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Who is Gary Gensler, The Rumored New SEC Chair?

Republished by Plato



“The year is 2021, and the nation is in crisis. North Korea has just tested a missile that will soon be capable of delivering a nuclear warhead to the continental U.S. The move took Washington by surprise as the project was likely funded via a new Chinese digital currency, which allowed North Korea to bypass the global banking system. In response, the National Security Council House has gathered in the White House Situation Room to formulate short- and long-term responses.”

That is the opening of a 2019 simulation on ‘Cryptocurrency and national insecurity’ in which Gary Gensler, who is rumored to be the new chair of the Securities and Exchanges Commission (SEC), took part.

Ignoring the dramatic angle of this simulation, much of it has become real now two years on. The dollar is no longer the only convenient means of international exchange. American banks are no longer the policemen of global monetary transfers.

As a catalyst of change, bitcoin and cryptos more widely are re-shaping global finance and global trade. The question is: what does the United States do about it?

The Banker Academic

Gensler spent much of his life working for Goldman Sachs, with little known about the man except he also spent plenty of his time in the power halls of Washington.

As chair of CFTC, he reformed the institution and woke it up to the challenge of regulating the $400 trillion derivatives market.

Soon after, he went to MIT where he taught on global finance and blockchain tech, with some papers suggesting he is effectively obsessed with this new invention.

“I remain intrigued by Satoshi’s innovation’s potential to spur change – either directly or indirectly as a catalyst,” Gensler said in late 2019, adding:

“The potential to lower verification and networking costs is worth pursuing, particularly to lower economic rents and data privacy costs, and promote economic inclusion.

Further, shared blockchain applications might help jumpstart multiparty network solutions in fields that historically have been fragmented or resilient to change.

Even in this slightly less ambitious form – acting as an innovative irritant to incumbents and traditional technologies – cryptocurrencies and blockchain technology have already prompted real change and can continue to do so.”

A Friend?

The above statement is just one of many that indicate Gensler is a believer as far as the technology is concerned, and we have no reason to doubt it.

There’s a but, or quite a few of them. Where bitcoin is concerned, he considers it just a speculative asset class. A very unsophisticated view in light of the immense sophistication that bitcoin contains.

On ICOs, he said the thousands of them issued in 2017 are all securities and went so far as to court a response from Coin Center after suggesting even eth is a security.

Ethereum however is now decentralized he said so might get away with a commodities classification, as happened, but XRP is definitely a security in his view.

As someone intimately familiar with the blockchain, a more interesting question for him to answer is: what does a security mean in the digital age, or better, in the crypto age?

Jay Clayton’s answer was that it means nothing different to what it meant a century ago during the age of horse carriages.

Gensler’s answer can’t be the same, for it would contradict his own statement, and thus presumably belief, that this technology is a change catalyst.

A Reformer?

If Gensler is indeed appointed, he will become the third most powerful person on the economy after Biden and Yellen.

He will be in command of a $20 trillion economy where entrepreneurship is in steep decline, IPOs have fallen, and where tech companies are concerned, they have scathing critiques of the current securities framework being incompatible with new digital businesses and their necessities.

The young across the world are outraged at the investment prohibitions enforced by the law, an outrage that may have well contributed to the 2019 year long protests in France.

Making this a fiery time to be SEC chair and yet a time of great opportunity because the institution is in desperate need of reform and due to its adverse effects on the economy, is under immense pressure to adapt.

As Gensler well knows, there are no rulers without the consent of the ruled, and there are no laws without their general appreciation.

This is something Clayton did not understand. He was of the view that no change was needed even though the world has greatly changed. He thought he could dictate.

Gensler appears to be very different from Clayton. First of all, he doesn’t come across as the school yard bully. Nor does he come across as completely uninformed and dare we say: stupid.

So we should be expecting a very different approach from SEC, but it isn’t very clear just how different considering he has said utility tokens are a fiction.

To help him, we’ll go back to this simulation and give our advice to the president, but this time the events are not unfolding, instead is what we told him two years prior.

The Immortal Race

You have two choices: fight or run. You can fight this technology, you can constrain it, delay it, maybe even injure it, and focus fully on maintaining the supremacy of the current framework, strengthen banks and their role, and promote this new technology only in the context of banks using it.

