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On 18 December 2024, the Hong Kong Securities and Futures Commission (HK SFC) announced that it had granted licences to four virtual asset trading platforms (VATPs) under its streamlined licensing process. The process follows a comprehensive series of on-site inspections conducted since June 2024. The four newly virtual asset trading licensed platforms, Accumulus GBA Technology (Hongkong) Co. Limited, DFX Labs Company Limited, Hong Kong Digital Asset EX Limited, and Thousand Whales Technology (BVI) Limited, will initially operate under a restricted scope of business while completing mandatory rectifications and assessments as outlined in the SFC’s newly published circular​. The streamlined licensing process as initiated by HK SFC mandates requirements such as rectifying issues identified during the HK SFC’s inspections and conducting independent vulnerability assessments and penetration tests to ensure compliance with security and operational standards​. The Hong Kong Securities and...

On 17 December 2024, the United Kingdom Financial Conduct Authority (UK FCA) published a consultation paper CP24/29 on the establishment of the Private Intermittent Securities and Capital Exchange System (PISCES). This proposed private stock market aims to allow investors to trade shares in private companies. PISCES is designed to address the increasing demand for trading private company shares as more firms opt to remain private for extended periods. The proposals apply to private companies seeking to raise capital through share sales and to firms operating trading platforms within the PISCES framework which allows intermittent trading events and mandatory risk warnings for investors. PISCES is aimed to bridge the gap between private and public markets, but it also raises important questions about regulatory oversight and market feasibility. While the initiative promises to unlock diversified investment opportunities, the risks inherent in private company trading require careful...

On 16 December 2024, the United Kingdom Financial Conduct Authority (UK FCA) released Discussion Paper DP24/4, presenting proposals to enhance transparency, market integrity, and consumer protection in the UK’s crypto markets. These rules, if approved would apply to cryptoasset trading platforms, intermediaries, issuers, and other market participants operating in or targeting the UK market. The document invites industry feedback on plans to introduce admissions and disclosures (A&D) requirements for cryptoassets and implement a robust Market Abuse Regime for Cryptoassets (MARC). The UK FCA’s discussion paper outlines measures to establish regulatory controls for cryptoasset admissions, disclosures, and market abuse prevention. It builds upon the UK government’s earlier consultation in February 2023, which laid the foundation for including cryptoasset activities within the FCA’s regulatory remit. The proposals certain areas for regulation, such as the admissions and disclosures...

On 16 December 2024, the United States Securities and Exchange Commission (US SEC) published the final rules for Electronic Submission of Certain Materials Under the United States Securities Exchange Act of 1934; Amendments Regarding the FOCUS Report which proposes amendments to require the electronic filing, submission, or posting of certain financial forms and materials under the United States Securities Exchange Act of 1934. The proposed rules updates the US SEC’s data collection processes by mandating the use of the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system and adopting structured data formats where appropriate. The proposed rule changes apply to market participants, including SROs, registered clearing agencies, broker-dealers, over-the-counter (OTC) derivatives dealers, and security-based swap entities. The US SEC also published an accompanying fact sheet on 16 December 2024, which summarises the proposed changes. The proposed rule was initially published...

On 18 December 2024, the Australian Securities and Investments Commission (ASIC) commenced civil proceedings in the Australian Federal Court against Oztures Trading Pty Ltd, trading as Binance Australia Derivatives, alleging significant breaches of consumer protection laws under the Australian Corporations Act 2001 (Cth). ASIC claims Binance misclassified 505 retail clients as wholesale clients, denying them crucial consumer protections while exposing them to high-risk crypto derivative products. According to ASIC’s Statement of Claim and Originating Process filed in the Federal Court, Binance’s compliance systems failed to meet legal standards, leading to systemic misclassifications, inadequate disclosures, and substantial financial harm to clientsThe case was filed in the Australian Federal Court’s Victoria Registry under File Number VID1381/2024. While ASIC has initiated proceedings seeking civil penalties, declarations, and adverse publicity orders against Binance Australia...

On 12 December 2024, the Australian Federal Court, in its judgment titled Australian Securities and Investments Commission v Bit Trade Pty Ltd 2024 FCA 1422, ordered Bit Trade Pty Ltd, the Australian operator of the Kraken cryptocurrency exchange, to pay AUD 8 million in penalties. The decision followed legal proceedings initiated by the Australian Securities and Investments Commission (ASIC). The Court found that Bit Trade unlawfully issued a margin trading product to more than 1,100 retail clients without meeting critical regulatory obligations under the Australian Corporations Act 2001 (Cth), as outlined in the judgment released by the Federal Court. The ruling comes after ASIC alleged that Bit Trade failed to comply with the design and distribution obligations (DDO) when offering its “margin extension” product. This financial product allowed clients to borrow funds, either in national currencies like USD or digital assets such as Bitcoin, to trade on the Kraken exchange. The...

