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US regulators eye the cryptocurrency sector



In her monthly Expert Take column, Selva Ozelli, an international tax lawyer and CPA, deals with the interface between new technologies and sustainability and presents the latest developments in taxes, AML / CFT regulations and legal questions about crypto and blockchain.

Recently, the headlines in the news have focused on regulatory concerns about the lack of investor protection in the cryptocurrency market, which has soared to more than $ 2 trillion, and the potential risks to financial stability.

National security agencies across President Joe Biden’s administration are grappling with high-profile cases of cryptocurrencies involved in ransomware attacks, intellectual property espionage, sanction violations, bribery of government officials, and tax evasion.

According to a recent report by the Financial Crimes Enforcement Network, ransomware-related suspicious activity reports filed in the first half of 2021, which are up 30% from full-year 2020, suggest that ransomware is an increasing threat to the U.S. financial sector , Businesses and the public

Biden’s government is weighing an executive order for federal agencies to investigate and make recommendations on relevant areas of the crypto industry related to national security, economic innovation, and financial regulation. The initiative would also aim to coordinate the agencies’ work on digital currencies across the executive branch, with a first White House crypto Tsar serving as the point person.

“Pandora Papers” by the International Consortium of Investigative Journalists

The International Consortium of Investigative Journalists published its Pandora Papers, which leaked nearly 12 million documents from law firms and other organizations around the world exposing the previously unknown owners of 29,000 offshore companies with US $ 32 trillion in assets worldwide – Dollars hidden from taxes or regulatory oversight in tax havens.

The owners of these companies include celebrities, politicians and criminal figures from the underworld from over 200 nations. The leak has already started investigations into corruption and tax evasion against several government officials around the world.

Meanwhile, a report from the World Economic Forum explains how blockchain technology can help reduce corruption in governments.

Related: CFTC renews: What Biden’s new agency picks for crypto regulation

OFAC. of the US Treasury Department

In a first such case, the Office of Foreign Assets Control (OFAC) recently targeted Suex, an over-the-counter digital currency broker, for its alleged role in laundering revenue from ransomware attacks. The effort was part of an effort by the entire government to combat ransomware and disrupt criminal networks and crypto exchanges that play a role in ransom laundering. The aim is to improve cybersecurity in the private sector and to increase the reporting of incidents and ransomware payments to US government agencies. This includes both the Treasury Department and law enforcement agencies under the Anti-Money Laundering and Terrorist Financing Framework (AML / CFT) as digital currency is the primary vehicle for facilitating ransomware payments and related money laundering activities.

Following this case, OFAC published an “Updated Notice of Potential Sanction Risks to Facilitate Ransomware Payments”. The updated recommendation emphasizes that the US government remains strongly advised against paying cyber ransoms or extortion demands and that it recognizes the importance of improving cybersecurity practices to prevent or mitigate such attacks.

Related: Compliance with the sanctions for transactions in fiat and cryptocurrencies is the same

OFAC also updated the advisory to emphasize the importance of reporting and working with relevant government and law enforcement agencies in the event of a ransomware attack to understand and combat ransomware attacks and malicious cyber actors receive a voluntary self-disclosure credit for attack victims if a sanction nexus is later determined. Please visit the Government’s Stop Ransomware website for more information.

Given the financial risks posed by ransomware and money laundering that represent digital assets around the world, participants at the G7 meeting in June pledged to work together to address this escalating risk as a matter of urgency and speed by adopting the AML standards of the Financial Action Task Force for digital assets implement and enforce virtual asset service providers.

Related: Are ransom payments in cryptocurrency tax deductible?

Intellectual property and cryptocurrency espionage

In other recent cases and reports, cryptocurrency has been involved in intellectual property espionage. Ethereum developer Virgil Griffith recently pleaded guilty to conspiracy to violate the International Emergency Economic Powers Act, which prevents US citizens from exporting technology and intellectual property to communist countries, when he held a cryptocurrency and cryptocurrency conference in 2019 at a North Korean conference Blockchain presentation held as part of the plea deal, Griffith could face up to 6 1/2 years in prison if convicted in January 2022.

