UK cryptosphere 🇬🇧 🌀
UK's growing crypto agenda and the future of regulation. Can account abstraction drive a billion users from Asia to Web3? Mark Cuban v John Stark on FTX’s collapse. Twitter alternatives take flight.
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The UK Financial Conduct Authority (FCA) has announced some new moves for cryptocurrency companies promoting their products to UK customers.
Companies must abide by the existing financial promotion regime by October 8, 2023.
The FCA wants to know who's in the room and who's playing by the rules.
What's covered?
Financial promotion includes websites, social media posts, mobile apps, and online advertising.
Companies will need to apply for registration and pay a fee if approved.
Firms have until August 4 to report back on their compliance measures.
The regime goes into effect later this year.
The FCA will not only target entities operating in the UK but also abroad.
Companies with marketing schemes affecting British customers will fall under their purview.
Legal Routes
To communicate financial promotions effectively, companies must understand the four legal routes available. These routes cover essential aspects such as Anti-Money Laundering and counter-terrorism financing (AML/KYC) requirements and provide guidance on cryptocurrency fund transfers. By following these routes, companies can ensure their messaging is compliant and meets regulatory expectations.
A comprehensive scope
When it comes to financial promotion, the FCA is leaving no stone unturned. The rules apply to various channels, including websites, social media posts, mobile apps, and online advertising. Companies need to be mindful of their marketing efforts across all these platforms and ensure compliance in every aspect of their promotional activities.
Economic Crime and Corporate Transparency Bill
Law enforcement empowered to seize and freeze criminal crypto
Amendments include extending measures to terrorism cases
Courts can request seizure of crypto used in crime
Government targets crypto-related money laundering
Crypto tactical advisers deployed nationwide
Next step: House of Commons approval and royal assent.
Online safety bill
The Online Safety Bill passed by the UK government, currently under debate, has raised concerns about the potential ban on end-to-end encryption.
The heart of the controversy lies in the fate of end-to-end encryption. This technology is highly regarded for its role in securing private communications and protecting the confidentiality of sensitive information.
Potential impact on Bitcoin
The Online Safety Bill's broad strokes may have indirect effects on the crypto industry, such as:
The fear of legal troubles could put a damper on crypto innovation. If companies are constantly worried about breaking the law, they might shy away from developing new services or products related to Bitcoin.
If encryption takes a hit, increased state surveillance could chip away at the privacy of Bitcoin users. After all, Bitcoin transactions are already pseudonymous, and more surveillance could make folks feel uneasy about their financial privacy.
With the bill's emphasis on robust age verification, there could be a surge in data collection. This might extend to crypto exchanges as well. The worry is that all this data could be misused or end up in the wrong hands.
If the Online Safety Bill becomes law with its current provisions, it could set the stage for future regulations in the crypto industry.
Tech giants unite
Prominent tech companies have joined forces in opposing the Online Safety Bill. Apple, the privacy champion, is urging the UK government to make some changes to the bill in order to preserve encryption. They're adamant that encryption plays a crucial role in protecting citizens from prying eyes and data breaches. WhatsApp and Signal are also waving their flags of concern, stating that user security is their top priority and any compromise to encryption would have a global impact.
Meet the big names
Now in light of all these moves in UK crypto sphere, nine figures have been identified as instrumental in shaping the nation's digital asset and Web3 agenda.
Dr. Lisa Cameron - A Scottish National Party MP who leads the Crypto and Digital Assets All Party Parliamentary Group (APPG) and also serves as the vice chair of the Web3 and Metaverse All Party Group.
Ian Taylor - The head of digital assets at KPMG UK, who previously led CryptoUK, a trade body for digital assets in the UK.
Katie Fortune - A senior manager in the Bank of England's Central Bank Digital Currency (CBDC) unit, where she oversees international and stakeholder engagement.
Andrew Griffith - A Conservative MP and economic secretary to the Treasury, Griffith is responsible for the financial services sector, including fintech, crypto assets, and CBDCs.
Ijeoma Okoli & Toby Norfolk-Thompson - Co-founders of the Digital Economy Initiative, an independent think tank that focuses on promoting public policy for crypto assets in the US and UK.
Sriram Krishnan - A general partner at venture capital firm Andreessen Horowitz (a16z), Krishnan will be leading the firm's new London office and is set to become a key player in the city's crypto scene.
Teana Baker-Taylor - The head of regulatory strategy for EMEA at Circle and non-executive director at CryptoUK, Baker-Taylor also leads regulatory strategy for stablecoin developer Circle in EMEA.
Victoria McLoughlin - Recently appointed as the interim head of markets interventions in the digital assets department at the Financial Conduct Authority (FCA).
On the other side of the pond
The US regulatory scene for crypto has been a hot mess, causing frustration among industry players. The SEC and CFTC are clashing over who gets to oversee the crypto space, creating confusion for market participants. Legal actions against major players like Binance and Coinbase have added to the chaos. What's more, the classification of crypto assets as securities or commodities remains a contentious issue, with no consensus in sight. It's like a wild west showdown, leaving everyone wondering when the regulators will get their act together and provide some much-needed clarity to the industry.
