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Kyrgyzstan Seizes 2,000 Cryptocurrency Mining Devices – Mining Bitcoin News

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Law enforcement agencies in Kyrgyzstan have seized thousands of crypto mining machines as part of a new offensive against illegal cryptocurrency mining in the country. Investigators have also identified industrial companies that power the Bitcoin farms.

Security service conducts operation against illegal mining in Kyrgyzstan

The State Committee on National Security (GKNB), Kyrgyzstan’s Organized Crime Agency, recently found and searched a number of facilities that mine cryptocurrency outside of the law. The special operation was carried out in the capital Bishkek and in Chuy Oblast, the northernmost region of the country.

During the offensive against illegal mining activities, police officers seized around 2,000 cryptocurrency mining units, GKNB said, quoted by Sputnik Kyrgyzstan. Preliminary proceedings are ongoing, added the agency’s press service.

Kyrgyzstan Seizes 2,000 Cryptocurrency Mining DevicesAla-Too Square in Bishkek.

The process of cryptocurrency mining is causing “colossal damage” to the country’s power grid, the state committee stressed. GKNB has also uncovered several large industrial companies powering illegal crypto farms.

Most of the attacked addresses are in the capital of the Central Asian Republic, Bishkek. Some of the mining equipment was confiscated from industrial facilities in the Bishkek Free Economic Zone. The police are currently working to identify all those involved in the corruption program.

Bishkek government takes steps to regulate the crypto industry

In August 2020, the Ministry of Economic Affairs tabled a bill to tax Bitcoin mining in Kyrgyzstan. The proposal puts a 15% tax on the cost of electricity used to mint digital coins. Legislation requires mining companies to apply for registration, which is required to operate legally in the country.

Kyrgyzstan Seizes 2,000 Cryptocurrency Mining DevicesNational Bank of the Kyrgyz Republic.

In January of this year, the National Bank of the Kyrgyz Republic announced that it was preparing two draft laws to regulate local cryptocurrency exchanges. According to the bank, the bills introduce a number of measures to reduce the risk of money laundering and terrorist financing. The trading platforms had to report their activities to the government.

Cryptocurrencies have enjoyed growing popularity in Kyrgyzstan over the past year. Decentralized digital money is seen as a new investment opportunity and also as an alternative solution for cross-border payments. Last October, the country’s central bank suspended SWIFT transfers and banking activities due to violent protests against the government.

What do you think of the government’s offensive against crypto-mining farms in Kyrgyzstan? Let us know in the comments below.

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Wyoming’s crypto sector’s fate up to federal regulators

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After years of groundwork, the future of Wyoming’s cryptocurrency banking industry is now in the hands of federal regulators, US Senator Cynthia Lummis’ Wyoming bureau officials told lawmakers Tuesday.

In a presentation to the Wyoming Legislature’s Select Blockchain Committee on Tuesday, Lummis’ political advisors Tyler Lindholm and Chris Land warned lawmakers that Wyoming could lose its competitive edge to other states when it comes to luring cryptocurrency companies to Cowboy State. Both men were major architects of Wyoming’s cryptocurrency laws.

The delay, they told lawmakers, was not due to any fault of state lawmakers, but rather was due to the slow pace of federal regulators and quasi-regulatory organizations like the American Bankers’ Association in developing rules that enable consumers to go to banking with the decentralized, digital currency. The most important of these steps: Cryptocurrency bankers’ access to an ABA routing number, an essential tool for financial institutions to conduct transactions.

Such a delay, said Senator Chris Rothfuss (D-Laramie), could cause Wyoming to lose ground to other states that are rapidly developing their own cryptocurrency regulations, costing the state its competitive advantage if other states catch up. (The Illinois Legislature, they determined, is about to approve his own Banking regulations for cryptocurrencies.)

“I don’t think much can be done,” Land told lawmakers. “We’re losing our first mover advantage and that keeps me up at night.”

A hesitant Fed

Lindholm, a former member of the Wyoming Legislature who was instrumental in passing most of Wyoming’s current cryptocurrency laws, said it was “no surprise” that cryptocurrency regulations met opposition from the federal government.

Wyoming lawmakers have taken on “a gorilla” laws that allow cryptocurrency banks or special purpose depository institutions to charter with the state’s banking division, he said. As Wyoming breaks new ground, federal regulators will likely need to familiarize themselves with their own rules to accommodate Wyoming’s unique cryptocurrency laws, he said.

