The U.S. cryptocurrency enforcement tsar has said that the country was stepping up scrutiny of crypto exchanges to target illicit behavior on the platforms, the Financial Times reported on Monday.
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.
European Union states on Tuesday gave the final nod to the world's first comprehensive set of rules to regulate cryptoassets on Tuesday, piling pressure on countries such as Britain and the United States to play catch up.
An EU finance minister meeting in Brussels approved rules that were thrashed out with the European Parliament, which gave its approval in April.
The rules are expected to be rolled out from 2024.
Regulating crypto has become more urgent for regulators after the collapse of crypto exchange FTX.
"Recent events have confirmed the urgent need for imposing rules which will better protect Europeans who have invested in these assets, and prevent the misuse of crypto industry for the purposes of money laundering and financing of terrorism," said Elisabeth Svantesson, finance minister for Sweden, which holds the EU presidency.
“Given retail trading in unbacked crypto more closely resembles gambling than a financial service, the MPs call on the Government to regulate it as such,” the lawmakers said.
“The events of 2022 have highlighted the risks posed to consumers by the cryptoasset industry, large parts of which remain a wild west,” Harriett Baldwin, chair of the Treasury Select Committee, said Tuesday. “Effective regulation is clearly needed to protect consumers from harm, as well as to support productive innovation in the UK’s financial services industry,′ she added.
“However, with no intrinsic value, huge price volatility and no discernible social good, consumer trading of cryptocurrencies like Bitcoin more closely resembles gambling than a financial service, and should be regulated as such. By betting on these unbacked ‘tokens’, consumers should be aware that all their money could be lost.”
Although Westpac did not explicitly mention Binance, it is believed that the ban will affect the exchange. Westpac’s general manager of risk and fraud operations Chris Whittingham, stated that scam proceeds are frequently sent to “high-risk” overseas exchanges.
This announcement comes in the wake of Binance Australia revoking its derivatives trading license and facing an investigation by the Australian Securities and Investments Commission (ASIC) for potentially violating its license by offering derivatives trading to retail Australian traders. Binance Australia recently announced that it could no longer process PayID Australian Dollar deposits due to restricted access imposed by third-party service provider Cuscal.
Furthermore, Binance and its CEO, Changpeng Zhao, are embroiled in a lawsuit filed by the U.S. Commodity Futures Trading Commission (CFTC), alleging that the exchange operates illegally and violates market laws.
Federal prosecutors unsealed charges against Bryan Lee on Friday, part of an ongoing prosecution in an alleged $45 million crypto and metaverse scam.
Lee allegedly helped scam more than 10,000 investors through the CoinDeal scam, which promised trillions of dollars in total returns, prosecutors said.
The alleged fraudsters purportedly used the names of two prominent billionaires as part of the scheme.
The US state of Texas is taking a significant step towards increased transparency and consumer protection in the cryptocurrency industry, as legislation requiring crypto exchanges to maintain reserves moves closer to becoming law. On May 15, the proof-of-reserves bill successfully passed a vote in the state Senate and now awaits only the signature of the governor.
The bill, known as Texas House Bill 1666, seeks to amend the Texan finance code and has previously passed through the state’s House of Representatives. Throughout the Senate readings, the bill has remained largely unchanged from its initial draft.
Under the proposed amendments, digital asset providers serving more than 500 customers in the state, with a minimum of $10 million in customer funds, will be required to keep customer funds separate from operational capital. Furthermore, these funds must not be used for any purpose other than fulfilling the original transaction requested by the customer.
The Securities Commission Malaysia (SC) has taken action against Huobi Global Limited, and its Chief Executive Officer Leon Li for operating a digital asset exchange (DAX) in Malaysia without registration.
Accordingly, the SC has issued a public reprimand against Huobi Global Limited, and Leon Li for operating illegally in Malaysia.
In addition, the SC has ordered Huobi Global Limited to stop its operations in the country, including to disable its website and mobile application on several platforms such as Apple Store, Google Play and any other digital application platform.
Investors should exercise caution when choosing investment platforms and to always do their due diligence before making any investment decisions. Additionally, investors should be wary of investment schemes that promise high returns with little risk, as they may be too good to be true. By taking these precautions, investors can safeguard their investments and avoid falling victim to fraudulent schemes.
A derivatives exchange launched by crypto trading platform Gemini Trust Co. last month has allegedly been operating without authorization in one of its jurisdictions, the Philippines’ Securities and Exchange Commission said in a warning to investors.
Gemini launched the exchange and has been offering and marketing derivatives products, which are considered to be securities under local law, in the country without having first registered with the regulator, according to a notice published on the SEC’s website on May 18.
New York-based Gemini does not have “the necessary license and/or authority to solicit, accept or take investments/placements from the public nor to issue securities,” the agency said, advising the public to both not invest and halt all current investments with the platform.
The world’s largest cryptocurrency exchange, Binance, commingled customer funds with company revenue in 2020 and 2021, in breach of U.S. financial rules that require customer money to be kept separate, three sources familiar with the matter told Reuters.
