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Fintech CEO: SEC’s Peirce Talks Regulatory Expectations and Raises Custody Questions

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In a recent interview, SEC Commissioner Hester Peirce talked about whether or not a single regulator would be a solution for the industry. A notable advocate for the SEC providing a regulatory framework, she balked at the idea of a one-stop shop, preferring a framework built from conversation with the industry. She further noted that NFTs were gathering interest from the SEC.

“I think that her commentary on NFTs begs the question: will the SEC be looking harder at the digital assets custody sector? Right now, it is still maturing, but there are already some major security concerns. As the SEC begins to look at the best way to move forward with digital assets in 2022, I think they’re going to have to deal with the looming custody issues,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

Fireblocks, which is among the best known custody providers, found itself embroiled in a lawsuit with StakeHound, which alleges the custody company lost roughly $70MM of Ethereum, after the key vanished. As a result, StakeHound could not access over 38,000 ETH.

“Custody, moving forward, is going to be a major concern, and a lot of folks aren’t talking about it yet. But, I was way ahead of the curve when talking about the need for regulation to stop money laundering and malfeasance from bad actors, such as hackers, too. Right now, it is the time to take a hard look at the situation within the custody arena,” opined Gardner.

“What we’ve done… is we’ve brought one-off enforcement actions… I’m just hopeful that we set our minds to work at building something that makes sense in terms of regulatory clarity, instead of always just falling back on enforcement,” Peirce said in the interview. In another segment, she continued to say, “Given the breadth of the NFT landscape, certain pieces of it might fall within our jurisdiction… people need to be thinking about potential places where NFTs might run into the securities regulatory regime.”

“I think that what she says about the NFT landscape can certainly also be said of the custody landscape. Right now, there is a lot of room for improvement in the security mechanism. With digital assets, custody isn’t simply an administrative function. There’s more to it, particularly as it relates to ensuring that assets are safe from malfeasance and chicanery, whether by solo hackers or rogue nation states wishing to do harm to the financial system,” said Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“The industry, as a whole, needs competent leadership out of the regulatory bodies which are tasked with overseeing them. And, the best way to do that, is like the commissioner says — inviting the industry in, working with them to create a commonsense rulebook. It also should be done in a comprehensive way, an encompassing look at all pieces of digital assets. From stablecoins to custody and beyond,” said Gardner.

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Cryptocurrency

Nigeria Leads Africa in Crypto Adoption as Investors Anticipate Market Rebound

Nigeria overtakes Kenya to claim the first position as the leading country with crypto adoption rate in Africa

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Nigeria overtakes Kenya to claim the first position as the leading country with crypto adoption rate in Africa. 

Investors King learnt that Nigeria leads other African countries in cryptocurrency adoption so far in 2021. Nigeria which is also Africa’s largest economy ranked 11th in the world position. 

Other African countries on the world list include Morocco which came 2nd in Africa and 14th in the world.

Kenya which led the African continent in 2021 was ranked 3rd in Africa and 19th on the global list. 

The ranking which was conducted by Merchant Machine used five different indexes which include; On-chain cryptocurrency value received at centralized exchanges, On-chain retail value received at centralized exchanges, Peer-to-peer (P2P) exchange trade volume, On-chain cryptocurrency value received from Defi protocols, and On-chain retail value received from Defi protocols. 

The report further stated that despite the ban on cryptocurrency-related transactions by the Central Bank of Nigeria (CBN), about 33.4 million Nigerians still traded or hold crypto assets. 

Millions of Nigerian youth have taken to cryptocurrency in recent years either as a way to attain financial freedom or to hedge against the downward pressure on the naira.

Google trend ranked Nigeria as the country with the highest number of bitcoin searches in the world. 

The challenging economy and the high rate of unemployment which the National Bureau of Statistics (NBS) has put at 33.3 percent have made many Nigerians take to cryptocurrency as an alternative way of revenue not minding the volatility risk. 

Besides, some Nigerians have found employment opportunities in the cryptocurrency industry either as cryptocurrency content writers, blockchain developers, cryptocurrency influencers or NFT creators.   

Meanwhile, many cryptocurrency investors believed that bitcoin and a host of other digital assets are trading at discounts.

