The UK’s Financial Conduct Authority (FCA) has confirmed it will be banning retail crypto derivative products from 6 January 2021. 

After a year-long of consultations and contemplation, the FCA has decided crypto retail derivative products, like futures and ETNs, are too risky for British retail investors, because it feels there is no reliable way to value the crypto assets that such products are based on. 

The FCA also said that crypto derivatives were subject to widespread market abuse and financial crime, and that retail investors lacked a proper understanding of, or a“legitimate investment need” for such products. 

Commenting on the decision interim Executive Director of Strategy & Competition at the FCA, Sheldon Mills, said:

“This ban reflects how seriously we view the potential harm to retail consumers in these products. Consumer protection is paramount here.

‘Significant price volatility, combined with the inherent difficulties of valuing cryptoassets reliably, places retail consumers at a high risk of suffering losses from trading crypto-derivatives. We have evidence of this happening on a significant scale. The ban provides an appropriate level of protection.”

According to the FCA, the ban will save British retail investors “around £53” in losses… though quite how they worked that out, given the volatility of the market that they themselves alluded to, is anyone’s guess. 

Most respondents during the FCA’s consultation process were opposed to the ban, and companies like CoinShares, which offers ETNs and other derivative products, had mounted a strong campaign against it. 

AYO.NEWS says:

Nanny State UK strikes again. While it is arguable the nascent crypto derivatives market needs better regulation, the biggest problem is simply lack of education. But, it seems the UK’s solution for everything these days is to impose bans, rather than try to educate people so they can make more informed decisions. 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020

Eccentric crypto advocate, gun toting libertarian and tax exile, John McAfee, has been arrested in Spain, and is awaiting extradition to the United States. 

Yesterday, the US Securities and Exchange Commission (SEC) filed charges against McAfee for promoting initial coin offerings (ICOs) without disclosing that the issuers were paying him. 

Reports now confirm that 75-year old McAfee, who was already wanted in the US for tax evasion, has been arrested by Spanish police and is awaiting extradition to the United States to stand trial. Apparently McAfee was detained on Saturday while boarding a flight from Barcelona to Istanbul- he was travelling on a British passport. 

According the  SEC complaint:

“From at least November 2017 through February 2018, McAfee leveraged his fame to make more than $23.1 million U.S. Dollars (‘USD’) in undisclosed compensation by recommending at least seven “initial coin offerings” or ICOs to his Twitter followers.”

Seven unidentified ICOs are referred to by the SEC, and it is alleged McAfee received compensation in the various tokens being issued, along with Bitcoin (BTC). The SEC even referred to some of McAfee’s famous Bitcoin price predictions (which he subsequently backtracked on, claiming he was joking). Apparently, McAfee has not filed tax returns from 2014 – 2018, despite receiving “considerable income.”

Despite being wanted for alleged tax evasion in the United States for years, McAfee has still been able to travel around the world without hindrance, attending many industry events and conferences. In June McAfee also launched his own distributed crypto exchange called ‘Ghost’ – which promised users true anonymity and included a Proof-of-Stake privacy coin.

If convicted on all charges, McAfee could be facing up to 30 years in prison.

Staying with dubious ICO promotions, the SEC has already prosecuted high profile individuals like Floyd Mayweather and DJ Khaled, for promoting ICOs while not declaring they were being paid. 

AYO.NEWS says:

McAfee is used to being held by police, having being arrested Belize on in connection with a murder investigation (though no charges were ever made), in the Dominican Republic for having a boat full of military grade weapons, and being detained by police in Norway for wearing ladies’ panties instead of a mask, but something tells us this could be the end of the road.

We guess that’s McAfee’s presidential campaign over then.

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020

Sky Sports has announced a crackdown on the growing problem of social media abuse. 

The major broadcaster, which currently sees over 40 million users engage across its digital and social media platforms, says it has seen a “spike in hateful comments on the basis of race, colour, gender, nationality, ethnicity, disability, religion, sexuality, age and class.” 

Now, Sky Sports presenters and reporters have united to support a new campaign to raise awareness and tackle the growing problem. In addition to presenters from football, boxing, F1, basketball, Sky Sports News and horse racing sharing their own experiences, Sky Sports will also do the following:

• Use the power of its reach and voice to highlight the scale of online hate and abuse and the damage that it can inflict upon people 
• Remove as many abusive and hateful comments posted on skysports.com and its social media platforms as possible; 
• Block users using hateful speech on digital and social media platforms
• Report  hate and abuse to the social media platforms; and in the most serious cases, to the relevant authorities
• Commission journalism that ‘shines a light on social injustices and inequality in sport’. 
• Work with social media platforms and policymakers to make their platforms  safer and more respectful

AYO.NEWS says:

Anyone who uses social media knows there’s a whole lot of toxicity out there, so while this is obviously a well intentioned initiative from Sky Sports, let’s hope it keeps balanced, remains focused on stopping hate, and isn’t hijacked by the ‘woke cancel culture’ mob – which has an uncanny knack of further fuelling hate and division.

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020

A day after crypto derivatives exchange BitMEX, its associated companies, and its executives got hit with charges, the exchange is still fully operational. 

Yesterday, the United States Commodity Futures Trading Commission (CFTC) charged Seychelles-based derivatives exchange BitMEX with operating an unregistered trading platform and breaking anti-money laundering regulations, but the company doesn’t seem phased. 

