A U.S. Department of the Treasury official has urged crypto industry players to jointly fight against fraudulent activity and the misuse of digital currencies.
The U.S. Department of the Treasury Under Secretary for Terrorism and Financial Intelligence Sigal Mandelker urged crypto industry players and regulators to prevent the illicit use of cryptocurrencies in a speech Dec. 3.
Speaking at the Financial Crimes Enforcement Conference on Dec. 3, Mandelker addressed the issue of mitigating risks related to emerging technologies, including digital currencies, which could potentially be used for nefarious purposes.
Mandelker stressed that financial institutions and cryptocurrency services providers must combat illicit activity and the risks of assisting bad actors. “The digital currency industry must harden its networks and undertake the steps necessary to prevent illicit actors from exploiting its services,” she said.
Mandelker also called on international regulators to strengthen anti-money laundering (AML) and Combating the Financing of Terrorism (CFT) frameworks in regards to digital currencies. Additionally, the Mandelker stressed the importance of supervision and enforcement of AML and sanctions obligations. Mandelker added:
“The lack of AML/CFT regulation of virtual currency exchangers, hosted wallets, and other providers — and, indeed, of the broader digital asset ecosystem — across jurisdictions exacerbates the associated money laundering and other illicit financing risks.”
The call to action followed a new approach that the agency took last week to target illicit actors, who deployed cryptocurrencies and other new technologies in order to launder and transfer ill-gotten funds. The cyber criminals allegedly used malware called “SamSam,” that affected over 200 victims, including state organizations and public institutions.
“As part of this scheme, two Iranian financial facilitators helped exchange the Bitcoin ransom payments into Iranian rial for the hackers. Last week, those two financial facilitators found themselves on OFAC’s Specially Designated Nationals and Blocked Person’s (SDN) list. For the first time ever, OFAC attributed digital currency addresses associated with designated individuals,” Mandelker said.
Meanwhile, the Estonian Ministry of Finance announced it will shortly add amendments to a recently-passed financial bill that are meant to “tighten” crypto-related regulation. The regulation reportedly introduces “virtual currency exchange service providers” and “virtual currency payment service providers,” while before there only was “alternative means of payment service provider.”
Today, the Department of Financial Services of New York (NYDFS) authorized a blockchain-based digital platform offered by a local Signature Bank. The system purportedly allows funds “to be transferred in real-time between two commercial clients of Signature Bank, eliminating any dependence on a third party.”
U.S. Rep. Warren Davidson of Ohio announced plans to introduce a bill in the House of Representatives that would regulate ICOs and cryptocurrencies.
U.S. Rep. Warren Davidson (R) has announced plans to introduce legislation that would clearly regulate cryptocurrencies and Initial Coin Offerings (ICOs), local Ohio news agency Cleveland.com reports Dec. 3.
According to Cleveland.com, Davidson announced his intention to introduce new legislation at the Blockchain Solutions conference. The bill would create an “asset class” for cryptocurrencies and digital assets, which “would prevent them from being classified as securities, but would also allow the federal government to regulate initial coin offerings more effectively.”
The Securities and Exchanges Commission (SEC) stance is that most cryptocurrencies are securities. The Commodity Futures Trading Commission (CFTC), on the other hand, treats cryptocurrencies as commodities.
In other words, the CFTC states that Bitcoin (BTC) has more in common with gold than with currencies or securities since it is not backed by a government and does not have liabilities attached to it. The Financial Crimes Enforcement Network (FINCEN), the agency managing anti-money laundering (AML) and know your client (KYC) standards, views crypto as money.
The U.S. Office of Foreign Assets Control (OFAC), which enforces economic sanctions, views crypto as money and blacklists wallets of sanctioned persons. Lastly, the Internal Revenue Service (IRS) treats cryptocurrencies as property, meaning that profits from selling them are subject to capital gains tax.
A group of U.S. Congressional representatives sent a letter in September to the SEC Chairman Jay Clayton calling for “clearer guidelines between those digital tokens that are securities.”
The same month, over 45 representatives of major crypto companies and Wall Street firms attended a Congressional roundtable discussion on cryptocurrency and ICO regulation. During meeting, which was hosted by Davidson, experts expressed concerns about a lack of regulatory clarity in the industry and discussed “token taxonomy.”
Davidson has previously demonstrated his support for the crypto industry, suggesting that the ICO market needs “light touch” regulation. A spokesman for the U.S. representative said in November that Davidson is working on a bill that, once law, would treat ICOs as products rather than securities at the federal and state level, effectively “sidestepping” security laws.
As Cointelegraph reported yesterday, seven Ohio funds will hand over $300 million to blockchain startups by the end of 2021. Of this funds, $100 million will be invested by nonprofit JumpStart.
Crypto markets are seeing a tint of green, with just a few top coins in the red. Bitcoin is hovering under the $4,000 mark.
Tuesday, Nov. 4: Most of the top twenty cryptocurrencies are in the green, having overcome yesterday’s losses, with Bitcoin (BTC) hovering under the $4,000 mark.
Market visualization from Coin360
During the day, Bitcoin has been trading in a narrow corridor between $3,768 and $4,091. At press time, the coin is trading at around $3,948, up around 1.61 percent on the day.