This can buy some time while the bank rails are upgraded, to the point eventually it may be possible to issue a crypto dollar, but that is difficult to do in a way we can control.

In addition, there are potential externalities. We can fight this only within USA. Other countries might adopt it and might even see strategic value in doing so. That’s a big risk, but you might think we can’t let our banks go the way of blockbuster.

Unless it’s our blockbuster-er. As this is a technology that anyone can put together, the only way we can maintain supremacy is to ensure we have the highest level of expertise, experimentation and even implementation of this technology.

Then, the free market can provide a crypto dollar and since those issuers would be within our jurisdiction, we can regulate them just as we do banks.

In the end, whether it’s a traditional bank or a tech bank is far less relevant than whether the best of them are American ones. To us, to the government and to the country, it makes no difference.

So instead of fighting it, you can run in the race for technological progress and do your best to win because that’s the only option that ends up with a chance of maintaining our most advanced level of development.

Your administration therefore must not only accommodate, but promote the unstoppable march of technological innovation, and know that only by doing so can we not only maintain, but enhance our global standing.

If you do so, then the superiority of our products will naturally attract global usage. If you don’t, then the inferiority of analogue dollars will naturally cause the global adoption of digital and crypto moneys which may well be issued by another country.



Ripple cites Tetragon verdict to stress XRP’s status has not been determined yet

Republished by Plato



A court in the U.S State of Delaware has rejected Tetragon Financial Group Ltd’s request for an order requiring Ripple to redeem the Series C preferred stock held by Tetragon.

“This ruling, coupled with a separate filing the SEC made today, should put to rest any confusion. The SEC has NOT determined that XRP is a security,” said Ripple in an announcement made earlier today, soon after the ruling.

The separate filing made by the SEC was in reference to John E. Deaton’s allegations on behalf of XRP holders. According to Ripple’s legal counsel Stuart Alderoty, the SEC found that the complaints made by the plaintiffs were mere allegations and the court presiding over the SEC’s case is “the exclusive method for testing the validity” of those allegations.

According to the ruling of the judge in the aforementioned case,

“… XRP is no more a security after the SEC filed the enforcement action than it was before it. A determination …resolves the question of whether XRP is a security. The enforcement action, by contrast, asks that question. The question is not yet resolved, so a determination has not yet been made. And when it is made, it will be made by the District Court.”

Here, it’s worth noting that soon after the ruling came out, Ripple went on to call the Tetragon lawsuit an opportunistic move to take advantage of the SEC’s allegations. In fact, Ripple’s lawyers have repeatedly and publicly claimed that the SEC is “dead wrong,” calling the regulator’s actions misguided.

Finally, Ripple’s legal counsel Stuart Alderoty was quick to highlight that today’s actions would put to rest the FUD that the SEC unilaterally determined that XRP is a security.

“We look forward to bringing the SEC’s case to a just and speedy resolution and remove the cloud that the SEC’s misguided actions have cast over the XRP market,” Ripple claimed.

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DeFi will bring a new golden age for the film industry

Republished by Plato



With an explosion of video streaming as a result of the COVID-19 pandemic and now around $40 billion locked into decentralized finance protocols, it’s time for decentralized finance and the film industry to meet.

Film financing is a cumbersome and inefficient system. Investors are the first to put their money in but last to see any return. There is no transparency into how funds are being used during production or how profits are allocated after distribution. Investment decisions are generally based on very little data about what people actually want to watch, so the chances of a film’s success are completely unknown until its release. DeFi and blockchain technology can address many of these problems by forming a new realm of decentralized film financing, or DeFiFi.

Related: It’s time for Hollywood to move to blockchain — Yes, you read that right

What is DeFiFi?

Imagine the creation of a decentralized film fund, in which financiers all hold a stake in the success of films that are produced by the platform. Using blockchain technology and decentralization, creators could present their projects to the community, which would vote on what films receive funding. The winning projects would be granted the financing they need from community-managed funds.

