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On 23 August 2024, the Federal Court of Australia delivered a landmark judgment against Bit Trade Pty Ltd, the operator of the Kraken cryptocurrency exchange in Australia. In the judgment, the apex court found that Bit Trade had failed to comply with critical design and distribution obligations (DDO) under the Corporations Act 2001 when offering its margin trading product, known as the "margin extension," to Australian customers. This judgment marks a significant victory for the Australian Securities and Investments Commission (ASIC) in its ongoing efforts to regulate the cryptocurrency sector and protect consumers. Bit Trade Pty Ltd, a subsidiary of the U.S.-based Payward Inc., operates the Kraken digital currency exchange in Australia. Since its acquisition by Payward in 2020, Bit Trade has provided Australian customers access to the Kraken Exchange, allowing them to trade digital assets such as Bitcoin and other cryptocurrencies. Central to the case was Bit Trade’s "margin...

On 22 August 2024, the Australian Securities and Investments Commission (ASIC) unveiled its much-anticipated Corporate Plan for 2024-25, setting the stage for a transformative approach to regulating the nation’s financial markets in the digital age. As digital currencies, blockchain technologies, and virtual assets continue to gain prominence, ASIC's plan emphasizes the critical importance of both innovation and consumer protection in this rapidly evolving landscape. The plan, which outlines ASIC’s strategic priorities over the next year, is deeply rooted in the realities of today’s financial environment. The rise of cryptocurrencies and the increasing use of blockchain technology have fundamentally altered the way financial transactions are conducted, presenting both opportunities and challenges for regulators. ASIC acknowledges these shifts and has positioned itself as a forward-looking regulator, committed to adapting its strategies to manage these new dynamics effectively. One of...

On 21 August 2024, the Securities and Futures Commission (SFC) issued warning to the public regarding a fraudulent digital platform known as "ICE Global Professional Station," which has been linked to various virtual asset-related scams and illicit activities. "ICE Global Professional Station" deceptively presents itself as a legitimate digital asset trading platform by impersonating Intercontinental Exchange, Inc. (ICE), a globally recognized and reputable financial services corporation. The fraudulent platform utilizes similar branding and nomenclature to mislead investors into believing they are engaging with a credible and authorized entity. The SFC's warning comes after numerous reports from investors who have suffered significant financial losses due to the platform's deceitful practices. Victims have reported severe difficulties in withdrawing funds after making deposits for cryptocurrency and other digital asset investments through the platform. These manipulative tactics...

On 20 August 2024, Tether, the world’s largest issuer of stablecoins, announced the launch of a new stablecoin pegged to the UAE Dirham (AED). This development marks a strategic collaboration between Tether and UAE-based companies, Phoenix Group and Green Acorn Investments, aiming to introduce a digital asset fully backed by liquid reserves within the UAE. The new Dirham-pegged stablecoin is expected to play a pivotal role in enhancing financial transactions both within the UAE and on an international scale, offering a secure and efficient means for trade, remittances, and reducing transaction costs. The introduction of this stablecoin comes as the UAE continues to assert itself as a global economic hub, particularly in the areas of blockchain and digital assets. With the implementation of the UAE Central Bank's Payment Token Services Regulation (PTRS), the Dirham-pegged stablecoin will be launched under a robust regulatory framework designed to ensure its stability and security. The...

On 21 August, 2024, the Securities and Exchange Commission (SEC) adopted a rule change affecting the venture capital industry by adjusting the dollar threshold required for a fund to qualify as a "qualifying venture capital fund" under the Investment Company Act of 1940. This adjustment is mandated by the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (EGRRCPA), which requires the SEC to update this threshold every five years to account for inflation. Crypto venture capital funds, like their traditional counterparts, benefit from being classified as "qualifying venture capital funds" under the Investment Company Act because this classification exempts them from the more stringent regulations that apply to investment companies. The SEC's proposed rule adjustment to increase the threshold for qualifying venture capital funds to $12 million is a positive development for the crypto industry. It provides more flexibility for crypto venture capital funds to raise...

On 20 August, 2024, the Securities and Exchange Commission (SEC) announced the approval of updates to the Public Company Accounting Oversight Board (PCAOB) audit standards, which will take effect for audits of financial statements beginning from 15 December, 2024. These changes include updated standards on general auditor responsibilities, the incorporation of technology-assisted analysis in audit procedures, and a significant amendment to the PCAOB’s contributory liability rule for associated persons of audit firms. The SEC has endorsed the PCAOB's new AS 1000, "General Responsibilities of the Auditor in Conducting an Audit," which modernizes and consolidates the principles governing an auditor’s duties. This standard emphasizes the auditor’s role in safeguarding investor interests by ensuring the issuance of accurate, independent reports. It also reinforces the need for auditors to exercise due professional care, skepticism, and judgment while adhering to stringent ethics and...

