Renata Szkoda – Page 6 – Global DCA

Author - Renata Szkoda

Congratulations to New Global DCA Officers, Board Directors and Committee Chairs!

A thank you to all of our Global DCA Full Members for taking the time to cast their ballots and help welcome our new Board of Directors. Election results were unanimous in favor of the slate presented during our Membership Meeting held on November 5th, 2021: Renata Szkoda (Chair - Full Member - Galaxy Digital) Gabriella Kusz Jenna Wright  (Full Member - LMAX Digital) Noah Baalessanvu (Full Member - CryptoSavannah) Kristin Boggiano (Full Member - CrossTower) David Nuelle (Full Member - Hehmeyer) David Carman (Full Member - Fintank) Independent (Open Seat) Pat Daugherty (Affiliate Member - Foley & Lardner) Tony Pettipiece (Affiliate Member - GRIP (DIFC) Investments) Committee Appointments The Global DCA is proud to welcome our new officers which were unanimously approved during the first Board meeting held on December 2, 2021: Treasurer: Thomas Bakas (RPM Financial Markets Group) Secretary: Bjondi Dervishi This past week the new Board of the Global DCA confirmed the following individuals to lead the four committees of the Global DCA. As a representative body, the Global DCA functions through its four committees to execute on its strategic plan and ensure a member-driven approach to its operations and functions: Conduct & Discipline Committee: Matthew Lisle (Galaxy Digital) Education, Training and Certification Committee: Ayla Kremb (Diffuse VC) Membership Committee: Brett Ladendorf (IASG Fund Services) Public Policy and Regulation: Michael Frisch (Croke, Fairchild, Morgan and Beres) US Advocacy Sub-Committee: Matthew Lisle (Galaxy Digital) and Gabriella Kusz

DeFi-ING EXPECTATIONS: November 10, 2021

With its roots in blockchain technology and peer-to-peer financial transactions, the world of Decentralized Finance (DeFi) is attracting more than just niche investors. Increasingly, institutions are exploring how and in what way they may enhance efficiency, execute transactions more effectively, increase returns on assets, and maximize profits using DeFi. With the proper understanding, risk management and strategic approach, institutions can defy expectations around efficiency, effectiveness, and profitability and take their firm to the next level. TABB Forum and Global DCA are proud to present the DeFi-ing Expectations: Utilizing Decentralized Finance to Drive Institutional Performance Conference Event and VIP Reception series to offer insight on emerging trends, products and applications tailored to the unique needs of the serious institutional investor. Click HERE to view the event recordings! Download PDF

Newest Global DCA Member Establishes PinkPanda Holdings as Cryptocurrency Regulation Leader

Oct 21, 2021 (AB Digital via COMTEX) -- CHICAGO, IL - OCT 21, 2021 - Pushing to the forefront of a currently self-regulated industry, Pink Panda Holdings, Inc. has recently become the newest corporate member of the Global Digital Asset & Cryptocurrency Association (Global DCA). Fortifying their efforts to make cryptocurrency more accessible with their upcoming mobile app wallet launch, Pink Panda’s company values and regulatory strategy closely align with the Global DCA’s mission to advocate, educate, and facilitate the evolution of the cryptocurrency and digital asset industry. Read Full Article HERE: https://www.marketwatch.com/press-release/newest-global-dca-member-establishes-pinkpanda-holdings-as-cryptocurrency-regulation-leader-2021-10-21

Global DCA Comment Letter to FASB on Treatment of Digital Assets under US GAAP

“Under the conceptual framework for financial reporting, the fundamental quantitative characteristics that make accounting information useful are relevance and faithful representation.  Accounting information is relevant if it can make a difference in a decision.  Faithful representation exists when there is an agreement between accounting information and the economic events that the accounting information purports to represent. It is difficult to conclude that the current accounting standards for digital assets fundamentally meet the objective of relevance and faithful representation for this asset class. Fair value accounting through profit and loss supports the accounting conceptual framework because digital assets are sensitive to market risk and experience market volatility.  Fair value accounting is also more relevant, provides more useful information for readers and enhances comparability across entities and industries.” – Global DCA. Read Response Letter

Global DCA Comment Letter to Bank for International Settlement on “Prudential Treatment of Cryptoasset Exposures”

“The Committee notes that for cryptoassets that confer direct claims on a pool of traditional assets held in a bankruptcy remote vehicle, a banking institution could set the credit risk exposure of bankruptcy remote assets of the redeemer to zero only if an institution has obtained a legal opinion for all laws relevant to involved parties, including the redeemer, the special purpose vehicle (SPV) and custodian, affirming that relevant courts would recognize underlying assets held in a bankruptcy remote manner as those of the cryptoasset holder. It is difficult to see how a banking institution would be able to meet that burden. It may be more constructive if the Committee were to consider proposing alternative suggestions, that could potentially offer a different standard for credit risk exposure of cryptoassets conferring direct claims on traditional assets held in a bankruptcy remote vehicle.” – Global DCA. Read Response Letter

