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Broker licensing for US blockchain developers threatens jobs and diversity

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Broker licensing for US blockchain developers threatens jobs and diversity

United States lawmakers will soon destroy a massive opportunity for job creation and a diverse workforce in blockchain technology if they do not amend infrastructure bill HR 3684, which would require blockchain developers to attain broker status on U.S. soil.

HR 3684 does not recognize the taxonomy of the asset class. Not every crypto asset falls under the definition of security — many are transactional tokens and used as consensus mechanisms essential to distributed ledger technology. Requiring broker status for every blockchain developer indicates that U.S. lawmakers have yet to understand blockchain technology or cryptocurrency’s complex and diverse set of use cases.

Related: Cryptocurrency mining under proposed US policy changes

“Blockchain enables us to build a new decentralized economic system, which will fundamentally change how people save and use their assets and money,” Jane Thompson, a futurist and blockchain social impact leader, shared with me. “However, there is nothing inherently financial to blockchain and the functions and features of a digital asset should determine its classification. This is an ill-informed and short-sighted bill and will continue to lock excluded groups out of an economic system already steeped in privilege.”

Blockchain is democratizing access to finance and new forms of digital enterprise. Its low barrier to entry has empowered people from different backgrounds all around the world to participate in this growing decentralized digital economy.

Related: Women, decentralization and the world’s economic drive: Experts answer

These pioneers are not the usual players of banking and Wall Street. Still, they have become respected developers, fintech entrepreneurs, innovators and advisors because of the opportunity that comes with the burgeoning blockchain industry. Never have we seen so many people from all walks of life participate in investing, trading and the use of digital assets.

The costs of initial and continuing education — plus the licensing and business expenses that can come with broker licensing — are nearly unattainable to most Americans, especially among lower socio-economic groups.

The learning curve of trading doesn’t help, especially since developers aren’t necessarily traders. It’s like requiring a doctor also be a lawyer, just to practice as a doctor legally. U.S. broker exams, especially the Series 7, are known to be extremely difficult and can require months or years of studying to pass.

HR 3684 is contradictory to the existing parameters of fintech and traditional finance. Why would blockchain developers be treated like brokers when they don’t have to manage client assets? Quant developers or even the standard developers working for online payment platforms like Paypal aren’t required to have broker licensing in the United States.

Regulation is essential in protecting consumers and the economy, but this ill-informed attempt to create a legal framework around crypto will only send industry leaders of all backgrounds, companies, and jobs overseas in a time when America needs job creation the most.

The U.S. Senate has approved HR 3684, despite the lack of an amendment, proposed by six senators earlier this week, which were aimed at clarifying the crypto language in the bill. It will move to the House of Representatives before reaching President Biden for final signoff.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Erin Grover is the head of blockchain social impact strategy for Jacobi Asset Management, with a specialty in crypto assets, crypto funds and algorithmic trading. She is a brand ambassador for Icoinic Capital and an advisor to the Akasha Innovation Hub, a blockchain accelerator established by Ethereum co-founder Mihai Alisie. Her prior work includes content strategy for the United Nations, USAID and similar NGOs in Afghanistan, East Timor, Cambodia and more.

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Record Crypto Inflows of $1.47B Last Week Boosted by Bitcoin ETFs

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Record Crypto Inflows of $1.47B Last Week Boosted by Bitcoin ETFs

Cryptocurrency investment products and funds saw record inflows from investors last week, according to the latest CoinShares data.

During the tenth straight week of crypto inflows last week, digital asset investment products saw inflows amounting to $1.47 billion, a new record by a significant margin. According to the weekly report from CoinShares, this is more than double the previous record of $640 million set earlier this year in February. Over the course of the week, total assets under management peaked at a new record of $79.2 billion, but finished the week at $76.7 billion. Year-to-date inflows now amount to $8 billion, far exceeding that of $6.7 billion in 2020.

The majority of inflows went to Bitcoin, amounting to $1.45 billion, while Ethereum saw outflows for a third consecutive week totaling $1.4 million. Altcoins Solana, Cardano and Binance also saw significant inflows at $8.1 million, $5.3 million and $1.8 million respectively.

Boosted by Bitcoin ETF approval

CoinShares attributes the outsized demand to the Securities and Exchange Commission (SEC) approving the first Bitcoin-based exchange traded funds (ETFs). This enabled the listing of two such Bitcoin investment products, whose inflows totaled $1.24 billion. This also contributed to Bitcoin achieving a new all-time high of over $67,000 last week.

