Binance's dance around regulations | Institutions are wary of entering crypto because of coin splits | SEC imposes civil penalties on two ICOs

Bitcoin $5,568                    Ethereum $175.65 
Crypto Mkt Cap $183B              BTC Dominance 52.80%

“We have made it clear that companies that issue securities through ICOs are required to comply with existing statutes and rules governing the registration of securities” — Stephanie Avakian, co-director of the SEC’s Enforcement Division

The Big Block

Since launching in 2017, Binance has found favor with high-frequency traders, made hundreds of millions in profits, and seen astonishing growth under its charismatic leader Changpeng Zhao — known simply as CZ. But despite becoming the world’s largest crypto exchange, questions have emerged about Binance’s approach to regulations, particular with respect to securities and banking rules.

For even as Binance appears to be making money hand over fist, it does so in the face of American and European laws. An unregulated exchange, Binance has a lax know-your-customer (KYC) policy. It allows customers to deposit or withdraw up to 2 bitcoin (roughly $11,200, at current value) per day without a full identity check. It also lists its own token, BNB or Binance Coin. There have been suggestions BNB resembles a security, though CZ and the company disagree. Binance also allows trading in dozen of other initial-coin-offering tokens that have the characteristics of securities.

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Around The Block

Forking headaches: Institutions are wary of entering crypto markets because of coin splits, KPMG analyst says

Crypto forks are holding back institutional investors from diving into the nascent digital coin market, says one KPMG crypto analyst.

“Dealing with forks and the implications of forks is a pretty significant concern,” Kiran Nagaraj, a managing director at consultancy firm KPMG, said in an interview. Nagaraj led efforts behind a recent report the firm put out Thursday on the institutionalization of cryptocurrency assets. The report was published the same day that bitcoin cash, a spin-off of the original bitcoin, underwent a much-anticipated hard fork. — More

SEC imposes civil penalties on two ICOs for violating security-registration laws

The Securities and Exchange Commission announced it has settled charges against two companies that sold cryptocurrencies via ICOs. Both companies have agreed to return funds to investors and register their tokens as securities. These companies will also be required to file periodic reports to the SEC and pay penalties for violating securities registration laws. "These are the Commission’s first cases imposing civil penalties solely for ICO securities offering registration violations," the SEC said in a press release. — More

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