Major banks team up to test network for tokenized money and U.S. Treasurys: CNBC Crypto World

Major banks team up to test network for tokenized money and U.S. Treasurys: CNBC Crypto World

today Bitcoin Falls to $62,000 FTX says that almost all customers of the bankrupt crypto exchange will get all their money back and Alma angotti who worked for the SEC for about a dozen years weighs in on the agency’s recent actions against crypto firms welcome to cnbc’s crypto world I’m McKenzie sigalos crypto prices are back in the red this morning with Bitcoin dropping more than 2% by new Eastern that cryptocurrency traded at around $62,000 meanwhile ether also down more than 2% trading just above $3,000 Ed salana down 5.7% to $145 okay let’s talk about the top stories FTX says that most of its customers will get all their money back and then some in a reorganization plan published late yesterday FTX estimates that it owes creditors more than 11 billion and the company says that it has between $4.5 billion and 16.3 billion to distribute to creditors now the plan says that customers whose claims amount to $50,000 or less will get about 118% of the amount of their allowed claim around 98% of creditors will receive that compensation now importantly this is based on the value of those assets in US dollars as of November 2022 and back then Bitcoin was trading at around $116,000 the reorganization plan still needs to be approved by the bankruptcy court FTX customer money has been locked up with the exchange since it filed for bankruptcy protection back in November 2022 next major financial institutions are teaming up to test a shared distributed Ledger nearly a dozen firms including JP Morgan City MasterCard and Swift will test a regulated settlement Network to tokenize Commercial Bank money central bank money us treasuries and more now this project is led by the Securities industry and finance markets Association and right now it’s just a test the transactions are just simulations but the goal of the network is to allow 247 settlement of multiple assets Something That Wall Street has seen as a major promise of blockchain Technology Raj dadar and Executive Vice President of blockchain and digital assets at MasterCard said in the press release that a shared Ledger could unlock the next generation of Market infrastructures all right for our main story crypto world’s Talia Kaplan spoke with Alma angti partner and Global legislative and Regulatory risk leader at the consulting firm guide housee about recent actions that the SEC has taken against crypto companies including the wells notice sent to Robin Hood earlier this week do you have a law background I do and you worked with the SEC for about 12 years and so I want to start off by asking you about the most recent developments as a pertains to potential enforcement action tied to the SEC we learned this week that Robin Hood received a Wells notice from the agency tied to its crypto operations so what do you make of that development and how do you think that will end up this is just one more case in the progression that the sec’s been focusing on in their crypto enforcement right and so it’s it’s just like a lot of the other exchange cases and if the SEC is correct and some all of these crypto assets are securities then as a practical matter all of these exchanges should be registered as broker dealers that’s how the law works now Robin Hood has a registered broker dealer entity they they sell Securities as everyone knows and so they may have a leg up because they have that regulated infrastructure that may or may not be in place in their crypto assets part right they have that governance and framework and and infrastructure so if again this all of this comes down to the SEC saying many of the products that you are selling are securities and if they are then they all have to be registered and that’s what these cases involve is the failure to register as a broker dealer now the sec’s lost a couple of these cases and expanding on that SEC chair Gary Gensler was actually on CNBC this week and he was asked about the wells notice to Robin Hood from the agency and he didn’t answer the question directly he said he can’t comment on specific cases but he did say that unlike traditional assets crypto assets don’t offer the same protections and investors don’t get the same disclosures as traditional assets and he did say that many of them are deemed secure ities so what is your reaction to that argument well I mean he’s right crypto assets whether they’re Securities or not if you’re not they’re not being sold through a regulated entity like a broker dealer even though they’re regulated in other ways these exchanges are regulated as money transmitters they don’t have the consumer protection requirements they don’t have the market safety and Market Integrity requirements and a lot of folks are investing in these products that’s what they’re using them for now the other side of the argument is people invest in a lot of things that aren’t Securities gold bars old comic books um all sorts of things art antique cars and they buy them hoping that they’ll go up in value the qu only question is not whether people are investing in them the the question is is whether they’re investing in them expecting that the activity of others will increase the value and that’s really the question and I think in the absence of clear legal guidelines the secc’s a vacuum of authority and they’re stepping in before something bad happens like that’s the that’s the view kindest to them overall what is your take on the sec’s approach of Regulation by enforcement we have seen a lot of enforcement actions against several crypto firms including coinbase in March the S scored a major win in its lawsuit against the crypto exchange when a judge ruled that the agencies claimed that coinbase engaged in unregistered sales of Securities could be heard by a jury at trial so do you think that this is an effective approach or do you think there’s a better way so if I Were King of the world world or queen of the world I probably and in the absence of legislation defining these things probably would have tried to give more guidance to or or Warnings now they might say they had been giving warnings saying these are securities uh bringing the cases against in the iOS but many of those involved fraud uh which is different and there there’s a lot of criticism coming from the industry that they try to work with the commission that they try to get guidance from them even on a one-on-one level through their office of of innovation and things and they’re not getting the feedback that they need so I think a little bit more cooperation with the industry while still moving forward to protect people that are investing in these assets is probably more productive overall um now but philosophically you always have to regulate by enforcement a little bit right because you cannot have regulations that outline every single possible thing that can happen now you also have experience with anti-money laundering cases I do and recently just last week former binance CEO Shang panga was sentenced to four months in prison after pleading guilty to money laundering violations back in November he was ordered to pay a $50 million fine and so I’m wondering given you advise and you consult government agencies regulators and the financial services industry around the world on money laundering and how to combat terrorism what is the answer there how can you combat moneya laundering in the crypto space so it’s interesting because the the moneya laundering rules in crypto are the most buttoned up because in 201 18 or 19 the office of the Treasury Department where I started the enforcement program Financial crimes enforcement Network said we’re just going to say if you’re doing business in crypto you’re a money transmitter and so the AML laws have applied for a very long time and so they’re not in bad shape um like the US Finance their issue is the sec’s on register broker dealer they haven’t been charged with um not having a good anti-money laundering program right and then as talking about the special mitigant of blockchain it’s traceable so you can actually identify the risk of transactions on the blockchain sometimes more easily than cash transactions now angotti also discussed regulatory developments in crypto here in the US in Greater detail and weighed in on the lawsuit the crypto firm cons is filed against the SEC after receiving its Wells notice from the agency you’ll be able to watch more of her interview over at cnbc.com crypto World okay that’s all for crypto world today but we’ll be back again tomorrow and we’ll see you then

CNBC Crypto World features the latest news and daily trading updates from the digital currency markets and provides viewers with a look at what’s ahead with high-profile interviews, explainers, and unique stories from the ever-changing crypto industry. On today’s show, Alma Angotti, partner and global legislative and regulatory risk leader at the consulting firm Guidehouse, weighs in on recent actions by the SEC, including the Wells Notice sent to Robinhood over its crypto operations.

Chapters:
00:00 – CNBC Crypto World, May 8, 2024
0:25 – Bitcoin dips
0:44 – The headlines
2:43 – Alma Angotti of Guidehouse

For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/42d859g
» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision
» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC
Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.
Connect with CNBC News Online
Get the latest news: http://www.cnbc.com/
Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC
Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC
Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC
Follow CNBC on Threads: https://cnb.cx/threads
Follow CNBC News on X: https://cnb.cx/FollowCNBC

#CNBC
#CNBCTV

Major banks team up to test network for tokenized money and U.S. Treasurys: CNBC Crypto World