ChainCatcher News, Japan is considering new lightweight legislation for cryptocurrency intermediaries (non-cryptocurrency exchanges). Last week, the Financial Services Agency (FSA) presented its ideas to the Financial System Council's Payment Services Working Group.The FSA provided an example of a gaming application or self-hosted wallet that offers access to third-party applications for cryptocurrency trading services and then switches back to the original application. In many cases, the FSA may consider the application operator to be acting as an intermediary, thus requiring registration as a cryptocurrency exchange. However, if an organization purely acts as a introducer and never touches any funds, this is quite burdensome.Therefore, the government is considering some more relaxed proposals that require intermediaries to register as intermediaries. Intermediaries will be obligated to provide information to users. They will be subject to advertising restrictions and may also bear liability for damages if issues arise.The FSA is considering how to handle losses. Currently, regulations for other financial service intermediaries that do not belong to large groups require a margin to cover potential losses. If the intermediary is affiliated with a cryptocurrency exchange, the losses may be borne by the exchange.

ChainCatcher news, according to Cointelegraph, the European Banking Authority (EBA) has stated that it will take significant steps to strengthen anti-money laundering (AML) measures, with the travel rule guidelines extending to crypto service providers and intermediaries starting from December 30. This means that crypto asset service providers (CASP) will be subject to the EU's anti-money laundering/counter-terrorism financing (AML/CFT) regime.In addition, crypto service providers and intermediaries will need to declare their multi-intermediary and cross-border transfer policies.

ChainCatcher news, the acting head of the Intermediaries Division of the Hong Kong Securities and Futures Commission, Choi Chung-fai, stated at the Asian Financial Forum that there is a trend of tokenization in traditional financial products, raising concerns about whether ownership may be lost and whether the related technology is reliable.Choi Chung-fai pointed out that regulation of virtual asset trading platforms is very important, as it involves the reliability of the public's investment of virtual assets on a platform. Therefore, it is necessary to consider the design and security measures involved, as well as how to respond to cyber attacks. Regarding the industry's proposal to allow customers to withdraw virtual assets through financial intermediaries, the Securities and Futures Commission's position is that if it involves licensed platforms, it is advisable.

ChainCatcher news, the Hong Kong Securities and Futures Commission today issued a notice regarding the activities of intermediaries engaged in tokenized securities. The notice mentioned that the Commission recognizes the potential benefits of tokenization for the financial market, particularly in enhancing efficiency, increasing transparency, reducing settlement times, and lowering traditional financial costs, but it also acknowledges the new risks associated with the use of this technology.The Commission supports intermediaries in actively tokenizing traditional securities and believes that more guidance should be provided regarding activities related to tokenized securities. The focus of the notice is to provide guidance for intermediaries to address and manage the new risks arising from the use of this new tokenization technology, so that the tokenized market can develop in a healthy, responsible, and sustainable manner.The notice emphasizes that intermediaries need to have sufficient manpower and expertise to conduct due diligence on tokenized securities and to be responsible for the overall operation of tokenization arrangements, even when third-party vendors/service providers are involved. It also highlights considerations for custody arrangements, disclosure requirements for client notices, and the complexity assessment of tokenized securities. In addition, intermediaries are required to comply with applicable laws and regulatory requirements, provide necessary information to the Commission, and implement appropriate controls in digital securities-related activities.

ChainCatcher news, SEC Chairman Gary Gensler stated in a speech released before the 2023 Global Exchanges and Fintech Conference, "There is no indication that investors and issuers in the crypto securities market should not be protected by our securities laws. As I have said many times, the vast majority of crypto tokens meet the investment contract test. These tokens are promoted by teams through websites and Twitter accounts. These tokens do not come out of nowhere. Crypto securities issuers need to register their offers and sales of investment contracts with the SEC or meet exemption requirements."Gary Gensler further stated that since most crypto tokens are subject to securities laws, most crypto intermediaries must also comply with securities laws. If intermediaries do not register, it is the investors who suffer, and the U.S. financial markets may also be affected. In other areas of the securities market, exchanges, broker-dealers, and clearing functions are separated, which helps mitigate conflicts that may arise from mixing such services. Crypto intermediaries may need to separate business lines, develop rulebooks to prevent fraud and manipulation, appropriately segregate customer funds, mitigate conflicts, or change their clearing and custody methods.Regarding crypto lending and staking as a service, Gary Gensler stated that in cases over the past few decades, the Supreme Court has made it clear that the economic reality of a product (rather than its label) determines whether it falls under the provisions of securities laws. It does not matter what assets investors put into lending or staking as a service platforms (cash, gold, Bitcoin, or anything else). Customers invest their assets through the platform, which then lends or pools, stakes, and promises returns. These are all classic securities, regardless of whether they involve cryptocurrency. (source link)

ChainCatcher News, U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler emphasized the importance of compliance for intermediaries and issuers of crypto securities in a speech at the U.S. Department of the Treasury's Financial Stability Oversight Council (FSOC). He stated, "Anything in the crypto market is incompatible with securities laws. The risks posed by this speculative, volatile, and what I believe to be fundamentally non-compliant market put investors at risk." (Bitcoin.com)

ChainCatcher news, the Secretary for Financial Services and the Treasury of the Hong Kong Special Administrative Region, Xu Zhengyu, recently published an article titled "The Hong Kong SAR Government's Policy Declaration Pragmatically Promotes the Development of Virtual Assets."The article points out that the Hong Kong Financial Services and the Treasury Bureau has recently been working to establish a licensing system for virtual asset service providers. Under the new system, virtual asset exchanges will be required to comply with regulations related to anti-money laundering, counter-terrorist financing, and investor protection, just like traditional financial institutions. This will help licensed virtual asset exchanges build credibility, allowing them to reach more investors in the Hong Kong market. In addition, financial intermediaries and banks will be able to collaborate with licensed counterparts from the virtual asset sector and provide virtual asset trading services to clients, subject to relevant regulatory conditions. (Source link)

ChainCatcher news, according to The Block, FTX CEO Sam Bankman-Fried (SBF) agreed with U.S. Commodity Futures Trading Commission (CFTC) Commissioner Christy Goldsmith Romero's views on the disclosure of derivatives trading information and knowledge testing, but he believes these tests should not be limited to digital currencies. SBF stated that requiring intermediaries such as futures commission merchants (FCMs) to disclose trading information and conduct knowledge-based testing is reasonable.It is reported that Romero previously tweeted, "Establishing a category for retail investors can provide them with more consumer protection. For example, disclosure information written in a way that ordinary people can understand, or disclosure information that can be used when weighing leverage usage rules."According to previous reports, CFTC Commissioner Christy Goldsmith Romero stated at the financial market quality conference on Friday that she intends to propose a new definition of retail investors that separates ordinary investors from professional investors/high-net-worth individuals. Romero said, "My suggestion is that we split the definition of retail into two, we can create rules and regulations for ordinary family members, and then we can expand access, which is a great opportunity to broaden access to financial markets." (source link)