senate

Warren’s surveillance legislation is tailor-made to help big banks

Warren’s Digital Asset Anti-Money Laundering Act would shut crypto providers down, playing into the hands of the banking industry.

It seems that every time Massachusetts Senator Elizabeth Warren fails to get an anti-crypto bill passed, she introduces a new draft. She has the strategy of messaging bills — legislation introduced for the purposes of media attention and fundraising more than actual passage — down to a science.

Warren’s latest legislation, the Digital Asset Anti-Money Laundering Act, threatens to undermine crypto’s core principles of freedom and personal sovereignty. While Warren argues that her bill is necessary to combat illicit activities, a closer look reveals its potential to stifle innovation, endanger user privacy and play right into the hands of big banks.

The bill, co-sponsored by Kansas Senator Roger Marshall, is based on the premise that digital assets are increasingly being used for criminal activities such as money laundering, ransomware attacks and terrorist financing. While some bad actors exploit digital assets, the bill’s approach of treating all developers and wallet providers as potential criminals is not only impractical but also dangerous.

Elizabeth Warren is pushing the Senate to ban your crypto wallet

Elizabeth Warren is back with an Anti-Money Laundering act that would — among other things — make it mostly illegal for you to use your own crypto wallet.

Massachusetts Senator Elizabeth Warren is once again smearing the cryptocurrency industry and attempting to make Americans more dependent on big banks.

Warren vowed in February to reintroduce the Digital Assets Anti-Money Laundering Act, a proposal that went nowhere when she first introduced it with Kansas Senator Roger Marshall in December 2022. While the proposal’s stated purpose is to protect Americans from scams, it is more likely to drive cryptocurrency businesses overseas and weaken consumer choice. It prohibits the use of digital asset mixers and requires self-hosted wallets — like the kind you keep on your cell phone — along with miners and validators to have Anti-Money Laundering (AML) policies. Many of those entities may not even be able to impose such requirements, meaning they would simply need to shut down or stop servicing American users.

The proposal is the wrong one — at an opportune time. While recent high-profile frauds and thefts demonstrate the need for some crypto regulations and enforcement, the bill amounts to a smear campaign against the industry that would make Americans more dependent on traditional banks. But she is simply wrong when she says that cryptocurrency is “the method of choice for international drug traffickers” and terrorists. In fact, only about $10 billion or less in cryptocurrency is involved with money laundering each year, compared with between $800 billion and $2 trillion laundered in conventional currencies.

The bill is particularly harsh on decentralized finance (DeFi), including noncustodial ones, requiring platforms to record the personal information of users and submit it to the government without a warrant or probable cause. It’s a bit like blaming the city because you were mugged on the sidewalk. The bill also lumps together all miners, including those mining for themselves as opposed to processing transactions for others, as money service businesses. It also ignores the fact that miners can provide other services unrelated to transactions.

Most absurdly, companies that develop the software would be required to register as money service providers, adopt Anti-Money Laundering policies and report customers to the Financial Crimes Enforcement Network. By this logic, electronics stores like Best Buy and Micro Center should register as money service providers because the cell phones they sell could be used to commit fraud.

Warren also seems unaware that blockchain and related technologies are not the same as cryptocurrency and that not all cryptocurrencies are openly traded or usable for purchases. For example, users of the Brave web browser, which blocks advertisements, can earn Basic Attention Token (BAT) by agreeing to watch ads and can then give them to content creators, who can exchange them with Brave for the money the advertisers paid. It’s a closed ecosystem, with the tokens having no monetary value because they symbolize time spent watching ads. It’s laughable to regulate companies such as Brave like banks or brokerages. Will casino chips be so regulated? Or frequent flier miles? Or the Inter-Stellar Kredit (ISK) currency of the online game Eve Online?

It is clear that this has nothing to do with protecting consumers. Instead, it is designed to hobble cryptocurrency and crypto businesses with an unreasonable regulatory burden. In fact, collecting all this data on blockchain users and crypto owners could enable much more crime and fraud. The federal government is not immune from hacking. Moreover, the FBI’s success in recovering cryptocurrency that was stolen or used for ransom payments demonstrates that blockchain is not the weak link in the system. A better approach would focus on the businesses involved in exchanging cryptocurrency for government-issued fiat currency, or on- and off-ramps. This is where ill-gotten money enters or disappears from the blockchain, and they are also most clearly involved in money transmission and custodial services.

Entrepreneurs are also involved in making DeFi less vulnerable to criminal activity. Companies are offering software that allows blockchain businesses to implement Know Your Customer policies and verify customer/vendor identities without compromising privacy. However, these software solutions are still expensive — and Warren’s bill still drastically overreaches.

The main effect of Warren’s bill could be to force many cryptocurrency businesses to either close their doors or leave the United States, giving Americans few legal opportunities to participate in the industry. This will reduce competition in banking and other financial services to the benefit of traditional ones, which — while they have their own AML and related regulations — don’t face similar scrutiny. In addition, the company that develops software for your local bank doesn’t have to comply with AML regulations.

Bringing the hammer down on crypto so heavily could also result in an increase in criminal activity by driving legitimate users and businesses away and the industry underground, much like how alcohol prohibition in the 1920s strengthened organized crime.

The Financial Action Task Force, an international body monitoring and advising governments on terrorist financing and money laundering, recommended that all crypto transactions be subject to scrutiny, regardless of risk factors. However, other countries are not taking such a Draconian approach. In the European Union, for instance, hosted wallets will be required to submit information for every transaction, while transactions between unhosted wallets will only need to implement AML compliance for transactions involving 1,000 euros or above. The United Kingdom only requires reporting if the transaction presents risk factors.

