Category: Digital Currencies

EBA issues guidance to crypto-asset service providers to effectively manage their exposure to ML/TF risks

The European Banking Authority (EBA) today extended its Guidelines on money laundering (ML) and terrorist financing (TF) risk factors to crypto-asset service providers (CASPs). The new Guidelines highlight ML/TF risk factors and mitigating measures that CASPs need to consider, representing an important step forward in the EU’s fight against financial crime. CASPs can be abused for financial crime purposes, including ML and TF. The risks of this happening can be increased, for example because of the speed of crypto-asset transfers or because some products contain features that hide the user’s identity. Therefore, it is important that CASPs know about these…

The EBA consults on new Guidelines on preventing the abuse of funds and certain crypto-assets transfers for money laundering and terrorist financing purposes

The European Banking Authority (EBA) today launched a public consultation on new Guidelines on preventing the abuse of funds and certain crypto-assets transfers for money laundering and terrorist financing purposes. These ‘travel rule’ Guidelines specify the steps that Payment Service Providers (PSPs), Intermediary PSPs (IPSPs), crypto-asset service providers (CASPs) and Intermediary CASPs (ICASPs) should take to detect missing or incomplete information that accompanies a transfer of funds or crypto-assets. They also detail the procedures all these providers should put in place to manage a transfer of funds or a transfer of crypto-assets that lacks the required information. These Guidelines aim…

U.S. Treasury Announces Largest Settlements in History with World’s Largest Virtual Currency Exchange Binance for Violations of U.S. Anti-Money Laundering and Sanctions Laws

WASHINGTON — The U.S. Department of the Treasury, through the Financial Crimes Enforcement Network (FinCEN), the Office of Foreign Assets Control (OFAC), and IRS Criminal Investigation (CI), has taken unprecedented action to hold Binance Holdings Ltd. and its affiliates (collectively, Binance) accountable for violations of the U.S. anti-money laundering (AML) and sanctions laws that protect American national security and the integrity of the international financial system. Binance is the world’s largest virtual currency exchange, responsible for an estimated 60% of centralized virtual currency spot trading. Today, Binance settled with FinCEN and OFAC for violations of the Bank Secrecy Act (BSA)…

Taiwanese authorities seize $320M in country’s largest crypto laundering scheme

The case has surpassed all previous records of money laundering investigated by the Criminal Investigation Bureau in Taiwan Taiwan authorities have arrested an individual suspected of laundering a record 10.4 billion Taiwanese dollars ($320 million) via digital assets. This marks the largest single case of crypto-related money laundering in the island nation’s history. Identified only by the surname Qiu, the suspect was arrested in June upon his return from a trip to Southeast Asia, according to Taichung’s Criminal Investigation Bureau and local media. The case emerged from an investigation initiated last year into a fake securities trading app. A probe…

ADGM introduces the worlds first DLT Foundations Regime

The Registration Authority (RA) of Abu Dhabi Global Market (ADGM) officially released the Distributed Ledger Technology (DLT) Foundations Regulations 2023, marking a significant milestone in the evolution of digital assets regulatory frameworks across the region and at an international level. This newly implemented legislative structure is designed to provide a comprehensive framework for DLT Foundations and Decentralised Autonomous Organisations (DAOs), enabling them to operate and issue tokens recognising the unique needs of the Blockchain industry. This new regime comes in line with ADGM’s strategy to foster initiatives in the broader blockchain and digital asset realm. By setting a global benchmark…

OFAC Sanctions Mexican and Colombian Nationals Involved in Sinaloa Cartel

On September 26, 2023, the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 10 individuals involved in illegal fentanyl, cocaine, and methamphetamine trafficking into the United States on behalf of Mexico’s Sinaloa Cartel. As we’ll explore below, one of those individuals controls an Ethereum address that was included as an identifier on his SDN List entry. Today’s actions represent a coordinated effort between OFAC, the Drug Enforcement Administration (DEA), the Government of Mexico’s La Unidad de Inteligencia Financiera, and the Colombia Counternarcotics Working Group. Who are the sanctioned individuals and what did they do?Nine of…

