The Enforcement Division within South Africa’s Financial Sector Conduct Authority (FSCA) has formed a team to investigate individuals or entities operating crypto financial services without proper licenses. Currently, 30 cases are under scrutiny. The FSCA aims to protect the public and maintain industry fairness by taking decisive action against unlawful crypto businesses. The regulator will […]
Bitcoin News
Tencent Tests Use Cases for Trading Settlements Using Digital Yuan and Mbridge
Tencent, the Chinese tech giant, was revealed to be participating in the tests that the Chinese institutions have completed using Mbridge, a CBDC-enabled cross-borders settlement platform. Tencent participated through its international settlements arm Tenpay, which piloted the use case of the Chinese CBDC, the digital yuan, to settle e-commerce exports using Mbridge’s rails. Tencent Participated […]
Bitcoin News
Coin Center Warns of DOJ Overreach in Tornado Cash, Samourai Wallet Cases
The recent actions by the Department of Justice (DOJ) against non-custodial crypto wallet developers have sparked controversy and concern within the cryptocurrency community. According to Coin Center, these charges mark a significant shift from previous U.S. policies regarding money transmission, potentially impacting the liberty and privacy rights of developers and users alike. Coin Center: DOJ […]
Bitcoin News
Ethereum Rollups Start Reaping Dencun Benefits: 99% Fee Drops Reported in Some Cases
Ethereum rollups, the layer 2 scaling structures, have started reaping the benefits of the recently applied Dencun upgrade. The update, which included EIP-4844, also known as Proto-Danksharding, has allowed transaction fees to decrease by 99% in some cases, with Arbitrum, Base, Optimism, and Starknet becoming cheaper across the board. Ethereum Dencun Upgrade Reduced Rollup Fees […]
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Crypto Crimes Highlighted in IRS Criminal Investigation’s 2023 Top 10 Criminal Cases
In the IRS’s list of top 10 criminal cases for 2023, cryptocurrency frauds are featured, ranging from multi-million dollar tax evasions to elaborate money laundering schemes.
Crypto Scams Among Most Significant Financial Crimes in IRS Criminal Investigation’s 2023 Report
The IRS Criminal Investigation (CI) division has released its annual list of the top 10 criminal cases for the year 2023, highlighting a significant focus on cryptocurrency-related crimes. The list, which was announced on the IRS website and IRS CI’s social media platforms, includes a variety of financial crimes ranging from international tax fraud to massive Covid-19 relief scams.
CI Chief Jim Lee underscored the range and complexity of this year’s cases, emphasizing the billions of dollars involved and the global impact of these crimes. “From international tax schemes to multi-level marketing involving cryptocurrency, our investigators have skillfully unraveled some of the most intricate financial frauds,” said Lee.
Among the top 10 cases, four are notably centered on cryptocurrency:
Amir Bruno Elmaani Sentenced in Crypto Tax Evasion: Coming in at number 8 on the IRS CI list is a man known as ‘Bruno Block,’ the founder of the cryptocurrency Oyster Pearl. Elmaani was sentenced to 48 months in federal prison. He was found guilty of evading taxes on profits from his Pearl tokens, leading to a tax loss of approximately .5 million. Elmaani’s lavish spending, including the purchase of yachts and homes, contrasted sharply with his reported income to the IRS.
Silk Road Bitcoin Seizure Leads to Conviction: Number 7 on the IRS CI list is James Zhong, who received a sentence of one year and one day for wire fraud related to the illicit acquisition of approximately 50,000 bitcoins from the infamous Silk Road dark web marketplace. The forfeiture of these bitcoins, valued at around .4 billion, marks one of the largest in history. Zhong’s elaborate scheme to conceal the stolen bitcoins spanned over a decade.
Bitcoin ‘Money Laundering’ Scheme Uncovered in New Hampshire: At Number 4 in the overall list is Ian Freeman. Freeman was sentenced to 96 months in prison for allegedly laundering over million through bitcoin transactions. Freeman’s operation was accused of catering to fraudsters, bypassing anti-money laundering laws and misrepresenting transactions as church donations.
