South African crypto traders have reportedly started receiving notices from the South African Revenue Service (SARS) indicating that their tax affairs are under review. The revenue collector is gathering information from various crypto-asset exchanges to assess compliance. Traders who fail to provide requested information could face criminal charges under the Tax Administration Act. SARS may […]
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US Court Sentences Onecoin’s Head of Legal and Compliance to 4 Years in Prison
A U.S. court has sentenced Onecoin’s purported head of legal and compliance to four years in prison. She “facilitated and committed money laundering, aiding in the exploitation of millions of victims,” said U.S. Attorney Damian Williams. The Onecoin legal chief was also ordered to forfeit 1,440,000. Onecoin’s Irina Dilkinska Sentenced The U.S. Attorney’s Office for […]
Bitcoin News
B2Prime’s Q1 Fiscal 2024 Results Highlight Strong Growth and Regulatory Compliance
PRESS RELEASE. B2Prime, a renowned multi-asset Prime of Prime liquidity provider, disclosed financial results of its Parent Company B2B Prime Services EU for January and February 2024. The report aims to highlight the company’s dedication to transparency, regulatory compliance, and market leadership. Regulated by the Cyprus Securities and Exchange Commission (CySEC) and the Financial Services […]
Bitcoin News
Transak Achieves Industry-First SOC 2 Type 2 Compliance in Crypto Sector
In a landmark achievement for the cryptocurrency sector, Transak has become the first global on/off-ramp service to secure SOC 2 Type 2 compliance. The firm explained to Bitcoin.com News that the accomplishment underscores the company’s commitment to data security and customer trust, paving the way for broader Web3 industry collaborations with heavily-regulated companies worldwide. Transak […]
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Binance Welcomes Back Steve Christie as Deputy Chief Compliance Officer
Binance has welcomed back Steve Christie, its former Senior Vice President of Compliance, as Deputy Chief Compliance Officer.
Binance Bolsters Compliance Team, Welcoming Steve Christie Back to Leadership Role
Cryptocurrency exchange Binance has announced the return of Steve Christie, its former Senior Vice President of Compliance, to the fold. Christie is stepping into the role of Deputy Chief Compliance Officer (DCCO), filling the gap left by Kristen Hecht, Binance’s previous Deputy Chief Compliance and Global Money Laundering Reporting Officer.
“I am impressed by what Binance has accomplished on the compliance front since I stepped away momentarily,” Christie remarked. “I always believed that no other crypto exchange dedicates as much effort in compliance as Binance… The team is even stronger today, and I am supported by a robust team with quality talent.”
Under the leadership of Noah Perlman, Binance’s Chief Compliance Officer, Christie will work to enhance the exchange’s global compliance program further. This involves close collaboration with regulators, industry bodies, and Binance’s business leaders to advance the company’s efforts and commitment to best practices in regulatory compliance.
Perlman expressed his enthusiasm for Christie’s return, highlighting his deep compliance expertise and familiarity with Binance’s operations. “When Steve first joined Binance in 2022, the compliance team underwent fast growth and made tremendous efforts and investments to strengthen and mature its compliance culture and program, which Steve helped lead. Compliance is always evolving and maturing, and he has helped Binance meet new changes and challenges, making compliance a business enabler and driver of sustainable industry growth,” Perlman said.
Binance ended its announcement by reiterating a commitment to “achieving the highest standards of regulatory compliance.”
Do you think this will help Binance in the eyes of regulators? Share your thoughts and opinions about this subject in the comments section below.
JPMorgan Warns of Increased Risk for Crypto Market Due to Tether’s ‘Lack of Regulatory Compliance and Transparency’
JPMorgan has warned of increased risk for the crypto market resulting from Tether’s “lack of regulatory compliance and transparency.” The global investment bank’s analysts explained that other stablecoin issuers that have been more compliant with existing regulations are likely to benefit from the coming regulatory crackdown on stablecoins and gain market share.
JPMorgan Warns About Tether and Crypto Market Risks
Global investment bank JPMorgan released a report on Thursday cautioning that the rapid expansion of Tether’s USDT stablecoin is a risk for the crypto market overall. USDT is the world’s largest stablecoin, with a market capitalization exceeding billion at the time of writing.
JPMorgan’s analysts explained that Tether’s “lack of regulatory compliance and transparency” is an increasing risk for the overall crypto market. Noting that Tether falls short of competitor Circle, the issuer of USDC, when it comes to regulatory compliance for their stablecoins, the analysts wrote:
Stablecoins issuers that have been more aligned with existing regulations are likely to benefit from the coming regulatory crackdown on stablecoins and gain market share.
Responding to JPMorgan’s criticism of USDT and the risks to the crypto market, Tether CEO Paolo Ardoino stated:
Tether’s market domination may be a ‘negative’ for competitors including those in the banking industry wishing for similar success but it’s never been a negative for the markets that need us the most.