Cyprus to Tighten Crypto Regulations in Accordance with FATF

One of the friendliest European jurisdictions to crypto, Cyprus, might bring its industry regulation to tighter standards. According to an Oct. 10 report by the Cyprus Mail, the Cypriot Ministry of Finance intends to amend the existing Prevention and Suppression of Money Laundering and Terrorist Financing Law. The ministry has presented its amendments package to the House of Representatives Standing Committee on Legal Affairs, Justice and Public Order. It seeks to align Cyprus with international standards for Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) set by the Financial Action Task Force (FATF), as well as the recommendations of…

Hackers Steal $53m Worth of Cryptocurrency from CoinEx

Global cryptocurrency exchange CoinEX announced that someone hacked its hot wallets and stole large amounts of digital assets that were used to support the platform’s operations. The incident occurred on September 12 and preliminary results of the investigation show that the unauthorized transactions involved Ethereum ($ETH), Tron ($TRON), and Polygon ($MATIC) cryptocurrency. CoinEx has not provided any info about the financial impact incurred, as the investigation has yet to determine the complete losses. However, a report from blockchain security firm PeckShield says that the attack drained CoinEx of about $19 million in $ETH, $11 million in $TRON, $6.4 million in…

Bankman-Fried Used Customer Funds for $100 in U.S. Political Donations

Sam Bankman-Fried used stolen customer funds to make more than $100 million in political campaign contributions ahead of the 2022 U.S. midterm elections, federal prosecutors said on Monday in a new indictment filed against the FTX cryptocurrency exchange’s founder. The new indictment charges the 31-year-old former billionaire with seven counts of conspiracy and fraud over the collapse of the exchange. He has previously pleaded not guilty to charges of stealing billions in FTX customer funds to plug losses at Alameda Research, his crypto-focused hedge fund. Mark Botnick, a spokesman for Bankman-Fried, declined to comment. Sam Bankman-Fried criminal charges unsealed: Conspiracy…

Coinbase Cleared to Offer Regulated Crypto Futures to Eligible U.S. Customers

Despite its ongoing legal battles with the SEC, Coinbase has gained approval from another regulator to offer eligible US customers access to crypto futures directly from its platforms. The clearance to operate as a futures commission merchant (FCM) came from the National Futures Association, a self-regulatory organization designated by the Commodity and Futures Trading Commission (CFTC), Coinbase revealed Wednesday. “Offering US investors access to secure and regulated crypto futures is key to unlocking growth and enabling broader participation in the crypto economy,” Coinbase Financial Markets CEO Andrew Sears told Blockworks in an email. Coinbase filed an application to the NFA…

U.S. Department of the Treasury, IRS Release Proposed Regulations on Sales and Exchanges of Digital Assets by Brokers

WASHINGTON – As part of the Biden-Harris Administration’s implementation of the bipartisan Infrastructure Investment and Jobs Act (IIJA), the U.S. Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) today released proposed regulations on the sale and exchange of digital assets by brokers, in an effort to crack down on tax cheats while helping law-abiding taxpayers know how much they owe on the sale or exchange of digital assets. This is part of a broader effort at Treasury to close the tax gap, address the tax evasion risks posed by digital assets, and help ensure that everyone plays…

UK Crypto, Stablecoin Laws Approved by Parliament’s Upper House

The Financial Services and Markets Bill stands to recognize crypto as a regulated activity and stablecoins as a means of payment under existing laws. U.K. parliamentarians have voted through a new bill that could recognize crypto as a regulated activity in the country.The approval of the Financial Services and Markets Bill (FSMB) on Monday by Parliament’s upper chamber, the House of Lords, means the bill is going to enter the final stages before it is put into law. The wide-ranging bill, spanning over 340 pages, was introduced in July to take advantage of Brexit freedoms and give regulators more power…

New Crackdowns on Crypto Enablers and ‘Pig Butchering’ on the Way

The US cryptocurrency enforcement chief has said that the country was stepping up scrutiny of crypto exchanges to target illicit behavior on the platforms. The Department of Justice (DOJ) is targeting crypto companies that engage in crimes themselves or allow crimes like money laundering to happen, Eun Young Choi, director of the agency’s National Cryptocurrency Enforcement Team (NCET), told the FT. On the target list with crypto exchanges are with the “mixers and tumblers” that obscure the trail of transactions, she said. “… they’re allowing for all the other criminal actors to easily profit from their crimes and cash out…

