order to Stop Issuing BUSD
Last week, the New York Department of Financial Services ordered Paxos Trust Co., which issues and lists Binance’s dollar-pegged cryptocurrency, to stop creating more of its BUSD token.
The regulated blockchain infrastructure platform later confirmed its compliance with the directive, saying it would cease the issuance of new BUSD tokens but would continue to manage its reserves. Owing to the directive, Binance CEO CZ–who alluded to a claim that the stablecoin is labeled as unregistered security– notes in a Twitter thread that he expects the BUSD market cap to decrease over time as well as the development to “have profound impacts on how the crypto industry will develop (or not develop) in the jurisdictions where it is ruled as such” should the court rule BUSD as a security. Paxos says it categorically disagrees that BUSD is a security under federal securities laws.
CME to Include Bitcoin Futures in Contracts Next Month
Derivatives marketplace, CME, last week announced that it will expand its suite of event contracts to include Bitcoin futures starting March 13.
Though still awaiting regulatory review, the Bitcoin futures contracts are set to provide a less complex way for investors to access cryptocurrency markets through CME’s fully regulated platform.
The CME Group is known for offering contracts on a number of its benchmark futures markets, including gold, silver, copper, crude oil, and natural gas.
The new contracts will track the daily price moves of the leading derivatives marketplace’s liquid benchmark Bitcoin futures, and “offer an innovative, lower-cost way for investors to trade their views on the up or down price moves of Bitcoin."
Siemens Issues First eWpG-Compliant Digital Bond On a Public Blockchain
Siemens last week announced it has issued €60 million worth of digital bond on a public blockchain in accordance with Germany’s Electronic Securities Act (Gesetz über elektronische Wertpapiere, eWpG).
The eWpG enables the issuance of securities through newly-established electronic securities registers which makes the likes of digital securities carry the same rights and obligations as physical, certificate-based securities.
With a maturation period of one year, the blockchain-based bond renders paper-based global certificates and central clearing unnecessary, thus ensuring transactions are executed faster and more efficiently. While it allows classic payment via bank account, the Siemens digital bond is sellable directly to investors without engaging established central securities depositories like banks and transactions can be completed within two days.
DekaBank, DZ Bank, and Union Investment have all invested in the bond.
CoinShare Sheds Light on 6 Developers Not Controlling Bitcoin software
To dispel the myth that only six individuals control Bitcoin, CoinShare last week explained the key process involved in updating the Bitcoin software. It cites that the Bitcoin Core open-source software that powers the Bitcoin network is managed by a large and diverse group of individuals though only a group of project “maintainers” have committed access to make changes to the code.
According to the explainer, merging the changes, in which the maintainers play a critical role, is the last step of a long process. It adds that the process entails a peer review and often takes many days or even years during which several changes are made.
Hong Kong Issues First Batch of Tokenized Green Bonds
Last week, the Government of the Hong Kong Special Administrative Region of the People's Republic of China (HKSAR Government) announced that it completed the offering of HK$16m tokenization under a Green Bond Scheme.
This world's first batch of government-issued tokenized green bonds was underwritten by four banks, while Goldman Sachs' tokenized platform GS DAP was used for the offering. The secondary issuance of security tokens was conducted on a private blockchain network and cash tokens representing claims on HKMA Hong Kong dollar fiat currency.
As an indication of Hong Kong's flexible and convenient legal and regulatory environment for innovative bond issuance forms, the HKSAR Government notes that it will release a white paper summarizing its experience and how to provide a reference for future issuance of tokenized bonds in the city country.
SEC Charges Do Kwon, Terraform Labs for Fraud
The US Securities and Exchange Commission (SEC) last week charged Do Kwon and his Singapore-based Terraform Labs for a multi-billion dollar crypto asset securities fraud. The financial regulator alleged that Kwon and Terraform offered and sold an inter-connected suite of crypto asset securities in unregistered transactions to raise billions from investors between April 2018 and May 2022 when their platform collapsed.
It also alleged that Kwon and Terraform failed to provide the public with full and truthful disclosure about their offering, while committing fraud by repeating false and misleading statements to build trust for investors.
Kwon has been on the run since the Terra platform fell. An arrest warrant was issued for him in Seoul and the South Korean foreign ministry served him a “Notice of Order to Return Passport” to invalidate his travel document after a stipulated period. A report later said he was traced to Serbia.
Ohio Enacts Law Prohibiting Compelled Production of Digital Asset Private Keys
To protect users’ rights, Ohio legislators last week passed a bill requiring no person in the state to be compelled to give up the private key of their digital asset wallet or make it known to any other person in any civil, criminal, administrative, legal or other proceedings unless a public key is unavailable.
The prohibition also extends to the compelled production of a private key to gain access to a digital identity or other interest or right except as specified, unless a public key is unavailable or unable to disclose the requisite information.
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