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
Unlicensed Crypto Business Leads to Indictments in Utah
Two Utah residents have been indicted for operating an unlicensed money-transmitting business, converting over .5 million into cryptocurrency, according to the U.S. Department of Justice (DOJ). The two were arrested over the weekend in Washington County. Utah Men Arrested for Illegal Cryptocurrency Transactions The U.S. Department of Justice and the U.S. Attorney’s Office for the […]
Bitcoin News
Australian Court Rules Against BPS Financial for Unlicensed Crypto Operations
The Federal Court of Australia has ruled against BPS Financial for operating “Qoin Wallet” without proper licenses. The Australian Securities and Investments Commission (ASIC) underscores the importance of regulatory compliance to protect consumers in the volatile crypto market. ‘First Court Outcome’ Against Crypto Payment Facility The Federal Court of Australia has found that BPS Financial […]
Bitcoin News
Hong Kong Securities Regulator Issues Warning Against ‘Unlicensed’ Crypto Platform Bybit
The Hong Kong securities regulator has labelled the crypto platform Bybit an unlicensed virtual asset trading platform (VATP). The regulator has also added Bybit’s products to its alert list of suspicious investment products. The Hong Kong regulator also advised the public to stop patronizing unlicensed entities. Regulator Threatens Enforcement Action The Hong Kong Securities and […]
Bitcoin News
Hong Kong Reiterates Unlicensed Cryptocurrency Platforms Will Be Expelled by June
Unlicensed cryptocurrency platforms will not be allowed to operate in Hong Kong starting next June, according to the Securities and Futures Commission (SFC). The commission closed the period for these institutions to introduce their applications to obtain a license on February 29 and will progressively expel the noncompliant exchanges from the Hong Kong market. Hong […]
Bitcoin News
Hong Kong Securities Regulator Issues Warning to Unlicensed Virtual Asset Trading Platforms
The region’s securities regulator has said that Hong Kong crypto investors must only use or trade on approved virtual asset trading platforms. The regulator urged crypto investors using platforms not featured on its two lists to close accounts or transfer funds to licensed entities.
Verifying a Virtual Asset Trading Platform’s Regulatory Status
The Hong Kong Securities and Futures Commission (SFC) has reminded crypto investors in the region to only use or trade on approved virtual asset trading platforms (VATP). In a statement released on Feb. 5, 2024, the SFC emphasized the importance of verifying a VATP’s regulatory status before engaging in any transactions.
The Hong Kong regulator’s latest warning came a few months after it asked users to refrain from using unlicensed operators. The SFC suggested at the time that many such entities had no realistic prospect of getting the license.
Meanwhile, in its latest warning, the SFC also urged investors to pay particular attention to the list on which the VATPs are featured. According to the regulator, there are two lists, one for licensed entities and another for those that applied for a license.
“VATPs on the ‘List of licensed virtual asset trading platforms’ are formally licensed by the SFC. VATPs on the ‘List of virtual asset trading platform applicants’ include VATPs operating in Hong Kong which have submitted licence applications to the SFC on or before 29 February 2024,” the SFC clarified.
The regulator also disclosed that Virtual Asset Service Providers (VATPs) failing to submit their license applications by Feb. 29 will be obliged to cease operations by May 31. On the other hand, the SFC urged crypto users using VATPs which are not featured on either list to close accounts or consider transferring their funds to licenced VATPs.
Concerning the license submissions by entities on the virtual asset trading platform applicants list, the SFC said such VATPs’ respective applications are still being processed hence “trading on these platforms [still] carries a risk.” The regulator concluded its statement by urging users to avoid trading on unapproved VATPs because they offer zero protection.
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DOJ Charges Belarusian National With Money Laundering Conspiracy and Operating Unlicensed Crypto Exchange
The United States Department of Justice (DOJ) has charged the Belarus national Aliaksandr Klimenka with money laundering conspiracy and the operation of an unlicensed money services business. Most of these criminal activities were perpetrated via BTC-e’s servers in the U.S. which were “leased to and maintained by Klimenka and Soft-FX.” According to the DOJ, Klimenka faces a maximum jail sentence of 25 years.
