{"id":183394,"date":"2021-02-19T23:57:24","date_gmt":"2021-02-19T20:57:24","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/law-decoded-bringing-blockchain-into-securities-markets-feb-12-19\/"},"modified":"2021-02-19T23:57:24","modified_gmt":"2021-02-19T20:57:24","slug":"law-decoded-bringing-blockchain-into-securities-markets-feb-12-19","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/law-decoded-bringing-blockchain-into-securities-markets-feb-12-19\/","title":{"rendered":"# Law Decoded: Bringing blockchain into securities markets, Feb. 12\u201319"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a36510cb904c\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a36510cb904c\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/law-decoded-bringing-blockchain-into-securities-markets-feb-12-19\/#Editors_note\" >Editor&#8217;s note<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/law-decoded-bringing-blockchain-into-securities-markets-feb-12-19\/#DLT_for_Israeli_securities\" >DLT for Israeli securities<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/law-decoded-bringing-blockchain-into-securities-markets-feb-12-19\/#Robin_who\" >Robin who?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/law-decoded-bringing-blockchain-into-securities-markets-feb-12-19\/#Ever-tightening_circle_of_sanctions_compliance\" >Ever-tightening circle of sanctions compliance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/law-decoded-bringing-blockchain-into-securities-markets-feb-12-19\/#Further_reads\" >Further reads<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Law Decoded: Bringing blockchain into securities markets, Feb. 12\u201319 <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDIvZjAxNDczYjAtYWY0Ni00MmZlLWE0YzEtYTM0YmE3NDgzNzFkLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-5a136f3a><em>Every Friday, Law Decoded delivers analysis on the week\u2019s critical stories in the realms of policy, regulation and law.<\/em><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Editors_note\"><\/span>Editor&#8217;s note<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">Technology<\/a> is by and large not the major barrier \u2014 though many in the industry have a decent bit of hubris about it. More important is that people, whenever their money is on the line, get mighty conservative. Which is not necessarily greedy or unreasonable, but it is why it was easier for lawmakers to greenlight email than electronic signatures. <\/p>\n<p>Conservatism surrounding money also means that old systems have to fail in a pretty conspicuous fashion for anyone to seriously talk about reforming or even discarding them. Think about how grotesque the subprime mortgage bubble of 2008 looked as regulators and <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> outlets dug through its wreckage in subsequent years: That\u2019s what it took for Dodd-Frank to pass into law.<\/p>\n<p>The whole Robinhood turbulence at the end of last month is not in the same league. But any casual observer, uncontaminated by the MBA jargon that exists to justify such shenanigans, can look at the events surrounding GME trading and know that these markets are not as free as we might imagine. And maybe it\u2019s for that reason that we\u2019ve spent so much time talking about it, because it\u2019s an intro to standing problems in securities trading that is interesting enough to teach a whole generation of casual observers what short-selling is. <\/p>\n<p>The thing is, the stock market is not going anywhere. But everyone sees in this eye-catching crisis an occasion to petition for what they want. For the blockchain community, it\u2019s been an opportunity to consider how you can disinter<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>te securities trading or even facilitate same-day settlement of trades \u2014 securities tokens in other words. Others have, however, used it as an opportunity to disown classic securities altogether. But, more low-profile than the Robinhood affair, this week has seen a number of developments that bring crypto into securities markets and securities markets onto blockchains.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"law_decoded\"><\/template><\/p>\n<h3><span class=\"ez-toc-section\" id=\"DLT_for_Israeli_securities\"><\/span>DLT for Israeli securities<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Israel\u2019s securities regulator\u00a0<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roved Simetria\u2019s digital bulletin board for advertising tech offerings, a step on the way to the start-up\u2019s planned DLT securities exchange.<\/p>\n<p>Simetria aims to provide a platform for other Israeli start-ups to issue private equity to international investors in a streamlined fashion. They expect to launch in May.<\/p>\n<p>Relative to its population, Israel has one of the liveliest tech ecosystems in the world. Simetria\u2019s application builds on the country\u2019s Ministry of Finance\u2019s declaration of interest in new trading platforms that operate in more niche markets than the Tel Aviv stock exchange. Simetria, however, is looking to focus on institutional investors, keeping the securities token market away from public offerings for yet another day.<\/p>\n<p>Despite the promise of peer-to-peer securities trading for the public, the biggest impact has been restricted to private platforms. Platforms that have focused on retail investors have been plagued with low volumes and, frankly, unattractive offerings. There is hope that, as more of these private platforms crop up around the world, they will produce a network that can build into public offerings that will, ultimately, break down the siloed operations of the individual public platforms. For now, however, the most exciting offerings are limited to institutions.<\/p>\n<p>For years now, the prospect of tokenizing traditional securities markets has been one of the crypto world\u2019s core promises for how blockchain would revolutionize legacy finance. It\u2019s been what you might call a long time coming.\u00a0<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Robin_who\"><\/span>Robin who?