“We’ve always worked closely with global regulators to educate them on the technology and provide guidance on how they must think about it,” the executive added.
Tether faced a million fine from the U.S. Commodity Futures Trading Commission (CFTC) in 2021 for misrepresenting its reserves, specifically claiming that USDT was fully backed by U.S. dollars. Following the fine, the crypto firm has strived to improve transparency by issuing quarterly attestations of its operations and finances. Tether reported a profit of .2 billion for 2023.
What do you think about JPMorgan analysts’ warning regarding Tether, USDT, and the risks to the overall crypto market? Let us know in the comments section below.
Floki Responds to Hong Kong SFC’s Warning, Asserts Compliance and Clarifies Staking Program
Floki has formally responded to the Hong Kong SFC’s recent warning, reiterating their commitment to compliance across jurisdictions and explaining the rationale behind their staking program’s high returns.
Cryptocurrency Project Floki Counters Hong Kong SFC’s Warning
In a detailed blog post dated Jan. 29, Floki, the team behind the dog-themed memecoin, addressed the recent warning from the Hong Kong Securities and Futures Commission (SFC) regarding its staking programs. The SFC had earlier labeled Floki and Tokenfi Staking Programs as “suspicious investment products,” cautioning users against their high promised returns.
We just published a response to the Hong Kong SFC’s notice about the Floki and TokenFi staking programs.
Our response highlights our thoughts about their notice, why $FLOKI and $TOKEN can sustainably have an impressively high APY, and our plans going forward!… pic.twitter.com/YfpnnDMhfq
— FLOKI (@RealFlokiInu) January 29, 2024
Floki’s response was a blend of regret and clarification, emphasizing their commitment to legal compliance across jurisdictions. The team outlined the steps taken to align with regulatory expectations, particularly in Hong Kong. These measures included warning notices on their websites, barring Hong Kong users from the staking program. The team also noted that they had already halted their offline marketing campaign in the region planned for mid-December 2023.
The SFC’s main concern revolved around the annual percentage yield (APY) of the staking programs, which ranged from 30% to over 100%. Floki’s response pointed to the uniqueness of their staking program, where rewards are given in TOKEN, the utility token of their sister project Tokenfi. They attributed the high APY to their decision to eschew traditional fundraising methods, opting instead to allocate a significant portion of Tokenfi’s token supply directly to stakers.
Floki further explained that the volatility of rewards, denominated in TOKEN, is subject to market dynamics. The team also explained that the decentralized nature of their staking programs ensured operational continuity and user control regardless of the team’s presence.
On the regulatory front, Floki reiterated its respect for regulatory bodies, saying, “We have huge respect for any and all regulators and will continue to engage with them to address any regulatory concerns they may have.” The team, however, expressed disagreement if the sole basis for the SFC’s warning was the high APY, influenced by market forces.
If, as it appears, a decision to single out the staking programs was made solely because of the high APY of our staking programs stated in social media posts and as moved by market forces, as explained above, then we will have to respectfully disagree.
Do you think Floki’s response sufficiently addressed SFC’s concerns? Share your thoughts and opinions about this subject in the comments section below.
Crypto Exchange Bitget Reveals Mandatory KYC Policy With Incentives for Early Compliance
On Thursday, the crypto exchange Bitget, headquartered in Seychelles, announced its decision to implement comprehensive Know Your Customer (KYC) policies across its platform. These new KYC requirements are set to take effect on December 15, 2023.
Bitget Rolls Out Mandatory KYC Procedures
Bitget is updating its compliance with relevant financial regulations by introducing new KYC guidelines. The initial announcement of the KYC rollout occurred in August, outlining a multi-tiered system. The first level permits users to engage in Bitget’s derivatives and copy trading, as well as to withdraw up to million daily.
In addition to the KYC implementation, Bitget is incentivizing the first 5,000 users who meet the KYC criteria before Dec. 15. These early adopters will receive 100 tether (USDT). For VIP users of Bitget, rewards range from 200 to 500 USDT for adhering to the KYC deadline. Additionally, participants who complete a KYC questionnaire will be entered into a draw for an iPhone 15 Pro and 100 USDT.
“As a leading player in the cryptocurrency exchange landscape, Bitget is committed to not only offering state-of-the-art services but also ensuring a secure and compliant trading environment for our global community,” Jamie Elkaleh, the country manager of Bitget said in a statement sent to Bitcoin.com News. “The introduction of mandatory KYC requirements for all users is a decisive step towards enhancing user security and aligning with global financial regulations.”
This development coincides with a period of intensified global regulatory scrutiny. In 2023, several crypto firms have faced enforcement actions due to non-compliance with KYC guidelines. Starting December 15, 2023, Bitget will require all users to submit their KYC details to access the platform’s crypto trading services. As of December 14, data indicates that Bitget ranks as the fourth-largest centralized crypto derivatives platform in terms of open interest.
