US SEC Commissioner Peirce: ‘The Journey Begins’ for Crypto Regulation with Crypto Task Force Initiative
On 4 February 2025, United States Securities and Exchange Commission (US SEC) Commissioner Hester M. Peirce published her statement titled The Journey Begins, after the launch of the US Crypto Task Force. In her statement she elaborated on the US Crypto Task Force and its goal to create a structured and transparent regulatory framework for the crypto industry while addressing past regulatory inconsistencies and enforcement-driven oversight.
- In her speech she acknowledged regulatory uncertainty persisted in the past despite developments, including the first bitcoin exchange-traded product application in 2013 and the DAO Section 21(a) report in 2017, which applied the Howey test to digital assets.
- The Task Force will focus on defining the security status of crypto assets under existing laws, identifying areas beyond the agency’s jurisdiction, and providing interim relief for coin and token offerings facing legal uncertainty.
- The agency is reviewing modifications to regulatory pathways such as Regulation A and crowdfunding to facilitate compliant token offerings.
- Special-purpose broker-dealer regulations are under examination to expand custody options for digital assets, while investment advisers will receive clearer guidelines on handling crypto custody.
- The Task Force will establish a regulatory approach for crypto lending and staking programs, refine the approval process for crypto exchange-traded products, and address the role of clearing agencies and transfer agents in digital asset transactions.
- Acknowledging the global nature of crypto markets, the initiative is also exploring cross-border regulatory sandboxes to encourage international cooperation on emerging digital asset technologies.
- Public participation is invited in shaping crypto regulations, encouraging written submissions and engagement through scheduled meetings on official US SEC website.
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US SEC Approves NYSE Arca’s Rule Change for Listing and Trading of Bitwise Bitcoin and Ethereum ETF
On 30 January 2025, the United States Securities and Exchange Commission (US SEC) granted accelerated approval to NYSE Arca, Inc.’s proposed rule change, allowing the exchange to list and trade shares of the Bitwise Bitcoin and Ethereum ETF under NYSE Arca Rule 8.201-E, which governs Commodity-Based Trust Shares. This approval was granted following Amendment No. 1 to the original proposal, ensuring compliance with US securities regulations and aligning with prior approvals of similar exchange-traded products (ETPs).
- The order, published as US SEC Press Release No. 34-102310, outlines the regulatory framework for NYSE Arca to list and trade shares of the Bitwise Bitcoin and Ethereum ETF (Trust).
- The ETF will hold spot bitcoin and spot ether, with asset allocation based on the relative market capitalisation of both cryptocurrencies.
- The ETF’s objective is to provide investors with exposure to bitcoin and ether while managing operational expenses.
- The assets of the Bitwise Bitcoin and Ethereum ETF will consist solely of bitcoin, ether, and cash, with net asset value (NAV) calculated daily based on benchmark pricing indices.
- The ETF will operate under a cash-only creation and redemption model, meaning shares will be issued and redeemed for cash rather than direct cryptocurrency transfers.
- NYSE Arca’s original rule change proposal was filed on 26 November 2024 and published in the Federal Register on 16 December 2024 for public comment.
- On 21 January 2025, NYSE Arca submitted Amendment No. 1, which provided additional details on the Trust’s structure, asset allocation, pricing mechanisms, and compliance measures.
- The US SEC reviewed these submissions and granted accelerated approval, stating that the proposal aligns with previous approvals for spot bitcoin and ether ETPs.
- The approval is consistent with Section 6(b)(5) of the United States Securities Exchange Act of 1934, which requires exchanges to prevent fraudulent and manipulative acts and protect investors.
- The ETF’s bitcoin and ether holdings will be priced using the CME CF Bitcoin – New York Variant and CME CF Ether – Dollar Reference Rate – New York Variant benchmarks.
- Coinbase Custody Trust Company, LLC will serve as the custodian for bitcoin and ether holdings, while the Bank of New York Mellon will oversee cash holdings, administration, and transfer agency services.
- The ETF will also be subject to NYSE Arca’s trading rules, designed to prevent fraud and market manipulation.
- The US SEC justified the accelerated approval by citing its consistency with prior approvals for spot cryptocurrency ETPs and its alignment with investor protection and fair trading practices.
- The listing and trading of Bitwise Bitcoin and Ethereum ETF shares on NYSE Arca is now set to proceed, pending final operational steps by the exchange and fund issuer.