One of the sources, a person with direct knowledge of Binance’s group finances, said the sums ran into billions of dollars and commingling happened almost daily in accounts the exchange held at U.S. lender Silvergate Bank.
The Binance-hosted wallets received more than $2 million worth of various cryptocurrencies that were then sent on to North Korean entities, OFAC alleged
Pakistan's minister of finance declared last week that cryptocurrency would never be legal in Pakistan and actions are in motion that would ban the digi-cash. Forever.…
"Cryptocurrency will never be legalized in Pakistan," declared Aisha Ghaus Pasha at a session of the Senate Standing Committee on Finance and Revenue last week. According to multiple local reports, the State Bank of Pakistan (SBP) and the Information Technology Ministry were ordered to begin working on the ban.
It turns out Pakistan has a pretty good reason for eschewing digital bucks. The Financial Action Task Force (FATF) – an intergovernmental body founded by the G7 – put it as a condition in order to keep the country off the "gray list" of countries flagged as of concern due to less than perfect records on Anti-Money Laundering and Counter-Terrorist Financing.
Japan is adopting enhanced measures to combat money laundering, notably, the "travel rule" advocated by the Financial Action Task Force (FATF).
The regulation mandates Virtual Asset Service Providers, or VASPs, to share identifying details about the sender and recipient for all crypto transactions over the value of $1,000.
FATF, a watchdog for financial crimes, made the recommendation to bolster the fight against illicit financial activities, particularly those utilizing cryptocurrency.
Back in 2019, FATF suggested the implementation of the travel rule as a crucial tool in the battle against money laundering and terrorist financing via crypto transactions.
Bitcoin of America, a prominent cryptocurrency ATM provider, has faced regulatory action in Connecticut, leading to the suspension of its operations within the state. The Connecticut Department of Banking emphasized that Bitcoin of America failed to acquire the necessary license to operate Bitcoin ATM kiosks, which ultimately led to the consent order. The order was enforced following reports of four Connecticut consumers falling victim to a scam involving the mentioned kiosks, resulting in significant financial losses amounting to tens of thousands of dollars.
Bitcoin of America, known for facilitating fund transfers to third parties, is required to obtain a license as a money transmitter. Recognizing the need for more comprehensive regulations and consumer safeguards, legislation is currently being pursued in the state legislature to regulate digital currency kiosks as money transmitters in Connecticut. The objective is to enhance oversight and prevent fraudulent activities associated with unlicensed crypto ATMs.
Losses from crypto fraud increased 41% year on year to £306 million in the 12 months to March 2023 compared with £216.5 million in the previous year, said law firm RPC, which collected the data from Action Fraud.
“These numbers show both the impact of crypto fraud on UK investors and more specifically the colossal impact that the collapse of FTX had on UK retail investors,” said Dan Wyatt, partner at RPC.
A former executive of the prominent South Korean cryptocurrency exchange Coinone, known publicly as Mr. Jeon, has conceded to charges of accepting bribes amounting to nearly 2 billion won ($1.51 million) for the exclusive listing of certain cryptocurrencies on the platform.
This troubling revelation, first reported by local news agency Yonhap, has shaken the cryptocurrency sphere, casting doubt over the integrity of other native cryptocurrency exchanges and triggering a nationwide investigation by Korean regulators.
The complaint alleges from approximately August 2018 through December 2019, to get actual and prospective customers to give them money, the defendants and other Icomtech agents falsely represented they would use the money to trade Bitcoin and other digital asset commodities for the customers; that Icomtech would provide “daily returns” of between 0.9% to 2.8% on the customers’ money from trading; and Icomtech would double the customers’ money in approximately four to eight months from trading. As alleged in the complaint, in actuality, the defendants did not trade Bitcoin or other digital asset commodities for the customers as they said, and did not earn daily returns nor double the customers’ investments based on trading. Instead, the defendants misappropriated the customer funds, and some customers lost all of their money.
The Securities and Exchange Commission today announced that former Coinbase product manager Ishan Wahi and his brother, Nikhil Wahi, agreed to settle charges that they engaged in insider trading through a scheme to trade ahead of multiple announcements regarding at least nine crypto asset securities that would be made available for trading on the Coinbase platform.
“While the technologies at issue in this case may be new, the conduct is not. We allege that Ishan and Nikhil Wahi, respectively, tipped and traded securities based on material nonpublic information, and that’s insider trading, pure and simple,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “The federal securities laws do not exempt crypto asset securities from the prohibition against insider trading, nor does the SEC. I am grateful to the SEC staff for successfully working to resolve this matter.”
Crypto exchange Binance Holdings Ltd. said it has received an order from one of Canada’s securities regulators to investigate whether the platform attempted to find a way around local regulations and compliance controls while seeking approvals in the country.
The Ontario Securities Commission served the world’s largest digital asset exchange with an investigation order on May 10, the platform said in a filing this month with the Capital Markets Tribunal. Two days later, Binance announced it would be withdrawing from the market, citing new regulatory guidance related to stablecoins and investor limits.
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