House Majority Whip Tyler Lindholm (R-Sundance) speaks under his ubiquitous cowboy hat at the 2019 Hackathon. (Andrew Graham / WyoFile)

Attitudes in Washington have warmed up on cryptocurrency. Federal Reserve Chair Janet Yellen made statements in support of cryptocurrency regulation earlier this year. Then the chairman of the Securities and Exchange Commission, Gary Gensler, presented a long-awaited testimony before the US Senate Banking Committee in which he offered a concrete commitment formalize a national regulatory framework for crypto.

“I believe the SEC that deals with the [Commodity Futures Trading Commission] and others, can ensure more robust supervision and stronger investor protection in the area of ​​crypto financing, ”Gensler told lawmakers.

Neither the Federal Reserve nor the SEC have defined cryptocurrency regulations, leaving what Gensler calls the “wild west” in the financial sector. While some pro-cryptocurrency lawmakers have sought the types of regulation necessary for decentralized currencies to have a place in mainstream economies, others have pushed for it more aggressive regulations aims to minimize the short-term volatility of the cryptocurrency markets and protect consumers.

Lummis believes that too much regulation of the maturing industry could stifle innovation, especially at the state level, Lindholm said. Lummis also has concerns on the treatment of emerging financial technologies such as cryptocurrency by the federal supervisory authorities, especially since the legislature itself continues to determine the appropriate level of regulation for crypto.

“Every time we hear the term ‘regulation’ we are concerned, especially at the federal level,” said Lindholm. “That direction might not be so kind to Wyoming.”

Environmental considerations

The production of cryptocurrencies harbors both economic and ecological challenges and opportunities.

In recent years, a number of cryptocurrency “mining” operations have sprung up in natural gas fields around Wyoming, including two locations on state land, officials from the Office of State Lands and Investments told lawmakers.

Such companies record emissions from the “flaring” of natural gas (the controlled combustion of exhaust gases at boreholes) on fuel generators specially developed to operate crypto mines. However, flaring is much less common in Wyoming than in places like New Mexico or Texas. Unlike other states, Obermüller said, Wyoming imposes strict limits on flaring and limits the growth potential of the crypto mining industry compared to North Dakota, for example. That state has built a growing crypto-mining sector from natural gas operations along the Bakken Formation, he said, to minimize the economic impact of fluctuations in fossil fuel markets.

“We don’t necessarily need that lifeline because we have the take-away capabilities to get the product to market and we’ve been constantly working on ways to reduce, reduce, reduce,” he said. “We just don’t like it [flaring] Here.”

It is also questionable whether the potential for mining cryptocurrencies could be a “sweetie” to lure additional drilling operations into the state, he said.

“I wouldn’t say it’s on the edge, but I don’t know that that would be the biggest driver,” said Obermüller.

I’m looking forward to

However, Wyoming lawmakers were treated to some good news about cryptocurrencies on Tuesday.

Lummis’ bipartisan Financial Innovation Caucus is examining the development of laws to formally regulate cryptocurrencies at the federal level, while leaving enough room for states to propose their own regulations, Lindholm told lawmakers. Legislation would be similar to Wyoming’s, clarifying regulatory jurisdiction and including language to ensure consumer protection and clear rules for Digital asset custodians like SPDI banks or cryptocurrency exchanges.

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Caitlin Long, CEO of the Cheyenne-based SPDI bank Avanti Financial, told lawmakers that regulation is not a question of if, but of when. Cryptocurrency has grown into a $ 2.3 trillion industry, she said, and states’ individual efforts to establish blockchain-based businesses through decentralized autonomous organizations are likely to force the hand of the government if they want to tax them.

The main goal of Long and other proponents remains the same for now: education.

“We need to educate the US Senate about what this industry is actually doing and how” [Congress] can be a friend and how [crypto firms] can be a good corporate citizen here in the United States instead of running it overseas, which has been our consistent method of ignoring it for the past few years, ”said Lindholm.

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Cryptocurrency faces existential threat as crackdown gathers steam

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Photo credit: Pixabay / CC0 Public Domain

Cryptocurrency firms are battling for lobbyists and subpoenas in a potentially existential battle to regulate the multi-trillion dollar industry.