Onecoin Co-Founder Sentenced in Multibillion-Dollar Scheme: Finally, at number 3 is Karl Sebastian Greenwood, co-founder of Onecoin, who was sentenced to 20 years in prison for his role in the Onecoin fraud scheme. The scheme, which started in 2014, defrauded millions of investors worldwide, with losses exceeding billion.
These high-profile cryptocurrency cases reflect the increasing scrutiny by law enforcement agencies on the use of digital currencies in criminal activities. The IRS CI’s focus on these cases demonstrates the agency’s growing proficiency and interest in investigating complex financial crimes that are natively digital.
The other cases on the list include international tax fraud, Covid-19 relief scams, and a billion-dollar biofuel tax fraud scheme, showcasing the variety of financial crimes tackled by the IRS CI in 2023.
As cryptocurrency becomes more prominent in society, it stands to reason there will be a commiserate uptick in crypto-related crimes. The IRS CI cases serve as a stark reminder of the potential for misuse and the importance of vigilance amongst crypto holders. These cases also serve as fodder for people and institutions demanding stronger regulations and oversight over all things crypto.
What do you think is the significance, if any, of the number of crypto-related cases in IRS CI’s top 10 list? Let us know in the comments section below.
FCA Has Dealt With 1,400 Cases Related to Unregulated Crypto Activity, UK Regulator Reveals
The U.K. Financial Conduct Authority (FCA) has revealed that it has dealt with over 1,400 crypto cases between January 2020 and June 2023. The regulator noted that “a shortage of crypto skills meant the FCA took longer than planned to register crypto-asset firms under money laundering regulations.”
1,400 Cases Related to Unregulated Crypto-Asset Activity
The U.K. National Audit Office (NAO) issued a report on Friday titled “Financial services regulation: Adapting to change.” The NAO, which examines public spending for Parliament, operates independently of the government and the civil service.
“The financial services sector is also undergoing significant changes: whole new sets of products, such as crypto-assets, and rapid advances in technology, such as AI, provide opportunities for innovation but also risks to businesses and consumers which the FCA [Financial Conduct Authority] must plan for,” the report details, adding that there were:
1,400 cases related to unregulated crypto-asset activity that the FCA has dealt with between January 2020 and June 2023.
The FCA began supervising crypto firms in January 2020 through money laundering regulations. Any firm wishing to exchange currency for crypto, vice versa, or safeguard crypto assets in the U.K. must register and be supervised by the FCA. Existing firms had to register by January 2021, while new firms must do so before operation.
“The FCA assessed 158 applications between 2020 and 2021. Only 29 firms were registered, and the others were withdrawn, refused or rejected. The FCA created a temporary registration regime for firms to continue to operate after the deadline while it completed their assessments, and all cases were resolved by March 2022,” the NAO report states. “While the FCA has required crypto-asset firms to comply with anti-money laundering regulations since January 2020, and began supervision work including engaging with unregistered firms, it did not begin taking enforcement action against illegal operators of crypto ATMs until February 2023.”
The report further explains, “There can be a significant delay between the FCA identifying an issue to tackle, and it taking regulatory action,” elaborating:
The FCA is aware it needs to maintain specialist skills to avoid causing delays in its work — for example, a shortage of crypto skills meant the FCA took longer than planned to register crypto-asset firms under money laundering regulations.
The FCA also monitors firms for violations of the financial promotions regulations. The report notes that the FCA has “a dedicated team to tackle high risk and illegal financial promotions,” adding that more than 3,150 crypto-asset scams were reported in 2020, rising to more than 6,300 in 2021 and more than 3,900 in the first half of 2022. “The FCA published a public list of unauthorised firms and since this list has been published more than 300 firms have been flagged by the FCA,” the report notes.
What do you think about the U.K. regulatory environment for crypto? Let us know in the comments section below.
Blockchain Experts Meet With Colombian President to Discuss Technology’s Use Cases
Samson Mow, CEO of JAN3, and other blockchain experts, met with Colombian President Gustavo Petro to discuss the possible uses blockchain and bitcoin tech could have to help modernize the management of certain institutions of the Colombian state.
