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Weekly Update #32

Republished By Plato
Republished By Plato

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Weekly Update #32

December 5, 2023

CipherTrace

MARK COLLINS & DEMETRIOS TSEAS

Regulatory:

South Korea’s National Pension Fund invests $20M in Coinbase shares: On Nov 16, National Pension Service (NPS), an entity that manages South Korea’s National Pension Fund (NPF) has reportedly bought nearly $20 million worth of Coinbase (COIN) shares in the third quarter, as cited by local outlet News1. The NPF proclaims itself as the world’s third-largest pension, with Assets Under Management as of 2023 at 775 billion U.S. dollars.

New Zealand Dollar pegged stablecoin goes live: On Nov 22, New Zealand-based Easy Crypto, introduced NZDD a stablecoin, issued by ECDD Company Ltd., backed one-to-one to the New Zealand Dollar (NZD). Underlying assets are being held in a local bank account, regulated by the New Zealand Financial Markets Authority. Initially NZDD is available on the Ethereum blockchain, with plans to expand to other blockchains as well.

EBA issues guidance to AML/CFT supervisors of CASPs: On Nov 27, the European Banking Authority (EBA)issued new guidance to AML/CFT supervisors of CASPs, extending its risk-based anti-money laundering and countering the financing of terrorism (AML/CFT) supervision guidelines to AML/CFT supervisors of crypto-asset service providers (CASPs). The new guidelines set clear expectations of the steps supervisors should take to identify and manage money laundering and terrorism financing (ML/TF) risks in this sector and are an important step forward in the EU’s fight against financial crime. “ CASPs can present high ML/TF risks. They also operate across borders. This is why a common supervisory approach to tackling ML/TF risks in that sector is important. By extending the scope of its AML/CFT Supervision Guidelines to supervisors of CASPs, the EBA fosters a common understanding, across all Member States, of the risk-based approach to the AML/CFT supervision of CASPs and how it should be applied.”

Paxos secures in-principal license to issue USD and other stablecoins in Abu Dhabi: On Nov 28, stablecoin issuer Paxos announced that it has secured an in-principal license to issue USD and other currency-backed stablecoins, offer crypto brokerage and custody services out of the Abu Dhabi Global Market. Two weeks ago, the Monetary Authority of Singapore (MAS) approved Paxos our new entity: Paxos Digital Singapore, to issue digital payment tokens.

FSB assesses risks of multi-function crypto-asset intermediaries: On Nov 28, the Financial Stability Board (FSB) published a report on the financial stability implications of multifunction crypto-asset intermediaries (MCIs). MCIs are individual firms, or groups of affiliated firms, that combine a broad range of crypto-asset services, products, and functions typically centered around the operation of a trading platform. Most of these activities have analogues in traditional finance but are often not provided by the same entity or are restricted or controlled to prevent conflicts of interest and promote market integrity, investor protection, and financial stability. The report warns that combining different activities within multifunction crypto-asset intermediaries (MCIs), could exacerbate MCI vulnerabilities; Financial stability implications from the failure of an MCI will depend on the effective implementation and enforcement of comprehensive and consistent regulations to crypto-asset markets globally and; Further work may be needed to enhance cross-border cooperation and information sharing and to address information gaps identified in the report.

U.S. Treasury asks for more power to combat illicit financial activity involving crypto: On Nov 29, Deputy Secretary of the Treasury Wally Adeyemo, asked Congress to significantly expand its surveillance and enforcement powers under the Bank Secrecy Act, speaking at the 2023 Blockchain Association’s Policy Summit, in Washington D.C. “ The Treasury provided Congress a set of common-sense recommendations to expand our authorities and broaden our tools and resources to go after illicit actors in the digital asset space ”, the U.S. deputy secretary of the Treasury said. He also highlighted that “ We need to update our illicit finance authorities to match the challenges we face today, including those presented by the evolving digital asset ecosystem” and that “ In addition to working with Congress, we are committed to working with the Financial Action Task Force (FATF) to make sure our allies and partners around the world join us in updating their regulatory approach. “

Brazil proposes legislation stipulating 15% tax on offshore crypto gains: On Nov 30, the Brazilian Senate reportedly passed legislation introducing an income tax of 15% on crypto gains from offshore exchanges exceeding $1,200. If signed by the country’s president, crypto gains exceeding this amount starting Jan 01, 2024, will be subject to this tax.

Crypto News:

A mining pool supported by Jack Dorsey launched: Ocean, a Bitcoin mining pool that secured $6.2 million in seed funding led by former Twitter CEO Jack Dorsey, has implemented a filtering mechanism for Ordinal inscriptions in transactions. The pool utilizes Knots, a Bitcoin node developed by Luke Dashjr, to exclude certain transactions. This was confirmed during the pool’s relaunch conference, sparking a debate within the cryptocurrency community over the classification of filtered data as spam or censorship. Bitcoin.com

Blockchain based video games wane in popularity: A recent study by CoinGecko reveals that over 75% of Web3 games launched in the past five years have failed, with only 690 out of 2,817 games maintaining an active player base. The average annual failure rate for Web3 games stands at around 80%, with 2022 witnessing the highest number of failed games, while 2023 shows a slowdown in the trend, suggesting a potential stabilization in the state of Web3 gaming. CoinGecko

Miami scammer sentenced to 64 months for defrauding $3.5M and a cryptocurrency exchange: Esteban Cabrera Da Corte has been sentenced to 63 months in prison for orchestrating a scheme to steal millions of dollars’ worth of cryptocurrency. The scheme involved deceiving U.S. banks and a cryptocurrency exchange by falsely claiming unauthorized transactions, resulting in over $4 million in fraudulent reversals by the banks and a cryptocurrency exchange loss of over $3.5 million. U.S. Attorney Damian Williams emphasized that the sentencing sends a clear message that cryptocurrency scammers and money launderers will be vigorously prosecuted. DOJ

Sinbad mixer sanctioned:The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned the cryptocurrency mixer Sinbad.io, alleging it was used by the North Korean hacking group Lazarus to launder hundreds of millions of dollars from high-profile hacks. U.S. citizens are now prohibited from using Sinbad, and any property associated with the mixer must be reported to OFAC, with potential sanctions for individuals still engaging in certain transactions with Sinbad, marking the latest move against mixing services following the sanctioning of Blender.io and Tornado Cash in the past 18 months. Reuters

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