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Singapore MAS Published Monetary Policy Statement – January 2025
On 24 January 2025, the Monetary Authority of Singapore (MAS) announced a slight reduction in the slope of the Singapore dollar nominal effective exchange rate (S$NEER) policy band. This adjustment was made in response to slowing economic growth and lower-than-expected core inflation.
- Singapore’s economy grew at a slower pace in the fourth quarter of 2024 following a strong third quarter, with growth expected to moderate further in 2025 due to external uncertainties and trade policy shifts.
- MAS Core Inflation eased to 1.9% year-on-year in the fourth quarter of 2024, lower than earlier estimates, with inflation projected to average between 1.0% and 2.0% in 2025.
- Singapore’s unique exchange rate-based monetary policy remains unchanged in structure, with the width and centre of the S$NEER policy band maintained.
- The Singapore dollar weakened against the US dollar amid broader US dollar strength but continued appreciating against other currencies in the S$NEER basket.
- Singapore’s GDP growth is forecasted at 1.0% to 3.0% for 2025, down from 4.0% in 2024, reflecting weaker external demand conditions.
- Inflation moderated more than expected, with core inflation declining from 2.7% in the third quarter to 1.9% in the fourth quarter of 2024.
- Excluding the impact of GST hikes, core inflation is estimated to have fallen below 1.5% year-on-year in the fourth quarter.
- Business costs remain stable, global oil prices are moderate, and food supply conditions are favourable, supporting a subdued inflation outlook.
- Domestic cost pressures are expected to ease, with wage growth stabilising and productivity gains reducing unit labour costs.
- Government subsidies on healthcare, education, and public transport will help contain essential service inflation.
- The reduction in the slope of the S$NEER policy band takes effect immediately, with the next monetary policy review scheduled for April 2025.
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Latvia’s Financial Services Sector Moves Towards Innovation, Connectivity, and Resilience
On 28 January 2025, Latvia’s central bank, Latvijas Banka, outlined its vision for the future of financial services, focusing on digital innovation, regulatory developments, cybersecurity resilience, and the integration of emerging financial services. The update, authored by Marine Krasovska, Head of the Financial Technology Supervision Department (FinTech department, Latvijas Banka), sets policy directions for banks, fintech firms, payment service providers, and crowdfunding platforms.
- The update aims for Latvia’s financial transformation to align with the European Digital Strategy, fostering collaboration between traditional banks, fintech firms, and new financial service providers.
- The implementation of the EU AI Act and the EU Digital Operational Resilience Act (EU DORA) will introduce stricter oversight, transparency, and security requirements for financial institutions.
- Financial entities using AI for fraud detection, credit scoring, or algorithmic trading must ensure compliance with reliability, fairness, and transparency standards.
- EU DORA mandates enhanced cybersecurity frameworks, including strengthened third-party risk management, incident reporting, penetration testing, and IT governance for financial institutions and service providers.
- The anticipated launch of the digital euro will improve payment infrastructure, enable secure cross-border transactions, and facilitate seamless interoperability between fiat currencies, crypto-assets, and stablecoins.
- Latvijas Banka is promoting fintech collaboration, allowing retailers to accept euros, stablecoins, and the digital euro through integrated payment gateways.
- A national fintech strategy was launched at the end of 2024 to attract foreign investment, with a focus on international outreach, regulatory improvements, and increased access to capital.
- Cloud computing adoption in Latvia’s financial sector surged from 14 entities in 2021 to 46 in 2024, prompting enhanced cybersecurity measures under EU DORA to mitigate risks.
- Crowdfunding services are gaining traction, offering alternative financing options for startups and small businesses, reducing dependence on traditional bank loans.
- AI-powered lending solutions are expected to accelerate credit assessments and expand digital lending opportunities, with Latvijas Banka working on guarantee programmes to improve financial inclusion.
- The regulatory framework will be implemented in phases, with DORA enforcement beginning in 2025 and the EU AI Act already in effect. The national fintech strategy is set for execution in the second half of 2025.
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US District Court Issues $451 Million Judgment in US CFTC Binary Options Fraud Case
On 29 January 2025, the United States District Court for the Northern District of Illinois issued a default judgment against multiple offshore entities and individuals for their involvement in a large-scale global binary options fraud. The ruling followed a complaint by the United States Commodity Futures Trading Commission (US CFTC) and found Yukom Communications Ltd., Linkopia Mauritius Ltd., Wirestech Limited (BigOption), WSB Investments Ltd. (BinaryBook), and Zolarex Ltd. (BinaryOnline), along with Israeli nationals Yossi Herzog, Lee Elbaz, and Shalom Peretz, liable for defrauding investors and violating the United States Commodity Exchange Act (US CEA).
