Swiss financial regulator: a risk Factor for the cryptocurrency investment is 800%

Management to oversee the operations of the financial market Switzerland (FINMA) informally signaled that the risk ratio for cryptocurrency investments should amount to 800%. The Agency announced this figure in a letter dated 15 October in response to the Association request EXPERTsuisse, consisting of experts in the field of tax and audit activities.

In his letter to FINMA also said that the relevant legal provisions are not yet valid, therefore, banks and other stakeholders are often required to clarify this issue.

“FINMA recently received many inquiries from banks and securities dealers, which owns positions in cryptocurrency assets, and subject to requirements on capital adequacy, risk allocation and legal regulations on the calculation of ratios short-term liquidity” —quoted by Swissinfo representatives of FINMA.

In Switzerland, for several years there has been a formal integration of cryptocurrency products and banking sector, this European country is trying to create a legal environment that can support the development and operation of new financial instruments. At the same time, until the international Basel Committee on banking supervision develops all acts and laws necessary to regulate this area, FINMA can only give approximate figures.

However, the final decision may be announced at the end of November, when is the next meeting of the Basel Committee. Therefore:

“All scriptactive must assign an overall risk ratio of 800% to cover market and credit risks, regardless of where hold positions in the banking or trading assets,” — said in a letter to FINMA.

According to several sources, comment on the situation, 800% is a big figure, but it is within the allowable range. For example, the startup SEBA, which in September drew 103 million dollars to create cryptocurrency Bank of Switzerland, said:

“This recommendation will have limited impact on its business model. Nice to see that the banks no longer look away from the increased number of clients requiring services associated with cryptocurrencies, and ask for advice and do your own contribution,” said a spokesman for lobby group Bitcoin Association Switzerland.

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Japanese regulator sent a warning to the six largest cryptocurrency exchanges of the country

Financial regulator of Japan – financial services Agency (FSA) sent the warning, the six largest stock exchanges of the country in which decided immediately to make certain improvements in its operations.

According to a press release published on its website, the FSA is required to conduct a full review of the risk management system is subject to the requirements of anti-money laundering (AML) practices and know-your-customer (KYC). Orders were sent to the following exchanges: bitFlyer, Quoine, BTC Box, Bit Bank, Tech Bureau and Bit Point.

bitFlyer, currently is on the 23th place in the world by trading volume. Representatives of the exchange said they have already begun to implement the recommendations of the FSA, in particular, has closed registration for new users and also began a review of existing data users.

The FSA concluded that in the case of bitFlyer “you have not created an effective management system to ensure reliable operation of the business, as well as the adoption of countermeasures against money laundering and financing of terrorism”.

Representatives of the exchange said they will fulfill all 11 items listed in a and provide a report on the work done by 23 July. Also representatives of the exchange said that:

We apologize to all stakeholders and our customers in connection with this order.

Recall that the FSA has sharply tightened their requirements to cryptocurrency exchanges after the incident with Coincheck, when it was stolen about 530 million dollars in the cryptocurrency.

As a result of further verification about 7 cryptocurrency exchanges have closed, and some others have suspended their work.

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What he thinks about cryptocurrency is the new head of the South Korean regulator?

According to The Korea Times, newly appointed Manager, financial Supervisory Service of South Korea (FSS) said at a press conference on may 6 that he sees in the cryptocurrency “some positive aspects”.

The new head of the FSS also said it will work on the regulation of cryptocurrencies together with other regulators.

Yun Suk-star, who will officially begin work on may 8, said that better regulation of the cryptocurrency sphere should contribute to the emergence of a large number of cryptocurrency products.

Young did not answer the question of how FSS intends to work further with the internal cryptocurrency exchanges, instead he said that “there are many problems that need to be addressed. We will do this gradually.”

After the introduction of the ban on anonymous trading, and operations for non-resident foreigners and South Korean citizens under 18 years “daily volumes for transactions with cryptocurrencies fell to 400 billion won, from 4 trillion”, – said Vice-President of the South Korean cryptocurrency exchanges Bithumb Lee Cheong-Ah in an interview with Korean newspaper.

The representative of South Korean cryptocurrency UpBit exchanger commenting on The Korean Times the inauguration of the new head of the regulatory authority stated that they “do not object to the introduction of rules”:

You can not completely kill the market, just imposing the rules. What should think the new head of the FSS, is how regulators can help the cryptocurrency industry to grow up and become better.