Anonymized Trade of Bitcoin
On Feb. 1, the DOJ announced that it had brought charges against Belarus national Aliaksandr Klimenka. The charges include money laundering conspiracy and the operation of an unlicensed money services business. Klimenka’s unlicensed crypto platform, BTC-e, allegedly facilitated a highly anonymized trade of bitcoin, according to an indictment unsealed on Jan. 30.
The DOJ further alleges that BTC-e helped facilitate transactions for criminals and received criminal proceeds. These illicit activities included computer intrusions, hacking incidents, ransomware scams, and identity theft schemes.
Most of these criminal activities were perpetrated via BTC-e’s servers in the U.S., which were “leased to and maintained by Klimenka and Soft-FX.” In the indictment, the DOJ contends that BTC-e had neither the required money services business registration nor an anti-money laundering program.
“Despite doing substantial business in the United States, BTC-e allegedly was not registered as a money services business with the U.S. Department of Treasury, had no anti-money laundering process, no system for appropriate ‘know your customer’ or ‘KYC’ verification, and no anti-money laundering program as required by federal law,” the DOJ said in a statement.
According to an indictment, Aliaksandr Klimenka, a Belarusian national, was arrested in Latvia on Dec. 21, 2023. Subsequently, he was extradited to the United States and made his initial court appearance on Jan. 31. As per the indictment, Klimenka faces a maximum jail sentence of 25 years if convicted.
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Latam Insights: Unlicensed Crypto Exchanges Still Allowed to Operate in Brazil, Lightning Strikes Salvadoran Bitcoin ATMs
Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news during the last week. In this issue: The Central Bank of Brazil confirms that unlicensed exchanges can still operate in the country; El Salvador will integrate Lightning Network transactions in its Chivo ATM network; and Trubit raises .25 million to expand crypto adoption in Latam.
Central Bank of Brazil Clarifies Exchanges Still Don’t Need Licenses to Operate
The Central Bank of Brazil issued a statement clarifying the state of the cryptocurrency regulation in the country regarding the operation of unlicensed exchanges. In its 40,874 communication, the bank revealed that the conditions and deadlines for virtual assets services providers (VASPs) to adapt to Brazil’s cryptocurrency law would be established in a normative act later.
Furthermore, João André Calvino Marques Pereira, head of the financial system regulation department of the bank, revealed that crypto platforms can still operate without a license during this period.
In the bank’s document, Calvino Marques stated:
Until the normative act on the matter comes into force, virtual asset service providers will be able to operate independently of prior authorization from the Central Bank of Brazil.
Salvadoran Bitcoin ATMs to Support Lightning Network
The ATMs of the Salvadoran Chivo network will integrate Lightning Network (LN) support. Matias Goldenhorn, CEO of Athena Bitcoin, the company that provides these ATMs to El Salvador, declared that they plan to have 100 Bitcoin ATMs supporting LN transactions by year’s end.
Nonetheless, Goldenhorn recognized that including LN support for all Bitcoin ATMs in El Salvador would take Athena at least two or three months more. Athena’s Bitcoin ATMs in other countries will be updated in 2024.
Only a small number of all the Bitcoin ATMs in the world have integrated LN transactions, so for Greenhorn, Athena’s move is a “revolution,” given that now Salvadoran users will be able to benefit from the low fees of the platform and the added privacy of not having their transactions registered on the Bitcoin blockchain.
Trubit Raises .25 Million to Expand Crypto Adoption in Latam
Galactic Holdings, the parent company of Trubit, a cryptocurrency exchange platform, raised .25 million in Series A funding round. Led by Galaxy Interactive and Dragonfly, the round will allow the company to expand its operation in Latam, focusing especially on payment services for retail and institutional customers.
Maggie Wu, cofounder and CEO of Trubit, thanked investors for their support, stating that the company was committed to “further expanding our presence in more Latin American countries to make cryptocurrency services accessible to everyone in their daily necessities, more simply and conveniently.”
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Spanish Securities Regulator Hints at Probing X for Hosting Crypto Ads For Unlicensed Organizations
The Spanish securities regulator has recently hinted at investigating and sanctioning X (formerly known as Twitter) for allowing unlicensed providers to post crypto ads. According to Spanish law, social networks and other service providers must verify that ad campaigns come from authorized financial service providers.