- The court imposed $112.9 million in restitution and $338.7 million in civil monetary penalties, bringing the total financial liability to over $451 million.
- The defendants were permanently enjoined from engaging in any activities violating the US CEA, banned from trading in any US CFTC-regulated markets, and prohibited from registering with the US CFTC or conducting any business related to commodity trading.
- The case, initially filed by the US CFTC on 12 August 2019, involved a fraudulent binary options trading scheme that operated between March 2014 and August 2019 under fictitious trade names such as BigOption, BinaryBook, and BinaryOnline.
- The fraud included false promises of profitability, misleading claims about brokers’ expertise, and manipulation of trading platforms to limit or prevent customer wins. Customers were deceived about bonuses and risk-free trades, which were structured to make fund withdrawals difficult or impossible.
- The defendants misappropriated customer funds, diverting them for personal enrichment rather than for trading purposes.
- The court determined that the fraudulent scheme was orchestrated by a network of offshore companies controlled by Herzog, Elbaz, and Peretz, using interconnected bank accounts to move funds across multiple jurisdictions.
- One defendant, Yakov Cohen, previously settled with the court in September 2024, agreeing to disgorge $7 million in illicit profits.
- In a parallel criminal case, Lee Elbaz was convicted in August 2019 for wire fraud and conspiracy, receiving a 20-year prison sentence and an order to pay $28 million in restitution. Another defendant, Cohen, pleaded guilty in 2024 to wire fraud conspiracy, resulting in a 5.5-year prison sentence and a $7 million restitution order.
- The United States National Futures Association has been appointed as Monitor to oversee restitution payments to defrauded customers.
- The US CFTC has been granted authority to enforce all financial penalties and ensure that the defendants remain barred from US financial markets.
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US SEC Appoints Natalia Díez Riggin as Senior Advisor and Acting Director of Legislative and Intergovernmental Affairs
On 30 January 2025, the United States Securities and Exchange Commission (US SEC) appointed Natalia Díez Riggin as Senior Advisor and Acting Director of the Office of Legislative and Intergovernmental Affairs. This office plays a key role in the US SEC’s engagement with Congress, government agencies, and regulatory stakeholders, ensuring that legislative initiatives align with the agency’s objectives.
- Ms. Riggin brings extensive experience in financial and economic policy, having worked closely with key legislative figures in the US Senate.
- Before joining the US SEC, she served as a Senior Professional Staff Member on the US Senate Committee on Banking, Housing, and Urban Affairs under Chairman Tim Scott.
- She previously held the role of Deputy Legislative Director for US Senator John Kennedy, advising on financial legislation and regulatory policy.
- Her background includes serving as Staff Director for the Economic Policy Subcommittee of the Senate Banking Committee, where she contributed to economic legislation and oversight.
- Earlier in her career, she worked as a policy aide to US Senators Mike Enzi and Mark Kirk, focusing on economic and financial regulations.
- She holds a Bachelor of Arts in political science and history from the University of Illinois Chicago.
- Ms. Riggin assumes her role immediately, during a period of transition for the US SEC as it refines its legislative priorities in response to evolving regulatory and economic discussions.
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US SEC Small Business Advisory Committee to Discuss Challenges Facing Emerging Fund Managers and Small Public Companies
On 30 January 2025, the United States Securities and Exchange Commission (US SEC) announced that its Small Business Capital Formation Advisory Committee will convene on 25 February 2025 to discuss capital-raising challenges for emerging fund managers and obstacles faced by small public companies not listed on a national securities exchange. The meeting, titled “Meeting of SEC Small Business Capital Formation Advisory Committee,” will include insights from industry experts and discussions on potential policy recommendations. The proceedings will be publicly accessible via webcast on the US SEC’s official website.
- The Small Business Capital Formation Advisory Committee was established to advise the US SEC on policies affecting small businesses, including capital-raising regulations, public market accessibility, and market participation challenges.
- The 2025 meeting follows previous discussions on similar issues, with a continued focus on improving capital access for emerging and small-scale entities.
- In the morning session, the committee will receive an update from the US SEC’s Office of the Advocate for Small Business Capital Formation, which will present its FY2024 Annual Report. This report will provide data on capital-raising activities, from early-stage startups to small-cap companies, and include policy recommendations.
