Last week was marked by two new legislative initiatives for the crypto industry in the United States. Senator Jack Reed has sponsored a bipartisan bill that would tighten Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations and sanction requirements for decentralized finance (DeFi). Account would be subject to DeFi operations to the same requirements as “other financial companies, including centralized cryptocurrency trading platforms, casinos and even pawnshops.”

Two major crypto lobby groups slammed legislation: Coin Center and Blockchain Association. The former issued separate statements describing the legislation as a “messy,” “dysfunctional” and “unconstitutional” way to regulate DeFi. Kristin Smith, CEO of the Blockchain Association, echoed Coin Center’s concerns, calling the new legislation redundant. Smith said federal law enforcement already has the tools and expertise to combat this “relatively small but important problem.”

Republican members of the House Agriculture and Financial Services Committee introduced the Financial Innovation and Technology for the 21st Century Act. The bill gives the Commodity Futures Trading Commission (CFTC) jurisdiction over digital commodities, clarifies the powers of the Securities and Exchange Commission (SEC) and creates a process for digital assets that were originally considered securities to be sold as commodities. Reps. French Hill and Dusty Johnson, who are among the bill’s co-sponsors, sent a letter to SEC Chairman Gary Gensler a day before introducing a bill criticizing the agency’s so-called “enforcement regulation” of the crypto industry.

More spot crypto ETF applications go to federal registry

Spot applications for bitcoin exchange-traded funds (ETFs) from several firms have been published in the Federal Register, moving them a step further in the SEC process. The Federal Register has received notices of proposed rule changes enabling Bitcoin ETF applications from BlackRock, Fidelity, Invesco Galaxy, VanEck and WisdomTree. Publication of applications in the Official Journal of the US Government gives the SEC the opportunity to accept or reject the application, extend the time allowed, or open the application for public comment.

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Kuwait bans transactions with crypto and virtual assets

The State of Kuwait is the latest jurisdiction to ban virtually all operations involving cryptocurrencies such as Bitcoin (BTC). Kuwait’s main financial regulator, the Capital Markets Authority (CMA), has issued a circular on the supervision and issuance of virtual assets in the country. In a circular, the CMA affirmed a commitment to an “absolute ban” on major use cases and operations involving cryptocurrencies, including payments, investments and mining. The circular also prohibits local regulatory authorities from issuing licenses allowing firms to provide virtual asset services as commercial businesses.

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Marathon shareholders file a lawsuit against the company’s top management

US crypto mining company Marathon Digital is headed to court after its shareholders alleged that CEO Fred Thiel and other top executives breached fiduciary duties, enriched themselves and squandered company assets. According to the legal team, the company’s management downplayed its problems, artificially inflated Marathon’s valuation, received excessive compensation, made lucrative insider sales and received improperly increased bonuses based on false and misleading statements.

The aim of the shareholders is to improve the management of the company by strengthening the board of directors’ supervision over the operation, nominating at least four candidates from among the shareholders to the board of directors and canceling the previous procedure for electing directors.

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