Treasury Secreatary: Libra Association Weakens Due to Failure to Meet Regulations

Neil Dennis

Treasury Secretary Steven Mnuchin said on Monday that the Libra Association was crumbling because it is failing to meet regulatory standards, and played down the role of recent warnings from members of Congress.

On Friday, key members of the Libra Association Visa, Mastercard and Stripe - all of whom received letters expressing "deep concerns" from Senators Brian Schatz and Sherrod Brown - announced, along with eBay, that they were withdrawing their membership. A week earlier, PayPal had also stepped down from the alliance.

Threatening

When questioned on CNBC's flagship programme Squawk Box whether he thought the letters to Visa, Mastercard and Stripe from Schatz and Brown had been "threatening", Mnuchin replied:

I wouldn't give them too much credit as we at Treasury sent them letters as well. I've met with representatives of Libra multiple times [...] and made it clear to them that if they don't meet our standards with money laundering that we would take enforcement actions against them.

He added that the companies which have dropped out appear to have realised that the project's compliance with the necessary regulatory standards has not been met. He concluded:

I think they realised they are not ready and I assume some of the partners got concerned and dropped out until they meet those standards.

 

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Brazil’s Securities Watchdog Blocks Binance From Offering Derivatives

  • Brazil's SEC has blocked Binance from offering derivatives products in the country.
  • Brazilian regulators ruled that derivative contracts are securities, regardless of whether they involve crypto-assets. 

Brazil’s equivalent of the U.S. Securities and Exchange Commission, the Comissão de Valores Mobiliários (CVM), has blocked leading cryptocurrency exchange Binance from offering derivative products in the country. 

According to an order published July 6, reported on by local news outlet Portal do Bitcoin, Brazilian regulators claimed derivative contracts are securities, regardless of whether the underlying assets are cryptocurrencies. 

The order reads, 

It remains evident that there are indications that the company BINANCE FUTURES, through the page '"www.binance.com" on the world wide web, captures customers residing in Brazil with a public offering of derivative intermediation services.

The order continued, adding that Binance “does not hold authorization” to act as an intermediary for securities in the country. 

The CVM determined that Binance must immediately suspend the “broadcasting of any public offering of securities intermediation services,” including derivatives products or else face a daily fine of R $1,000 ($186). 

The order fails to clarify whether Binance’s spot trading services will continue to be allowed to operate in Brazil, as opposed to only banning their derivative offerings. 

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