- The session will also revisit discussions on supporting emerging fund managers, with insights from industry experts Ashok Kamal, Executive Director of NuFund Venture Group, and Sara Zulkosky, Co-Founder & Managing Partner at Recast Capital.
- The afternoon session will focus on small public companies with market capitalisations of $250 million or less that are not listed on a national securities exchange. The discussion will include perspectives from Dan Zinn, General Counsel and Chief of Staff at OTC Markets Group, on the challenges these businesses face in securing investment and maintaining market liquidity.
- The committee will examine why some companies choose to remain off major exchanges and explore strategies to improve their capital access, with discussions on investor participation and regulatory barriers.
- The meeting will begin at 10:00 AM ET with introductory remarks from US SEC commissioners and newly appointed committee members, followed by an update on the capital-raising environment for startups and small-cap businesses.
- At 11:00 AM ET, the committee will discuss emerging fund managers, highlighting funding obstacles, investment dynamics, and institutional barriers that hinder capital access. Industry practitioners and angel investors will contribute to the discussion.
- After a break at 12:45 PM ET, the committee will reconvene at 1:45 PM ET to examine challenges for small public companies not listed on national securities exchanges. Dan Zinn of OTC Markets Group will provide an overview of opportunities and limitations for these firms, with discussions on policy solutions.
- The meeting will conclude at 3:30 PM ET, with committee members reflecting on the discussions and considering regulatory recommendations to improve capital formation.
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UK FCA Proposes Reforms for Corporate Bond Issuance and Investment Opportunities
On 31 January 2025, the United Kingdom Financial Conduct Authority (UK FCA) published consultations proposing changes to corporate bond issuance, capital-raising processes, and public offer platforms. The reforms, detailed in CP25/2: Consultation on further changes to the public offers and admissions to trading regime and the UK Listing Rules and CP25/3: Consultation on further proposals for firms operating public offer platforms, aim to make bond issuances more cost-effective, encourage investment opportunities for wealth managers and retail investors, and improve access to capital through alternative public offer platforms.
- The UK FCA is proposing a single standard for corporate bond prospectuses, simplifying requirements for both large and small bond issuances to lower costs and increase accessibility.
- The reforms are expected to encourage more companies to issue bonds in smaller denominations, broadening investment options for retail and institutional investors.
- The consultation proposes reducing administrative burdens for further securities issuance, making it easier and more affordable for UK-listed companies to raise additional capital.
- A new framework for public offer platforms will allow companies to raise funds through authorised firms, providing an alternative to traditional public markets and resembling crowdfunding models.
- The UK FCA is establishing clear regulatory requirements for public offer platforms to ensure transparency, investor protection, and compliance.
- These proposals build on the UK FCA’s broader market reforms, including its July 2024 consultation on a new prospectus regime to replace the UK Prospectus Regulation.
- The reforms address gaps identified in previous consultations, refining disclosure requirements and improving capital-raising procedures for companies while making corporate bonds more accessible to investors.
- The UK FCA is also focused on UK financial markets through initiatives like PISCES, a private stock market for trading shares in private companies, and regulatory support for asset managers, digital securities innovation, and cryptocurrency regulation.
- The UK FCA has invited public comments on the proposals until 14 March 2025, after which feedback will be reviewed.
- Subject to FCA Board approval, the new rules are expected to be finalised by summer 2025, with implementation scheduled for early 2026.
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UK FCA Confiscates Over £500,000 from Convicted Insider Dealer in Landmark Enforcement Action
On 3 February 2025, the United Kingdom Financial Conduct Authority (UK FCA) secured a confiscation order of £586,711.01 against convicted insider dealer Mohammed Zina. The order, issued on 29 January 2025, requires Zina to pay the full amount within three months or face an additional five-year prison sentence, with the obligation to repay remaining in force with accruing interest.
- The confiscation order represents all of Zina’s available assets and is part of the UK FCA’s efforts to ensure that individuals convicted of financial crimes do not retain illicit gains.
- Zina, a former Goldman Sachs analyst, used his access to confidential market-sensitive information to engage in insider trading in six different stocks between 15 July 2016 and 4 December 2017, making approximately £140,486 in profits.
- The UK FCA’s investigation also uncovered financial fraud linked to his trading activities, as Zina secured £95,000 in fraudulent loans from Tesco Bank.
- In February 2023, Zina was convicted of nine offences, including insider trading and fraud, and sentenced to 22 months’ imprisonment. The court assessed his total criminal benefit at £1,091,424.72, adjusted for inflation as of 2025.
