1. US Lawmakers Form Fintech Task Force to Examine Industry
The United States House of Representatives Financial Services Committee has passed a resolution to form the Task Force on Financial Technology, according to a press release by the committee on May 9.
The new task force purports to “examine the current legal framework for fintech, how fintech is used in lending and how consumers engage with fintech.”
Congressman Stephen Lynch (D), the newly appointed chair of the Task Force on Financial Technology, commented in a press release on the need for the committee to reevaluate how to best protect consumers using new fintech:
“The lives of consumers are changing with user-friendly financial service apps but these emerging technologies come with vulnerabilities and the need to reevaluate our consumer protection standards.”
Some noted crypto-friendly representatives such as Warren Davidson (R) and Tom Emmer (R) will be joining the newly-founded fintech task force.
In April, Davidson reintroduced the Token Taxonomy Act with fellow representative Darren Soto (D), with the intent of providing regulatory certainty and discluding cryptocurrencies from securities laws.
Emmer proposed three pro-blockchain and crypto bills in 2018: the Resolution Supporting Digital Currencies and Blockchain Technology, the Blockchain Regulatory Certainty Act, and the Safe Harbor for Taxpayers with Forked Assets Act.
As previously reported by Cointelegraph, a number of CEOs at leading banks testified before the U.S. House Financial Services Committee in April about blockchain technologies and cryptocurrencies. During this testimony, Davidson called attention to the regulatory certainty issues surrounding cryptocurrencies in the U.S., saying that it was causing the country to fall behind the curve in fintech.
2. SEC Commissioner Hester Peirce Concerned Crypto Industry Hindered by Regulatory Delays
United States regulator and so-called “crypto mom” Hester Peirce gave remarks in which she expressed fears that the cryptocurrency industry has been hindered by the Securities and Exchange Commission (SEC) dragging its heels. Peirce spoke at the Securities Enforcement Forum in East Palo Alto, California on May 9.
In her speech, Peirce stated that, given the rapid development of the digital currency industry, she worried that the SEC’s hesitance to provide clear guidance would hold back its growth.
The sticking point was, according to Peirce, how to decide when issuing tokens represented an offering of securities, especially considering that securities laws do not cease to apply just because there is a new evolution in the industry.
Peirce says that the SEC, as a regulator, has to provide industry players with clear guidance on how to comply with the law, which the agency has not yet done. She further noted that the agency’s “Jackson Pollock approach to splashing lots of factors on the canvas without any clear message leaves something to be desired.” Peirce continued:
“We should not be trying to guide innovation, but we also should recognize that we cannot stop it and embrace the potential for positive change that innovation offers. Our silence is likely to simply push this innovation and any attendant economic growth into other jurisdictions that have done their work and provided clear guidelines for the market participants to follow.”
The commissioner added, “The U.S. securities markets have historically been the envy of the world; I do not want heel-dragging by the SEC in crypto to mar that well-deserved reputation.”
In March, Peirce argued in favor of self-regulation for cryptocurrency markets when possible, during a public talk together with former Commodity Futures Trading Commission chairman Gary Gensler at the MIT Bitcoin Expo 2019.
At the time, Peirce advocated for a lighter regulatory touch when possible, nonetheless affirming that security offerings must comply with the SEC’s registration requirements. She also supported the ongoing efforts by major crypto trading platforms to register with the agency as either exchanges or as alternative trading venues in order to be able to compliantly list security tokens.
In February, Peirce proposed that the lengthy process of establishing cryptocurrency regulation in the U.S. may ultimately prove to be beneficial and allow more freedom for the industry to come into its own.
3. Blockchain Entrepreneur, Ontario Regulators Seek Settlement in Namedrop Scandal
The Ontario Securities Commission (OSC) along with blockchain corporation NextBlock Global Limited and its CEO Alex Tapscott, have filed for a public settlement hearing on May 9.
Tapscott and NextBlock were previously accused by the OSC Staff of the Commission of misleading prospective investors during a funding round that reportedly “raised approximately $20 million from 113 accredited investors.”
Investors were allegedly shown investor slide decks that falsely portrayed various well-known figures in the blockchain industry as NextBlock advisors. NextBlock allegedly did not inform the individuals that they were being purported as advisors to the project.
