Binance Obtains Virtual Asset License in Dubai

Check out the biggest breaking crypto market updates for today: 

Kansas Heartland Tri-State Bank Closed By FDIC As Banking Crisis Deepens

The Heartland Tri-State Bank of Elkhart is the latest bank to join the ongoing bankcrisis in the United States. 

The Federal Deposit Insurance Corporation (FDIC) reportedly took control over the bank after it was closed by the Kansas Office of the State Bank Commissioner yesterday. 

According to the FDIC, the four branches of Heartland Tri-State Bank will reopen as branches of Dream First Bank under regular business hours from July 31st. This means that the depositors of the failed Heartland Tri-State Bank will become customers of Dream First Bank. 

Heartland Tri-State bank is the first bank to collapse since troubled First Republic Bank was acquired by JPMorgan in My after efforts to rescue the company failed. 

It also follows the dramatic collapse of Silicon Valley bank in March that triggered days of chaos in the U.S. banking system. 

This also marks the second bank crisis last week. On July 25, PacWest merged with Banc of California, with both banks seemingly looking to shore up amid the banking industry turmoil. 

Behind the bank’s failures is believed to be rising U.S. interest rates along with poor risk management from financial institutions. The U.S. Federal Reserve increased its benchmark rate over the past year to 5.25% in July – the highest rate since 2007 – in an effort to curb inflation in the country. 

In June, the inflation rate in the U.S. was 4.1% year-over-year. 

Heartland Tri-State Bank had approximately $139 million in total assets and $130 million in total deposits as of March. Along with deposits, Dream First Bank agreed to purchase all the failed bank’s assets. 

The FDIC estimates that the cost of the Deposit Insurance Fund (DIF) will be $54.2 million. The DIF is an insurance fund created by Congress in 1933 and managed by the FDIC to protect deposits in the nation’s banks. 

“Compared to other alternatives, Dream First Bank, National Association’s, acquisition ws the least costly resolution for the DIF,” said the FDIC. 

Democrats in the House Financial Services COmmittee introduced several bills in June in what they described as the “first wave” of legislation aimed at addressing failures at major banks. 

“The failures of Silicon Valley Bank, Signature Bank, and First Republic Bank make clear that it is past time for legislation aimed at strengthening the safety and soundness of our banking system and enhancing bank executive accountability,” said Representative Maxine Waters. “Congress must not sit idly by,” she added.

Binance Obtains License to Operate As Virtual Asset Exchange In Dubai

Crypto exchange giant Binance has reportedly obtained an Operational Minimum Viable Product license from Dubai’s Virtual Asset Regulatory Authority (VARA). 

The license will allow Binance FZE, the exchange’s Dubai subsidiary, to operate virtual asset exchange services in Dubai. However, the services enabled by the license are currently limited to institutional and qualified retail investors in Dubai. 

Richard Teng, head of regional markets of Binance, stated, 

“We are honored to be the first exchange to be granted an operational Minimum Viable Product License by VARA. Our priority is to be able to operate this first fully regulated exchange in, and from Dubai, in a FATF-compliant ecosystem, setting the stage for global scalability with uncompromised user assurance.” 

THe news follows Binance’s earlier efforts to obtain a provisional MVP license in March 2022 and a preparatory MVP license in September 2022. 

Eligible users in Dubai will now be able to access authorized services, “knowing they’re under investor protection and market assurance standards tailored specifically for the virtual asset sector,” the exchange said. 

Even as Binance secures licenses in Dubai and a number of other jurisdictions, it faces mounting scrutiny in other global markets. Last week, the exchange said it had withdrawn an application for a license from German financial regulator BaFin. 

Earlier in July, Binance’s office in Australia was searched by local regulators as part of an ongoing probe into the cryptocurrency exchange, Bloomberg reported. 

In the U.S., Binance currently finds itself in the crosshairs of multiple regulators, with the Commodities Futures Trading Commission first filing a lawsuit against it in March. The Securities and Exchange Commission also sued the exchange and Zhao last month for allegedly violating securities laws.

SEC Asked Coinbase To Halt Trading In Everything Except Bitcoin, CEO Says

According to a Financial Times report, the U.S. Securities and Exchange Commission (SEC) had asked Coinbase to stop trading in all cryptocurrencies other than bitcoin prior to suing the crypto exchange for failing to register as a broker. 

Coinbase CEO Brian Armstrong stated, 

“We really didn’t have a choice at that point, delisting every asset other than bitcoin, which by the way is not what the law says, would have essentially meant the end of the crypto industry in the US. It kind of made it an easy choice… let’s go to court and find out what the court says.” 

The SEC’s case identified 13 mostly lightly traded cryptocurrencies on Coinbase’s platform as securities, asserting that by offering them to customers the exchange fell under the regulator’s remit. 

But the prior request for COinbase to delist every one of the more than 200 tokens it offers – with the exception of flagship token bitcoin – indicates that the SEC, under chair Gary Gensler, has pushed for wider authority over the crypto industry. 

Oversight of the crypto industry has, so far, been a grey area, with the SEC and the Commodity Futures Trading Commission jockeying for control. 

The CFTC sued the largest crypto exchange, Binance, in March of this year, three months before the SEC launched its own legal action against the company. 

Gensler has previously said he believes most cryptocurrencies with the exception of bitcoin are securities. However, the recommendation to Coinbase signals that the SEC has adopted this interpretation in its attempts to regulate the industry. 

Ether, the second-largest crypto, which is fundamental to many other industry projects, was abset from the regulator’s case against the exchange. It also did not feature in the list of 12 “crypto asset securities” specified in the SEC’s lawsuit against Binance. 

The SEC said its enforcement division did not make formal requests for “companies to delist crypto assets.” 

“In the course of an investigation, the staff may share its own view as to what conduct may raise questions for the commission under the securities laws,” it added. 

Stocks, bonds, and other traditional financial instruments fall under the SEC’s remit, but US authorities remain locked in debate as to whether all – or any – crypto tokens should fall under its purview.

Luke Baldwin

Leave a Comment

Your email address will not be published. Required fields are marked *