- The insider trading involved shares in Arm Holdings plc, Alternative Networks plc, Punch Taverns plc, Shawbrook plc, HSN Inc., and Snyder’s Lance Inc.
- The confiscation order was issued under the UK Proceeds of Crime Act 2002, which allows the authorities to recover assets obtained through criminal conduct.
- The court determined Zina’s criminal benefit based on the total gross value of the shares at the time of sale, not just the net profits.
- If Zina fails to pay within the three-month deadline, he will serve an additional five years in prison, with the outstanding sum continuing to accrue interest.
- The UK FCA stated that it will pursue enforcement against any additional assets that may become available in the future.
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US SEC Secures Final Judgment against Investment Adviser Over Fraudulent “Cherry-Picking” Scheme
On 5 February 2025, the United States Securities and Exchange Commission (US SEC) issued a litigation release announcing that it had obtained a final judgment on 23 December 2024 against investment adviser Steven J. Susoeff and his firm, Steve Susoeff, LLC, operating as Meritage Financial Group. The judgment, issued by the United States District Court for the District of Nevada, followed allegations of a fraudulent “cherry-picking” scheme that violated United States federal securities laws.
- The US SEC’s complaint, filed on 1 February 2023, alleged that Susoeff systematically allocated profitable trades to favoured accounts, including those of his girlfriend and business associate, while directing unprofitable trades to client accounts.
- The fraudulent activity took place between January and July 2021, during which Meritage Financial Group managed approximately $8 million in assets for 59 clients.
- The scheme involved executing trades through a block trading account, allowing Susoeff to delay trade allocations until their profitability was determined, thereby ensuring that gains were assigned to select accounts and losses to unsuspecting clients.
- Despite multiple warnings from the brokerage firm holding his clients’ accounts, Susoeff allegedly continued the practice until he was removed from its trading platform.
- The US SEC charged Susoeff and Meritage Financial Group with violations of the antifraud provisions of Section 10(b) of the United States Securities Exchange Act of 1934, US SEC Rules 10b-5(a) and (c), Sections 17(a)(1) and (3) of the United States Securities Act of 1933, and Sections 206(1) and 206(2) of the United States Investment Advisers Act of 1940.
- The final judgment permanently enjoins Susoeff from committing future violations of these securities laws.
- Susoeff was ordered to pay $54,232 in disgorgement, representing the net profits obtained from the fraudulent scheme, along with $11,695 in prejudgment interest.
- A civil penalty of $144,566 was also imposed.
- The US SEC’s litigation and investigation were conducted by attorneys from its Los Angeles Regional Office, with investigative efforts led by Kelly C. Bowers and Robert H. Conrrad, and support from the Division of Economic and Risk Analysis.
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US SEC Announces Executive Staff Appointments Under Acting Chairman Mark T. Uyeda
On 4 February 2025, the United States Securities and Exchange Commission (US SEC) announced key executive staff appointments under Acting Chairman Mark T. Uyeda. The newly appointed team will provide strategic guidance on regulatory matters and work closely with US SEC staff to enhance oversight and enforcement efforts.
- Gabriel Eckstein has been appointed as Chief of Staff.
- Steven Levine has been appointed as Deputy Chief of Staff.
- Holly Hunter-Ceci, Charles Lee, Jaime Marinaro, and Kelsey Pristach have been appointed as Senior Advisors to the Acting Chairman.
- Peter Gimbrere has been appointed as Managing Executive.
- Andrew Vollmer has been appointed as Counselor to the Acting Chairman.
- Graham Conlan, David Marcinkus, and Richard Gabbert have been appointed as Counsel to the Acting Chairman.
- Richard Gabbert has also been appointed as Chief of Staff for the Crypto Task Force.
- Taylor Asher has been appointed as Senior Policy Advisor to the Acting Chairman and Chief Policy Advisor for the Crypto Task Force.
- Landon Zinda has been appointed as Counsel to the Acting Chairman and Senior Advisor for the Crypto Task Force.
- Letia Butler has been appointed as Confidential Assistant.
- Sharon Freeman has been appointed as Program Support Specialist.
- Malika Sullivan has been appointed as Receptionist.
- Antonia Apps has been appointed as Acting Deputy Director for the Division of Enforcement.
- Sebastian Gomez Abero has been appointed as Acting Deputy Director for Legal and Regulatory Policy within the Division of Corporation Finance.
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