Receiving Wide Coverage ...
Closer to Bitcoin Regulation: Japan is close to regulating cryptocurrency Bitcoin, following the collapse of Tokyo-based exchange Mt. Gox. Draft regulation, which includes a tax on Bitcoin transactions and prohibits banks and securities firms from handling the cryptocurrency, appears to treat Bitcoin more like a commodity than an actual currency, but a lawmaker, who opposes the plan, has asked for clarification. One look at this Journal quote from an anonymouse and you will understand why: "What we are considering is that bitcoin isn't a currency, but that doesn't mean it will automatically be categorized as a commodity." Despite the lack of clarity, there's already been some criticism of Japan's proposal. "If banks and securities firms can't handle Bitcoins, Japanese consumers will be stuck with illegal shadow banks like Mt. Gox, and their risk will be much higher as a result,'' one source tells Dealbook. Meanwhile, another Bitcoin site, Flexcoin, said it was shutting down on Tuesday after losing about $600,000 worth of bitcoins to a hacker attack. And Dealbook reminds everyone about Silk Road "the online marketplace where drugs and weapons could be bought with Bitcoin" by reporting that Christopher Nadovich, director of laboratories in the electrical and computer engineering department at Lafayette College, had a small role in the federal investigation that resulted in the site's shutdown this fall, as he provided a back-up server to the website.
U.K. Forex Probe: The Bank of England has suspended an employee as it reviews whether bank officials knew about alleged manipulation of foreign exchange markets. Another confusing statement, courtesy of the Journal: "The central bank said that to date, it has found 'no evidence' that its staff 'colluded in any way in manipulating the foreign exchange market or in sharing client information.'" The Bank of England has become embroiled in the ongoing forex investigations after it was discovered several of the traders fired or suspended in relation to the alleged manipulation served on a committee hosted by the U.K. central bank.
StanChart Hit by Emerging Markets: Standard Chartered "reported its first fall in profits for more than a decade" largely due to volatile emerging markets. (In a story tangentially related, the Times reports that those pesky emerging markets just aren't the profits generator they used to be.) StanChart, however, did offer "better-than-expected forecasts" about its capital ratio.
Wall Street Journal
More fodder for the debate on the strength of Citigroup's global compliance efforts: Oceanografía, the Mexican oil-services firm Citi claims defrauded it, "was well known in energy and investor circles as being behind on its bills despite a steady stream of contracts with state oil firm Petr-leos Mexicanos."
Financial Times
Standard & Poor's is warning of downgrades for European banks related to "the introduction of new 'recovery and resolution' rules under which banks will be rescued by bondholder 'bail ins,' rather than state bailouts."
The U.S. is considering sanctions on Russia banks if the nation elects to send troops into the Ukraine. "The administration is considering placing senior Russian officials on a visa ban and asset freeze list," the paper reports "The idea of broader trade and investment sanctions, which secretary of state John Kerry alluded to at the weekend, is only being analysed as a much more distant prospect."
New York Times
Dealbook has obtained a government document that reveals what took place behind the scenes of the federal investigation into what, if anything, JPMorgan Chase knew about Bernie Madoff's Ponzi scheme. "The document highlights the legal hurdles federal authorities can face when investigating a Wall Street giant," the article notes.