As previously reported by Cointelegraph, Tapscott returned funds to Next block investors shortly after Forbes revealed the investor slide debacle at the end of 2017. According to the aforementioned expose, Kathryn Haun, Vinny Lingham, Vitalik Buterin and Karen Gifford — who were pictured in the investor slide decks — all spoke to Forbes and denied being Next block advisors.
The upcoming hearing — set for May 13 — will determine whether an agreement reached between the Staff of the Commission and NextBlock on April 9 will be approved by the OSC.
Earlier this year, the OSC told Canadian media that it was “looking into” the cryptocurrency exchange QuadrigaCX, which sought creditor protection after the death of its founder resulted in the loss of millions of dollars worth of customer funds.
4. PayPal CFO Says Firm Not Interested in Crypto Sector Right Now
The chief financial officer (CFO) of major payment system PayPal said that the firm is hesitant about getting involved in the cryptocurrency sector in an interview with Yahoo Finance on May 7.
Speaking about the company’s future cryptocurrency plans, PayPal CFO John Rainey pointed out that the firm previously allowed its merchants to accept bitcoin (BTC) as a form of payment, but subsequently saw the instability and volatility of the currency. “If a merchant accepted that they would quickly convert it to a more stable currency like the euro or dollar,” Rainey stated, adding:
“We have teams clearly working on blockchain and cryptocurrency as well, and we want to participate in that in whatever form it takes in the future. I just think it’s a little early on right now.”
Rainey also revealed that PayPal made a $500 million worth investment in transportation network company Uber because the two companies intend to jointly develop a payments platform.
In mid-April, PayPal won a cybersecurity patent for a system entitled “Techniques for cryptocurrency ransomware detection and mitigation,” that intends to improve the detection of ransomware and prevent it from locking up users’ access to their files.
Last year, PayPal filed another patent to increase the speed of cryptocurrency payments by using secondary private keys to reduce wait times for transactions between merchants and consumers. The patent details how the creation of secondary wallets with their own private keys will make transaction times much faster, “practically eliminat[ing] the amount of time the payee must wait to be sure they will receive a virtual currency payment in a virtual currency transaction.”
5. Swiss Post Partners With Blockchain Startup on Temperature Monitoring Shipments Solution
Switzerland’s national postal service Swiss Post has cooperated with blockchain firm Modum to further develop a temperature monitoring solution for shipments. The news was reported by Swiss logistics news site Die Post on May 7.
Die Post reports that Swiss Post has cooperated with Modum, a blockchain and Internet of Things (IoT) technology firm, as a technology partner to launch a smart service. Dubbed ThermoCare, the service is for monitoring the temperature of packages, enabling sensitive goods to be tracked, analyzed and recorded over the full course of their travel route.
The solution is reported to be aimed at optimizing the transport of pharmaceutical goods in particular, as well as offering promise for the food industry.
ThermoCare leverages Modum’s thermo-monitoring technology in order to ensure that specially packed goods — in ThermoCare boxes — are kept within a specified temperature range during transport. Alongside temperature control, the solution also offers temperature monitoring via a Modum sensor, which logs and records the temperature of the goods in real time.
Temperature data can reportedly be accessed at any point during a delivery consignment by an employee scanning the package, removing the need to open or unpack goods for quality control.
Any temperature deviations can thus be tracked immediately, allowing for the parties involved to determine which location or organization is responsible for any slip in quality management.
Swiss Post and Modum’s partnership is reported to be long-term cooperation, Die Post notes.
As previously reported, Swiss Post and state-owned telecoms provider Swisscom announced in December 2018 their partnership to develop a 100% Swiss blockchain infrastructure.
The new infrastructure was designed as permission, blockchain to be operated jointly by two entities, with its key premise being to provide a service that retains all data within Switzerland, and can thus meet the security requirements of banks.
Last year, IBM and Danish transport and logistics giant Maersk launched their global blockchain shipping solution, which generates a distributed, immutable record on the fly for critical data across the supply chain. The solution, dubbed TradeLens, integrates IoT and sensor data to enable the monitoring of variables such as temperature control and container weight.