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The financial regulator of Hong Kong called ICO “blatant fraud”

The Commission on securities and futures of Hong Kong (SFC) has publicly expressed their skepticism about primary offerings of coins (ICO).

Speaking at the event dedicated to the investment industry Julia Leung, Deputy head of the Commission on securities and futures in Hong Kong, has again warned the public about the risks associated with the ICO:

“Although we recognize that innovative technologies such as the Blockchain, have the potential to improve the efficiency of the financial sector, it does not give anyone the right to hold public fundraising, violating the legislation on securities”.

Julia Leung also expressed concern that, despite the loud statements, many of ICO projects in fact may not offer the promised technological innovation, which means big risks for investors:

“Many ICO questionable, if any, are outright fraud. Issuers manage to escape from the scrutiny of the police or securities regulators due to the transboundary nature of their projects, as well as the nature of cryptocurrency”.

Also the head of the SFC commented on the recent closure of one of the local ICO-projects, in which, in the opinion of the regulator, offered in Hong Kong of unregistered securities. Earlier, SFC ordered several cryptocurrency exchanges to delist tokens obtained during the ICO, on the basis of their consideration by the Agency as securities.

In the framework of its activities, the SFC seeks to educate the public about the alleged risk of investing in cryptocurrencies. In January, the Commission on securities and futures of Hong Kong launched a campaign in the media using the underground network of the city, with the aim to ease the growing public interest in investments through ICO.

In his speech Leung explained the popularity of such investments. Based on her statements ICO appealing through the spirit of adventurism among the users:

“Most of those who invest in the ICO understand that tokens have no value, but rely on their fast growth on the secondary market.”

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Chinese regulator plans to continue “removal of cryptocurrency activity in the country”

Last year the Chinese government at the legislative level to prohibit the holding of ICO and stopped with the yuan of all cryptocurrency exchanges. According to local editions, and announced plans of the people’s Bank of China (PBOC) for the year 2018, the regulator aims to complete the initiated by the “correction” all transactions made with the virtual currency and the introduction of new “reforms and principles of supervision.”

It has been many months since then, as was her inhibitions, but investors continued to monitor the actions of the IBOs in the hope that sooner or later the government dreams will allow operation of cryptocurrency exchanges. It is worth noting that such a development is unlikely given the rumors that the Bank plans to create its own digital currency. Moreover, talking about the opening of a public cryptocurrency exchanges.

Last week representatives of the NBK, said that the Bank will continue to work towards the detection and suppression of cryptocurrency transactions, including schemes of multilevel trade. According to the representative of the institution, the Central Bank conducts research with the aim of creating your own digital of the yuan:

“There will be an updating of all types of virtual currencies. First and foremost, we will launch the reform and innovation to promote research and development in the field of issuing its own digital currency the Central Bank. Secondly, the Bank should strengthen the control and adjust the operation of all types of virtual currencies”

On 3 April, the Director General of the NSC for financial research, sun Guofeng said that traditional funds have an adverse impact on interest rates in the economy, and cryptocurrency issued by the Central Bank will increase interest rates. Based on many reports in recent years China was interested in developing its own cryptocurrency, and the Central Bank participated in many blockchain studies. Sun Guofeng believes that digital currency can help the NSC in the application of methods of negative interest rates, and therefore progress in the field of research and development the Central Bank should be accelerated.

“In the long term due to the lower natural interest rate, the monetary authorities of regulation may include a policy of negative interest rates in the normal tools of monetary policy,” explains sun Guofeng.

They say that the Chinese government still has a negative attitude towards cryptocurrency, but the concept of the blockchain is close to him. Speculators believe that the digital Renminbi, issued by the PBC, could destroy public baccani, for example, the Bitcoin blockchain. Currently there is no information about what action is going to take the regulator of China. In the vast majority of reports describes in detail how the IBO monitors the exchange who have moved abroad, as well as the OTC market of digital currency, which is under the watchful eye of the Central Bank.

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Japanese regulator suspended the activities of two cryptocurrency exchanges

Financial regulator of Japan imposed sanctions on three cryptocurrency exchanges after a series of inspections of trading platforms in the country. The two commercial platforms have been ordered to suspend trading activities. The regulator is not satisfied with the measures taken to prevent money laundering and minimise systemic risks.

