EU regulator warns of DeFi risks; Upbit Receives First Digital Asset License Approval in Singapore
Have you heard the latest news from the EU? Apparently they are not that keen on the idea of decentralized finance (DeFi) and its impact on the financial system. In a recent report, the European Securities and Markets Authority (ESMA) warned of the risks and challenges posed by DeFi, particularly when it comes to consumer protection, market integrity and financial stability.
One of the main topics that ESMA addressed was the concept of “Code as Law,” meaning that the rules and outcomes of DeFi applications are determined by the underlying smart contracts and not by human intervention or oversight.
ESMA argued that this approach could lead to legal uncertainty, operational failures, cyberattacks, fraud and manipulation. They also questioned whether DeFi users are fully aware of the risks and responsibilities associated with using such platforms and whether they have adequate recourse in the event of disputes or losses.
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ESMA also suggested that some DeFi activities could fall under the existing EU regulatory framework depending on their characteristics and functions. For example, some DeFi tokens may be considered financial instruments or electronic money, and some DeFi platforms may offer investment services or payment services. Therefore, ESMA called on DeFi providers to comply with relevant rules and regulations and cooperate with authorities and regulators.
This report is not surprising considering that the EU has taken a cautious and conservative stance on crypto-related matters. However, it also shows that the EU is paying attention to developments and innovations in the DeFi space and is trying to weigh the potential benefits and risks of this emerging sector.
ESMA acknowledged that DeFi could offer greater efficiency, transparency, competition and financial inclusion, but also emphasized the need for a level playing field and a solid governance framework.
Coinbase; The approval of a Bitcoin spot ETF is partially priced in.
The cryptocurrency market has long been anticipating the launch of a Bitcoin spot exchange-traded fund (ETF) in the United States. Many experts believe that such a product would increase the acceptance and legitimacy of Bitcoin as an asset class and attract more institutional and retail investors to the space.
However, the US Securities and Exchange Commission (SEC) is hesitant to approve Bitcoin spot ETF proposals, citing concerns about market manipulation, investor protection and regulatory oversight. The SEC has so far only approved Bitcoin futures ETFs that track the price of Bitcoin futures contracts and not the underlying asset itself.
Coinbase, one of the largest and most influential cryptocurrency platforms in the world, recently expressed its opinion on the prospects of a Bitcoin spot ETF in the US. In its third-quarter 2021 shareholder letter, Coinbase said it expects a Bitcoin spot ETF to be approved in the U.S. “in the next few years,” but also noted that some of the potential implications of such a move are evolving Admission prices already reflect prices in the current market.
“We believe a Bitcoin spot ETF approval in the US is partially priced in, as several Bitcoin futures ETFs have already launched and are trading at a premium to net asset value.” [net asset value]” wrote Coinbase. “We also believe there is still significant upside potential for the approval of a Bitcoin spot ETF, as this would likely increase retail demand and lower barriers to entry for many investors interested in gaining exposure to Bitcoin.”
Coinbase added that it is actively working with regulators and policymakers to advocate for a clear and consistent regulatory framework for cryptocurrencies, including a Bitcoin spot ETF. The company said it believes such a framework would benefit not only Coinbase, but the entire industry and its customers.
“We continue to work closely with regulators and policymakers to educate them about our industry and our products and to provide feedback on proposed rules and guidance,” Coinbase wrote. “We believe constructive dialogue and collaboration are essential to foster innovation and growth in the crypto economy while protecting investors and consumers.”
Upbit Receives First Digital Asset License Approval in Singapore
Upbit, one of the largest cryptocurrency exchanges in South Korea, has announced that it has received a provisional license from the Monetary Authority of Singapore (MAS) to operate as a digital asset service provider in the city-state. This is a significant milestone for Upbit as the company looks to expand its global presence and offer its services to more customers in the fast-growing Asian market.
According to a press release, Upbit has applied for a license under the Payment Services Act (PSA), which regulates the activities of digital payment token (DPT) providers in Singapore. The PSA requires DPT service providers to comply with various rules and standards, such as anti-money laundering, terrorist financing, cybersecurity and consumer protection. Upbit said it has met all requirements and demonstrated its commitment to safe and responsible operations.
Upbit is the first major Korean exchange to receive the license from MAS, widely considered one of the most progressive and forward-thinking regulators in the world. Upbit said it will leverage its experience and expertise in the Korean market to provide high-quality services to its Singaporean customers and contribute to the development of the local blockchain ecosystem.
Upbit also said it plans to launch its Singapore platform in the first quarter of 2024 after completing necessary preparations and receiving final approval from MAS. The platform will offer a variety of features and functions such as spot trading, margin trading, staking, lending and derivatives. Upbit said it will support multiple fiat currencies, including the Singapore dollar, US dollar and Korean won, as well as over 200 cryptocurrencies.
Lee Seok-woo, CEO of Upbit, expressed his gratitude and joy in receiving the provisional license from MAS. He said: “We are honored and pleased to be recognized by MAS as a trustworthy and reliable digital asset service provider.” This is a testament to our efforts and successes in the Korean market, where we have established ourselves as a leading exchange with a have established a good reputation and customer base. We look forward to bringing our expertise and innovation to Singapore and offering our customers the best possible products and services.”
Social finance apps Tomo and New Bitcoin City reach a TVL of over $1 million
In a remarkable feat of innovation and adoption, two social finance apps have surpassed $1 million in Total Value Locked (TVL) within a week of their launch. Tomo and New Bitcoin City are both decentralized applications (dApps) that leverage blockchain technology to create peer-to-peer lending and borrowing platforms with social features.
Tomo is a dApp that allows users to lend and borrow cryptocurrencies to friends, family, and trusted contacts. Users can create personalized loan agreements, set interest rates and repayment terms and chat with their lenders or borrowers within the app.
Tomo also rewards users for on-time repayments and referrals with its native token TOMO, which can be staked to earn passive income or used to access premium features.
New Bitcoin City is a dApp that allows users to create and join virtual communities based on their interests, hobbies or goals. Users can pool their funds to invest in various DeFi protocols such as yield farming, liquidity mining or NFTs and share the profits among members. New Bitcoin City also features a gamified interface that allows users to customize their avatars, explore the city, and interact with other residents.
Both Tomo and New Bitcoin City have attracted a lot of attention and capital in the crypto community as they offer novel ways to engage with DeFi and connect with like-minded people. According to DeFi Pulse, Tomo reached a TVL of $1.2 million on October 16, 2023, while New Bitcoin City reached a TVL of $1.1 million on October 16, 2023. These numbers are expected to increase as more users discover and join these innovative platforms.
The success of Tomo and New Bitcoin City shows the potential of social finance as a new paradigm for DeFi. By combining financial services with social interactions, these dApps create more value and utility for their users and promote a sense of community and trust among them. Social finance is not just a trend, but a movement that could redefine the future of finance.
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