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Latvia’s Central Bank ‘Latvijas Banka’ Opens Applications for EU MiCA Licensing for Crypto Asset Service Providers
On 2 January 2025, Latvia's central bank, Latvijas Banka, officially began accepting applications for the EU Markets in Crypto-Assets (MiCA) licence. This development follows the implementation of the MiCA Regulation on 30 December 2024, establishing a unified legal framework for the crypto-asset industry across the European Union. Latvijas Banka is offering free pre-licensing consultations to crypto-asset service providers, providing expert guidance on application viability, regulatory compliance, and documentation readiness. These consultations aim to minimise service downtime and accelerate the path to market. Crypto-asset service providers seeking an EU-wide licence can benefit from Latvijas Banka's framework, with a competitive supervision fee structure. Approved entities will pay a 0.6% supervision fee, with a minimum of €3,000 annually, and gain the ability to passport services across EU member states. Latvia also provides a supportive ecosystem for fintech companies,...
Gary Gensler Reflects on His Tenure in Final SEC “Office Hours”
On 16 January 2025, Gary Gensler, Chair of the United States Securities and Exchange Commission (US SEC), released the final episode of his Office Hours series. In this candid video, Gary Gensler discussed the importance of the US capital markets, the US SEC’s role in protecting investors, and the broader significance of public service. Chair Gary Gensler began by explaining the vast influence of US capital markets, which, at $120 trillion, dwarf the US banking system and touch nearly every facet of the economy. He talked about how these markets facilitate mortgages, auto loans, and government borrowing, connecting individual households and businesses to a wider financial ecosystem. By referencing the US SEC’s role in enforcing “common-sense rules of the road,” he discussed the importance of trust and order in financial markets, likening them to stop signs or referees on a playing field. Launched during Gensler’s tenure, the Office Hours series aimed to bridge the gap between the SEC...
IOSCO Publishes Final Report on Initial Margin Transparency in Centrally Cleared Markets
On 15 January 2025, the International Organization of Securities Commissions (IOSCO), in collaboration with the Basel Committee on Banking Supervision (BCBS) and the Bank for International Settlements’ Committee on Payments and Market Infrastructures (CPMI), released a final report titled Transparency and Responsiveness of Initial Margin in Centrally Cleared Markets – Review and Policy Proposals. This publication aims to address systemic risks by increasing transparency and enhancing the responsiveness of initial margin (IM) models used by central counterparties (CCPs). The report builds on prior analysis of margining practices and incorporates industry consultations and data-driven research. Its recommendations are part of a larger initiative by global regulatory bodies to ensure the resilience of financial markets, particularly in the wake of significant market disruptions observed during the COVID-19 pandemic and subsequent commodity market volatility. The report is a culmination...
US CFTC and Bank of England Collaborate on Report Enhancing Margin Practices in Cleared Markets
On 15 January 2025, the United States Commodity Futures Trading Commission (US CFTC) and the Bank of England issued statements on the release of Final Report on Transparency and responsiveness of initial margin in centrally cleared markets – review and policy proposals addressing transparency and responsiveness of initial margin in centrally cleared markets. The report, published by the Basel Committee on Banking Supervision (BCBS), the Committee on Payments and Market Infrastructures (CPMI), and the International Organization of Securities Commissions (IOSCO), represents a culmination of collaborative efforts to strengthen financial stability in response to market challenges observed in recent years. The report was co-chaired by the US CFTC and the Bank of England. It builds on the September 2022 report Review of Margining Practices, which identified six critical areas for policy improvement following the market turmoil in March 2020. After extensive data analysis and consultations...
US SEC Chief Economist Jessica A.Wachter to Depart, Returning to Academia
On 15 January 2025, the United States Securities and Exchange Commission (US SEC) announced the upcoming departure of Jessica A. Wachter, Chief Economist and Director of the Division of Economic and Risk Analysis (DERA). Jessica A. Wachter, who has led the division since mid-2021, will leave the US SEC on 17 January 2025 to resume her academic career at the Wharton School of the University of Pennsylvania. US SEC Chair Gary Gensler commended Wachter for her significant contributions to the agency, stating: “I thank Jessica for her leadership of the Division of Economic and Risk Analysis, her judgement, and her thoughtful economic analysis. As Chief Economist, she ably led a division that has a seat at the table for all of the SEC’s critical decision making, whether it’s policymaking, enforcement, or monitoring markets. I have enjoyed and learned so much from working with Jessica who has been one of my closest advisors. I wish her very well as she returns to academia.” Under Jessica...
US CFTC Announces Departure of Clearing and Risk Director Clark Hutchison
On 13 January 2025, the United States Commodity Futures Trading Commission (US CFTC) announced the departure of Clark Hutchison, Director of the Division of Clearing and Risk, effective 15 January 2025. Hutchison has led the division since July 2019. Clark Hutchison managed the supervision of derivatives clearinghouses and their members, ensuring rigorous oversight through risk assessment and surveillance. Before joining the US CFTC, he held senior roles in prominent global financial institutions, focusing on clearing and risk management. His extensive experience includes serving as a special advisor to the board of the Futures Industry Association, a member of the Chicago Mercantile Exchange’s Risk Committee, and a board member of NASDAQ Futures, Inc. Clark Hutchison’s appointment as Director of the Division of Clearing and Risk commenced in July 2019. His departure, announced two days prior to his final day on 15 January 2025, comes 2,016 days after he assumed the role. US CFTC...
