US Defense Security Service considers reporting requirements for cryptocurrency ownership

Maria Nikolova

DSS has received a heavy volume of enquiries from the industry on whether ownership of cryptocurrencies should be reported by cleared persons or clearance applicants.

Owning Bitcoins can be a matter overseen by national defense bodies. On Monday, February 5, 2018, the United States Defense Security Service (DSS) published a clarification on reporting requirements with regard to cryptocurrencies.

DSS says it has received a number of questions from the industry as to whether ownership of cryptocurrencies, such as Bitcoin, should be reported by cleared persons or clearance applicants. DSS notes that there is no current Department of Defense guidance related to the reporting of ownership of cryptocurrencies. It adds, however, that it is working with DoD policy offices for further clarification and once such guidance is issued, DSS will ensure the widest dissemination to industry.

In the meantime, the number of regulatory actions against virtual currency scams is on the rise. In January this year, CFTC Enforcement Director James McDonald and SEC Enforcement Co-Directors Stephanie Avakian and Steven Peikin made a joint statement regarding virtual currency enforcement actions.

“When market participants engage in fraud under the guise of offering digital instruments – whether characterized as virtual currencies, coins, tokens, or the like – the SEC and the CFTC will look beyond form, examine the substance of the activity and prosecute violations of the federal securities and commodities laws.

“The Divisions of Enforcement for the SEC and CFTC will continue to address violations and to bring actions to stop and prevent fraud in the offer and sale of digital instruments.”

A recent example of such an action is the lawsuit targeting Randall Crater, Mark Gillespie, and My Big Coin Pay, Inc., alleged to have misappropriated over $6 million from customers. The CFTC Complaint says that from at least January 2014 through January 2018, the Defendants fraudulently solicited potential and existing MBC customers throughout the United States by making false and misleading claims and omissions about MBC’s value, usage, and trade status, and that MBC was backed by gold. Defendants also allegedly fraudulently solicited numerous customers in the District of Massachusetts, receiving in excess of $5 million from those customers.

Read this next

Retail FX

Investors from Cyprus and Dubai acquire ‘significant stake’ in M4Markets

Seychelles-regulated brokerage firm M4Markets firm has picked up some investment from Cyprus and Dubai based investors in a new funding round that it will be using to grow its business.

Executive Moves

UAE broker Amana elevates Amr Masry to sales director

Amr Masry has been promoted to a new senior role at Amana Capital, becoming the group’s newest Sales Director, following a successful tenure with the UAE-based FX and CFDs broker.

Executive Moves

TopFX promotes Omar Al-Janabi to head of sales and business development

Prime brokerage firm TopFX has strengthened its Middle East operations with the promotion of Omar Al-Janabi, who is taking on an expanded role as global head of sales and business development.

Retail FX

Plus500 says 2022 revenue to be ‘significantly’ ahead of analysts’ estimates

Israeli-based, but London-stock market listed Plus500 said it expects annual revenue and earnings to be ahead of analysts’ estimates even as trading levels normalised from record volumes in the first quarter.

Digital Assets

Crypto derivatives giant BitMEX launches spot market

Crypto exchange BitMEX is looking to branch out of its singular focus on crypto derivatives with a suite of new product offerings. Although derivatives are to remain at the heart of BitMEX’s business, the popular platform will add spot crypto trading as it aims to aggressively grow their user base.

Uncategorized

PrimeXM reports mixed trading volumes for April

PrimeXM has reported weaker trading volumes for April 2022, in line with other institutional and retail platforms that saw the activity of their clients dropped compared to a month earlier.

Digital Assets

DLT Finance approved by BaFin to support brokerage and custody of digital assets

DLT Finance is already partnered with big names within the digital asset space, including Kraken, Bitstamp, B2C2, and Bittrex.

Institutional FX

LUKB taps vestr to launch actively managed products, AMCs

The partnership with vestr goes to show the growing importance of digitising the active investment management space.

Digital Assets

Jewel taps Tokeny to launch stablecoin-as-a-service solution on Polygon

Jewel aims to offer a stablecoin-as-a-service solution to other digital asset and financial institutions B2B, allowing those businesses to provide cheaper, easier and near real time payments with stablecoins issued and redeemable directly at the bank level at Jewel.

<