OFAC Sanctions Dubai-based Financial Services Firm and CEO for Role in Russian Sanctions Evasion

On May 19, 2023, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 22 individuals and 104 entities operating in 20 countries for their role in facilitating Russian sanctions evasion. Concurrently, OFAC has expanded its Russian sanctions program for future targeting of individuals and entities involved in key sectors of the Russian economy. One of the individuals sanctioned today, an Irish national named John Desmond Hanafin, has an active Ethereum address included as an identifier on his SDN List entry. Hanafin is the founder and CEO of Huriya Private FZE LLE, a Dubai-based financial services company also sanctioned today…

Watchdog Proposes First Set of Global Rules for Crypto Sector

INTERNATIONAL securities watchdog IOSCO unveiled on Tuesday the first global approach to regulating cryptoasset and digital markets, drawing on lessons from last year’s collapse of the FTX exchange that fuelled concerns over consumer protection. The industry, which typically only has to comply with anti-money laundering checks, has been calling for a global approach to regulation as different jurisdictions follow their own rules. The moves come after crypto exchange FTX began U.S. bankruptcy proceedings last November following a liquidity crisis that prompted intervention from regulators worldwide. Tuesday’s recommendations are a “turning point in addressing the very clear and proximate risks to…

Japan’s Crypto Anti-Money Laundering Measures to Start in June

Lawmakers in Japan have decided to enforce stricter Anti-Money Laundering (AML) measures to trace cryptocurrency transactions from June 1. On May 23, the Japanese parliament made the decision to roll out tougher AML procedures from next month, according to a report the same day from local media outlet Kyodo News. The move aims to bring Japan’s legal framework in line with global crypto regulations. Lawmakers revised the AML legislation in December after it was deemed insufficient by the international financial watchdog, the Financial Action Task Force (FATF). According to reports, a vital feature of the new measures is the enforcement…

SEC’s Gensler seeks $2.4B in funding to chase down crypto ‘misconduct’

United States Securities and Exchange Commission Chair Gary Gensler says the regulator is spread thin and needs additional funding to keep up with the “increased complexity in the capital markets.” United States Securities and Exchange Commission Chair Gary Gensler has thrown his support behind U.S. President Joe Biden’s request to allocate a record $2.4 billion in funding for the regulator, highlighting the ongoing need to crack down on “misconduct” in the cryptocurrency industry. In prepared testimony for the March 29 budget hearing with the House Appropriations Committee, Gensler said the additional funding was needed to keep up the pace of…

U.S. Charges North Korean Banker With Crypto Laundering

A U.S. court charged a China-based representative of North Korea’s Foreign Trade Bank with two counts related to laundering illicit crypto proceeds for the benefit of the North Korean nuclear weapons and ballistic missile program, according to a statement by the U.S. Attorney’s Office. Sim Hyon Sop, a 39-year-old North Korean national, is accused of conspiring with traders in China to launder cryptocurrency stolen by North Korea’s hackers by purchasing goods through Hong Kong-based front companies. The second indictment alleges that Sim managed a scheme laundering proceeds from the work of various North Korean IT specialists, who under fake identities…

Europe passes landmark crypto regulation

The European Parliament passed landmark crypto regulation, the Markets in Crypto-Assets (MiCA), on 20th April, 2023 becoming one of the world’s leading jurisdictions for crypto asset regulation. MiCA is a regulatory framework for crypto assets not already covered under existing financial services legislation. The regulation includes provision for consumer and investor protection, addresses financial stability and monetary policy risks as well as measures against market manipulation, money laundering, terrorist financing and criminal activity. The European Commission first proposed MiCA in 2020, ahead of many other global economies including the US and the UK. The global crypto asset market has existed…

Crypto laundromat which washed €44M in dirty money is taken down in operation by German, US police