“Bitcoin hitting new all-time highs shows both how far we’ve come and the capacity bitcoin has to upend the financial system and create a global economy, linking the developed and emerging markets like never before,” said co-founder and CEO of Paxful Ray Youssef. “While this recent price rally can be attributed to movements like the approval of the first bitcoin ETF for institutional investors, we can’t ignore the impact of significant development and adoption in emerging markets.”

After its debut, the ProShares Bitcoin-futures-based ETF became the second-highest traded fund in history, attracting a staggering 24 million shares. It proved so successful that it was already approaching the limit on the number of futures contracts permitted by the Chicago Mercantile Exchange. However, following this act proved difficult as Valkyrie’s Bitcoin futures-based ETF opened at $25, but only fell from there.

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South Korean pension fund to invest in Bitcoin ETF: Report

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South Korean pension fund to invest in Bitcoin ETF: Report

KTCU plans to invest in Bitcoin ETF products after consultation with domestic asset managers,” an executive reportedly said.

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South Korean pension fund to invest in Bitcoin ETF: Report

South Korea’s public pension fund, the Korean Teachers’ Credit Union (KTCU), is reportedly looking to gain exposure to Bitcoin (BTC) via a crypto exchange-traded fund (ETF).

KTCU, one of the largest institutional investors in South Korea, is considering investing in a pure Bitcoin ETF or Bitcoin-linked ETFs in the first half of 2022, local news agency The Korea Economic Daily reported Monday.

According to the report, KTCU is considering investing in several Bitcoin ETF products, including those by South Korean asset management firm Mirae Asset Global Investments. The company launched two ETFs tracking the value of Bitcoin futures via its Canadian subsidiary, Horizons ETFs, in April 2021.

“As there are some well-made cryptocurrency-linked ETF products by asset managers such as Korea’s Mirae Asset Global Investments, we plan to invest in the ETF products after consultation with domestic asset managers,” an executive at KTCU reportedly said.

The official also mentioned potential investment in a Bitcoin ETF by Mirae Asset’s subsidiary, Global X ETFs, which filed for a Bitcoin ETF with the United States Securities and Exchange Commission in July.

According to the report, KTCU is the second-largest institutional investor in South Korea, with $40.2 billion in assets under management. The pension fund has allocated 40% of its investments in alternative assets, 10% domestic and 9% international stocks. KTCU has yet to determine the size and other details of its potential Bitcoin ETF investment.

Related: Why now? SEC took eight years to authorize a Bitcoin ETF in the US

The news comes amid global pension funds getting increasingly interested in gaining exposure to cryptocurrencies like Bitcoin and major companies in the industry. Last week, the Houston Firefighters’ Relief and Retirement Fund reportedly purchased $25 million in Bitcoin and Ether (ETH). Canada’s Ontario Teachers’ Pension Plan Board participated in a $420-million funding round for major crypto exchange FTX, the firm announced on Thursday.

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Dubai regulator announces new regulations for investment tokens

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Dubai regulator announces new regulations for investment tokens

The UAE continues to be one of the friendliest jurisdictions worldwide for the digital asset industry.

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Dubai regulator announces new regulations for investment tokens

The Dubai Financial Services Authority (DFSA) has established a regulatory framework for investment tokens as part of its efforts to stimulate the digital financial and technological environment while also meeting market players’ demands and requirements.

The DFSA is an independent regulatory body in Dubai that is in charge of monitoring and regulating financial services companies wanting to operate in the city. It also licenses and regulates its products and services.

According to a report by Emirati news agency WAM, the DFSA’s regulatory framework defines investment tokens as either “a Security Token or Derivative Token.”

The report notes that the creation of a new regulatory structure is the first step in the DFSA’s Digital Assets Regime, which reflects the suggestions made in Consultation Paper 138 published in March 2021. The consultation paper sought public input on the DFSA’s plans for regulating security Tokens. 

As reported by Cointelegraph in March, the financial regulator in Dubai called on members of the public to submit comments on its proposed rules for cryptocurrencies considered to be security tokens.

The investment token framework is designed to safeguard investors and provide legal certainty for market operators. 

Related: UAE regulators approve crypto trading in Dubai free zone

It specifies the sort of investment tokens that are permitted and which may be listed on a Digital Asset Exchange in the Dubai International Financial Centre, as well as other pertinent information.

The DFSA is also working on plans for unlisted securities not covered by the investment tokens regulatory framework. These are anticipated to include cryptocurrencies, utility tokens and certain stablecoins. The DFSA is expected to publish a follow-up consultation paper in the fourth quarter of this year.

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