The New York state Department of Financial Services (DFS) released guidance on Dec. 15 for regulated banks seeking to engage in activities with virtual currency. The guidance, which took effect immediately, describes the application process and “summarizes the types of information the Department considers relevant” for obtaining the agency’s approval. The 11-page document consisted largely of bullet points as it described the informational requirements for several categories, such as “Business Plan” and “Consumer Protection,” in detail, followed by a series of formal checklists. Approval is required 90 days before engaging in activities, the document reminded. Approval for prior activities “does …

A United States Trustee has announced nine creditors to the committee responsible for part of crypto exchange FTX’s bankruptcy proceedings. According to court documents filed Dec. 15, U.S. Trustee Andrew Vara named crypto market maker Wintermute Asia among those on the ‘Committee of Unsecured Creditors’. Other creditors included individual investors, crypto hedge fund Coincident Capital, GGC International — an affiliate of lending platform Genesis — Pulsar Global, Wincent Investment Fund, and Octopus Information. The committee would play a role in representing creditors who lost funds or were otherwise affected by the downfall of FTX. The firm’s bankruptcy filing on Nov. …

Following the global trend of tightening the crypto regulation in the aftermath of recent market failures, France may reassess its eased regime of licensing for digital asset providers. That would challenge the nation’s efforts to present itself as one of the most pro-crypto countries in Europe. According to the Financial Times, Hervé Maurey, a member of the French Senate’s finance commission, proposed an amendment to eliminate a clause enabling crypto companies to operate without a full license until 2026. The current regime preserves this possibility even after the Markets in-Crypto Assets (MiCA) coming into law in 2024. Maurey’s amendment will …

The Financial Conduct Authority’s (FCA) recently appointed chair has presented an unfriendly attitude toward cryptocurrencies in a cross-party Treasury select committee meeting. Ashley Alder, who will assume control of the FCA in February 2023, described cryptocurrency-related businesses as ‘deliberately evasive’ and suggested the sector facilitated money laundering during the meeting with Treasury members on Dec. 14. According to a report from Financial Times, the current chief executive of Hong Kong’s Securities & Futures Commission highlighted his belief that the cryptocurrency ecosystem created risk which called for further regulatory purview from government: “Our experience to date of [crypto] platforms, whether FTX …

Mike Belshe, the CEO of digital asset custodian BitGo has confirmed that Alameda Research attempted to redeem 3,000 Wrapped Bitcoin (wBTC) in the days before FTX’s bankruptcy filing on Nov. 11. During a Dec. 14 Twitter Spaces hosted by decentralized finance (DeFi) researcher Chris Blec, Belshe confirmed the firm knocked back the redemption request because the unknown Alameda representative involved didn’t pass Bitgo’s security verification process and seemed unfamiliar with how the wrapped-Bitcoin burning process worked. Full convo here. This part starts at 1:09:30. https://t.co/0KQg6bzd8k — Chris Blec (@ChrisBlec) December 14, 2022 “[The security details] didn't match the process. So …

According to Bahamian court records filed on Dec. 14, Ryan Salame, the former co-CEO of FTX Digital Markets told the Securities Commission of the Bahamas (SCB) on Nov. 9 that FTX was sending customer funds to its sister trading firm Alameda Research. He also told the SCB only three people had the access required to transfer client assets to Alameda: Former FTX CEO Sam Bankman-Fried, FTX co-founder Zixiao “Gary” Wang and FTX engineer Nishad Singh. The allegation spurred SCB executive director Christina Rolle to contact the commissioner of the Royal Bahamas Police Force to request an investigation. Related: Realized losses …

Crypto-friendly Congressman Tom Emmer is considering re-floating a bipartisan bill that would lift the requirement for certain crypto businesses and projects to register as Virtual Asset Service Providers (VASPs) in the wake of the FTX collapse. The bill titled “Blockchain Regulatory Certainty Act” was led by Republican Emmer and Democratic Congressman Darren Soto. It was initially tabled at the 117th congress on Aug. 17, 2021, but did not make it any further down the line. Probably a good time to re-up my bipartisan Blockchain Regulatory Certainty Act. The bill asserts that blockchain entities that never custody consumer funds are not …

After being denied bail in a Bahamas Magistrate Court, former FTX CEO Sam Bankman-Fried could spend up to two months in the country’s Fox Hill Prison, a facility with reported cases of physical abuse against prisoners and “harsh” conditions. Authorities in the Bahamas reportedly remanded Bankman-Fried to the medical wing of Fox Hill following a Dec. 13 hearing. SBF’s counsel said he had been taking medication prior to his arrest on Dec. 12 including Adderall and anti-depressants, but it’s unclear if the former CEO will serve his time at the correctional facility, its medical unit, or an alternative location. According …

The Organisation for Economic Cooperation and Development (OECD) analyzed the crypto winter in a new policy paper titled “Lessons from the crypto winter: DeFi versus CeFi” released Dec. 14. The authors examined the impact of the crypto winter on retail investors and the role of “financial engineering” in the industry’s current problems and found a lot not to like. The paper from the OECD, an intergovernmental body with 38 member states dedicated to economic progress and world trade, concentrated on events in the first three quarter of 2022, and placed the blame for them squarely on a lack of safeguard …

The collapse of FTX was triggered by Binance, claimed investor Kevin O'Leary on Dec. 14 speaking at the United States Senate committee hearing about the crypto exchange meltdown. O'Leary, who was a paid spokesperson for FTX, provided details about conversations with Sam Bankman-Fried in the days before FTX filed for bankruptcy. During his testimony, O'Leary said he had questioned SBF regarding how customer funds were used in the past 24 months and was told that almost $3 billion were used to repurchase shares of FTX owned by Binance. When asked by Senator Pattrick Toomey why FTX failed, O'Leary replied, "I …

United States lawmakers with the Senate Banking Committee had their share of crypto proponents and skeptics in a hearing exploring the collapse of the FTX exchange. In a Dec. 14 hearing on ‘Crypto Crash: Why the FTX Bubble Burst and the Harm to Consumers’, many senators reiterated views on crypto they had held seemingly without considering the events leading up to the collapse of FTX and the arrest of Sam Bankman-Fried. Unlike in a Dec. 13 House hearing — in which FTX CEO John Ray was the sole witness — the Senate hearing featured a mix of anti- and pro-crypto …

In the months following the announcement of my company’s first experimental title, Cyberstella, visits to my personal LinkedIn profile increased by an astonishing 300%. What does this tell us about the rising trend of anonymous developers popping up in every Web3 community to spam users with investment opportunities and then disappear from the face of the Earth? Well, it spells out trouble for anonymous crypto developers who think they can get away with never putting their face where the money is, so to speak. The fundamental principle behind crypto investing is a two-step process: Issue your project’s native token, leverage …