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Regulation

Markets will decide on regulations, not the government: Currency Comptroller

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Brian Brooks, Acting Comptroller of the Currency said the future of cryptocurrency regulations is in the hands of the people, and not the government.

He told Cointelegraph’s Alex Cohen at the LA Blockchain Summit that he believes that change tends to happen slowly. While the Internet 1.0 didn’t seem revolutionary, look where we’re at now.

“In the end, it’s the market and consumers that will decide the fate of crypto regulation, not the government,” said Brooks, formerly the Chief Legal Officer at Coinbase. 

He explained that the role of the government is to set up a regulatory framework to prevent money laundering, fraud, and other criminal activities — not to build tech or issue a token.

“The government has no history to build products that innovate and offer people good choices. They don’t issue travelers checks, American Express does. They don’t issue prepaid cards, Citibank does. So why do we think it’d be different in constructing a payments instrument?”

Instead, the government needs to focus on what it does best: establishing rules and conducting supervision. “We’re trying to build the framework, we’re excited that there are tech companies coming out with tokens. Let’s marry those two things up,” he said.

Brooks believes that decentralization is inevitable and uses the analogy of how post offices were the central authority for communication at one point in time, but internet P2P communications have made them almost obsolete. He imagines the same scenario will play out for the crypto industry. “One day finance may look a lot like communication today,” he said. “The central authorities may not play as big of a role as they perform today.”

“I don’t advocate for that, but I also don’t resist it — the point is that the trendlines are probably unstoppable at some level and we just need to put a framework around that so that people don’t get scammed in the future any more than they get scammed today.”

Brooks seems less concerned with the problem of money laundering in crypto than some officials, and he pointed out that much money laundering happens in the current banking system.

“If there are bad actors in crypto, we need to do what we can to stop those activities just like how we do with the banks. Believing that there’s a future state where we can eliminate criminal activity or risk completely, is foolhardy.”



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Regulation

London Stock Exchange-listed firm inks FCA’s approval for crypto services

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Mode Global Holdings, a London Stock Exchange-listed fintech group, has secured major regulatory approvals for cryptocurrency and fintech operations in the United Kingdom.

The company announced Thursday that Mode has secured its Electronic Money Institution license and AMLD5 registration from the U.K. Financial Conduct Authority.

The AMLD5 registration has been granted to Mode’s crypto arm Fibermode Limited, establishing it as an official crypto asset firm in the United Kingdom, pursuant to the amended regulations on money laundering, terrorist financing and transfer of funds.

The AMLD5 registration is a requirement for crypto-related businesses in the country that fall within the scope of money laundering regulations. According to the announcement, Mode is the fifth company to have received this registration to date since the FCA became the official AML supervisor of the crypto industry in the U.K. in January 2020.

Alongside the AMLD5, Mode’s subsidiary Greyfoxx Limited also acquired the EMI license, which enables Mode to offer a “range of innovative financial services” to both businesses and consumers in the United Kingdom, the announcement notes.

Following the acquisition of new regulatory approvals, Mode is planning to further expand its crypto services, including decommissioning its investment product known as the “Bitcoin Jar.” The product aims to allow Mode customers to use Bitcoin (BTC) to generate BTC interest rather than simply holding it in a wallet or on an exchange.

Mode CEO Ryan Moore noted that the new regulatory developments provide a major step in Mode’s mission to deliver a trusted and regulated environment. “It means we now have the ability to scale our operations and continue delivering innovative payments products for our customers under our own EMI licence. Both the EMI licence and the AMLD5 registration ensure business transparency, strong oversight and give our customers confidence in our offering,” he said.

Related: UK regulator warns against 111 unregistered crypto companies… and FOMO

The latest news comes shortly after a member of the British Parliament pointed out major difficulties in the process of registering crypto firms under the FCA’s AML regulations in late May. Economic secretary John Glen elaborated that FCA was not able to process and register all applications by its previous deadline due to a significant number of firms failing to adopt robust AML control frameworks as well as employ proper staff.