On 20 August, 2024, the U.S. Securities and Exchange Commission (SEC) issued a crucial order adjusting the registration fee rates for fiscal year 2025, set to take effect on 1 October, 2024. This adjustment, detailed in the "Order Making Fiscal Year 2025 Annual Adjustments to Registration Fee Rates," establishes a new fee rate of $153.10 per million dollars of securities registered. The SEC's move reflects its ongoing commitment to ensuring that the fees collected are aligned with the regulatory demands of overseeing a dynamic and complex financial market. This change underscores the SEC's role in maintaining a robust regulatory framework that protects investors and ensures market integrity. The impact of this rule change will be felt across a broad spectrum of companies that are required to register their securities with the SEC. The adjusted fee rate will inevitably lead to increased costs for these companies as they prepare to issue new securities. For large corporations issuing...

On 20 August, 2024, in a decisive move against financial fraud, the Commodity Futures Trading Commission (CFTC) announced that it has issued an order against Get Money Tradez LLC (GMT) and its managing member, Jeffrey Carmon, Jr., based in Houston, Texas, requiring them to pay more than $520,000 in penalties and restitution. The CFTC found that the respondents had engaged in a fraudulent scheme involving two forex trading pools, soliciting nearly $1 million from 19 unsuspecting participants, only to misappropriate significant portions of those funds for personal use. The investigation revealed that from July 2021 to the present, GMT and Carmon solicited $950,000 from the public under false pretenses. Carmon falsely claimed to be a highly successful forex trader, despite suffering net losses in 17 out of 19 months from January 2020 to July 2021. Instead of fulfilling his promises to invest the pool participants’ funds, Carmon misappropriated at least $113,000, which he diverted for...

On 19 August 2024, in response to public concerns regarding the protection of national data by financial institutions (FIs), the Monetary Authority of Singapore (MAS) issued a strong statement reaffirming its commitment to the stringent safeguarding of customer data. This follows a letter by Dr. Pei Sai Fan, published in Lianhe Zaobao on 10 August 2024, which called for enhanced protection of citizens' data held by insurance companies and other financial institutions. MAS has made it clear that all FIs, including insurers, must implement robust and comprehensive IT security measures to ensure that customer data is shielded from unauthorized access or disclosure. This directive is part of the broader regulatory framework under which MAS-licensed insurers operate, ensuring that they maintain sound IT security policies as a fundamental aspect of their operations. These requirements are in line with Singapore's commitment to maintaining a secure and resilient financial ecosystem,...

On 19 August 2024, in a decisive move to uphold the integrity of Singapore's financial advisory sector, the Monetary Authority of Singapore (MAS) issued a nine-year prohibition order (PO) against Mr. Hoi Wei Kit, a former representative of OCBC Bank. This action follows Mr. Hoi's conviction for multiple serious offences under the Penal Code (PC) and the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA). The prohibition order is a clear message from MAS about its zero-tolerance policy towards financial misconduct, particularly when it involves a breach of trust with clients. The criminal activities committed by Mr. Hoi occurred between October 2017 and January 2018, during which he defrauded five OCBC customers. By falsely claiming that OCBC was offering time deposit accounts, Mr. Hoi induced these customers to sign up for these non-existent products. He then transferred a total of $170,000 from their accounts into his own personal bank...

On 19 August 2024, the Monetary Authority of Singapore (MAS) today announced the issuance of a one-year prohibition order (PO) against Mr. Aw Jun Ray, Reko Corinthians, a former representative of HSBC Bank. The PO, which takes effect immediately, prohibits Mr. Aw from engaging in any financial advisory services and participating in the management, directorship, or substantial shareholding of any financial advisory or capital markets services firms regulated under the Financial Advisers Act (FAA) and the Securities and Futures Act (SFA). The enforcement action against Mr. Aw is grounded in strict legislative provisions that govern the conduct of financial advisory professionals in Singapore. Under Section 32(2)(b) of the Financial Advisers Act 2001, any individual who, in connection with their principal’s lodgment of any document, omits to state any matter or thing that results in the document being misleading in a material respect, is guilty of an offence. The penalty for such an...

On 15 August, 2024, Google has come under legal fire as it faces a $5 million lawsuit filed by Maria Vaca, who alleges that a fraudulent crypto wallet app she downloaded from the Google Play Store led to the complete loss of her savings. The lawsuit, filed in a California state court, centers on the claim that Google should be directly responsible for the security of the apps it hosts, especially those that handle sensitive financial transactions, such as cryptocurrency. According to the lawsuit, Vaca downloaded what she believed to be a legitimate crypto wallet from the Play Store, trusting in the platform's reputation and the apparent authenticity of the app. However, shortly after installation, the app turned out to be malicious, effectively draining $5 million worth of her digital assets. The details regarding which specific crypto assets were stolen or the identity of the app have not been disclosed, leaving a cloud of uncertainty over the exact mechanisms used in the scam. This...