Last month, lobbyists from firms seeking representation in Washington were overwhelmed as regulators threatened cryptocurrency companies with lawsuits or injunctions. Current and former enforcers say these warnings are likely just the beginning.

Over the past decade, the cryptocurrency market has grown from a little-known project shared among technologists and libertarians to a massive and largely unregulated industry. But while the sector has found innovative ways to digitally track possessions and send money cheaply, it has also launched savings accounts and mutual funds, products that regulators say should follow the same rules as those in traditional financial networks.

As the cryptocurrency industry prepares for a regulatory battle, some lobbyists asking to withhold their names to discuss customer matters said they were so inundated with crypto firms trying to hire them in August that they had to turn down some potential customers . Some of the crypto firms said they were being targeted or expected by regulators, the lobbyists said.

Earlier this month, the Securities and Exchange Commission announced to Coinbase Global Inc. that it could be sued for offering high-interest accounts.

“These firms should definitely prepare if they haven’t already,” said Owen Tedford, an analyst with Beacon Policy Advisors in Washington. “It wouldn’t be the least bit surprising if the Coinbase announcement were, in some ways, a warning shot for the entire industry.”

Almost a third of the new registrations by lobbyists in the financial sector in August and September concerned crypto companies or advocacy groups, according to Senate documents. Coinbase hired two new firms in August, doubling its presence in Washington, including Andrew Olmem, deputy director of the National Economic Council at Trump’s White House. A subsidiary of the Diem Association, a group of companies including Facebook Inc. that plans to launch a new cryptocurrency, hired new lobbyists, as did the Digital Currency Group, a cryptocurrency-focused venture capital firm.

SEC chairman Gary Gensler took the first blood last week. On Friday, Coinbase tacitly gave up the loan product and announced the move in a brief update to a month-old blog post.

“Crypto loans may be the easiest way for the SEC to break into the industry, but it’s very clear that they deal with cryptocurrencies themselves,” said Tyler Gellasch, a former counsel at the SEC, the Healthy Markets Association directs whose members are large asset managers. If many cryptocurrencies are considered securities, exchanges like Coinbase and the rest of the crypto industry will “not be able to make money the way they do today”.

Established crypto-lending institutions like BlockFi Inc. and Celsius Network Inc. have already raised more than $ 35 billion in deposits of traditional cryptocurrencies like Bitcoin and stablecoins, which are valued at $ 1 and are used as a substitute for fiat money.

Crypto industry executives have said they suspect competing firms in traditional finance, such as large banks, are responsible for driving regulators forward.

At an “Ask Me Anything” event with customers in September, Alex Mashinsky, chief executive officer of Celsius Network said he believed bank managers called the SEC and state regulators to complain about crypto lending firms.

“We have to work twice as hard because these people at both state and federal levels have the biggest lobbyists working for them,” Mashinsky said. “We will win. The fight is for all the money in the world, right?”

The recent battle has centered around crypto loan firms, which sometimes offer depositors double-digit returns. The firms say they can do this by lending the deposits at even higher rates to institutional investors who need to borrow crypto for their own trading.

Regulators believe that many of the companies should have registered their products as securities, making them subject to additional disclosure and supervision. The products are sometimes marketed as an alternative to bank savings accounts, and some regulators have said investors might think they were taking low risk.

The dispute came to a head earlier this month when Coinbase CEO Brian Armstrong accused the SEC of “sketchy conduct” in a series of tweets and denied that Coinbase’s proposed accounts were securities.

Gensler said during a Senate hearing on banking last week that Coinbase has not registered with the SEC even though “dozens of tokens” on its exchange could be securities. A Coinbase spokesman said the company doesn’t believe it has any securities on its platform.

Crypto executives say they are frustrated that regulators are threatening to sue them instead of instructing them on how to obey the law.

BlockFi CEO Zac Prince said at the SALT conference in New York last week that the SEC and other regulators need to clarify what is allowed in his industry. Five states have already taken action against his company, accusing it of offering unregistered securities to residents. Prince said at the conference that federal guidance was needed, not state action. BlockFi announced on Wednesday that New Jersey had agreed to extend its order to suspend the offering of the accounts through December.

Even some companies with similar products that have been filed with the SEC are craving more regulatory guidance. For example, Circle Internet Financial Inc. offers corporate clients high-yield deposit accounts and has reported the SEC under an accredited investor exemption, said CEO Jeremy Allaire.