Jonathan Toebbe, a US Navy nuclear engineer who held a top-secret security clearance and specialized in naval nuclear propulsion – and had access to military secrets – was charged in October with attempting to provide information about the construction of American nuclear submarines Passing on someone he thought he was a representative of a foreign government in exchange for cryptocurrency that violates the Atomic Energy Act, the Justice Department said.

Cybereason, a provider of mission-oriented protection against cyberattacks, has released a new report entitled “Operation GhostShell: Novel RAT Targets Global Aerospace and Telecoms Firms,” ​​which exposes a highly focused cyber espionage operation against global aerospace and telecommunications companies. The report, which follows the company’s “DeadRinger” report released in August, reveals a newly identified Iranian actor named MalKamak who was behind the attacks and has been in office since at least 2018. MalKamak uses a previously unknown, sophisticated remote access Trojan known as “ShellClient” which bypasses antivirus and other security tools and uses the cloud service provider Dropbox for command and control.

Related: The United States is updating its crypto AML / CFT laws

According to a study by Slovak security provider ESET, a cyber espionage group called FamousSparov has targeted hotels, international governments, international organizations, engineering firms and law firms for at least 2019. The group used a known Microsoft Exchange vulnerability – which was also exploited by suspects Chinese hackers and fraudsters who want to mine cryptocurrency – to attack their victims, who include the US Republican Governors Association. While ESET didn’t associate FamousSparov with any particular nation, it found similarities between its techniques and those of SparklingGoblin, an offshoot of the Winnti Group – which is affiliated with China – and DRBControl.

In July, the US government blamed China for the exploitation of the Microsoft Exchange Server attacks and for the first time also accused the Chinese government of using criminal hackers in the attacks, and released a report warning of China’s ongoing attack on the defense , Semiconductor, medical and other industries to steal intellectual property.

The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect the views and opinions of Cointelegraph.

Wolkenstein Özelli, Esq., CPA, is an international tax attorney and certified public accountant who regularly writes on tax, legal and accounting issues for Tax Notes, Bloomberg BNA, other publications and the OECD.

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Jack Dorsey’s Twitter departure means more time for bitcoin passion



Jack Dorsey, Co-Founder and CEO of Twitter Inc. and Square Inc., speaks during the Bitcoin 2021 conference in Miami, Florida, USA, on Friday, June 4th, 2021.

Eva Marie Uzcategui | Bloomberg | Getty Images

The decentralization of power on the Internet is an important personal issue for Dorsey. At Twitter, he led funding for a project called BlueSky, which is a set of openly published standards for social media companies to make it easier for users of different social media networks to communicate with one another. New Twitter CEO Parag Agrawal has played a pivotal role in pursuing this vision, which is a reminder of how the Internet was originally built on common standards.

Dorsey has also been vocal in advocating decentralization of the workplace. Twitter was one of the first to announce the possibility of employees working from home indefinitely in the wake of the Covid-19 pandemic. In addition, Dorsey had discussed moving a part-time job to Africa to “work decentralized,” although he withdrew that plan when the Covid pandemic became more serious.

Tom Lee, the head of research at Fundstrat Global Advisors, told CNBC that the changing of the guard on Twitter was “up for crypto.”

“There is not enough capital available for crypto-innovations, so people like Jack Dorsey really have to concentrate,” said Lee on Monday at CNBC’s “Tech Check”.

Square’s foray into crypto

Square also kicked off its crypto-focused projects this year. With Dorsey now relieved of his responsibility on Twitter, many are excited to see what crypto tasks Square will take on next.

The company started trading bitcoin in 2018 using the Cash app, which allows users to buy and sell bitcoin. In 2019, Square founded Crypto, an independent team dedicated to contributing to bitcoin open source work, and just last year Square founded the Cryptocurrency Open Patent Alliance (COPA), a non-profit organization that aims to Pool patents to fuel crypto innovation.

