Crypto crackdowns: Binance under scrutiny, MiTrade banned in Philippines

Highlights 

• The Nigerian government is investigating Binance over suspicious flows of $26 billion through the exchange in 2023 from unidentified sources and users.  
• Due to a lack of regulation, Honduran officials have banned financial institutions from transacting and holding cryptocurrencies. 
• Philippines officials have banned access to the unlicensed crypto exchanges MiTrade and OctaFX. They are now inaccessible from within the country. It is unclear if users will have access to Binance following a warning issued by the Philippines SEC in November 2023. 

Forecast

Poland and the Czech Republic sit at the top of the leaders’ chart for crypto company registrations in Europe (Figure 1) as per a new report published by DeFiLlama News on March 8, 2023. It shows that many startups are attracted to registering in a country that offers cheap (

Sentiment

The approval of spot BTC ETFs in the U.S. has prompted Hong Kong and Australian financial regulators to consider launching their own local spot BTC ETFs. With U.S. ETF inflows setting a daily record inflows of $1.12 billion on March 12, 2024, investor confidence in digital assets like BTC is soaring. A recent survey in Australia revealed that 19% of respondents expressed interest in investing in an Australian Securities Exchange (ASX) listed spot BTC ETFs, highlighting the growing positive sentiment (Figure 2).

Analysis

Rostin Behnam, Chair of the Commodity Futures Trading Commission (CFTC), urged Congress to pass the FIT Act that was introduced in July 2023, when all Republicans and six Democrats voted to advance the legislation. This bill aims to establish comprehensive crypto regulation in the U.S. The bill categorizes digital assets into three groups: digital commodities, restricted digital assets (securities), and payment stablecoins. While the CFTC and SEC would continue to oversee commodities and securities, respectively, the bill would foresee that they be jointly responsible for stablecoins. Under the legislation, the difference between a digital commodity and security is that the former runs on a sufficiently decentralized blockchain. It also requires the SEC to develop a 30-day certification process to designate crypto firms as sufficiently decentralized. Currently, the absence of clear regulatory directives between the SEC and the CFTC makes it challenging for entities to navigate this ecosystem. According to a facts sheet accompanying the bill, approximately 70% of the market capitalisation of digital assets should be considered as belonging to commodities despite major differences from traditional physical commodities. Behnam states that if the Act is enacted, his team will create a regulatory framework for cryptocurrencies within 12 months. 

For the past two years, Coinbase has been urging the SEC to provide regulatory clarity for the cryptocurrency industry in the United States. To push for clear guidelines, Coinbase took its plea for regulatory engagement to the U.S. Court of Appeals for the Third Circuit on March 11. The absence of clear regulations means crypto companies based in the U.S. are compelled to adhere to uncertain rules. Coinbase has criticized the SEC for exercising authority over digital assets while disregarding its petition for rulemaking. This lack of action is stifling growth and innovation within the U.S. crypto sector. It may be causing the country to lag behind Europe and the UAE in establishing itself as a leading global cryptocurrency hub.