• As demand increases for trade surveillance tailored for digital assets, Solidus is expanding its customer base both domestically and internationally

• Tackling trade manipulation in blockchain-based trading is not a one-company job, and Solidus is constantly forming strategic partnerships with firms offering complementary services

• We're continuing to grow and looking to hire for various tech and business positions

Everything you need to know from the past few weeks, including:

• FINRA joins SEC in making digital assets an inspection priority for 2019

• U.S. Congress promoting legislation to tackle digital asset manipulation

• Korean exchange owners face jail time for manipulated volume reports

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Legislation and Regulation

• Bills introduced to the U.S. Congress are looking to stymie digital asset manipulation and encourage blockchain and digital asset innovation, in a bipartisan effort.

• Locally, state legislators in Washington, New Hampshire, Wyoming, and Pennsylvania promoted or passed rules to help define digital assets and simplify their taxonomy. In New York, Robinhood received the sought-after BitLicense, joining approximately 15 other companies who are licensed to provide virtual currency services in the Empire State.

• In addition to evolving legislation, regulation is sure to further tighten this year, with FINRA joining the SEC and stating digital assets will be a focus of its inspections in 2019.

• In Korea, for the first time, the founders of Komid, a digital asset exchange, were sentenced to jail for manipulative volume reports. Simultaneously 14 leading Korean exchanges agreed to establish inspections by a self-regulatory industry organization in an effort tackle market manipulation.

• The Stock Exchange of Thailand, the country’s premier traditional stock exchange, said it's seeking digital asset licensing.

• South Africa’s central bank proposed a licensing regime for digital asset exchanges and wallet providers.

• In Europe, the British Financial Conduct Authority (FCA) released a consultation paper on digital assets that aims to help innovators establish if they need to adhere to regulation. The FCA paper follows a study by the European Banking Authority calling for a unified continental legislative approach, as well as a European Securities Market Authority (ESMA) advice paper suggesting digital assets often qualify as securities.

Our take:

For the digital asset space globally, stakes of non-compliance are constantly increasing with a first jail penalty. The combination of increasing legislation and regulation is bound to maintain this trend and we can expect significantly more regulated and prudent blockchain-based finance by the end of 2019, ushering accelerated mainstream and institutional adoption.

Other Industry News

• In a series of interviews, Gemini Trust founders Cameron and Tyler Winklevoss discussed their digital commodity exchange's regulated approach and repeatedly pointed out manipulation and trade surveillance as a central priority in the path forward. Recently, Gemini announced it successfully passed a complete SOC 2 compliance audit, a first in digital assets.

• In another first, tZERO officially launched secondary trading on its platform, enabling the buying and selling of the firm’s own tokens, touting it as a “first step towards trading other digital assets.”
• VanEck resubmitted it’s Bitcoin-ETF application to the SEC, after withdrawing it earlier this month due to the U.S. government shutdown and concerns it would be rejected.
• Investment giant Fidelity posted an update on its continued effort to respond to institutional clients’ “clear need for a trusted platform provider in order to engage with digital assets in a meaningful way.”
• Following the launch of a new crypto-to-fiat platform, Binance - the world’s largest exchange by volume, sees a massive increase in demand creating a long registration backlog.
• The London Stock Exchange agreed to sell its traditional trading tech to the Hong Kong digital asset exchange AAX.

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