Tag: regulation

Binance Registers With FIU as It Seeks to Resume Operations in India

Binance, the world’s largest cryptocurrency exchange, has registered with India’s Financial Intelligence Unit (FIU), a senior FIU official said on Friday, as the exchange seeks to resume operations in the country.

The exchange was barred from operating in India in December for non-compliance with local regulations as part of the financial watchdog’s crackdown on offshore crypto exchanges that were operating in the country without registration.

India requires virtual digital asset service providers, like crypto exchanges, to be registered with the FIU as a reporting entity and comply with obligations mandated under the country’s anti-money laundering rules.

While Binance has registered with the FIU, it can resume operations only after paying a penalty for previous non-compliances, which is yet to be determined, Vivek Aggarwal, director of the FIU said.

The FIU had issued show cause notices to 9 offshore cryptocurrency exchanges in December 2023 for non-compliance with local rules.

The financial watchdog had also asked the ministry of electronics and information technology to block online access to the exchanges.

Offshore crypto exchange KuCoin has also registered with the FIU and has resumed operations after paying a fine of 3.45 million rupees ($41,313), Aggarwal said.

Kucoin had announced the registration in March, but had not shared details of the penalty.

Binance and KuCoin did not immediately respond to emails seeking comment.

© Thomson Reuters 2024

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Crypto Firm, Industry Group Sue US SEC for ‘Overreach’ on Digital Assets

A Texas cryptocurrency company and an industry group sued the U.S. Securities and Exchange Commission on Wednesday, saying the regulator has overstepped its authority and asking a judge to rule that digital assets traded on exchanges are not securities.

Fort Worth-based crypto company Lejilex and lobbying group Crypto Freedom Alliance of Texas (CFAT) claim the SEC has asserted jurisdiction over the industry without a “clear statutory mandate.”

Lejilex says it seeks to run a cryptocurrency platform called Legit.Exchange. The company formed last year said it plans to list digital assets including those the SEC has deemed securities in lawsuits against Coinbase, the largest cryptocurrency exchange in the U.S., and Binance, the world’s largest crypto exchange.

Lejilex wants the court to rule that listing pre-existing tokens will not violate securities laws.

“We wish we were launching our business instead of filing a lawsuit, but here we are,” Lejilex co-founder Mike Wawszczak said in a statement.

A spokesperson for the SEC did not immediately reply to a request for comment.

Both Coinbase and Binance have denied the SEC’s allegations.

CFAT asked the court to block the SEC from suing its members, and said the agency’s assertion of jurisdiction over digital assets has made it harder to convince Texas lawmakers to embrace “sensible policies.”

The group launched last year and counts Coinbase and venture capital firm Andreessen Horowitz’s a16z crypto fund as members.

CFAT and Lejilex argue the SEC is wrong to classify digital assets as “investment contracts” because they create no ongoing commitment between creator and purchaser.

They also asked the court to apply the “major questions” doctrine, which lets judges invalidate executive agency actions of “vast economic and political significance” unless Congress clearly authorized them.

The once-rare doctrine has gained traction among regulatory opponents, as the conservative-leaning U.S. Supreme Court has applied it in a couple of recent cases.

Crypto companies fighting SEC enforcement actions, including Coinbase and Binance, have made the same arguments in the other cases, so far without success.

A judge in July rejected the argument that an ongoing commitment is required to make an asset a security in the SEC’s case against Ripple Labs. Another judge overseeing the regulator’s lawsuit against Terraform Labs found the “major questions” doctrine does not apply to the cryptocurrency industry. Both of those cases were brought in New York.

The new lawsuit filed in federal court in Fort Worth brings the industry’s fight with the regulator under the jurisdiction of the 5th U.S. Circuit Court of Appeals. More than two thirds of the judges on the appeals court were appointed by Republican presidents, making it the favored venue for challenges to the SEC under the Biden administration.

The case was assigned to Judge Reed O’Connor, an appointee of Republican former President George W. Bush with a track record of ruling in favor of conservative litigants challenging laws and regulations governing guns, LGBTQ rights and healthcare.

Paul Clement, former U.S. Solicitor General under President George W. Bush, represents the plaintiffs.

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RBI Not Planning Harsher Rules to Curb Fintech Sector After Paytm Strictures, Official Says

India’s banking regulator doesn’t intend to impose drastic measures on the country’s fintech sector, a senior official said, weeks after it stunned investors by abruptly suspending much of the operations of Paytm Payments Bank, founded by high-flying billionaire Vijay Shekhar Sharma.

