June 6, 2018

Weekly Brief

New positions in the CFTC and SEC, Bittrex launches fiat trading, Bitfinex hack...

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Summary

Tensions stemming from the lack of regulatory clarity with major U.S. financial regulators continue to ease with this week’s new committee formations tasked with handling emerging issues.

Following CFTC Commissioner Brian Quintenz's statement at Consensus last month, the commission has issued new guidance for exchanges offering crypto-derivative products and announced this week the creation of a new subcommittee which will specifically oversee cryptocurrencies. The neighboring SEC took a step to dispel concerns amid a series of probes on Initial Coin Offerings (ICOs) by announcing a new, senior role aimed at addressing emerging cryptocurrency tech. 

In the private sector, two major exchanges grabbed headlines this week. Bittrex and NY-based Signature Bank announced a partnership enabling support for fiat-to-crypto trading, an indication of banks' increasing appetite to partner with cryptocurrency exchanges. Meanwhile, Bitfinex experienced a DDoS attack on Tuesday morning, temporarily suspending its operations. Additional details have not yet been disclosed.

Articles From the week

SEC Names Valerie A. Szczepanik Senior Advisor for Digital Assets and Innovation

Pressed for details on Ether policy, the U.S. Securities and Exchange Commission (SEC) announced a new role, "Associate Director of the Division of Corporation Finance and Senior Advisor for Digital Assets and Innovation", with responsibilities to oversee the SEC's efforts involving cryptocurrencies and ICOs. Valerie Szczepanik, formerly the Assistant Director in the Division of Enforcement’s Cyber Unit, will be the first to hold the role, which was announced on Monday.

CFTC Commissioner Quintenz Announces TAC Subcommittees

Following his recent appearance at Consensus and ongoing tension with the SEC, CFTC Commissioner Brian Quintenz announced the formation of four new subcommittees as part of the group's Technology Advisory Committee (TAC). In addition to subcommittees on Modern Trading Markets, Cybersecurity, and Distributed Ledger Technology, a subcommittee will be forged to cover Virtual Currencies - highlighting the committee's recent push to deepen its understanding of trading in cryptoassets.

The statement comes weeks after the commission issued guidance for exchanges launching cryptocurrency projects. Still, the industry awaits a final decision from the SEC and CFTC about the classification of Ether.

Bittrex Launches Fiat Trading Through New Bank Agreement

Seattle-based Bittrex Inc,. announced upcoming support for crypto-to-USD trading on its platform, which currently hosts almost 200 crypto trading pairs. The development is enabled through the exchange's partnership with Signature Bank, who will hold the firm's USD. In an interview last week, Bittrex Chief Executive Officer Bill Shihara said that, "It’s been a long path. It’s not just about banks being able to trust Bittrex. It’s about banks being able to trust crypto in general. And I think it’s really showing that crypto is turning the corner in terms of mainstream acceptance."Bittrex has more than three million customers globally, but will initially only roll out USD trading support to users in Washington, California, New York, and Montana.

Bitfinex Briefly Halts Trading After Cyberattack

Trading at Bitfinex, one of the world's largest cryptocurrency exchanges, halted abruptly Tuesday morning after the platform experienced a cyberattack. The incursion, a Distributed-Denial-of-Service, or DDoS, attack flooded the exchange with an excessive number of visits, overwhelming the platform. According to the exchange, "The previous outage was caused by issues with one of our infrastructure providers... While the platform was recovering, the attack caused extreme load on the servers."Attacks on top exchanges remain a sensitive topic after CoinCheck's $500 millionhack in January. Still, the intent and counterparties involved in the attack remain unknown.

QUOTE OF THE WEEK

"Trust is the foundation of the financial system, but it is a fragile foundation that can easily be shaken. How can we reap the benefits of the new technologies while maintaining trust?"

- Christine Lagarde, IMF Managing Director

What we've been listening to

Unconfirmed Podcast: Jill Carlson

"Blockchain consultant, Jill Carlson, who has worked with 0x, dydx, Algorand, Tezos, O1 Labs, and the IMF, discusses why Blockchain Week to her seemed to be too much about Lambos and how crypto has reached its "illogical conclusion" and is replicating Wall Street's misbehaviors."

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