Colombian President Gustavo Petro Discusses Blockchain and Bitcoin Implementation
Gustavo Petro, president of Colombia, announced on November 29 that he had met with several blockchain and bitcoin experts to discuss applying this tech to improve the management of several institutions and projects in the country.
The meeting, which saw the presence of JAN3 CEO Samson Mow, JAN3 Marketing Director Raul Velasquez, JAN3 CMO Edwin Rivas, RSK Labs co-founder Diego Gutierrez, Bingx International Operations Consultant Cristian Quintero, and Tropykus co-founder Mauricio Tovar, included the discussion of three main topics.
The first one had to do with modernizing the billing processes of the health system in Colombia, which he suggested could be monitored in real-time using blockchain tech instead of relying on manual procedures that still use ink and paper records.
Also, Petro hinted at utilizing blockchain tech to manage land registries and issue land ownership titles. Gabriel Angulo, IT VP of the National Agrarian Bank, was also present to review these discussions to articulate these efforts. In July 2022, Colombia announced the launch of the first National Land Registry built on top of the Ripple ledger in partnership with Peersyst Technology.
The last topic discussed included using Bitcoin in free work cooperatives in the Colombian popular economy, although no more details were shared on this subject. Petro also stressed that these technologies “can be promising for the prosperity of the people.”
The Ministry of Information Technologies and Communications of Colombia has already issued a reference frame for implementing blockchain tech in state projects that explicitly states these efforts must comply with the Colombian legal framework.
What do you think about the intentions of Colombian President Gustavo Petro in implementing blockchain tech to modernize state processes? Tell us in the comments section below.
Latam Insights: Venezuela and Argentina Leverage ‘Unique’ Crypto Use Cases, Brazilian Congress Advises Indicting CZ
Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news during the last week. In this issue: Venezuela and Argentina use crypto uniquely, according to Chainalysis; the Brazilian Congress recommends indicting Binance CEO Changpeng Zhao, and the Argentine peso keeps falling to record lows.
Chainalysis: Argentina and Venezuela Present Unique Crypto Use Cases
According to a recent article referencing Chainalysis 2023 Geography of Cryptocurrency Report, Venezuela and Argentina use crypto uniquely to tackle their particular issues. Argentina is leveraging crypto to fight the breakdown of its currency, which has reached record lows recently. For Argentines, cryptocurrency (especially stablecoins) presents an opportunity to save in dollars, preserving their purchasing power.
Alfonso Martel Seward, Head of Compliance & AML at Lemon Cash, stated:
We have really high inflation, and there are lots of restrictions against buying foreign currencies. That makes crypto a valuable option for saving. As crypto adoption has grown, lots of people here will now get their paycheck and immediately put it into USDT or USDC.
Also, in the Venezuelan case, Chainalysis explained that crypto is used to fight authoritarianism, enabling remittances to reach Venezuelans and providing refuge against hyperinflation. Leopoldo Lopez, a former Venezuelan opposition leader now in exile, detailed:
Venezuela has had one of the worst-ever hyperinflation rates at over 1 million percent. Cryptocurrency, particularly stablecoins, has helped many Venezuelans overcome this.
Furthermore, he remembered when a crypto-enabled system allowed more than 65,000 doctors and nurses to receive direct aid in 2020 amid the COVID crisis.
Brazilian Congress Advises Indicting Changpeng Zhao
Binance might be heading to another legal battle, as a committee of the Brazilian Congress has recommended the indictment of four Binance officials, including Binance CEO Chagpeng “CZ” Zhao. The committee, comprised of 28 members of the lower chamber of Congress, also called the country’s securities and exchange regulator (CVM) to investigate the exchange for its alleged “repeated violation of the securities market rules.”
Binance stated that it will go to “great lengths” to collaborate with the committee responsible for the investigation, stressing that it “strongly rejects any attempts to make Binance a target or even expose its users and employees with allegations of bad practices without any proof, amid competitive disputes given the company’s leadership position in Brazil and in the world.”