There are “no harsher measures coming on fintech,” P. Vasudevan, an executive director in charge of enforcement at the Reserve Bank of India, said on Friday. The central bank would be happy to see self-regulation for the sector, but expected firms to follow rules on data privacy, Vasudevan said. He added the supervisor wants to have a hands-off approach on fintech regulation.

The comments from Vasudevan, a key official closely involved in the development of the payments space in India in the past decade, are comforting even as the regulator cranks up its actions against payments firms violating the customer verification and data protection norms put in place by the central bank.

SoftBank Group Corp.-backed Paytm, a giant in India’s fintech space, has been in the crosshairs of the regulator for some time, with multiple warnings over the past two years about questionable dealings between its popular payments app and its lesser-known banking arm. The RBI is considering scrapping the license of Paytm Payments Bank Ltd. as early as next month, Bloomberg reported earlier this month.

Apart from imposing measures against Paytm bank, the regulator caused anxiety among payments services providers this week after it asked a large card network to halt certain operations. The card network, the central bank argued, was not allowed to offer a payment system without having authorization.

RBI officials, including Governor Shaktikanta Das, had said earlier this month that the regulator is supportive of the fintech industry and wants companies to grow.

© 2024 Bloomberg LP

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Meta Allows EU Users to Access Instagram, Facebook, Messenger Separately to Comply With Regulations

Facebook parent Meta will allow users in the European Union, European Economic Area, and Switzerland to prevent information from being shared across the company’s apps. As a result, people who live in these regions will be able to use Instagram and Facebook separately, even if they are connected on the platform. Meanwhile, Meta will also allow users to create a Messenger account that is not linked to their Facebook account while changing how messaging on the company’s Marketplace platform works.

In a detailed post explaining the changes being made to comply with regulations — the EU’s Digital Markets Act (DMA) — that Meta and other firms must comply with, the company says that users in the EU, EEA, and Switzerland who have already linked their Facebook and Instagram accounts can continue to operate these accounts, or unlink their accounts “so that their information is no longer used across accounts”.

Meta’s announcement comes a month after Instagram-Messenger cross app chats were shut down. Three years after CEO Mark Zuckerberg said Meta would allow users to chat across its services, the company limited messaging to each platform. It also turned on support for end-to-end encrypted (E2EE) chats on Messenger in December.

Meanwhile, the company is also changing how users in these regions can use Messenger — while you can continue to chat using your Facebook account, Meta will also let you sign up for a new Messenger account that operates independently of your existing account. You’ll be able to send messages and call your contacts, but some features won’t work as expected.

For example, Messenger features for Marketplace that allow sellers to chat with buyers will be replaced with an option to use email, if their accounts are unlinked. Similarly, users who unlink their accounts from Facebook Gaming won’t have access to multiplayer features and targeted recommendations, according to the company.

Just like Meta’s optional ad-free subscription for Facebook and Instagram that was introduced two months ago, these changes will only be available to users in the EU, EEA, and Switzerland. The company could also bring the same functionality to other regions if legislation similar to the DMA is passed, allowing users in more countries to operate their accounts independently.

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Telecom Bill 2023: OTT Apps Not Covered Under New Bill, Telecom Minister Reportedly Says

Over-the-top (OTT) apps or services will not be under the ambit of the newly passed Telecommunications Bill 2023, telecom minister Ashwini Vaishnaw told ET Telecom. The minister’s statement comes days after Parliament passed the new telecom bill that replaces three older laws, including the including the 138-year-old Indian Telegraph Act. Provisions under the new bill reduce the powers of the Telecom Regulatory Authority of India (TRAI) and give the government unprecedented powers, including the ability to take over telecom services in the interest of national security.

After the Telecommunications Bill (2023) was passed on Thursday, concerns were raised related to increased scrutiny and interference from the government, if OTT communication apps like WhatsApp and Signal were included under the ambit of the new telecommunications bill, that is awaiting the President’s assent, before it becomes law.

“[…]There is no coverage of OTT in the new telecom bill passed by the Parliament,” the minister told the publication, explaining that these OTT apps are currently covered by the Information Technology Act, 2000 and will continue to be regulated by the same law that is overseen by the Ministry of Electronics and Information Technology (MeitY).

Earlier this week, Meta reportedly expressed concerns over the telecom bill in an internal email to colleagues from Shivnath Thukral, Director and Head of India Public Policy at Meta. The revised version of the telecommunications bill that was passed by Parliament does not contain and references to OTT or OTT platforms, but mentions terms like ‘telecommunication services’, ‘messages,’ and ‘telecommunications identifier,’ which could also apply to OTT platforms.