The production of the films would happen off-chain, so there would be a need for oversight from members of the DeFiFi community to ensure funds are being used appropriately during production. The completed film could then be distributed on the platform to the built-in audience who voted for it. The accounting process would be completely transparent, as the in-app currency paid to watch the film would flow back into the DeFiFi fund and be distributed to all participating parties per the encoded contract. Since all the transactions would be recorded on the immutable and transparent ledger, there could be no confusion about how profits were being used.

This level of transparency is unheard of in the existing, fragmented processes of financing, production and distribution. In a DeFiFi ecosystem, creators who would otherwise have no access to film financing gain the chance to bring their ideas to life. Regular people who are generally at the whims of whatever Hollywood decides would gain a say in what films are produced. Financiers can make smarter decisions on what films to back based on what real people want to watch.

By harnessing the “wisdom of the crowd,” each film has a built-in audience of supporters who would organically assist in the promotion of the film once released. The unprecedented visibility into the use of funds and distribution of profits could dramatically increase the number of people willing to invest in films, potentially leading to a new golden age for the movie industry.

The golden age of decentralized film

With investing in films made easier and more transparent, more financiers will want to participate. The more capital available for film production, the more films can be produced, supporting more filmmakers with interesting ideas and providing more great content to movie fans around the globe. The dawn of a new era in the decentralized film industry could be upon us.

Other use cases for DeFi and blockchain technology that would help to expand the entertainment ecosystem to further support creators and incorporate fan participation would be digital rights tracking and rewards for engagement. At present, the only recourse for creators whose ideas have been used without credit or payment is to go to court, which is prohibitively expensive for many filmmakers. A digital rights management system would allow artists to register their ideas at any stage of the creative process — i.e., concept, treatment, script, rough cut, final film. Their submission would be recorded on an immutable ledger and timestamped, providing leverage to any creator whose ideas or work has been stolen without compensation.

Related: Circling back to blockchain’s originally intended purpose: Timestamping

Additionally, fans and other ecosystem participants can be rewarded for their participation in building a thriving film community — unlike on social media platforms today, where users are responsible for the billions of dollars made by the platforms but who receive no compensation for their part in these tech giants’ explosive growth.

It’s about time users gain control over their own data, which has become equivalent to currency in the digital realm. In a DeFiFi ecosystem, users could be rewarded for contributing through curating content, promoting posts or performing other tasks essential to the upkeep of the decentralized network, such as running nodes, validating blocks of transactions or identifying bugs in the code.

DeFi is only just getting started

DeFi has contributed immensely to the growth of the entire cryptocurrency economy and will continue to play a pivotal role in drawing users to the space. Many of the most impactful use cases for DeFi have yet to be fully realized, and so the growth we will see in 2021 will well-surpass the surge in 2020. There are opportunities to be leveraged in bringing DeFi to film but also to fundraising, grant issuance, corporate treasuries and hedge fund governance. The possibilities are endless.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Gagan Grewal is the CEO of Mogul Productions and leads the financial vision for the platform, including the development of the Mogul Continuous Organization and Smart Wallet. Prior to joining Mogul, Gagan was the managing partner of a private equity firm, led the private banking team for Scotia Wealth Management, and founded his own recruiting firm with a successful exit.

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Thailand’s crypto market seeks clearer regulations as industry interest peaks

Republished by Plato



Thailand currently lays claim to one of the more regulated crypto trading markets in the world, with exchanges having to adhere to strict regulatory standards. For example, at the start of the year, Bitkub, the country’s largest cryptocurrency exchange, was shut down by regulators after the trading platform faced a series of lengthy service outages. 

Despite these seemingly stringent conditions, the country’s crypto market has continued to thrive. That being said, a tipping point came recently when Thailand’s Securities and Exchange Commission released a statement that it plans to enact a 1-million-baht (about $33,000) annual income minimum requirement for crypto investment in the country.

The decision was met with immediate backlash from the local investor community — as it would potentially exclude low- and middle-income earners from the cryptocurrency market — so much so that the regulatory body had to clarify its above-stated stance within days of making the announcement.

In this regard, the SEC noted that the previous draft document was just a means of gauging investor sentiment, with Ruenvadee Suwanmongkol, secretary-general of the Thai SEC, claiming: “I proposed the criteria that many considered too tough to prompt people to express their opinions on the matter and did not intend to say these are the exact qualifications that will be implemented.”