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Oh sorry, did you want to hear about that Robinhood hearing yesterday? The full House Financial Services Committee gathered virtually to yell at the CEOs involved in the GME flurry last month.<\/p>\n<p>I don\u2019t like writing much about these hearings, as I don\u2019t want to give them that much weight. They are <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>ly full of sound and signalling, legislating nothing. But the range of reactions may actually signify something about tomorrow and tomorrow and tomorrow. As they say. <\/p>\n<p>Democrats largely wavered on their earlier calls to end naked short-selling by hedge funds, though Melvin Capital\u2019s CEO swore up-and-down that his firm did not, and could not, engage in naked short-selling at all. Democrats remained, however, quite hostile to Robinhood\u2019s shortcomings in collateral \u2014 which, if they were as bad as they look, may well end up being the subject of an SEC action. A broadly bipartisan question was the wisdom of providing options and margin trading to retail investors. <\/p>\n<p>Republicans were, per tradition, more sympathetic to the financiers. In addition to advocating for expanded access to \u201caccredited investor\u201d labeling, the idea of day-of \u2014 or T-0 \u2014 settlement loomed large. Robinhood\u2019s Tenev definitely leaned on a T-0 solution as a way of evading blame. As a technological development, T-0 seems to depend upon new digitization of the U.S. dollar in addition to securities. While this is unlikely to happen in the near future, this is an area where blockchain lays a persuasive claim to being the best solution to both issues. <\/p>\n<h3><span class=\"ez-toc-section\" id=\"Ever-tightening_circle_of_sanctions_compliance\"><\/span>Ever-tightening circle of sanctions compliance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The U.S. Treasury\u2019s Office of Foreign Asset Control announced fines on BitPay for providing services to users in sanctioned countries. <\/p>\n<p>The settlement is remarkably similar to one that OFAC reached with BitGo at the end of December. Both attribute the services provided to negligence rather than active sanctions evasion. Helping the cases of both was that the dollar amounts of transactions in sanctioned areas were fairly low, and OFAC accused neither of servicing specially designated nationals. Consequently, the fines have been fairly limited.<\/p>\n<p>Nonetheless, these settlements are shots across the bow for the crypto industry. OFAC is saying that it\u2019s watching. And while it took a few years to actually get around to finding the activity, that suggests that it\u2019s digging through the past with the latest technological tools. <\/p>\n<p>The issue with sanctions is that the compliance regime necessary to identify user IP addresses by location and avoid <em>any<\/em> interaction with a sanctioned geographical region is pretty hard to square with most crypto practices. For contrast, the Treasury\u2019s FinCEN office enforces money laundering regimes, which is more merciful \u2014 if your practices are sound, laundering can still happen on your platform and you\u2019re not necessarily liable. Sanctions violations work on the standard of strict liability, which means that OFAC can come for any amount.<\/p>\n<p>In practice, OFAC has limited resources and, despite its best efforts, has not yet reached omni<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/sciencee\/\" data-internallinksmanager029f6b8e52c=\"5\" title=\"Science\" target=\"_blank\" rel=\"noopener\">science<\/a>. But there are hundreds of millions of people living in sanctioned countries, many of whom are particularly keen on crypto as those sanctions and local capital controls have ravaged their respective currencies. So OFAC\u2019s advancing interest in the field is worth looking out for. <\/p>\n<h3><span class=\"ez-toc-section\" id=\"Further_reads\"><\/span>Further reads<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>For the Atlantic Council, Josh Lipsky outlines Treasury Secretary Janet Yellen\u2019s role in bringing a <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.atlanticcouncil.org\/blogs\/new-atlanticist\/how-janet-yellen-can-help-deliver-the-digital-dollar\/\">digital dollar to market<\/a>. <\/p>\n<p>Attorney Peter Connors <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.jdsupra.com\/legalnews\/the-next-step-fincen-proposes-to-8898894\/\">writes on<\/a> new FinCEN requirements for disclosing foreign cryptocurrency accounts. <\/p>\n<p>More commentary on the implications for crypto of <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.lexology.com\/library\/detail.aspx?g=0c647dbc-e75e-4b6b-8111-66cbedf304be\">Biden\u2019s nominee<\/a> to chair the SEC comes from Scott Kimpel.<\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/law-decoded-bringing-blockchain-into-securities-markets-feb-12-19\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Law Decoded: Bringing blockchain into securities markets, Feb. 12\u201319 &#8221; Every Friday, Law Decoded delivers analysis on the week\u2019s critical stories in the realms of policy, regulation and law. Editor&#8217;s note Technology is by and large not the major barrier \u2014 though many in the industry have a decent bit of hubris about it&#8230;.<\/p>\n","protected":false},"author":1,"featured_media":183395,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDIvZjAxNDczYjAtYWY0Ni00MmZlLWE0YzEtYTM0YmE3NDgzNzFkLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[86706,74906,74892,52214,70934,71523,71407],"class_list":["post-183394","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-robinhood","tag-sto","tag-tokens","tag-congress","tag-regulation","tag-sanctions","tag-trading"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/183394","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=183394"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/183394\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/183395"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=183394"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=183394"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=183394"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}