The telecom bill is now waiting the President’s assent before it becomes a law — it was approved in the Rajya Sabha through a voice vote on Thursday, a day after it was passed by the Lok Sabha. The bill is set to replace the Indian Telegraph Act of 1885, the Wireless Telegraphy Act of 1933, and the Telegraph Wires (Unlawful Possession) Act of 1950.

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Tesla recalls nearly all US vehicles over autopilot system defects | Automotive Industry News

The firm’s largest-ever recall comes after a two-year investigation by federal safety regulator focused on autopilot function.

Tesla is recalling more than two million cars in the United States, nearly all of its vehicles sold there, after a federal regulator said defects with the autopilot system pose a safety hazard.

In a recall filing on Wednesday, the carmaker said autopilot software system controls “may not be sufficient to prevent driver misuse”.

“Automated technology holds great promise for improving safety but only when it is deployed responsibly,” said a spokesperson for the National Highway Traffic Safety Administration (NHTSA), which has been investigating the autopilot function for more than two years.

“Today’s action is an example of improving automated systems by prioritizing safety.”

The decision marks the largest-ever recall for Tesla, as autonomous vehicle development in the US hits a series of snags over safety concerns. The company has said that it will install new safeguards and fix current defects.

The recall covers models Y, S, 3 and X produced between October 5, 2012, and December 7, 2023.

Speaking before the US House of Representatives on Wednesday, acting NHTSA Administrator Ann Carlson said she was happy Tesla had agreed to a recall.

She said that the agency first started investigating Tesla’s autopilot function in August 2021 after hearing about several fatal crashes that occurred when the autopilot was on.

“One of the things we determined is that drivers are not always paying attention when that system is on,” she said.

Documents posted on Wednesday by the agency said the current autopilot design can lead to “foreseeable misuse of the system,” and that the changes to be instituted will “further encourage the driver to adhere to their continuous driving responsibility”.

Some experts have raised questions over whether such steps go far enough.

“The compromise is disappointing,” Phil Koopman, a professor of electrical and computer engineering at Carnegie Mellon University who studies autonomous vehicle safety, told The Associated Press.

“Because it does not fix the problem that the older cars do not have adequate hardware for driver monitoring.”

Driverless cars, exalted by supporters as an exciting technological advancement, have faced a series of setbacks in recent months.

In October, California suspended testing by the self-driving car firm Cruise, after California’s Department of Motor Vehicles (DMV) raised questions about safety concerns.

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Government Bans Use of ‘Dark Patterns’ on E-Commerce Platforms; Guidelines Issued

In order to protect consumers’ interest, the government has banned use of “dark patterns” on e-commerce platforms which intend to deceive customers or manipulate their choices. A gazette notification in this regard as “Guidelines for prevention and regulation of dark patterns” was issued on November 30 by the Central Consumer Protection Authority (CCPA) which is applicable to all platforms offering goods and services in India, and even advertisers and sellers.

Resorting to dark patterns will amount to misleading advertisement or unfair trade practice or violation of consumer rights. The penalty will be imposed as per the provisions of the Consumer Protection Act, it added.

“In the emerging digital commerce, dark patterns are increasingly being used by the platforms to mislead the consumers by manipulating their buying choices and behaviour,” Consumer Affairs Secretary Rohit Kumar Singh told PTI.

The notified guidelines will ensure clarity in the minds of all stakeholders — buyers, sellers, marketplaces and regulators – as to what is not acceptable as unfair trading practices, the latter being liable under the Consumer Protection Act, he added.

According to the notification, dark patterns have been defined as any practice or deceptive design pattern using user interface or user experience interactions on any platform that is designed to mislead or trick users to do something they originally did not intend or want to do, by subverting or impairing the consumer autonomy, decision making or choice.

For instance, ‘basket sneaking’ is a dark pattern that includes additional items such as products, services, payments to charity or donation at the time of checkout from a platform, without the consent of the user, such that the total amount payable by the user is more than the amount payable for the product or service chosen by the user.

Another dark pattern called “forced action” means forcing a user into taking an action that would require the user to buy any additional goods or subscribe or sign up for an unrelated service or share personal information in order to buy or subscribe to the product or service originally intended by the user.

Likewise, CCPA has specified 13 dark patterns to provide only as a guidance for the industry.

Initially, CCPA had identified 10 dark patterns but after the public consultation another three were included.

