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The U.S. Securities and Exchange Commission (SEC) sued Coinbase on allegations of violating federal securities law, a day after filling a similar suit against Binance. According to the SEC, Coinbase has operated as an unregistered broker, exchange and clearing agency simultaneously, arguing that it solicited customers, handled orders, allowed for bids and acted as an intermediary all at once. "The Coinbase Platform merges three functions that are typically separated in traditional securities markets - those of brokers, exchanges, and clearing agencies... Yet, Coinbase has never registered with the SEC as a broker, national securities exchange, or clearing agency, thus evading the disclosure regime that Congress has established for our securities markets." https://www.sec.gov/news/press-release/2023-102

The International Organization of Securities Commissions (IOSCO) published its conclusive report containing policy suggestions for crypto-asset and digital asset markets, after a consultation period that started in May 2023. The recommendations aim to help establish a coordinated global regulatory response to the risks posed by crypto-asset service providers (CASPs), including market abuse, conflict of interest, client asset protection and disclosures. The regulatory approach taken is consistent with IOSCO's principles and associated standards for securities markets regulation, and IOSCO denied crypto industry requests for a bespoke regime for stablecoins. https://www.iosco.org/library/pubdocs/pdf/IOSCOPD747.pdf

The American Institute of Certified Public Accountants (AICPA) published proposed criteria for stablecoin issuers when they disclose their proof of reserves. It asks for more details than any stablecoin issuers currently provide in their disclosures. For example, the call for issuers to disclose the banks where they hold cash, the amount of redeemable stablecoins on each blockchain, and details about tokens that are not redeemable, either temporarily or permanently (e.g., pre-minted or blacklisted tokens). Plus proof of reserves will need to disclose the conditions required to redeem the stablecoin directly.

The International Organization of Securities Commissions (IOSCO) published nine decentralized finance (DeFi) policy recommendations covering six key areas: (1) understanding DeFi arrangements and structures, (2) achieving common standards of regulatory outcomes, (3) identification and management of key risks (4) clear, accurate and comprehensive disclosures (5) enforcement of applicable laws, and (6) cross-border cooperation. They are meant to be complementary to the crypto and digital assets markets recommendations issued in November 2023.

The Dubai government approved a new virtual assets law and established the Dubai Virtual Assets Regulatory Authority (VARA).  VARA will operate as an affiliated agency of the Dubai World Trade Center and will focus on compliance and disclosures of virtual asset service providers in the United Arab Emirates (UAE). The new agency will also handle the UAE's crypto licensing regime. These crypto licenses will only be given to firms that establish a business presence in the UAE.

Crypto exchange Kraken will "immediately" end its crypto staking-as-a-service platform for U.S. customers and pay $30 million to settle Securities and Exchange Commission (SEC) charges it offered unregistered securities. Staking is a process in which investors lock up their crypto tokens with a blockchain validator with the goal of being rewarded with new tokens when their staked crypto tokens become part of the process for validating data for the blockchain. The SEC alleged that Kraken was offering investment contracts in exchange for investors' tokens, without providing the proper disclosures and safeguards required by US securities laws. https://www.sec.gov/news/press-release/2023-25

The Abu Dhabi Global Market (ADGM) Financial Services Regulatory Authority (FSRA) published a consultation paper proposing amendments to the regulatory framework that governs the use of virtual assets. It proposes changes to the requirements on the "use, sharing, and reuse of public keys," as well as making amendments to risk disclosure requirements. The FSRA also wants to allow regulated Multilateral Trading Facility/Custodian groups within ADGM to conduct non-fungible token (NFT) activities.

The Bank for International Settlements (BIS) published a paper on how the promise of par convertibility by various types of stablecoins breaks down. Public information disclosure has an ambiguous effect on run risk. Transparency can lead to greater run risk when market expectations are pessimistic or when transacting in and out of the coins is easy (e.g., USDC). Conversely, transparency strengthens a stablecoin peg when priors are strong and conversion is costly. The paper doesn't say it, but presumably costly conversion strengthens the peg even if transparency is weak (e.g., as USDT was until recently)?

The Hong Kong Monetary Authority (HKMA) has issued new guidance for authorized institutions engaged in digital asset-related activities. Key areas covered include governance and risk management, segregation and safeguarding of client digital assets, delegation and outsourcing, disclosure requirements, record-keeping, reconciliation, and compliance with anti-money laundering and counter-financing of terrorism regulations.

The Basel Committee approved a set of changes to the crypto-asset standard that was first published in December 2022. However, the standard will only be published later this month. It also finalized the set of tables and templates for banks to use in crypto-asset disclosures. https://www.bis.org/bcbs/publ/d567.htm

The Bahamas' Parliament passed the Digital Assets and Registered Exchanges Act, 2024 (DARE 2024) 1.5 years after the collapse of Bahamas-headquartered FTX. It will tighten requirements for virtual asset service providers (VASPs) and put in place a full licensing regime. VASPs will be required to have a trade surveillance system in place, and insider trading, unlawful disclosure of information and market manipulation is prohibited. https://laws.bahamas.gov.bs/cms/images/LEGISLATION/BILLS/2024/2024-0019/2024-0019.pdf

"CoinDesk presents a consolidated guide to what we know, and don't know, about the collateral behind the largest stablecoins."

"The US Financial Accounting Standards Board (FASB) discussed how entities that hold crypto assets within the scope of this project should present and disclose crypto assets in the financial statements. "