What do you think about Bitget rolling out a KYC program? Share your thoughts and opinions about this subject in the comments section below.
Crypto Firms’ Compliance With Regulation Should Not Be at the Expense of Innovation — Zak Taher
Zak Taher, the CEO of Multibank.io, said he believes the United Arab Emirates (UAE) is the most attractive investment destination for overseas digital asset companies due to its effective governance and the leadership of its individuals. The UAE’s status within the global financial landscape, combined with its geographical advantages and favorable time zone, further enhances its appeal as an investment destination, according to Taher.
Taher on UAE, Digital Asset Innovation, and Regulation
According to Taher, the proof that the UAE possesses such important attributes is seen in the country’s world-leading crypto regulatory frameworks. To the United States, which has adopted an aggressive approach, Taher said the country’s desire to see crypto firms complying with regulation should not be at the expense of innovation. The Multibank CEO argued that ensuring a “robust balance” between consumer protection and innovation is key to safeguarding consumers without stifling innovation.
Taher meanwhile attributed the reluctance of some prospective crypto users to trade to their lack of confidence in the trading platforms. To instill confidence in these platforms, Taher urged crypto exchange owners to consider embracing regulation. He also suggested that crypto exchanges should prioritize human interaction, customer success, and communication to become more user-friendly.
In his written answers sent to Bitcoin.com News via Telegram, Taher also offered his thoughts on crypto derivatives and touched on some of the common compliance risks associated with these assets. Below, are Taher’s answers to all questions sent.
Bitcoin.com News (BCN): Some U.S. regulatory bodies have taken seemingly aggressive regulatory actions towards crypto exchanges and platforms. What is your view on this, and what should be the right approach to regulating an industry as innovative as crypto?
Zak Taher (ZT): Unlike other crypto exchanges, our core business has been in the financial field since 2005, providing us with extensive experience in navigating authorities and regulatory bodies worldwide. Our go-to approach involves a dual-prong strategy.
Innovation vs. Compliance Balance — When it comes to innovation and compliance, we recognize the inherent risks that innovation introduces. The optimal approach is to strike a robust balance between the two. This doesn’t imply restricting innovation but rather project managing it effectively.
Allocation of Resources: Expanding on the first approach, resource allocation takes center stage. Often, executives concentrate their budget on marketing, hiring top talent from Fortune 500 companies, while overlooking the importance of compliance and legal expertise. Just as in a war, where a strong shield is crucial for protection, allocating resources to compliance is imperative to safeguard both the company and its stakeholders.
BCN: The UAE seems to be at the forefront of crypto regulatory innovation, with the Virtual Assets Regulatory Authority (VARA) providing investors, developers, and companies with clear rules. Besides regulatory clarity, what makes the UAE an attractive destination for talent and capital?
ZT: The attractiveness primarily stems from the country’s effective governance and the individuals leading it. Its position in the global financial landscape, coupled with geographical advantages and a favorable time zone, contributes significantly. The world-class infrastructure, government support, and tax-friendly environment enhance the overall appeal.
The UAE government is dedicated to blockchain, cultural diversity, and ensuring a superb quality of life for residents. Such belief is evident in the establishment of one of the best regulatory frameworks to safeguard users in crypto transactions, reflecting a visionary approach.
BCN: Your company, Multibank Group, claims to be one of the world’s most regulated financial institutions with a long history in regulated derivatives broking. What expertise do legacy platforms such as yours bring to crypto in terms of security, user experience, and regulation?
ZT: It’s funny, in our discussions with crypto-specific affiliates and networks, they express surprise at our unique approach in focusing on partnerships, a strategy less common in the crypto space but prevalent in the FX domain. In terms of user experience, crypto exchanges often boast more user-friendly interfaces and customer journeys compared to FX and derivatives trading platforms. Regarding regulations, the close collaboration between Multibank Group and regulators worldwide proves advantageous. The team’s expertise in obtaining licenses is evident, with the group currently holding 14 licenses and counting.
BCN: Many people often sign up for crypto exchanges but end up not making a single trade. What are some of the issues faced by crypto newbies that stop them from trading or owning digital assets, and how can these be solved?
ZT: The cornerstone is trust, and the remedy lies in regulation. It’s not surprising that people, especially newcomers, hesitate to invest. It’s reminiscent of the caution exercised with a bank. Times have swiftly changed since the last bull market, contributing to increased hesitancy. A significant means of instilling trust in individuals depositing their hard-earned money into the exchange is through regulation. This assurance stems from holding proper licenses and expertise in Tradfi. This approach effectively mitigates fear, encouraging individuals to feel confident about making deposits. Additionally, the organization’s emphasis on human interaction, customer success and communication, positions it as a people-first company, offering a more connected level of account management, especially for novices needing a helping hand.
