November 28, 2022

🔥Bahamas' reputation is in shambles thanks to FTX

November 28, 2022

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In This Issue

Latin America and The Caribbean•FTX SAGA: Now that the Bahamas’ crypto bet has gone bad, the country’s reputation is in shambles•BITCOIN: Apparently El Salvador's "Volcano Bonds" may be issued soon

Africa•CBDC: Differing motivations and uneven progress for African CBDC adoption - BIS•REGULATION: The Kenyan government wants to tax your crypto, but also protect you from scams

Asia•NEXT FRONTIER: First crypto licenses issued in Uzbekistan•BLOCKCHAIN: DBS becomes the first Asian bank to execute a tokenized repo transaction on JP Morgan's platform

Eastern Europe•REGULATION: Russia's government toying with the idea of an official country-wide crypto exchange•LAW ENFORCEMENT: Another crypto scam, this one was worth $575 million

Latin America and The Caribbean

Image Credit: Rinald Rolle via Unsplash

Crypto was supposed to take the Bahamas to the moon and diversity the country away from offshore banking. Now that FTX has crashed and burned, and took the Bahamas credibility down with it, a harsh spotlight is shining bright on the Bahamas right now and people have begun to distance themselves from the fallout. Prime Minister Philip Davis, who was with SBF when FTX broke ground on the site of its Bahamian headquarters and tweeted about the "positive footprint" it left, defended the Securities Commission of the Bahamas and said that he had “not identified any deficiencies” in the its regulatory approach. Days before the FTX collapse, global exchange OKX announced that the Bahamas would be its new regional hub.BITCOIN: Apparently El Salvador's "Volcano Bonds" may be issued soon (1 minute read)

El Salvador's congress is reviewing a bill to establish a National Digital Assets Commission that would regulate digital asset issuers, service providers, and other participants who publicly offer crypto. If passed, the bill would require that a Bitcoin Fund Management Agency be established to administer, safeguard, and invest "funds from public offerings of digital assets carried out by the State of El Salvador and its autonomous institutions," indicating that the Central American nation is going ahead with its plans to issue bitcoin-backed bonds, AKA "Volcano Bonds." The bill is expected to pass in El Salvador's Congress where the country's President Nayib Bukele's New Ideas party has a majority of seats.Want more Latin America & Caribbean news?•Government holds hackathon for equity tokenization (Portuguese)•Vitalik Buterin: Bitcoin Fans 'Ignored' El Salvador's Undemocratic Government•Central Bank President Points to Cryptocurrencies and Blockchain as the Future: “They Came to Stay” (Portuguese)•Lemon Cash lays off 38% of its employees and reviews expansion plans in Brazil (Portuguese)•Mexican unicorn Bitso sets out transparency roadmap amid FTX crash

Africa

Image Credit: Benigno Hoyuela via Unsplash

A new CBDC report by the Bank of International Settlements (BIS) surveyed 19 African central banks (there are 41 central banks in Africa) and all of them are actively interested in implementing a retail and/or wholesale CBDC, however, the motivations driving interest differed among them. Almost half (48%) of the central banks' motivation were driven by the provision of cash, noting that replacing cash with a CBDC would save money on printing, transporting, and storing banknotes and coins; meanwhile, all of the central banks hope that a CBDC will achieve greater levels of financial inclusions. Nigeria is the only country with a live retail CBDC, known as the eNaira, Ghana has a retail CBDC in a pilot phase, and South Africa is testing a wholesale CBDC for institutional use.

Kenya's lawmakers are considering approving changes to existing rules to tax crypto exchanges, wallets, individual capital gains, and transactions. The Capital Markets (Amendment) Bill, 2022 will also establish a centralized database of all crypto transactions and amend the definition of a security to include digital currencies. The bill is also intended to protect Kenyans from scams and other risks associated with crypto, which is still unregulated in the country.

Asia

Image Credit: Nosirjon Saminjonov via Unsplash

After blocking several global crypto exchanges like Binance and Huobi in August, Uzbekistan's crypto market watchdog, the National Agency for Perspective Projects (NAPP), has issued the country's first crypto licenses to two “cryptocurrency stores", physical locations where people can go to buy and sell crypto. The two licensed shops are based in Tashkent and don't appear to have an operating website yet. Uzbekistan is expected to adopt a national cryptocurrency regulatory framework in 2023 and starting on January 1st next year the government will allow licensed companies to provide crypto exchange services to Uzbek citizens and companies.

Singapore's DBS Bank became the first Asian bank to execute an intraday tokenized repo transaction (click here to learn what a repo is) on JP Morgan's Onyx Digital Assets network. The blockchain-based platform also used JPM Coin, a payment rail and deposit account ledger that enables instant settlement. During the DBS transaction, JP Morgan also acted as both Triparty Agent and Collateral Token Agent for the first time.

Eastern Europe

Image Credit: Nikolay Vorobyev via Unsplash

Russia’s State Duma is developing a draft amendment to create a national crypto exchange. Deputies plan to gather feedback from the market before presenting the document to the Ministry of Finance and the central bank. The intent of establishing a national exchange is to collect taxes, according to Sergei Altukhov, a member of the Economic Policy Committee, who said, "It makes no sense to say that cryptocurrencies do not exist, but the problem is that it circulates in a large stream outside of government regulation. These are billions of rubles of lost budget revenues in the form of taxes."LAW ENFORCEMENT: Another crypto scam, this one was worth $575 million (2 minute read)

Two Estonian citizens were arrested and charged for a $575 million crypto fraud and money laundering scheme. The two individuals, Sergei Potapenko and Ivan Turõgin, defrauded hundreds of thousands of people via a fake crypto mining equipment rental company and crypto bank. The two men were arrested in Tallin, Estonia and demonstrates that global law enforcement agencies around the world are becoming increasingly focused on crypto crime.Want more Eastern Europe news?•Employees of the Ministry of Emergency Situations detained for a bribe turned out to be thieves of equipment for mining (Russian)•New Council at Ukraine’s Securities Watchdog to Draft Crypto Taxation Regulations•Siluanov: The Ministry of Finance and the Central Bank have not yet reached a compromise on the regulation of cryptocurrency (Russian, State Media)•Siluanov warned citizens against buying cryptocurrencies and urged to give preference to OFZ (Russian, State Media)

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