20.01.2021

US Congress Weighs Bill Spelling Out CFTC’s Crypto Derivatives Oversight

A provision in the 2019 CFTC Reauthorization Act clarifies how the regulator would collect information on digital commodities contracts and commodity swaps. The bill is heading to the House of Representatives for a floor vote after being passed unanimously by the House Agriculture Committee, which oversees the CFTC.

The U.S. Congress will soon vote on a bill providing new information about the Commodity Futures Trading Commission’s (CFTC) authority over the cryptocurrency derivatives markets.

If passed, the bill would be the first to place Congressionally-mandated, digital commodity-specific requirements on the CFTC. What’s more, according to the provision’s writer, Rep. Sean Patrick Maloney (D.-NY), it has already become the first crypto derivatives legislation in history to make it past committee.

“It’s time for Congress to get smart about crypto and create an integrated approach to regulating digital currencies,” Maloney said in a statement. “This provision is an essential first step in our efforts to close the gap in regulation of crypto-assets in the derivatives market, fight manipulation and detect fraud.”

The provision itself is short, saying the CFTC will “adopt rules detailing the content and availability of trade and trader data and other information the board of trade must be able to access” from contract markets underpinned by digital commodities.

A nearly-identical subsequent paragraph places the same requirements on swap execution facilities.

In response to a request for comment, a CFTC spokesperson sent CoinDesk a statement by Chairman Heath Tarbert, who said he commended the Agriculture Committee on passing bipartisan legislation.

“The sound regulation of our derivatives markets, which see more than $4 trillion in notional activity each day, is critical to the health of the U.S. economy and the pocketbook of every American,” he said, adding:

“I look forward to working with members of both parties in both chambers to see a bill through to completion.”

Digital commodity section o… by CoinDesk on Scribd

US Court Fines ICOBox $16M for Securities Violation in SEC Case

A federal court has ordered ICOBox to pay a $16 million penalty to the Securities and Exchange Commission’s (SEC) for violating U.S. securities law.

On March 5, Judge Dale S. Fischer of the District Court for the Central District of California granted the SEC’s motion for default judgment against the ICO-as-a-service platform and founder and CEO Nikolay Evdokimov.

The SEC first brought charges against ICOBox in September 2019, accusing the company of hosting an unregistered securities sale. The regulator also accused the company of acting as an unlicensed securities broker for more than 30 token sales.

Raising $14.6 million from more than 2,000 unaccredited investors in its 2017 ICO, Evdokimov had claimed during the sale that ‘ICO’ tokens would rise in value as companies started using the platform.

As part of the judgment, ICOBox will be fined $16 million and Evdokimov will have to pay a personal penalty of more than $192,000.

Default judgments are usually granted in favor of a plaintiff when a defendant has not responded to summons or has failed to appear before the court. The SEC filed a motion for default judgment on January 9, after numerous attempts to serve Evdokimov personally.

According to the filing, Evdokimov did not return emails and moved out of his last known residence “in the middle of the night with two months’ rent unpaid” soon after the SEC had served Evdokimov’s wife in late September.

When the SEC tried to serve notice to ICOBox’s resident agent in the Cayman Islands, they were informed they had resigned and had not, apparently, been replaced.

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