POLICE on both sides of the Atlantic today reported bringing down a massive money laundering operation using a cryptocurrency mixer at its heart. Criminals are suspected laundering of 152 000 Bitcoins (worth roughly BILLION) through the ‘ChipMixer’ platform. Much of the dirty money was connected to darkweb markets, ransomware groups, illicit goods trafficking, procurement of child sexual exploitation material, and stolen crypto assets. Officers in Germany and the US said they took down the infrastructure of the “laundromat” platform, seizing about 1909.4 Bitcoins in 55 transactions (approx. €44.2 million) and 7 TB of data. Ransomware actors such as Zeppelin, SunCrypt,…

FROM RUSSIA WITH CRYPTO: MOSCOW-BASED EXCHANGES OFFERING TO ANONYMOUSLY CONVERT STABLECOINS FOR CASH IN THE UK

Moving money around the world has never been easier. At the click of a button, it’s possible to ping funds from one continent to another in a matter of minutes. While much of this still flows through established payment providers and financial institutions, like major multinational correspondent banks, there are a growing range of alternatives on the market. One is the proliferation of cryptocurrencies, which use blockchain technology to move digital assets from one place to another. Some cryptocurrencies, called stablecoins, peg their value to ‘real world’ assets, such as the US dollar, to help reduce fluctuations in their value.…

Report: $3.8 Billion in Crypto Stolen Last Year, Mostly by North Korea

Hackers stole US$3.8 billion worth of cryptocurrency last year, surpassing the $3.3 billion record registered in 2021 despite a dramatic fall in the crypto market’s value, according to a new report by blockchain analysis firm Chainanalysis. North Korean hackers stole most of it. Crypto theft peaked in March and October, which alone saw equivalents of $732 and $776 million stolen. Elaborate encryption mechanisms underlying blockchains — public ledgers recording transactions in blockchain networks — make them nearly invincible to hacker attacks. There are still weak spots that can be exploited, however. The report said that over 82% of all cryptocurrency…

Britain Sets Out Plans to Regulate Crypto Industry in Wake of FTX Collapse

The U.K. formally laid out plans to regulate the cryptocurrency industry, with the government looking to rein in some of the reckless business practices that emerged over the past year and contributed to the demise of FTX. In a widely-anticipated industry consultation launched Tuesday, the government proposed a number of measures aimed at bringing regulation of crypto asset businesses in line with that of traditional financial firms. Among the proposals unveiled Tuesday was a move that would strengthen rules targeting financial intermediaries and custodians that store crypto on behalf of clients. A big theme that emerged in 2022 was the…

Watchdog and West Yorkshire police raid crypto ATM operators in UK first

Authorities have raided several sites around Leeds as part of what is believed to be the UK’s first crackdown on illegally operated crypto ATMs. Evidence was gathered from multiple sites around the city that were suspected to be hosting machines allowing customers to buy or convert traditional currencies into cryptoassets including bitcoin. The raids follow a joint investigation between the Financial Conduct Authority and the West Yorkshire police force’s digital intelligence and investigation unit. “The FCA will review evidence gathered during these visits and consider further potential enforcement action,” the regulator said. While the FCA does not regulate cryptoassets, it…

Most Criminal Cryptocurrency Funnels Through Just 5 Exchanges

The crypto money-laundering market is tighter than at any time in the past decade, and the few big players are moving a “shocking” amount of currency. FOR YEARS, THE cryptocurrency economy has been rife with black market sales, theft, ransomware, and money laundering—despite the strange fact that in that economy, practically every transaction is written into a blockchain’s permanent, unchangeable ledger. But new evidence suggests that years of advancements in blockchain tracing and crackdowns on that illicit underworld may be having an effect—if not reducing the overall volume of crime, then at least cutting down on the number of laundering…

UK Treasury Considers Plan for Digital Pound

The government is considering introducing a “digital pound”, the economic secretary to the Treasury has told MPs. The UK was committed to becoming a world crypto hub, Andrew Griffith said. And the government was “a long way down the road… to establish a regime for the wholesale use, for payment purposes, of stablecoins”. Stablecoins are designed to have a predictable value linked to traditional currencies or assets such as gold. The currency, for use by households and businesses, would sit alongside cash and bank deposits, rather than replacing them. ‘Game-changing technology’A public consultation on the attributes of a digital pound…

