Law Decoded, July 25-August 1

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Despite some good signs of the cryp­to prices recov­ery, last week could hard­ly be called bright for the mar­ket, as the major news came from the enforcers and not the reg­u­la­tors. Accord­ing to a report from the New York Times, the Unit­ed States Trea­sury Department’s Office of For­eign Assets Con­trol (OFAC) has been inves­ti­gat­ing cryp­to exchange Krak­en for alleged­ly allow­ing users based in Iran and oth­er coun­tries to buy and sell cryp­to in a poten­tial vio­la­tion of U.S. sanctions. 

In the oth­er hemi­sphere, the Philip­pines’ think tank Infrawatch PH filed a twelve-page com­plaint call­ing on the local Secu­ri­ties and Exchange Com­mis­sion (SEC) to crack down on Binance’s activ­i­ties in the coun­try. The news comes short­ly after the Philip­pines’ Depart­ment of Trade and Indus­try (DTI) waved off a Binance ban pro­pos­al in ear­ly July, cit­ing a lack of reg­u­la­to­ry clar­i­ty, as one of the world’s largest cryp­to exchanges indeed still doesn’t hold a license in the Philippines. 

These devel­op­ments form an alarm­ing trend, giv­en the ongo­ing inves­ti­ga­tion by the U.S. Secu­ri­ties and Exchange Com­mis­sion into Coinbase’s alleged trad­ing of unreg­is­tered secu­ri­ties. Michael Baci­na, an Aus­tralian dig­i­tal assets lawyer with Piper Alder­man, told Coin­tele­graph that the impact on exchanges might occur whether or not the tokens are ulti­mate­ly found to be secu­ri­ties. And, it would be seri­ous and chill­ing for both those exchanges and the token projects. 

Cathie Wood sells Coinbase shares amid insider trading allegations

One of the largest stock­hold­ers of the Coin­base cryp­tocur­ren­cy exchange has dumped a mas­sive amount of shares due to a report­ed probe by the SEC. Cathie Wood’s invest­ment firm Ark Invest­ment Man­age­ment has sold a total of more than 1.4 mil­lion Coin­base shares, or 0.6% of the exchange-trad­ed fund’s (ETF) total assets. Based on the sell­ing day’s clos­ing price, the val­ue of the sold shares amount­ed to slight­ly more than $75 million.

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No stablecoin bill in the U.S. until September

Law­mak­ers in the Unit­ed States House of Rep­re­sen­ta­tives have report­ed­ly pushed back the time­line for con­sid­er­ing a bill address­ing the poten­tial risks of sta­ble­coins. Accord­ing to a report from the Wall Street Jour­nal, peo­ple famil­iar with the mat­ter said House mem­bers will like­ly delay vot­ing on a sta­ble­coin bill until Sep­tem­ber after being unable to com­plete a draft in time for a com­mit­tee meet­ing. The unre­solved issues in the bill report­ed­ly includ­ed pro­vi­sions on cus­to­di­al wal­lets from the Trea­sury Depart­ment and con­cerns from the SEC.

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IMF suggests dark clouds ahead for crypto

The IMF’s July update on the World Eco­nom­ic Out­look titled “Gloomy and More Uncer­tain” points to “high­er-than-expect­ed infla­tion” and a con­trac­tion of glob­al out­put as indi­ca­tors of incom­ing poor eco­nom­ic growth. And, unfor­tu­nate­ly for the cryp­to indus­try, in that sense, it is still heav­i­ly tied to the glob­al finan­cial mar­ket — the report cites the cryp­to bear mar­ket as one of the glob­al macro factors. 

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