On 12 December 2024, the United States Securities and Exchange Commission imposed a cease and desist order against Cantor Fitzgerald, L.P., a global financial services firm, for causing materially misleading disclosures by two special purpose acquisition companies (SPACs) it controlled. The US SEC found that Cantor Fitzgerald misled investors about discussions with potential merger targets, violating federal securities laws. The firm has agreed to pay a $6.75 million civil penalty as part of a settlement. Cantor Fitzgerald was charged with causing two SPACs, CF Finance Acquisition Corp. II (CFAC II) and CF Acquisition Corp. V (CFAC V), to deny substantive discussions with potential merger targets before their respective IPOs. The US SEC’s investigation revealed that Cantor had indeed engaged in pre-IPO negotiations with potential targets, including View, Inc. and Satellogic Inc., which later became the merger partners of the SPACs. These misleading statements, contained in public...

On 13 December 2024, the United States Securities and Exchange Commission announced that Erik Gerding, Director of the Division of Corporation Finance, will step down from his role effective 31 December 2024. Washington. Cicely LaMothe, currently serving as Deputy Director of Disclosure Operations, has been named Acting Director upon Mr. Gerding’s departure. Mr. Gerding joined the US SEC in October 2021 as Deputy Director of the Division of Corporation Finance, focusing on Legal and Regulatory Policy. He became Director in February 2023, during which time he oversaw the implementation of several major regulatory initiatives. These included rules on climate-related disclosures, cybersecurity risk management, executive compensation, and conflicts of interest in securitizations. Under his leadership, the Division also finalised reforms such as universal proxy, updates to United States Rule 10b5-1 plans governing insider share sales, and standards for clawbacks of erroneously awarded...

On 11 December 2024, the United States Commodity Futures Trading Commission (US CFTC) announced that the United States District Court for the Central District of California issued two orders against five individuals involved in a fraudulent digital asset scheme operating under the name Icomtech. The court's consent order and default judgment require the defendants—Marco A. Ruiz Ochoa, David Carmona, Juan Arellano Parra, Moses Valdez, and David Brend—to collectively pay over $5 million for defrauding at least 190 investors out of more than $1 million through false promises of high returns from trading digital assets like Bitcoin. The legal actions stem from the US CFTC's May 2023 complaint, which charged the defendants with fraud and misappropriation in violation of the United States Commodity Exchange Act (CEA) and related US CFTC regulations. The court found that from August 2018 to December 2019, the defendants engaged in a deceptive scheme that falsely represented to investors...

On 11 December 2024, the United States Securities and Exchange Commission filed a complaint against Ken Peterman, the former Chief Executive Officer, chair of the Board, and president of Comtech Telecommunications Corp., in the United States District Court for the Eastern District of New York. The complaint alleges that Peterman engaged in insider trading by selling Comtech stock while in possession of material non-public information about the company's poor financial performance for the second quarter of its fiscal year 2024 (Q2 FY24). These actions violated United States federal securities laws and breached his fiduciary obligations. The complaint centres on Peterman’s sale of Comtech shares prior to the public disclosure of financial losses for Q2 FY24, which resulted in a 25.4% drop in Comtech’s stock price. By acting on confidential information obtained through his position at Comtech, Peterman avoided approximately $12,445 in losses and attempted to avoid further losses by...

On 9 December 2024, the United States Securities and Exchange Commission (US SEC) issued an order instituting administrative and cease and desist proceedings, pursuant to section 15(b) of the United States Securities Exchange Act of 1934 and Sections 203(e) and 203(k) of the United States Investment Advisers Act of 1940, making findings, and imposing remedial sanctions and a cease-and-desist order against Morgan Stanley Smith Barney LLC (MSSB), alleging serious lapses in its policies and procedures designed to protect client funds. The US SEC’s order is issued against the MSSB’s failure to detect and prevent the misappropriation of millions of dollars from customer accounts by four financial advisers (FAs). The US SEC found that MSSB failed to adopt and implement effective safeguards, allowing the fraudulent activities of its financial advisers, Michael Carter, Chingyuan “Gary” Chang, Douglas McKelvey, and Jesus Rodriguez, to go undetected. These individuals misused client funds...

On 9 December 2024, the United States Commodity Futures Trading Commission filed a complaint against Francier Obando Pinillo, accusing him of operating a fraudulent cryptocurrency scheme. Pinillo, through his unregistered entities, Solanofi, Solano Capital Investments and Solano Partners LTD, allegedly solicited funds from over 1,500 individuals, including members of his church, misappropriating approximately US$5.9 million in the process. The complaint states that Pinillo allegedly used his businesses to promise guaranteed monthly profits of up to 34.9% through purported cryptocurrency trading and staking activities but no such trading took place. Instead, Pinillo misappropriated the funds for personal gain, using falsified account statements to deceive customers into believing their investments were growing exponentially. Pinillo targeted financially vulnerable and unsophisticated individuals, leveraging his position as a pastor at a Spanish-speaking church in Pasco, Washington....