ASIC Seeks Feedback on Extending Relief for Business Introduction Services
On 13 January 2025, the Australian Securities and Investments Commission (ASIC) announced that it is consulting on the future of the ASIC Corporations (Business Introduction Services) Instrument 2022/805 (the Instrument). The Instrument, which provides conditional regulatory relief for certain business introduction services, is set to expire on 1 April 2025. ASIC is inviting feedback on two key issues: whether the relief for managed investment schemes should be extended and whether previous relief for securities, other than debentures, should be reinstated. Submissions must address why such reinstatement is necessary, particularly if the crowd-sourced funding (CSF) regime under the Corporations Act 2001 does not adequately support small- to medium-scale capital raisings. Stakeholders have until 5 February 2025 to provide input. The Instrument grants conditional relief from specific provisions in the Corporations Act, including fundraising, financial product disclosure, hawking, and...
Gemini Trust Fined $5 Million for Misleading the US CFTC on Bitcoin Futures Product
On 13 January 2025, the United States Commodity Futures Trading Commission (US CFTC) announced that Gemini Trust Company LLC, a New York-based trust company, has been ordered by the US District Court for the Southern District of New York to pay a $5 million civil monetary penalty by a consent order. This penalty follows findings that Gemini made materially false or misleading statements and omissions during the self-certification process for a bitcoin futures product. The case, which began with a US CFTC complaint on 2 July 2022, involved allegations of misconduct by Gemini from July to December 2017. During this period, Gemini’s representatives made or failed to disclose certain critical facts to the US CFTC about the bitcoin futures contract, which was to be settled based on the spot bitcoin price determined through an auction held on the Gemini platform. These misrepresentations, which included false claims about prefunding requirements, trade volumes, liquidity, and fee rebates,...
Mosaic Exchange Ltd. and CEO Ordered by US CFTC to Pay Over $1.1 Million for Cryptocurrency Fraud Scheme
On 13 January 2025, the United States Commodity Futures Trading Commission (US CFTC) announced that Mosaic Exchange Ltd. and its CEO, Sean Michael, have been ordered by the US District Court for the Southern District of Florida (case 9:23-cv-8130-AMC) to pay over $1.1 million in penalties and restitution. This judgment follows findings of fraudulent digital asset solicitation and trading activities conducted between February 2019 and June 2021. US CFTC filed a complaint on 26 September 2023, alleging that Mosaic and Michael fraudulently solicited 18 individuals to trade Bitcoin and other digital asset commodities, misrepresented their assets under management, fabricated trading success rates, and misappropriated customer funds. These violations contravened the US Commodity Exchange Act (CEA) and US CFTC regulations. The defendants, who failed to respond adequately to legal proceedings, were found liable by default judgment orders entered on 23 December 2024 and 30 December 2024....
US SEC Fines Robinhood Broker-Dealers $45 Million for Regulatory Violations
On 13 January 2025, the United States Securities and Exchange Commission (US SEC) published order instituting administrative and cease-and-desist proceedings, pursuant to sections 15(b) and 21c of the United States Securities Exchange Act of 1934, making findings, and imposing remedial sanctions and a cease-and-desist order civil penalties totalling US$45 million against Robinhood Securities LLC and Robinhood Financial LLC for multiple violations of federal securities laws. This enforcement action addresses lapses in their brokerage operations, including trading activity reporting, regulatory compliance, recordkeeping, and safeguarding customer information. The US SEC’s investigation revealed a series of violations by Robinhood firms between 2018 and 2024, including delays in filing suspicious activity reports, inadequate identity theft prevention measures, improper handling of off-channel communications, and deficiencies in cybersecurity safeguards. Robinhood Securities was...
UK FCA Fines Arian Financial LLP £288,962.53 for Failures Linked to Cum-Ex Trading
On 10 January 2025, the United Kingdom Financial Conduct Authority (UK FCA) announced that it had fined Arian Financial LLP £288,962.53 for failings in its systems and controls against financial crime. The UK FCA found that Arian's shortcomings exposed the firm to risks of facilitating fraudulent trading and money laundering linked to cum-ex trading schemes and withholding tax reclaims. The investigation revealed that between January and September 2015, Arian executed over-the-counter equity trades totalling approximately £37 billion in Danish equities and £15 billion in Belgian equities for clients associated with the Solo Group. These trades, described as circular and indicative of financial crime, were used to arrange withholding tax reclaims in Denmark and Belgium. During the period in question, the Solo Group submitted tax reclaims amounting to £899.27 million to Danish authorities and £188 million to Belgian authorities, of which payments of £845.9 million and £42.33 million,...
HK SFC Warns Public About Unlicensed Virtual Asset Trading Platform “iSCAT Exchange”
On 10 January 2025, the Hong Kong Securities and Futures Commission (HK SFC) issued a public warning against an unlicensed virtual asset trading platform (VATP) known as International Standard Carbon Assets Technology Co., Limited, or “iSCAT” and “iSCAT Exchange”. This platform, which claims to provide cryptocurrency trading services, has not been granted a licence by the HK SFC and is therefore operating unlawfully under Hong Kong regulations. The HK SFC in its publication, revealed that "iSCAT" has been promoting its services through social media, directing potential investors to its website and mobile application for trading cryptocurrencies. Such operations fall under the category of regulated activities as defined in Hong Kong’s Securities and Futures Ordinance (HK SFO) and the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. These laws prohibit entities from carrying out virtual asset services, including the operation of virtual asset exchanges, or marketing...
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