Providing his thoughts on the matter, Pinpraaj Chakkaphak, CEO of local cryptocurrency exchange ERX, told Cointelegraph that the original intention of the SEC was not malicious but one that sought to create a mechanism that could help protect investors from any unwarranted market risks, adding:

“We understand the good intentions of the SEC. However, many stakeholders in the digital assets market and the majority of the public disagree with the plan. From ERX’s point of view, this protection mechanism should not focus on minimum income; instead, it should come in the form of improved information disclosure by operators and investor education.”

Regulations should not impede market growth

To gain a better overview of the situation, Cointelegraph spoke with Konstantin Anissimov, executive director at CEX.IO — one of the most widely used crypto exchanges in Thailand. In his opinion, by taking a stance that potentially hampers lower-income families from gaining access to a potentially lucrative investment class, the SEC was going against the very fundamentals of a free-market economy and freedom of choice.

However, on the other hand, he did concede that if a majority of the lower-income population did not have any basic financial education and understanding of the risks of such investments, the SEC’s approach may have been the only way to protect the public’s best interests. Anissimov added:

“Multiple approaches can be taken, and minimum income is just one of them. I am sure that the Thai SEC will take on the feedback received from the investment community and act in the interest of its population.”

Additionally, in a statement shared with Cointelegraph, Akalarp Yimwilai, CEO of a local crypto trading platform Zipmex, pointed out that he sincerely believes that the proposed draft law comes from a place of good intent and that it serves to protect investors by minimizing unnecessary risks.

He highlighted that the Thai crypto market is still in its infancy and that regulations around the space have only come into being around three years ago. As a result, the SEC is still looking to craft a legal framework for this asset class that can protect investors from future risks. However, Yimwilai did go on to say:

“The proposed draft aims to protect, but it is important to also see that in doing so, a higher wall is being proposed which limits the opportunity of access to digital assets for many in this country. The key here, I believe, is to work hand in hand with the SEC to ensure the sustainability and height of that wall.”

Lastly, he believes that if the current draft was to get implemented, it could potentially lead to a substantial rise in the number of scams, potentially driving investors into an unregulated market where they could run into uncharted territory. Not only that, it could also lead to a lot of much-needed capital flowing out of Thailand, resulting in the long-term detriment to the country’s development and finances.

The Thai crypto market has been booming

The Thai digital assets industry has grown significantly during recent months. According to the country’s SEC, the number of cryptocurrency trading accounts within the county has risen from 160,000 at the end of 2020 to 470,000 on Feb. 1. Not only that, approximately 50% of these accounts are owned by investors younger than 30 years of age.

Furthermore, Chakkaphak pointed out that crypto trading volumes in November 2020 lay at 18.44 Billion THB, compared to 100.90 billion in February 2021, thus showcasing a staggering increase of 447.18% within a matter of just three months. He went on to add:

“Investors wanting to invest in the traditional stock market or in digital assets should educate themselves and do in-depth research. Our priority is to enable and educate investors to learn and build knowledge about investing in digital assets, as it is a new opportunity for all investors.”

Also, according to Yimwilai, Zipmex traded $1 billion in 2020 in Thailand, with the figure expected to grow exponentially in 2021. Not only that, but the cryptocurrency exchange was also able to raise $6 million in fresh funding from U.S.-based VC firm Jump Capital.

He further highlighted that the assets under the company’s management are currently valued at around $100 million, which seems to back up the notion that the Thai masses are ready to dive head first into the burgeoning crypto sector.

Do things look promising?

Though for now, the SEC seems to be backtracking on its initial outline for market entry requirements. According to the Suwanmongkol, people who are putting their hard-earned money into cryptocurrencies are mostly new investors who may not be fully aware of the risks that come with investing in high-risk, highly volatile assets. “If the SEC just stands by and does nothing, it would be totally our responsibility if investors lose on cryptocurrency,” she added.

Lastly, the SEC reportedly had a dinner talk with representatives from local digital exchanges recently, suggesting that the government agency may still be looking to consult prominent members from within the space. The final hearing, regarding the matter, will take place on March 24 before the survey finally closes on March 27.

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