Oasis patches vulnerability, Ether is security says NY AG (CFTC disagrees), India imposes crypto KYC, Nigeria may change crypto course, Iran CBDC pre-pilot, Thai staking proposal

Hello everyone,

I prepared the bi-weekly update on Friday and much has happened since then: the collapse of Silvergate, SVB and Signature, Coinbase filing an amicus brief in the Wahi case, the US DoJ reportedly investigating TerraUSD’s implosion and Binance announcing GBP on-and off-ramps will be suspended in May.

Here’s what happened up till Friday last week:

• Oasis.app patched the vulnerability that led to a UK court order in the Wormhole exploit case:

chrisb.eth 🦇🔊 @chrisbducky

TLDR; OASIS.APP CAN NEVER BE COMPELLED TO DO WHAT IT DID TO THE WORMHOLE HACKER AGAIN - OUR AUTOMATION CONTRACTS ARE NOW FULLY DECENTRALIZED Please read on for a detailed account of how we got here and why we made the decisions we did👇

More news from Europe

• France is tightening its licensing requirements for crypto companies. Under a bill waiting for the President’s signature, a transition period offered to crypto companies currently operating in the country will be abolished.

• Profits from crypto trading are taxable, the German Federal Fiscal Court ruled. 

• BaFin, the German financial services regulator, declined to view all NFTs as securities, instead proposing a case-by-case analysis.

• A UK parliamentary committee heard Financial Conduct Authority officials about crypto regulation.

North America

• Ether, like LUNA or UST, is a security, according to New York State’s Attorney General. She brought a lawsuit against KuCoin for failing to register as a securities and commodities broker-dealer and falsely representing itself as an exchange. The claim also alleges that KuCoin sold unregistered securities in the form of KuCoin Earn, its lending and staking product. The AG is seeking a court order “that stops KuCoin from misrepresenting that it is an exchange, prevents the company from operating in New York, and directs KuCoin to implement geo-blocking based on IP addresses and GPS location to prevent access to KuCoin’s mobile app, website, and services from New York.

  • And just to confuse us even more: stablecoins and Ether are commodities, reaffirms the US CFTC chair. 🤷🏻‍♀️

• Silvergate announced voluntary liquidation, sending crypto prices south. (And by now we can add the SVB and Siganture updates.)

• Binance.US was given the green light by a US bankruptcy lawyer to buy assets from Voyager Digital. The DoJ appealed.

• The US government appears to have been moving US$1 billion worth of Bitcoin, in what may be a precursor to a crypto sale.

• DeFi will be on the agenda for the inaugural US CFTC tech advisory meeting on 22 March.

• Naomi Osaka and Shaquille O’Neal may be dropped as defendants from an FTX-related class action lawsuit in the US. A federal judge’s order said it was unclear whether the two sports stars had been served. The plaintiffs have until December to show cause.

• US lawmakers launch another attempt to exclude crypto validators and miners from the definition of ‘brokers’ required to report transactions to US tax authorities under the Infrastructue and JOBS Act.

• Changing tax obligations on crypto wash trading could lead to billions of revenue income, according to Biden budget plans.

• US accounting body PCAOB urges caution on proof of reserve reports, which investors should not view as evidence of solvency, it said.

Asia

• India imposes KYC obligations on all crypto companies.

• The Thai SEC wants to prohibit crypto asset service providers using crypto deposits for staking or lending. It plans a public hearing and consultation on the proposed regulation.

• WeChat integrates the e-renminbi into its platform.

Middle-East

• Iran’s Central Bank completes a pre-pilot of its CBDC.

Continent of Africa:

• Nigeria’s president-elect wants to “reform government policy to encourage the prudent use of blockchain technology in finance and banking, identity management, revenue collection and the use of crypto assets.” A review of blockchain and digital assets rules should create “a more efficient and business-friendly regulatory framework”, according to the manifesto.

If you want more…

📚 Newsletter: Around the Blockchain’s crypto law newsletter edition with SEC's new approach to custodies, South Dakota's proposed UCC amendment, CSA's requirement on crypto and more.

🎧 Podcast: Law of Code podcast episode #78 with Multicoin Capital’s General Counsel and Chief Compliance Officer Greg Xethalis discussed the GBTC, Bitcoin-backed ETPs, the Investment Act of 1940 and algorithmic stablecoins.

Thanks for reading!