Taiwan's Legislative Yuan (parliament) has passed the first reading of a draft act aiming to regulate cryptocurrency assets. Yung-Chang Chiang, one of the legislators backing the bill, expressed hope that the Financial Supervisory Commission (FSC) would submit their version of the draft for further consensus building. Although the FSC recently issued guidelines suggesting the crypto industry self-regulate via an industry association, such guidelines lack the force of law.
This proposed legislation empowers regulatory authorities to impose administrative penalties on violators of the self-regulation rules. The draft mandates that all crypto platforms in Taiwan must acquire a permit to operate, or face potential shutdown. While the date for the second reading remains uncertain, aside from adhering to anti-money laundering rules set in July 2021, the Taiwanese crypto industry is currently largely unregulated.
The UK's Economic Crime and Corporate Transparency Bill, which aims to empower law enforcement agencies to seize and freeze cryptocurrency linked to criminal activities, has received the King's approval and is now law. Introduced in September and recently passed by Parliament, the bill addresses a range of illegal activities including drug trafficking, cybercrime, and now, after amendments, terrorism. This legislation not only allows authorities to seize crypto without a conviction but also introduces provisions to identify other assets connected to crypto crime. While the UK is taking steps to become a major crypto hub, the country is also actively cracking down on related illegal activities, as evidenced by the seizure of millions of pounds in cryptocurrency and the deployment of crypto tactical advisers in police departments.
Citadel Securities has responded to Terraform Labs' allegations, firmly denying any involvement in the 2022 depegging incident of the UST stablecoin. In their court filing, Citadel criticized Terraform's reliance on unverified social media claims, especially a post from a pseudonymous user suggesting a clandestine interaction with Citadel's CEO, Ken Griffin. Despite Terraform's insinuations, Citadel underlined its negligible cryptocurrency transactions, pointing out two test trades amounting to roughly $0.13. Furthermore, Citadel is not only asking the court to dismiss Terraform's motion but is also seeking sanctions against Terraform for what it deems a baseless and misleading claim. This legal tussle emerges amidst Terraform's larger legal challenges as the US Securities and Exchange Commission has also filed a lawsuit against the firm over the 2022 depeg event.
Nasdaq attempted a rebound on Friday, aiming to mitigate some of this week's sharp declines. Tech shares received a lift, with Amazon leading the charge due to impressive quarterly figures. However, Wall Street's atmosphere remains somber, given Thursday's setbacks where both the S&P 500 and the Nasdaq shed over 1% of their value. Nasdaq's slide further entrenched it into correctional territory.
Surveying the week, the broad indices portray a bleak picture. With the S&P 500 depreciating 1.8% and the Nasdaq receding by 2% over the week. Heavyweights like Meta and Alphabet (Google's parent firm) significantly influenced this downward trajectory.
Bitcoin, though exhibiting a bullish demeanor, especially on extended timeframes, seems to be awaiting another spark for a leap. Notably, with equities experiencing a downturn and absent any groundbreaking shifts in the crypto realm, Bitcoin might start to take a breather. This assumption gains traction considering the dip in trading volume from $120 billion to a mere $30 billion. While market players have amplified their positions, the sentiment suggests a possibility of re-entry at a more favorable juncture. Notwithstanding the upbeat chatter, the anticipated BTC spot ETF might still have a couple of months before realization. If equities persist with their downward trend, Bitcoin might retrace towards the $29k-$32k range before any significant surge.
Shifting the lens to the options space, contracts worth $4.5 billion are poised for expiration this Friday, which may translate into additional volatility in the markets. Historical patterns indicate that monthly and quarterly settlements typically induce tremors in the crypto marketplace. Highlighting the options arena further, the aggregate notional open interest across bitcoin and ether options on Deribit has crossed the $20 billion mark.
In regulatory developments, Taiwan has initiated its foray into crypto regulations, tabling a crypto-oriented bill for preliminary scrutiny. This legislation endeavors to categorize virtual assets and chart out a framework for the operational dynamics of exchanges within its jurisdiction.
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