Global DCA Response to European Financial Reporting Advisory Group on Accounting for Digital Assets and Liabilities

“Measurement requirements under IAS 38 and IAS 2 are limiting as they were not developed with digital assets in mind; therefore, we recommend considering a separate asset class for digital assets for the purpose of applying these standards. Unlike most commonly known intangible assets (e.g. software, intellectual property, brands), digital assets have some cash-like properties; some are traded in active markets and many can have trading or investment asset attributes.  A significant portion of digital assets held would not have a claim on the issuer, therefore would not meet requirements for a financial asset, and yet, they are held generally for investment purposes, are used to pay for services and experience price volatility, which are the main attributes of a financial asset and as such diverge from the concept of an intangible asset under the current standards. The fair value methodology would be much more reflective of the true economical value of the assets or liabilities on balance sheets of entities, which of course translates to more accurate reflection of the entity’s financial position…” – Global DCA. Read Response Letter

Global DCA Response to US FDIC “Proposed Guidelines for Evaluating Account and Services Requests”

“The GDCA strongly believes that regulators should create pathways to safely develop and mature fintechs and emerging firms in the Digital Assets Industry. Government agencies around the world, including here in the U.S., are recognizing that well-constructed regulatory sandboxes can drive innovation, facilitate market entry of firms, improve access to capital, and strengthen competition, among other benefits.  Allowing tiered or phased access to Accounts and Services could share some aspects of a sandbox; specifically, by allowing the regulatory requirements to flex along with the size, maturity, and level of risk each applicant poses. The sandbox model is a proven approach to foster inclusion of ‘new’ banks and Fintech firms, allowing for ease of access, and an iterative approach to shaping the rules as the industry evolves. Such an approach would have the benefit of building capacity and expertise about the Digital Assets Industry within the Federal Reserve system, allowing the Board to gain insight into and a closer view of this emerging area.” – Global DCA. Read Response Letter

Consultation on Financial Action Task Force’s (FATF) Risk Based Approach to Virtual Assets and Virtual Asset Service Providers (VASPs)

“The private sector has stepped up […] on implementation of the Travel Rule across different VASPs and jurisdictions, in particular with regards to the sharing of private account information and Personal Identifiable Information (“PII”) data securely across the globe, and […] have defined and delivered common messaging standards that can be leveraged to provide private and secure transmission of all the required data for use by all VASPs. Examples of these are: OpenVasp2, the InterVASP Messaging standard IVMS1013 , and TRP (the Travel Rule Protocol4 ) and TRISA (The Travel Rule Information Sharing Alliance5). These different protocol implementations now provide a base upon which applications can be built to interchange data in the same manner as different email tools and protocols share data securely on the internet.[…] The net result will be global interchange standards that VASPs and other participants can leverage…” – Global DCA. Read Response Letter

Global DCA Comment Letter to H.M. Treasury on U.K. Regulatory Approach to Cryptoassets and Stable Coins

“Creating a regulatory environment in which firms can innovate, while maintaining the highest regulatory standards so that people can use new technologies reliably and safely is especially crucial as the UK seeks to maintain its leadership position as a global centre of excellence for fintech firms in the digital era and attract and retain investment post-BREXIT. Moreover, the industry participants recognize that the current post-Brexit era may create significant incentives for the UK to take a global leadership role in the development of a regulatory framework that will provide the digital assets industry with clear directives and regulatory requirements, allow for ongoing industry engagement in the evaluation of applications as well as the development of standards, and finally include a data-driven assessment process.” – Global DCA Read Response Letter

Global DCA Comment Letter to FinCEN on Proposed Rule for Transactions in Convertible Virtual Currency and Digital Assets

“While the GDCA fully supports protecting U.S. national security and acknowledges the concerns surrounding unhosted wallets raised by FinCEN, we suggest […]to focus on the source of funds and the concept of “Know Your Customer” during the KYC/AML onboarding and monitoring process instead of focusing on the means and in effect penalizing a specific technology solution that is believed to be utilized by bad actors.  The GDCA questions whether applying extensive reporting, verification and recordkeeping requirements on the holders of self-hosted wallet solutions is the most effective approach to capture illicit activity and suggests that closer consideration should be given to the source of funds and the risk profile of a customer or a counterparty while evaluating transactions in digital assets.” – Global DCA. Read Response Letter