Relying on decentralisation to avoid the law

It has long been known that BitMEX has all but ignored even basic AML and KYC requirements, seemingly confident in relying on its decentralised structure to evade any repercussions. However, there is an increasing awareness that, although authorities in a specific country like the United States, may be unable to directly shutdown operations completely, they could still effectively disrupt operations by targeting key individuals and third-party service providers. 

Indeed, even BitMEX itself eventually acknowledged it couldn’t continue to ride roughshod over regulations indefinitely, introducing mandatory KYC requirements in April 2020. In July, BitMEX’s parent company, HDR Global Trading Limited, also restructured and rebranded as ‘100x Group’ , possibly in an effort to further distance itself from its past behaviour. But, it looks like that was far too little, far, far too late. 

According to a statement released yesterday, the CFTC has filed a civil enforcement action in the Southern District of New York, against five corporate entities and three individuals who are allegedly responsible for owning and operating the exchange. 

As expected, the individuals include Arthur Hayes, CEO of BitMEX, along with Ben Delo and Samuel Reed. The corporate entities charged are HDR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited, and HDR Global Services (Bermuda) Limited (BitMEX).

Civil and criminal charges

The CFTC alleges BitMEX has illegally offered services to retail trades amounting to a staggering $1 trillion USD since launching in 2014, and is seeking disgorgement of all “ill-gotten gains”, civil monetary penalties, permanent trading bans, and injunctions against future violations. Specifically, the CFTC says BitMEX received $11 billion in BTC deposits and raked in over $1 billion in fees, “while conducting significant aspects of its business from the US and accepting funds from US customers.” 

The US attorney for the District of New York has also indicted Hayes, Delo, Reed, and BitMEX’s head of business development, Gregory Dwyer, for violating and conspiring to violate the Bank Secrecy Act. If convicted they could each face fines of up to $250K and up to five years imprisonment. 

Citing the audacity of the operation, FBI Assistant Director, William Sweeney, commented:

“One defendant went as far as to brag the company incorporated in a jurisdiction outside the U.S. because bribing regulators in that jurisdiction cost just ‘a coconut.’ Thanks to the diligent work of our agents, analysts, and partners with the CFTC, [the defendants] will soon learn the price of their alleged crimes will not be paid with tropical fruit, but rather could result in fines, restitution, and federal prison time.”

As of last night, Reed was the only individual to have been arrested. Meanwhile Sean Hecker and Jenna Dabbs, partners for Kaplan Hecker & Fink, the law firm representing Dwyer, sent out statements insisting that their client had complied with the CFTC investigation, had never even been invited to talk with US prosecutors, and had “always worked in good faith to comply with all applicable regulations and requirements. 

HDR Global responds

In a statement, an external spokesperson for HDR Global, said:

“We strongly disagree with the US government’s heavy-handed decision to bring these charges, and intend to defend the allegations vigorously. From our early days as a startup, we have always sought to comply with applicable US laws, as those laws were understood at the time and based on available guidance.”

The BitMEX platform has continued to operate normally, and the company has assured customers that their funds are safe. 

AYO.NEWS says:

Yesterday’s charges were hardly surprising, and everyone at BitMEX and its associated companies must have seen them coming months ago. Indeed, we first reported about a possible US investigation of BitMEX way back in July 2019. Perhaps most surprising is that Samuel Reed hadn’t already ensured he was out of reach. 

Will the US be able to exert enough pressure in the right places to get BitMEX itself shutdown, or will this just turn into one very long and very costly circus that results in nothing more than a few more wealth crypto exiles who simply avoid every stepping foot on US territory (or anywhere with easy extradition) again? 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020

Romanian authorities have announced the country’s first ever auction of seized crypto assets. 

Earlier today, Romania’s National Agency for the Management of Seized Assets (ANABI) confirmed it will be holding an auction for confiscated Bitcoin (BTC) and Ether (ETH). The action is in response to a ruling from the Prosecutor’s Office in the Ploiesti Court, and involves cryptocurrency seized during a fraud case. 

ANABI has stressed that it will only transfer the crypto assets to a winning bidder who provides public addresses associated with a legal and registered crypto platform, adhering to Romania’s legislative norms, and complying with Know Your Customer and Anti-Money Laundering provisions. 

As previously reported, it was only in July 2020 that Romania finally brought its cryptocurrency regulations up to full 5AMLD standard. 

AYO.NEWS says:

It’s no secret that there’s a whole lot of cryptocurrency sloshing about in the criminal world, so we can expect to see this kind of thing become common as courts and various authorities become more comfortable with handling crypto. In February, the United States Marshals Service (USMS) auctioned over 4,000 confiscated Bitcoins (BTC), worth around $37.4m USD at the time. 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020

The Danish gambling authority, Spillemyndigheden, has appointed former deputy director of the Danish Immigration Service, Anders Dorph, as its new director. 

Dorph is scheduled to take up his new role on 1 November 2020. 

Commenting on his appointment, Dorph said:

“Spillemyndigheden is an exciting agency that plays an important role in the regulation of the gaming market. That is why I’m very much looking forward to the task and to collaboration with many talented colleagues.”

While Denmark’s minister of taxation, Morten Bødskov, added:

“Anders Dorph has an extremely wide professional profile with broad experience from politically led organisations and cooperation across authorities. I look forward to benefiting from his experience.”

Spillemyndigheden’s previous director, Morten Niels Jakobsen, stepped down in August and is now director of the Danish Valuation Agency, Vurderingsstyrelsen – the body responsible for for the public assessment of land and property values. 

All original content featured on this site is © Pentagon Digital Limited, 2020