BCN: Recently, your platform introduced a “Panic Sell” button on its crypto exchange. What is the reasoning behind the introduction of this button?
ZT: In a bear market, the cryptocurrency exchange scene can resemble a bit of a cycle, with users shifting from one platform to another, often involving seasoned cryptocurrency enthusiasts. While this dynamic has its merits, it’s crucial to emphasize outreach to newcomers, a goal we actively pursue in the FX and Tradfi space. Our panic sell feature adds a playful element, allowing users to swiftly liquidate their tokens in challenging situations, giving them that edge. Such features are not only enjoyable but also prove helpful for crypto novices, particularly those seeking efficiency in their initial experiences in the space.
BCN: Derivatives such as options and futures have dominated cryptocurrency trading since their debut around 2014. As you may be aware, these products are also heavily favored by institutional investors. What common compliance and regulatory risks do you see for crypto derivatives?
ZT: In the realm of crypto derivatives, compliance and regulatory risks demand a multifaceted approach. To address anti-money laundering and counter-terrorism financing concerns, one needs robust know your customer (KYC) and know your transaction (KYT).
From a regulatory standpoint, vigilance in market abuse surveillance is crucial, involving the implementation of systems to monitor market manipulation, employing data analytics, and establishing whistleblower programs.
Global expansion requires a nuanced approach due to jurisdictional variations. Recognizing diverse regulatory approaches in each country is essential, especially for futures or options trading. Establishing common rules that align with regulatory guidelines becomes imperative to navigate the complexities of global markets effectively. This comprehensive strategy ensures regulatory compliance while fostering a secure and protected environment for users engaging in crypto derivatives.
What are your thoughts on this story? Let us know what you think in the comments section below.
Binance Compliance Officer Under Scrutiny For FTX, Gemini, And Sex Trafficker Associations
In a recent investigative report by the media outlet Unlimited Hangout, serious allegations were made against Noah Perlman, the chief compliance officer of Binance.
The report highlights Perlman’s alleged ties to the collapse of FTX, the troubled Gemini exchange owned by the Winklevoss twins, and even convicted and deceased sex trafficker Jeffrey Epstein.
If the allegations made by the media outlet prove true, and Perlman is investigated by US authorities, Binance could find itself embroiled in another executive scandal following the departure of former CEO Changpeng Zhao (CZ).
Associations With Epstein And Alleged Fraud
Unlimited Hangout alleges that Perlman’s father, Itzhak Perlman, a renowned violinist, had flown on multiple occasions on a plane owned by Jeffrey Epstein. Itzhak Perlman also reportedly accompanied Epstein to Michigan’s Interlochen Center for the Arts, where Epstein later built a lodge for him, which was later described as a “lair to target girls.”
While Noah Perlman served as a federal prosecutor for the Department of Justice’s Special Coordinator for Crimes against Children, these family connections to Epstein raise questions about his associations.
After leaving the Department of Justice, Perlman joined Gemini, the cryptocurrency exchange owned by the Winklevoss Twins, as the chief compliance officer. Although Perlman had left Gemini months before the New York Attorney General filed a lawsuit against the exchange, he had been allegedly “heavily involved” in Gemini’s Earn program, which became the focus of the alleged .1 billion fraud.
As reported by NewsBTC, the lawsuit alleges that certain individuals knew that the program’s partner, Genesis, was financially unstable and withdrew their funds before its collapse.
Per the report, Perlman held the position of chief operating officer at the time, raising suspicions about his role in the alleged misconduct.
Troubled Bank’s Links To Binance Officer And FTX
Perlman’s involvement with Farmington State Bank, later renamed Moonstone, adds another layer of complexity to the alleged wrongdoing cited by Unlimited Hangout.
According to the report, in 2019, Perlman was listed as a director of FBH Corp., the entity that took over the rural bank. Moonstone Bank later garnered attention when Alameda Research, linked to FTX, acquired an .5 million stake.
Sam Bankman-Fried, the former chief of FTX, also reportedly invested million in the bank. However, Moonstone Bank faced regulatory challenges, with the Federal Reserve initiating an enforcement action against it shortly before the Bank of Eastern Oregon acquired its deposits and assets.
Overall, Perlman is at the center of serious allegations concerning his alleged connections with Jeffrey Epstein, the failed Earn program at Gemini, and Moonstone Bank.
However, it is important to note that these allegations have not been substantiated by any investigations or official connections made by US authorities or other global agencies.
The claims and allegations put forth by media news outlets require further response from Binance’s executives and investigation by relevant authorities.
There has been no official statement from Perlman regarding these allegations. It remains to be seen how the exchange and Perlman himself will address these claims and provide clarity on the matter.
Featured image from Shutterstock, chart from TradingView.com