On its weekly chart, BTC reach a low $3,755 before reach a high of $4,404. Today, the CEO of Japanese fintech firm and crypto exchange operator Quoine predicted that BTC will “surpass” its all-time price highs by the end of 2019, noting that “there’s nothing new, no catalyst” in the immediate future to drive prices back up.
Bitcoin 7-day price chart. Source: CoinMarketCap
The second largest crypto by market capitalization Ripple (XRP) is trading at around $0.352, having gained 0.83 percent on the day at press time. Today, the coin dipped to its lowest price point of the week at $0.349, while the intraweek high was $0.399 on Nov. 28.
XRP 7-day price chart. Source: CoinMarketCap
Ethereum (ETH) is maintaining its position as the third largest coin by market cap, which is over $11.4 billion at press time. ETH is trading around $110, up 1.68 percent over the day as of press time. On its 30-day chart, ETH is in a solid downtrend, down from a high of $221.62 on Nov. 7.
Ethereum 30-day price chart. Source: CoinMarketCap
At press time, the main losers in the top 20 cryptocurrencies are Bitcoin Cash (BCH) and EOS, which are down over 6 percent on the day and are trading at $149 and $2.43, respectively. Bitcoin SV (BSV) — which was created in November of this year following BCH’s hard fork — is also in the red, trading at around $91, down almost 3 percent on the day, according to CoinMarketCap.
Total market capitalization of all cryptocurrencies is around $126.9 billion as of press time, according to CoinMarketCap. The daily trading volume of all coins is $13.5 at press time.
Total market capitalization 24-hour chart. Source: CoinMarketCap
Today, the world’s second-largest stock exchange, Nasdaq, confirmed it plans to launch Bitcoin futures in the first half of 2019. There has reportedly “been enough work put into this to make [the question of regulatory approval] academic […] we’re doing this, and it’s happening.”
At the same time, Ehud Barak, a former Israeli Prime Minister, compared digital currencies to Ponzi schemes. However, Barak underlined that blockchain technology and smart contracts are important and useful technological and mathematical concepts.
New York state financial regulators have authorized a blockchain-based payments system offered by a local commercial bank.
NYDFS superintendent Maria T. Vullo announced today that the department authorized New York-based Signature Bank to offer its digital payment platform Signet in the state. The approved system reportedly uses blockchain technology to allow the bank clients to “transfer ‘Signets’ to make payments with no transaction fees, at any time of the day, year-round.”
The system purportedly allows funds “to be transferred in real-time between two commercial clients of Signature Bank, eliminating any dependence on a third party.” Signet has been subject to a “comprehensive and rigorous review” and needs to comply with “significant regulatory conditions.”
Namely, the “approval includes required conditions to ensure […] compliance with New York’s strong standards and regulations regarding anti-money laundering (AML), anti-fraud, and consumer protection measures.”
Moreover, Signet balances are eligible for coverage by the Federal Deposit Insurance Corporation (FDIC), of which Signature Bank is a member. This corporation underwrites most private U.S. bank deposits “up to the legal insurable amounts defined.”
Vullo declared that the department is “pleased to strengthen and foster regulated innovation […] specifically within our state-chartered banking system.” The superintendent stated:
“New York continues to support and help advance innovation through sound state regulation and with products such as Signet…”
According to the press release, Signature bank is a “full-service commercial bank with 30 private client offices throughout the New York metropolitan area,” which currently has $45.87 billion in assets.
This is just the latest development in the growing New York blockchain industry. In November, crypto hardware wallet Ledger opened a New York office to develop its institutional custody offering Ledger Vault.
Binance’s CEO has revealed the company’s plans to launch its own blockchain, “Binance Chain,” in the near future.
“Binance is pushing for blockchain adoption and doing many things to help advancement of the industry. E.g. we will have the Binance chain ready in the coming months, on which millions of projects can easily issue tokens.”
According to Forbes, Binance announced their plans during a recent private event in Singapore hosted by Forbes Asia. Speaking at the “Decrypting Blockchain for Business” event, Binance CEO Changpeng Zhao (CZ) stated that the new plans actually indicate an old vision of crypto, which will expectedly lead to increasing its adoption on a global scale.
In order to reach a fundamental “payment adoption increase,” CZ said that the company will be “pushing really hard into that space,” since their “original intent” hasn’t taken off “for some reason.”
Forbes’ author Michael del Castillo, who unveiled the recent news, commented on Twitter that the he expects that there will be “millions of coins and thousands of blockchains.”
On Nov. 8, CZ revealed that Binance’s business was still “very stable,” despite the recent exchange volume drop of around 50 percent, as well as the significant slump of crypto markets this year. The Binance CEO stated that while Binance possessed just 10 percent of the trading volumes they had in January 2018, the volumes are still higher than those of “two or three years ago,” and the business is “still profitable.”
Recently, Binance has launched its fiat-to-crypto exchange in Uganda, enabling its customers to purchase two major cryptocurrencies — Bitcoin (BTC) and Ethereum (ETH) — with local fiat currency Ugandan shillings (UGX).