Fraudsters Sentenced for £21m Loss in Cryptocurrency

Four offenders were sentenced today (13 January 2023) for fraudulently obtaining and laundering Bitcoin and other cryptocurrency worth tens of millions of pounds from an Australia-based cryptocurrency exchange. Stephen William Boys, 58, Kelly Caton, 44, Jordan Kane Robinson, 23, and James Austin-Beddoes, 27, were found guilty of fraud, converting and transferring criminal property at Preston Crown Court and then sentenced to a total of 15 years. All four were associates of James Parker, who masterminded the conspiracy from his home in Blackpool over a three-month period between October 2017 and January 2018. James Parker identified and then exploited a loophole…

Thailand’s SEC issues rules on management of digital wallets for custody of digital assets and keys

The Securities and Exchange Commission (SEC) has issued regulations requiring digital asset business operators that provide custody of clients’ digital assets to establish a digital wallet management system to accommodate efficient custody of digital assets and keys* and ensure safety of clients’ assets. The regulations cover the following requirements: (1) Policy and guidelines for overseeing risk management and management of digital wallets and keys as well as communication to clarify such policy, action plans and procedures, work supervision and internal control to ensure compliance with the policy; (2) Policy and procedures for designing, developing and managing digital wallets as well…

New York’s Financial Regulator Takes Aim at Firms Co-Mingling Crypto Funds

New York’s chief financial regulator is set to release new guidance on Monday dictating that companies separate customers’ crypto assets from their own, after alleged co-mingling of funds at collapsed crypto exchange FTX and its affiliated trading firm Alameda Research led to hefty losses for clients. The New York State Department of Financial Services (NYDFS), which leads one of the few state agencies with a regulatory system in place for cryptocurrency companies, will also stipulate that state-regulated companies disclose to customers how they account for clients’ digital currency. The guidance is the latest in a series of crypto-related directives NYDFS…

Elizabeth Warren’s Tough-On-Crypto Bill is Taking Shape

Sen. Elizabeth Warren, D-Mass. is working on a sweeping cryptocurrency bill that would hand the Securities and Exchange Commission most regulatory authority over the market, according to two people familiar with her efforts. While discussions are still early and details could change, Warren’s office is looking at a range of crypto-related issues, including regulations, taxation, climate, and national security. The senator has recently stepped up her criticism for the industry and demanded “comprehensive” new rules to govern it following the massive collapse of the crypto exchange FTX. (FTX founder Sam-Bankman Fried is an investor in Semafor.) Ideas on the table…

FTX diverted $200 million of customer money for two venture deals that caught the SEC’s attention

Of the billions of dollars in customer deposits that disappeared from FTX in a flash, $200 million was used to fund investments in two companies, according to the Securities and Exchange Commission, which charged founder Sam Bankman-Fried with “orchestrating a scheme to defraud equity investors.” Through its FTX Ventures unit, the crypto firm in March invested $100 million in Dave, a fintech company that had gone public two months earlier through a special purpose acquisition company. At the time, the companies said they would “work together to expand the digital assets ecosystem.” The other deal the SEC appears to have…

OFAC Sanctions Internet-based Suppliers of Illicit Fentanyl and Other Synthetic Drugs

Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned three individuals and nine entities associated with darknet marketplaces and research chemicals sites under the Illicit Drugs Executive Order (EO 14059) for supplying illicit synthetic substances to U.S. markets through internet sales and a host of shell companies. Today’s action marks the first time this EO has been used to designate activities related to online and darknet market illicit drug sales. Two individuals, Alex Adrianus Martinus Peijnenburg (Peijnenburg) and Martinus Pterus Henri De Koning (De Koning) began their business selling illicit fentanyl, synthetic stimulants, cannabinoids, and…

Hochul Signs Partial Cryptocurrency Mining Nan into New York Law

New York’s nation-leading Climate Leadership and Community Protection Act, the most aggressive climate and clean energy law in the nation, while also continuing our steadfast efforts to support economic development and job creation in upstate New York.” The new law will also trigger a study by state Department of Environmental Conservation to study the impacts of the cryptocurrency mining industry on the environment. The measure was hotly debated in the halls of the state Capitol this year, with environmental groups pushing lawmakers and Hochul to support the bill and the industry urging Hochul to reject it. “Thank you, Governor Hochul,…