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Apple Filing Reveals iPhone Maker Expects to Change App Store Policy to Comply With EU Regulation

Apple expects it will be compelled to make changes to its App Store policies, as the firm must comply with the European Union’s new Digital Markets Act (DMA). The iPhone maker’s recent filing with the US Securities and Exchange Commission (SEC) shows the company expects to make policy changes related to applications running on iOS and iPadOS, the company’s operating systems for iPhone and iPad, respectively. Until now, the EU has named seven major tech firms — including Apple — that will be governed under the new regulations.

TechCrunch reports that Apple, in its recent Form 10-K filing with the US SEC, states that it expects that it will have to make changes to the App Store in order to comply with the EU’s DMA regulation. The iPhone maker also said in the filing that it might also introduce other changes to its policies governing external app distribution, platform access charges for developers, and communications related to alternate billing systems.

According to the report, Morgan Stanley analysts have also written to clients that the change in Apple’s language suggests that the App Store policy changes — including allowing third party apps on devices in Europe — are likely to begin. The EU’s DMA regulations are expected to fully go into effect starting in 2024 and will impact companies that have a market valuation of EUR 75 million (roughly Rs. 670 crore) or 45 million monthly active users (MAUs) living in the EU.

Last year, Bloomberg reported that Apple was already preparing its systems to allow alternative app stores on iPhone and iPad, as the company would have to comply with the incoming EU regulations aimed at checking the power of Big Tech firms.

If the mandatory App Store distribution limit is lifted, developers might be able to sidestep Apple’s up-to-30 percent commission charged on all App Store transactions. In the US, Apple has fought — and largely won — an antitrust trial against Fortnite maker Epic Games after it booted the developer for flouting its App Store policies. 

Apple is not the only Big Tech firm that will be impacted by the EU’s DMA rules when they go into effect in 2024. The new rules require tech firms to allow users to easily change default settings, sideload apps outside the default app store, and allow users of major messaging platforms to chat with each other, while allowing smaller platforms to also access core features and functionality.

According to Bloomberg, the changes being developed by the company will only go into effect in the EU for the foreseeable future, but the move could lead to the company opening up its systems in other regions, if legislation or regulation related to limiting the reach of Big Tech firms is passed in other regions.

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Coinbase Sues SEC for Response on Months-Old Petition Seeking Clarity on Regulation of Crypto Sector

Coinbase, one of the world’s largest crypto exchanges, has sued the US Securities and Exchange Commission (SEC) to clarify rules surrounding the growth of crypto businesses in the US. The crypto exchange has asked a US court to compel the SEC to provide detailed information to allow crypto companies to plan and develop their operations. This move comes months after Coinbase asked the SEC for clarity on crypto rules after the regulator opened investigations into the business activities of the crypto exchange.

In July 2022, Coinbase in July 2022 filed a petition asking the SEC if it would use its official rulemaking process to provide guidance to crypto players. This legal action is a follow-up to Coinbase’s petition to the US SEC seeking clarity.

“Coinbase filed a narrow action in federal court to compel the SEC to respond yes or no to our July 2022 petition asking the SEC to use its formal rulemaking process to provide guidance for the crypto industry. The Administrative Procedure Act (the APA) requires the SEC to respond to Coinbase’s rulemaking petition ‘within a reasonable time’,” Coinbase wrote in a blog post.

The exchange says that over the last nine months, over 1,700 entities have submitted comments to Coinbase’s petition. If the SEC responds with a no to Coinbase’s petition, then the crypto exchange would have an option to challenge that decision in court and pitch the need for clear crypto guidelines in the US.

“It’s important for the SEC and any other agency petitioned for rulemaking to respond to the petition once the agency has made up its mind, especially if the answer is no – otherwise the public can never exercise its right to ask a court if the agency’s decision was proper. From the SEC’s public statements and enforcement activity in the crypto industry, it seems like the SEC has already made up its mind to deny our petition. But they haven’t told the public yet. So, the action Coinbase filed today simply asks the court to ask the SEC to share its decision,” the blog added.

In March this year, the SEC threatened to sue Coinbase Global over some of the crypto exchange’s spot market as well as its Earn, Prime and Wallet products. Coinbase’s step to get the SEC to make its decision on its petition is being seen as a reaction to the SEC’s threat to probe the crypto firm.

Xiaomi launched its camera focussed flagship Xiaomi 13 Ultra smartphone, while Apple opened it’s first stores in India this week. We discuss these developments, as well as other reports on smartphone-related rumours and more on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
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