Although bitcoin is trading below 20,000 dollars at the time of this report, many cryptocurrency investors, however, believed that the market will soon rebound. 

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Blockchain: Lekki Free Trade Zone Partners Gluwa to Create Virtual Free Zone

Lekki Free Free Zone Development Company (LFZ) is collaborating with a California-based blockchain company, Gluwa to create a virtual free zone within the Lekki corridor. 

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Lekki Free Free Zone Development Company (LFZ) is collaborating with a California-based blockchain company, Gluwa to create a virtual free zone within the Lekki corridor. 

Both companies are looking for ways to explore blockchain technology for the use of trade collaboration, growth and sustainability among companies that operate within the Lekki Free Trade Zone.

LFZ head of innovation and special projects, Mr Tomiwa Idowu disclosed that the initiative will be a tripartite project between LFZ, Gluwa and the Nigeria Exporting Zone Processing Zones Authority. 

Tomiwa Idowu said that the partnership, when finalised, will create a dashboard for the tokenization of goods into non-fungible tokens (NFTs) and provide digital asset-backed loans for new and existing enterprises that are looking to fund operations and/or expand their businesses. He stated that the project will be similar to the integration of Opeansea and Compound. 

Non-fungible tokens often abbreviated as NFTs are unique digital assets which can be bought, sold or borrowed. 

Idowu further stated that he is overwhelmed with the partnership and looks forward to the possibilities and prospects it will bring to Lagos State. 

He went further to commend the Lagos State Governor, Babajide Sanwo-Olu as a beacon of progress and hope not only for Lagos State but the nation in general. 

“Our Governor has always been a firm believer in fast-paced development, which involves using technology to leap-frog bureaucracy and going straight to solving immediate problems”. He said.

Gluwa Chief Executive Officer (CEO), Tae Oh disclosed that he anticipates the partnership with the Lekki Free Trade Zone which is the most developed free zone in Nigeria. He noted that its proximity to Dangote Refinery and the Lekki Deep Sea makes the zone ideal for partnership. 

Incorporated in 2014, Gluwa is an open-source platform powered by blockchain technology to connect global capital to emerging market investment opportunities. Gluwa launched its stable coin in 2016 and has acquired more than one million borrowers. 

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Cryptocurrency

Cryptocurrency Exchange Platform Luno, Adds Two Digital Currencies Solana And Cardano To Its Portfolio

Luno adds two new digital currencies Solana (SOL) and Cardano (ADA) to its portfolio

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Luno, a digital currency exchange facility that offers clients a technology platform to store and trade cryptocurrencies, has expanded its crypto offerings by adding two new digital currencies Solana (SOL) and Cardano (ADA) to its portfolio.

The company disclosed that following these new additions, users can now trade Cardano (ADA) on the Luno app and website, alongside its existing cryptocurrency offerings.

It further disclosed that Solana (SOL) will be made available on the platform from next month October to enable users trade the digital asset.

Cardano (ADA) is reportedly one of the biggest cryptocurrencies by market cap, which has been described as the third-generation blockchain following Bitcoin and Ethereum which are known as the first and second generation blockchain.

Also, Solana (SOL) has been described as one of the best-performing digital currencies in recent years, known to have one of the fastest blockchain in the world and the fastest growing ecosystem in crypto.

Speaking on the company’s latest addition of the two new digital assets to its platform, General Manager for Africa at Luno Marius Reitz said, “As big advocates of building for the long term, we believe it’s important to give customers access to newer crypto applications that have a promising future.

“Now, not only do customers have access to ADA and SOL, but they also have the peace of mind that comes with the rigorous security that customers rely on from Luno.

“In a world that can look complex, we want to break down the complications around cryptocurrencies to make it easy for people to buy, send, store, and learn about.

“Customers don’t need to make one large investment to get started but can build and grow their investment over time through smaller amounts – similar to how they make contributions to their pension for example.”

Reitz concluded by saying, while the two added digital assets Cardano and Solana meet Luno standards for safety, however, being listed on the platform is not an endorsement of its future potential as an investment, noting the fact that investors are always advised to conduct their research.

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