“We’d like to understand if regulators in the United States are regulating crypto lending and want to work with the industry to define what’s important to them there and set the rules for engagement,” Allaire said. “The United States has been extremely reluctant to provide clarity on digital assets.”

For their part, the enforcers believe the law is already clear. During the bank hearing, Gensler pointed to longstanding court rulings that helped define the agency’s jurisdiction, saying that many crypto products and even cryptocurrencies are likely to fall under their jurisdiction.

Gellasch, the former SEC attorney, said that if exchanges offer securities, they may be forced to register with the agency.

Some Washington crypto advocates said they hope disputes like the one between the SEC and Coinbase make it to court so that a judge, instead of agency staff, can determine what is within limits for companies.

“I want you to have the courage of your beliefs and fight it if you really think your product is not a security,” said Jerry Brito, executive director of Coin Center, a think tank for crypto advertising.

Joe Rotunda, director of the enforcement division of the Texas State Securities Board, said other crypto lending firms shouldn’t expect his agency or other states to hold back, even if the SEC begins to move.

“I’m very relieved to see federal regulators scrutinizing cryptocurrency custody accounts,” said Rotunda, who said his agency and others are still investigating other companies offering similar products. “At the same time, they still haven’t done anything.”

Regulators frown as crypto players jump into banking

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Invesco is partnering with Mike Novogratz’s Galaxy Digital to launch crypto ETFs | Currency News | Financial and Business News

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  • Invesco is partnering with Galaxy Digital to launch a crypto ETF in order to be ready when the SEC approves digital asset funds.
  • The companies aim to have the ETF track the performance of crypto as it trades like a stock.
  • “Ultimately, we believe we can define this new market,” said Invesco’s John Hoffman.
  • Sign up for our daily newsletter here, 10 things before the opening bell.

Invesco confirmed in a regulatory filing on Tuesday that it is partnering with Galaxy Digital Holdings to launch exchange-traded cryptocurrency funds and join a long list of over two dozen companies longing to be the first in the country, who set up a fund backed by digital assets.

Invesco, one of the largest ETF operators in the United States, and Mike Novogratz’s Galaxy Digital aim to have their ETF track the performance of cryptocurrencies as they trade like a stock.

First in the pipeline is a Bitcoin-holding ETF that Galaxy proposed last year and that Invesco joined as a sponsor after the market closed on Tuesday, the Wall Street Journal reported for the first time.

“This is about broadening your horizons,” John Hoffman, Invesco’s Head of Americas, told The Journal. “We ultimately believe that we can define this new market.”

Invesco and Galaxy are preparing their ETF to be ready in case the SEC ever approves crypto funds.

According to Hoffman, Invesco initially teamed up with Galaxy, a cryptocurrency enthusiast and former hedge fund manager Novogratz, which was founded in 2018 based on the company’s expertise in this area.

In June, Invesco also submitted two cryptocurrency-focused ETFs – the Invesco Galaxy Blockchain Economy ETF and the Invesco Galaxy Crypto Economy ETF – that will invest in stocks that focus on digital assets and technology.

“There are a number of ways to bundle these commitments. It’s no different from any other asset, ”Hoffman told The Journal. “We started with stocks and invested in companies involved in the exploration and production of energy. Then we got into futures and added other ways to get these various exposures.”

But despite the enthusiasm of various companies – with Cathie Wood’s Ark Invest the newest fund provider to submit its own application – the SEC does not seem to share this enthusiasm.

As of now, the regulator, led by Gary Gensler, has not yet approved a cryptocurrency ETF, including those proposed by VanEck, Valkyrie Investments and FirstTrust / SkyBridge. She has extended the decision to approve VanEck’s ETF by 60 days until November 14th.

Gensler previously taught courses on blockchain and cryptocurrencies at the MIT Sloan School of Management, which led some to believe that he would be more receptive to digital assets. But while he was running the SEC, he cracked down on cryptocurrencies. Most recently, he compared stablecoins with poker chips.

However, he has hinted that he is more open to cryptocurrency ETFs, suggesting that those who adhere to the strictest mutual fund rules could offer investor protection. He also seems inclined to approve a futures-based ETF.

The US is lagging behind other countries in approving Bitcoin ETFs, with Canada this year approving the first publicly traded Bitcoin ETF in North America, the Purpose Bitcoin ETF, as well as Ethereum ETFs.

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