Spanish Securities Regulator Hints at Taking Actions Against X
The Spanish securities regulator, the National Stock Market Commission (CNMV), hinted at taking action against X, formerly known as Twitter, for allowing unauthorized financial services providers to run crypto ads on its platform. Rodrigo Valbuena, president of the CNMV, stated that the institution had recently detected several ads on X’s platform that did not comply with the current crypto advertisement regulation.
At the Deloitte-ABC financial meeting, Valbuena described these ads, explaining that:
The advertising pieces illicitly use the image of some Spanish actors and impersonate the design and identity of a national media outlet to try to obtain data and money from investors.
Furthermore, Valbuena stressed that it was one of the clearest fraud attempts out there, saying that it was “difficult” to admit these ads could be spread as “regular, moral or legal” by any channel.
Spain’s Crypto Regulation and Social Networks
The Spanish regulation for stock markets includes an article that forces communications service providers and social platforms, such as ISPs and social networks, to take measures to avoid the diffusion of ads contracted by unlicensed entities. In Spain, these platforms are responsible for checking that their customers are not on the CNMV’s list of “pirate” operators and are authorized to lend financial services.
Valbuena clarified that the CMNV was responsible for surveilling these platforms and sanctioning the possible unfulfillments of these norms and that the institution would exercise all of its power to sanction those responsible in these cases.
He also bashed social network companies, emphasizing that these “should not accept even one euro as remuneration for unauthorized advertisements from companies designed to profit by deceiving their followers.”
The CNMV has been vigilant on how cryptocurrency service providers leverage traditional and non-traditional media to advertise their products. In 2022, the institution issued a circular establishing rules to be followed by mass cryptocurrency advertisement campaigns. Since then, the CNMV has registered 210 interventions, reviewed 1327 advertising pieces, sent 196 information requests, and applied sanctions to a single cryptocurrency campaign.
What do you think about the CNMV and its possible probe on X? Tell us in the comments section below.
Free Talk Live Co-Host Ian Freeman Sentenced to 8 Years for Running Unlicensed Bitcoin Business
Following his conviction for unlicensed money transmission, money laundering, and tax evasion at the close of December 2022, Keene dweller, libertarian activist, and Free Talk Live co-anchor, Ian Freeman has been sentenced to eight years behind bars this Monday. His fellow Free Talk Live co-host, Mark Edge, explained that an appeal is poised to trail the verdict.
Libertarian Broadcaster Handed 8-Year Sentence for Selling Bitcoin
As the concluding defendant in the Crypto Six saga, Ian Freeman faced a federal judge’s verdict on Monday, following his conviction at December’s end. During the interlude before sentencing, Freeman remained unconfined, but post-sentencing, U.S. Marshals escorted him to incarceration.
At 43, Freeman articulated to the court his belief of not having trespassed the law, stating his crypto sales venture aimed to propagate cryptocurrency adoption.
Post-sentencing, Mark Edge, Free Talk Live’s co-host, penned:
Ian Freeman received 8 years in federal prison with 2 years probation. He was taken into custody. Appeal to follow.
The crypto sphere showed no favor towards the sentence, vocalizing their stances on social platforms. “Ian Freeman was just sentenced to 8 years in prison for selling bitcoin via his ATM,” relayed Bruce Fenton to his audience.
The Libertarian Party of New Hampshire (LPNH) also weighed in. “Ian Freeman has been sentenced for 96 months for the ‘crime’ of selling bitcoin without the proper government paperwork,” the LPNH post proclaimed. “Thanks to sound money, the days when tyrants can effectuate edicts like this are numbered.”
“Terrible news,” lamented the bitcoin enthusiast Mandrick on the social media platform X. “Ian Freeman was sentenced to 8 years in federal prison. I met my wife, and first heard about bitcoin through his podcast Free Talk Live.” Freeman alongside Edge pioneered in advertising bitcoin on a syndicated radio channel via their Free Talk Live (FTL) broadcast.
Since its inception in 2011, the syndicated broadcast has embraced bitcoin for advertising ventures, and for over a decade, FTL’s national radio segments have championed bitcoin during the show and in ads.
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