Crypto Regulatory Affairs – Global Regulatory Response to FTX Collapse

The collapse of FTX – once one of the most dominant cryptoasset exchanges worldwide – has sparked concern from investors, consumers, industry participants and regulators alike. Previously, there were discussions – and a signed letter of intent – indicating that fellow crypto exchange Binance would be acquiring FTX. Shortly after, news broke that it would be walking away from the deal completely due to the severity of FTX’s internal mismanagement. A spokesperson from Binance told media outlets: “As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations,…

E.U. to Discuss Crypto Legislation With U.S. Officials

EU representatives will reportedly broach the need for a more coordinated global crypto regulatory framework with US officials at next week’s IMF-World Bank annual meetings. The bloc’s Commissioner for Financial Services, Mairead McGuinness revealed there was a “crowded agenda” for the US next week. Speaking at a media roundtable hosted by Bloomberg, Commissioner McGuinness added: “One of the items that won’t be bottom of the list, it will be in there right around the top is crypto.” “I am sure they want to hear what we’ve done, how it went, what the problems were. I would be very happy to…

Money Laundering Cases Registered at Agency Doubled in Last 6 Years

Almost 3 000 cross-border money laundering cases have been registered at Eurojust during the past six years. Since 2016, the number of cases brought to the Agency has been steadily rising. Over 600 cases were brought to the Agency in 2021, representing more than double of those registered in 2016.These are some of the findings of Eurojust’s first comprehensive report on money laundering, published on 20 October. Due to its clandestine nature, the global scale of money laundering is difficult to measure, but it is considered to be significant. The United Nations Office on Drugs and Crime (UNODC) estimates that…

UK High Court Shuts Down PGI Global for Involvement in a Crypto Fraud

The United Kingdom’s crackdown on cryptocurrency is still on fire as the government is continuously taking down any illicit acts associated with virtual assets. Recently, the United Kingdom High Court ordered PGI Global UK to shut down, following their non-compliance with the guidelines and links with possible involvement in a crypto fraud with their investors. According to the UK government’s Insolvency Services press release, authorities have appointed their Official Receiver as the company liquidator. PGI Global received around 612,425 Pound Sterling (over 700K USD) in their bank accounts from their would-be investors. Over 10,000 USD were used for making a…

The UK has a new name for stablecoins

The proposal is another ripple of recognition for the Bitcoin, crypto and digital assets industries in the United Kingdom. The United Kingdom moved forward on the Financial Services and Markets Bill on Oct. 25, hardening its vision for Bitcoin cryptocurrency and “digital settlement assets” in the country. The suggested bill proposes “a range of measures to maintain and enhance the U.K.’s position as a global leader in financial services, ensuring the sector continues to deliver for individuals and businesses across the country.” The bill reasserts the U.K.’s intention to become a global cryptocurrency hub, comments echoed by Lisa Cameron, member…

FCA takes action as Crypto scams

The United Kingdom’s Financial Conduct Authority (FCA) has opened 432 regulatory cases regarding possible crypto scams or unregistered businesses, according to the regulator’s fourth Consumer Investments Data Review published this week. The document aggregates data from April 1, 2021, to March 31, 2022. Take Advantage of the Biggest Financial Event in London. This year we have expanded to new verticals in Online Trading, Fintech, Digital Assets, Blockchain, and Payments.The FCA saw an increase in enquires about cryptocurrency scams (59%) during the reported period. Although many consumers contacted the financial watchdog before they were scammed or their funds were stolen, 79%…

Russia to Legalise use of Cryptocurrency in International Trade

The Bank of Russia and the country’s Ministry of Finance have reconsidered their positions toward cryptocurrency, acknowledging it to be necessary to legalize the use of cryptocurrencies in cross-border settlements, per a report by local news outlet TASS. According to TASS, the two government bodies have agreed that “it is impossible” to continue without enabling cryptocurrency as a legal payment method for international trade. The move comes as Russia dabbles on how to best regulate the Bitcoin and cryptocurrency markets. Swamped in Western sanctions, the world’s largest country has sought alternatives to the U.S. dollar so as to guarantee the…