In July this year, the Office of the Comptroller of the Currency granted permission for federally chartered banks to provide custody services for cryptocurrency. While significant, the need for enterprise-grade infrastructure to securely deploy custody solutions has become crucial. Adrien Treccani, CEO of METACO — a technology partner for institutions entering the digital asset ecosystem — mentioned in a report published by Cointelegraph, PwC and CV VC that the institutional adoption of custody solutions for managing digital assets has clearly entered a new phase: “Greater regulatory clarity on digital assets in many jurisdictions, as well as adoption by large global …

Binance’s famously light Know Your Customer requirements are being targeted by the current owners of Zaif, a Japanese cryptocurrency exchange that got hacked in 2018. Plaintiffs are claiming that its weak KYC requirements and high daily withdrawal limit facilitated the laundering of $60 million stolen from the exchange. The lawsuit was filed in the Northern District of California by representatives of Fisco cryptocurrency exchange, which acquired Zaif soon after the hack. Fisco is accusing Binance of helping launder $9 million in cryptocurrency, and is seeking compensation for these alleged losses. The plaintiffs maintain that Binance had the power to identify …

A new report by the Financial Action Task Force, or FATF, details a series of red flags that can help identify illicit activity involving cryptocurrencies. Among them are a general set of guidelines involving exchanges in jurisdictions with weaker regulations, where Binance is seemingly singled out for often moving to avoid stronger regulatory oversight. The report, published on Sept. 14, lists a variety of red flags for spotting money laundering or terrorism financing, grouped by categories. Most red flags cited are commonly seen in traditional finance as well: young or old people suddenly transacting for huge sums of value, or …

Of all the developments in blockchain technology over recent years, enterprise adoption has perhaps been the most anticlimactic. As the initial coin offering bubble started to inflate during 2017, blockchain entrepreneurs and commentators alike were hyping the technology as a solution for almost every industry and business problem in existence. Fast-forward to 2020, and progress in enterprise blockchain has been lethargic at best. Almost without exception, notable implementations of enterprise “blockchain,” such as IBM’s Food Trust or Maersk-led Trade-ins, have used distributed permissioned ledgers. Proponents of blockchain technology point to various reasons why businesses have been slow to adopt decentralized …

The U.S. filed criminal charges against Russian national Artem Lifshits for his management of an affiliate of the infamous Internet Research Agency, which U.S. authorities accuse of interfering in the 2016 election. The new complaint alleges that Lifshits has managed the translator department of Project Lakhta since 2017, in which capacity he illegally obtained U.S. identification documents in order to use "the means of identification of United States persons to open bank accounts, PayPal accounts, and cryptocurrency accounts." The charge is conspiracy to commit wire fraud. The U.S. Department of Justice says these accounts were a means for Lifshits and …

Crypto investor Ari Paul has predicted that within a year or two much of the crypto ecosystem will only allow withdrawals to whitelisted addresses. In a tweet on August 26, the BlockTower Capital co-founder and CIO Ari Paul forecast that there may also be a division between ‘clean’ coins that can be traced to regulated institutions and all others. 1/ Within a year or two, most crypto exchanges will probably only allow withdrawals to "whitelisted" addresses. We'll have separate ecosystems for coins: "clean" coins that can be traced to a regulated institution, and everything else. — Ari Paul ⛓️ (@AriDavidPaul) …

South Koreans will soon be able to remotely open bank accounts requiring KYC verification using only their smartphones. According to an Aug. 26 announcement from ICONLOOP, the technology arm of South Korean blockchain network ICON, is partnering with Shinhan Bank to issue KYC compliance certificates. The bank is South Korea’s second-largest, with $375 billion in assets. The blockchain firm will allow customers to use its Zzeung mobile app’s blockchain-based decentralized identity (DID) technology to open bank accounts. Such compliance certificates allow users to bypass redundant KYC compliance processes to request service at Shinan Bank, the second largest in South Korea. …

Thailand’s central bank is looking at smart contracts and decentralized finance (DeFi) implementations for its national digital currency, the digital baht. Vijak Sethaput, senior developer for the Bank of Thailand’s (BoT) central bank digital currency project Inthanon, discussed the country’s CBDC progress in an interview hosted by a global think tank for central banking, the Official Monetary and Financial Institutions Forum, on Aug. 13. Sethaput was joined by Sky Guo, CEO of New York-based enterprise blockchain firm Cypherium, which is focused on global CBDC implementations and interoperability. In the interview, Guo said that global jurisdictions can borrow from the DeFi …

In June 2019, the intergovernmental Financial Action Task Force (FATF) introduced its revised set of standards for virtual asset service providers. The document establishes the anti-money laundering and counter-terrorism (AML/CFT) requirements that regulated VASPs — the term mainly referring to cryptocurrency trading platforms — must eventually implement in their day-to-day operations. The guidelines are framed as recommendations, and the FATF leaves it to the participating nations’ governments to develop their own regulations in accordance with suggested principles. The watchdog has also set a 12-month review timeframe to monitor the public and private sectors’ progress in putting the revised standards into …

Recently, there have been discussions regarding Estonia’s new law on cryptocurrency, the revocation of 500 crypto licenses in Estonia, and companies exiting from Estonian regulatory jurisdiction. Let’s focus on three major recommendations. Do your research before engaging with a legal partner in Estonia Yes, it might sound odd, but I think one of the reasons why companies have been losing their crypto licenses is some consulting companies. I won’t mention specific firms, but I am aware that some consulting companies conduct very aggressive marketing, spamming their adverts for a single reason — to sell a “ready company” with licenses and, …

Recently, crypto traders have shown a lot of enthusiasm for decentralized exchanges, or DEXs. The enthusiasm is warranted. We’re starting to see the fruits of many years of hard work pay off with DEX trading volume and use increasing every day. In spite of this growth, the vast majority of crypto trading still takes place on centralized exchanges. DEXs offer a clear set of benefits in terms of fund security, flexible custody and transparency, so why is it that the majority of the market still shuns them in favor of centralized alternatives? We think we know the answer, and we’ve …

There is no doubt that digital currencies provide benefits for an individual, a company and an institution by facilitating better access to financial products and services. Money laundering costs the global economy between $800 billion and $2 trillion annually, according to a United Nations report. This amounts to 2%–5% of the global gross domestic product. Today, more than 90% of money laundering still goes undetected. Developments in technology, however, have resulted in newer and faster tools. Criminals use these advancements to continue laundering money. At the same time, government authorities and fintech companies leverage technology to identify transaction attributes and …