Square announced in July that it was launching a new business dedicated to building decentralized financial applications (DeFi) for Bitcoin, which Dorsey described as “an open developer platform with the sole aim of creating untrusted, license-free, and decentralized financial applications simplify”. Services.”

In October, Square’s CEO said the company could get into the bitcoin mining business, and earlier this month the payments company released a whitepaper outlining plans to launch “tbDEX,” its own decentralized exchange for buying and selling Selling cryptocurrencies, will be described in detail.

The payment giant is also building its own hardware wallet to “make Bitcoin custody more mainstream”.

Square added Bitcoin to its balance sheet, attributing the election to an alignment of values. The company recorded a fair value of $ 351.7 million on its Bitcoin investment as of September 30.

“We believe Bitcoin has the potential to be a more ubiquitous currency in the future,” said Amrita Ahuja, Square’s chief financial officer. “As acceptance increases, we intend to learn and participate in a disciplined manner. For a company that develops products that are based on a more inclusive future, this investment is a step on the way.”

Investments like this come at a critical time for the crypto industry.

“I don’t think the place is over-invested yet,” said Lee. “Crypto is the interface between financial services and technology. That is literally 60% of the economy. “

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Cryptocurrency Billionaire Justin Sun Has Bought More Than $100 Million Worth of Art This Year. So What’s He Going to Do With It?



When Sotheby’s record-breaking Macklowe Collection auction received the winning bid of $ 78.4 million for Giacometti’s Le Nez (1947) earlier this month, curious minds immediately began to speculate who the buyer was. Maybe it was hedge funder Steve Cohen, a longtime collector of the artist’s work? Or maybe the Qatari royal family?

Just a few days after the sale, the real buyer showed up: Justin Sun, the Chinese-born, 31-year-old tech billionaire and founder of the cryptocurrency platform TRON. The news served as positive evidence that at least some of the new crypto rich are putting their money into the arts. So far this year, Sun has spent more than $ 100 million on auctions.

Now the entrepreneur says he’s just beginning to build his art collection – and his appetite includes installations, videos, classic contemporary and more. Although he was unable to attend Art Basel Miami Beach due to travel restrictions, plans to buy through galleries and in the primary market soon, he said, with an eye to emerging talent. These purchases are displayed in the metaverse as the IRL items are loaned to institutions around the world.

Alberto Giacometti, Le Nez. Conceived in 1947; this version was conceived in 1949 and cast in 1965. Courtesy Sotheby’s.

“Because our goal is to build the best and most diverse collection of contemporary art, we’re interested in a variety of art forms and categories such as video, music, installation, and AI art that we don’t already have,” said Sun. “Most of the works of art we own are static and we strive to diversify our collections to enrich our museum in the Metaverse … art that anyone can see and engage in interesting conversations to spark creativity.”

In addition to Le Nez, Sun has acquired a Picasso portrait of Marie-Thérese valued at £ 14.6 million ($ 20 million); a triptych of “Dread Wig” portraits by Andy Warhol for £ 1.4 million ($ 2 million); KAWS Untitled (Kimpsons) (2001) for HK $ 2.5 million ($ 323,647); and Cube by top NFT artist Murat Pak.

Many of these works, acquired from Sun through the APENFT Foundation, are now being digitally assimilated to “see” in the APENFT Virtual Museum on cryptovoxels in the Metaverse, a virtual world powered by the Ethereum blockchain. Those who have the technology – Oculus Quest, Oculus Rift, and HTC Vive – can explore it up close.

“The traditional art world is extremely opaque and buying art is seen as only for the privileged,” Sun said. “Just as blockchain democratizes finance like never before, we want to democratize the art market by registering blue-chip art as NFTs in the blockchain and enabling a creative economy.”

Sun hopes to bridge the gap between the metaverse and the art world universe by loaning some of the physical works to institutions. “We look forward to working with some of the world’s leading museums to further explore this concept and, more importantly, bring its real world application to the art world,” he said.