The financial services Agency (FSA) has suspended the FSHO and Eternal Link, and Lastroots received the instruction to carry out a number of measures to improve security measures.

Eternal Link had to stop work from April 6, FSHO since April 8. It is expected that Japan’s Finance Minister will present the full results of the investigations conducted by the FSA.

In March, the regulator has already suspended the work of two cryptocurrency exchanges — Bit Station and the aforementioned FSHO, which by order of the FSA was forced to pause for a month. The Agency reported that the leadership of the FSHO has not conducted thorough inspection of large-scale transactions and has not carried out necessary measures “for the safe operation of the exchange”. According to Japanese press, Bit Station came under sanctions due to the fact that its senior officials was involved in the theft of cryptocurrency deposits. Such accusations led to the arrests of four senior representatives of two cryptocurrency exchanges in South Korea.

In early February, the FSA said that checks all cryptocurrency platform in the country, including 16 platforms that were not registered at the time of application. The regulator has published a list of 32 of cryptocurrency exchanges, half of which has already received a license from the FSA for the provision of services for the exchange of cryptocurrencies.

Such measures, the Japanese regulator made after the notorious hacking Coincheck in January. Authorities still are investigating the largest in the history of cryptocurrency Heist. According to experts on cyber security, cyber criminals were able to launder the vast majority of NEM tokens with darknet channels.

Crime in cyberspace has become a real problem in Japan. In 2017 as a result of theft or fraud, lost more than $ 6.3 million in the cryptocurrency, and that’s not counting theft of $ 530 million from the stock exchange Coincheck.

The Japanese authorities decided to create the center, which is dedicated to the fight against cyber crime, including the theft of cryptocurrency. The command employs approximately 500 analysts and investigators from different law enforcement units in the country. According to the National police Agency of Japan in 2017, was not less than 149 attacks associated with cryptocurrencies.

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The regulator of Luxembourg warns of the risks of investing in the ICO and cryptocurrencies

The financial regulator in Luxembourg (CSSF) has issued a warning about the risks associated with investments in cryptocurrency and ICO.

In the official document, the regulator notes that cryptocurrencies are not issued by any Central Bank, very volatile, and trades are often not fully transparent. Also it refers to the lack of consumer protection and the risks of theft, as cryptocurrency exchanges are highly vulnerable to hackers. In addition, the regulator claims that the information about the cryptocurrency “is often incomplete, difficult to understand or does not reflect the related risks”.

According to the regulator, the ICO model is not proven, and the information about the tokens and the collected money is not verifiable.

The regulator of Luxembourg also said that he is positive to Blockchain, when it is not used in the field of cryptocurrencies and believes that the use of this technology “can bring certain advantages in the financial sector and in various innovative projects”.

Recently, other European regulators have also expressed skepticism about the cryptocurrency and ICO. The Federal financial supervision authority of Germany (BaFin) published the risks associated with investing in cryptocurrency and ICO. In November 2017, the European authority for securities and markets (ESMA) warned investors about the high risks ICO.

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The French regulator has blacklisted 15 cryptocurrency sites

The French stock market regulator The Autorite des Marches Financiers (AMF) made 15 of cryptocurrency sites to the black list.

According to a press release, listed companies are violators of the “Law Sapin II”:

Investment proposals related to the various assets are under the control of AMF. Therefore, no bids may be advertised in France without prior registration with the AMF.

The press release lists 15 companies-offenders who continued to advertise and sell their investment services in France, despite the new rules.


In the black list are also businesses that illegally offering investments in commodities such as rare earth metals, wine and diamonds.

The AMF reminds consumers that “despite advertising you must not lose sight of the fact that high profits are always associated with high risk.” Further, the Agency recommends that users always carefully study investment and refrain from investing in areas where they have sufficient understanding.

Recall that in December last year, the Manager of the national Bank of France françois Villeroy de Galhau issued a warning about the high risks of investing in bitcoin, saying that it is a speculative asset and not a currency or digital currency.

In January the Minister of economy of France, Bruno Le Mayor has appointed Jean-Pierre Landau, the open criticism of cryptocurrency, to lead a working group to work on the regulation of cryptocurrencies.

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