TTD Blockquote 🔊
Laura Shi, the director of strategic initiatives at ConsenSys
“Account abstraction will drive a billion users from Asia to Web3”
According to ConsenSys executive Laura Shi, account abstraction, also known as "smart accounts," is set to be the game-changer that attracts a whopping billion users from Asia to Web3.
The growth of the Ethereum and Web3 ecosystem in Asia has been phenomenal, with DApps constantly improving the user experience specifically for the Asian market. And guess what's driving this growth? It's the introduction of zero-knowledge Ethereum Virtual Machine (zkEVM) rollups and the widespread adoption of Optimistic Rollups. These technologies are making waves and bringing more and more users into the fold.
“More DApps are improving [user experience] UX for the Asian market, including introducing Asian language support,” she said.
Account abstraction takes things to a whole new level. It offers greater programmable functionality and "bank-like" features, making it even more appealing to users in Asia.
The concept of account abstraction has been in the works for a while, it was proposed in September 2021 by Vitalik Buterin and other developers in EIP-4337 . They wanted to find a way to enhance the Ethereum experience without making major changes to the consensus-layer protocol. And now, their vision is becoming a reality.
TTD Clash ⚔️
We've got ourselves a clash of the titans!
Mark Cuban and John Reed Stark are at it again, this time throwing verbal punches over who's to blame for the collapse of FTX.
In one corner, we have billionaire entrepreneur Mark Cuban, pointing fingers at the United States Securities and Exchange Commission (SEC) and saying that clear regulations could have saved the day!
According to him, if the SEC had followed Japan's lead in crypto regulation, FTX wouldn't have gone down the drain, and no one would have lost their hard-earned money. Take that, SEC!
John Reed Stark, a former securities official and a self-proclaimed cryptocurrency skeptic, is ready to counterpunch. He argues that blaming the SEC for FTX's collapse is a bit of a stretch. In fact, he calls it a "dumpster fire" along with other crypto platforms like BlockFi, Celsius, Terra, and Voyager.
Stark defends the SEC's actions, claiming that they actually saved investors from losing millions, maybe even billions, in crypto losses. He points out that whenever the crypto industry seeks regulatory clarity, they cry foul when rules are proposed.
But Cuban believes that implementing "brightline investor protection regulations" is the way to go. In his opinion, if you're not registered, you're in violation, and you can kiss your crypto operations goodbye.
And the battle continues with Stark accusing firms like Binance, Coinbase, Beaxy, and Bittrex of deliberately ignoring the SEC's warnings and reaping profits without registering.
Not the first round: Just a few weeks ago, Cuban called out the SEC for not providing clear registration processes for crypto firms.
TTD Flight ✈️
Once upon a time, there was a social media giant named Twitter, whose influence reigned supreme across the digital realm. But the times, they are a-changin'.
Step aside, Twitter, and make way for the new kids on the block—Spill and Threads!
In recent months, the Twitter Kingdom has been rocked by a series of misfortunes: technical hiccups, reports of a data center closure, massive layoffs, and a lawsuit over alleged non-payment for office services.
The final blow? Twitter introduced a limit on the number of posts users can see, which sent its loyal followers into a tizzy, making them question their loyalties and scout for alternatives.
Enter Spill and Threads, poised to seize the throne from the tweeting titan.
First, we have Threads, Meta's brainchild
Remember when Mark Zuckerberg tried to buy Twitter back in 2008? Well, Twitter's board said, "No, thank you," and Zuck had to wait patiently in the wings. Fast forward to today, Meta is ready to carve its path into the microblogging world with Threads. Born amidst the chaos following Musk's takeover of Twitter, Threads is being hailed as the potential “Twitter-killer.”
Threads offer the same features as Twitter but adds an Instagram twist: users can choose their audience—public, friends, or close friends.
Threads is set to go live on July 6. Coincidentally (or not), the launch falls during Twitter's "rate limit" debacle. Meta's certainly hoping to leverage this perfect storm to invite Twitter's disenchanted users to start fresh on Threads.
Then, let's meet the Spill
This platform, founded by former Twitter executives Alphonzo "Phonz" Terrell and DeVaris Brown, is committed to fostering diversity. By designing an advanced anti-abuse system from the get-go, Spill is taking a firm stand against online harassment, offering a safe haven for all, especially marginalised communities. But there's more! Spill plans to reward its users for viral content, tracking content origins via blockchain technology.
In essence, this whole shebang isn't just about product launches. It's a clash of the Titans—Twitter vs Meta—with Spill and Threads being the gladiators in the digital Colosseum. The stakes are high, the popcorn's popping, and we're all waiting to see who will emerge victorious.
TTD Surfer 🏄
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