Argentine Peso Likened to Excrement Before Hitting Record Lows
The Argentine peso kept losing value this week, hitting record lows after presidential candidate Javier Milei compared it to excrement. In a radio interview, Milei invited people to save in foreign currency, stating:
The peso is the currency issued by the Argentine politician and therefore cannot even be worth excrement, because that garbage is not even useful for fertilizer.
These statements prompted the filing of two legal complaints against Milei, who was accused of causing the fall of the national currency to 1050 pesos per dollar in its “blue” informal exchange rate.
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Bank of Ghana Launches Hackathon to Explore Various Use Cases of CBDC
The Ghanaian central bank said it will be hosting a 12-week hackathon where participants are expected to explore the e-cedi’s nine different use cases. At the end of the hackathon, the central bank will hold a conference where individuals with outstanding solutions are recognized.
Addressing Ghana’s Financial Inclusion Challenges
The Ghanaian central bank, also known as Bank of Ghana (BOG), recently announced the launch of a central bank digital currency (CBDC) hackathon. According to the bank, this event seeks to avail opportunities to fintech startups, developers and innovators to develop innovative solutions that explore various use cases of CBDC.
https://t.co/bvOB6EsBoW#eCedi #hackathon #bankofghana pic.twitter.com/KOGqPwBrGT
— Bank of Ghana (@thebankofghana) October 6, 2023
In a press release jointly issued with technology partner Emtech, the Ghanaian central bank said the hackathon will run for a period of 12 weeks. During this time, innovators are expected to come up with solutions that address financial inclusion challenges. At the end of the hackathon, a conference where outstanding solutions are recognized will be held.
Real Life Use Cases
Explaining why this method of discovering the best solutions was chosen, the BOG said:
“The project is a part of the e-cedi research project and presents an opportunity for the Bank to explore emerging technologies, foster creativity and contribute to the advancement of the e-cedi development.”
Meanwhile, the Ghanaian central bank stated that individuals and teams with a passion for the technology are eligible to join the hackathon. Among the nine use cases that the BOG wants developers and innovators to focus on is the use of the e-cedi in merchant transactions. Other use cases include using the e-cedi for government payments and inbound remittances.
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Reserve Bank of Australia Unveils Proposed CBDC Use Cases
The Reserve Bank of Australia said on March 3 that it has selected 14 digital currency proposed use cases from a large number of submissions obtained from industry participants. An assistant governor at the RBA, Brad Jones, said the Aussie central bank is encouraged by the composition of providers that have been “invited to participate in the live pilot.”
Collaboration Between Industry Participants and the Central Bank
The Australia central bank, which has been exploring the benefits of central bank digital currency (CBDC), recently announced the digital currency’s proposed use cases as well as the names of providers “invited to participate in the live pilot.” In a press statement, the bank, which is known as the Reserve Bank of Australia (RBA), said the chosen use cases were selected from a large number of submissions from industry participants.
Brad Jones, an assistant governor at the RBA, is quoted in the statement lauding the industry participants’ willingness to engage regulators. Jones said:
We are delighted with the enthusiastic engagement by industry in this important research project. It has also been encouraging that the use case providers that have been invited to participate in the pilot span a wide range of entities in the Australian financial system, from smaller fintechs to large financial institutions.
According to Jones, the pilot as well as the more comprehensive study will be conducted in parallel to “serve two ends.” The first of these ends is helping the industry gain some “hands-on learning” experience. Bolstering policymakers’ understanding of “how a CBDC could potentially benefit the Australian financial system and economy.”
CBDC Design Considerations
For his part, Dilip Rao, a CBDC program director with the Digital Finance Cooperative Research Centre (DFCRC), said the process of “validating use cases” with industry participants and regulators is important because it will likely “inform further research into design considerations for a CBDC that could potentially play a role in a tokenised economy.”
Meanwhile, some of the use cases chosen by the RBA include offline payments, corporate bond payments, and funds custody. As shown by the statement, the RBA has chosen around 14 use cases and more than eight chosen providers.
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