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Cryptocurrencies brace for winter, virtual Adidas and a bitcoin city



A representation of the virtual cryptocurrency Bitcoin can be seen in this illustration from October 19, 2021. REUTERS / Edgar Su / File Photo

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  • Omicron worries weigh on important cryptocurrencies
  • Ether and other DeFi, Metaverse-Linked Tokens outperform Bitcoin
  • El Salvador wants to build “Bitcoin City”
  • Adidas cooperates with Coinbase

Nov 29 (Reuters) – Cryptocurrencies last week survived one of the biggest market shocks since the early days of the pandemic, with El Salvador being a notable buyer as investors decided not to share Adidas’ excitement over a foray into the busy Metaverse.

El Salvador’s plans to build the world’s first “Bitcoin City” and the entry of Adidas were the bright spots for digital assets in a week in which major cryptocurrencies were overwhelmed by fears about the new Coronavirus variant Omicron.

Bitcoin was down 0.5% on Monday and has lost about 17% of its value in the past 19 days from a record $ 69,000. But competing currency ethers and tokens associated with the metaverse and decentralized financial applications have done better.

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Adidas’ move made waves after the German sporting goods retailer announced a partnership with Coinbase Global Inc (COIN.O) in a tweet, even though the shares of Adidas (ADSGn.DE) did not participate in the celebration.

The company also bought a piece of virtual land called “adiVerse” in the blockchain-based world The Sandbox, with the German company hinting that it would expand it to offer virtual reality products, and comes at a time when it does Best seller warned due to supply chain issues.

“This is something big because it is also an indication of what will hit the fans in the NFT area in a few months: the Adidas sneakers and other virtual branded clothing, shoes and objects,” said Ipek Ozkardeskaya, senior analyst at Swissquote .

The price of SAND, the virtual currency used to buy real estate and other items, rose 90% on the news to $ 7.18, according to CoinGecko, and received a second spike since Facebook in Meta Platforms Inc late last month ( FB.O) was renamed. Continue reading

MANA, the speculative currency used in the leading blockchain-based online world, Decentraland, rose 36% to $ 4.90. Land and other items on Decentraland are sold in the form of non-fungible tokens (NFTs).

In addition to the sell-off sparked by the Omicron news, the biggest headwind for Bitcoin and Ether last week came from an announcement by the Indian government about a law that would restrict most private cryptocurrency transactions by the country’s estimated 15 to 20 million crypto investors would prohibit. Continue reading


Bitcoin traded around 4,376,477 Indian rupees ($ 58,296.12) on India’s WazirX exchange, a slight premium to outside of the country prices that reversed from a 15% discount on Tuesday following the announcement.

“When it comes to a blanket ban, in combination with China you are talking about two centers of the world’s population that are effectively frozen out of crypto,” said Simon Peters, crypto analyst at eToro.

Elsewhere, the President of El Salvador announced plans to build the world’s first “Bitcoin City”, which was originally financed by Bitcoin bonds. In September El Salvador introduced Bitcoin as legal tender. Continue reading

Average daily trading volume across all digital asset product types declined an average of 13% through the end of October through November 19, while net inflows averaged $ 203 million, half of October, according to data from CryptoCompare.

It found that assets under management in Bitcoin-related products rose by 9.5% to 48.7 billion in the first three weeks of November.

Decentralized finance-related tokens Solana (SOL) and Litecoin-based products achieved in the 30 days to 19

A piece of virtual real estate in Decentraland was sold for a record $ 2.4 million in cryptocurrency on November 23, the buyer – crypto investor (COIN.NLB) – and Decentraland said. Continue reading

Meanwhile, the upcoming December holiday season could add volatility, while the Fed’s economic slowdown for Bitcoin could be on the decline, analysts said.

“There should be more agnostics focused on the fact that we’re in a bad part of the crypto cycle here – the fixes could be epic,” said Brent Donnelly, president of research firm Spectra Markets.

“Make sure you can survive the winter.”

($ 1 = 75.08 Indian Rupees)

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Reporting by Lisa Pauline Mattackal and Medha Singh in Bengaluru Additional reporting by Tom Westbrook in Sydney Editing by Vidya Ranganathan and

Our Standards: The Thomson Reuters Trust Principles.

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