Lawmakers, including Warren, should remember that their job is to promote the public good, not to carry out a crusade against an entire industry.

Brendan Cochrane is a partner at YK Law LLP, where he focuses on blockchain and cryptocurrency issues, and an adjunct professor at Suffolk University Law School teaching “Blockchain, Cryptocurrency and the Law.” He is also the principal and founder of CryptoCompli, a startup focused on the compliance needs of cryptocurrency businesses.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Ted Cruz and Ron DeSantis take on the ‘digital dollar’: Law Decoded, March 20–27

Two lawmakers in one week weighed in against the possibility of a United States central bank digital currency.

Two lawmakers in one week weighed in against the possibility of a United States central bank digital currency (CBDC). Florida Governor Ron DeSantis — expected by many to throw his hat into the ring for the 2024 U.S. presidential race — has called for a ban on a digital dollar in the state. DeSantis spoke out against the Federal Reserve issuing and controlling a CBDC, claiming the initiative would grant “more power” to the government.

Texas Senator Ted Cruz went even further, introducing a bill to block the Fed from launching a “direct-to-consumer” central bank digital currency. Cruz stated it’s “more important than ever” to ensure U.S. policy on digital currencies protects “financial privacy, maintains the dollar’s dominance and cultivates innovation.” The anti-CBDC bill is a second attempt by Senators Cruz, Braun and Grassley, who introduced a similar bill on March 30, 2022, to prohibit the Fed from issuing a CBDC directly to individuals.

Representative Tom Emmer introduced another anti-CBDC bill in February. The bill could prohibit the Fed from issuing a digital dollar directly to anyone, bar the central bank from implementing monetary policy based on a CBDC, and require transparency for projects related to a digital dollar. It’s also presented as an apparent effort to protect Americans’ right to financial privacy.

G7 to collaborate on tighter crypto regulation

The next G7 meeting in May might bring a push from seven of the world’s advanced economies for stricter regulations on cryptocurrencies globally. Together, leaders from Japan, the United States, the United Kingdom, Canada, France, Germany and the European Union will outline a cooperative strategy to increase crypto transparency and enhance consumer protections, as well as address potential risks to the global financial system, officials told journalists.

Recommendations on the regulation, supervision and oversight of global stablecoins, crypto assets activities and markets are scheduled to be delivered by July and September 2023. It is unclear, however, what the overall tone of the recommendations will be.

IRS calls for public feedback on taxing NFTs

The U.S. Internal Revenue Service (IRS) said it plans to release guidance on having nonfungible tokens (NFTs) treated as collectibles under the U.S. tax code. According to the government body, collectibles under U.S. tax law “do not have as advantageous capital-gains tax treatment as other capital assets,” seemingly referring to how crypto assets are currently taxed in the country. Under the U.S. tax code, selling collectibles such as coins or artwork is subject to a maximum capital gains tax rate of 28%. The proposed IRS guidance could apply the same standard to an NFT certifying ownership of a coin, piece of art or similar collectible.

Texas lawmaker introduces resolution to protect Bitcoin miners

Cody Harris, a member of the Texas House of Representatives, has introduced a resolution to have the legislature say the “Bitcoin economy is welcome” in the state. Harris encourages Texas lawmakers to “express support for protecting individuals who code or develop on the Bitcoin network,” as well as miners and Bitcoiners operating in the Lone Star State. House Concurrent Resolution 89, if adopted, would largely not apply to Texas’ laws and regulations but instead express a certain sentiment among lawmakers.

Binance’s response to U.S. Senators lacks financial information: Report

Binance’s Patrick Hillman answered a letter from United States Senators requesting information on Binance’s operations in the country and its relationship with Binance.US.

Binance has answered a letter from United States Senators from early March requesting information about the crypto exchange operations in the country, including its balance sheet.

According to a report on March 18, Binance’s response did not include the financial data requested. Bloomberg learned from an anonymous source that despite being omitted from the letter, the exchange sent the information to U.S. regulators.

In the 14-page document, Binance chief strategy officer Patrick Hillman dives into the exchange’s compliance history, recognizing previous mistakes and claiming the firm has built solid Know Your Customer and Anti-Money Laundering policies in the past years. The response, however, failed to address the senator’s concerns about Binance’s lack of transparency.

Hillman noted in the letter:

“Binance leverages both internal tools and tools from established third-party vendors to scan user transactions and profiles in real time […] between August 2021 and November 2022, Binance stopped over 54,000 transactions as a result of transaction monitoring alerts.”

On March 2, three U.S. senators led by Elizabeth Warren sent a letter to Binance CEO Changpeng “CZ” Zhao and Binance.US CEO Brian Shroder, raising concerns about Binance’s activities and requesting the companies balance sheets.

According to the Senators, there is evidence that Binance and its American arm attempted to evade U.S. regulators, evade sanctions and facilitated the laundering of at least $10 billion. “What little information about Binance’s finances is available to the public suggests that the exchange is a hotbed of illegal financial activity,” the senators wrote in the letter.

Binance has previously stated that the two companies are separate entities with independent management and operations.

Among the senator’s requests were “all Binance and Binance subsidiary balance sheets from 2017 to the present,” as well as Anti-Money Laundering and similar policies, and documents about the relationship between Binance and Binance.US.

The U.S. Securities and Exchange Commission (SEC) launched in February a probe into Binance.US regarding trading firms alleged to be connected to Binance CEO Changpeng Zhao. An investigative report has suggested that Binance was behind a transfer of roughly $400 million in funds from a Binance.US account to a trading firm managed by CEO Changpeng Zhao.

Binance’s response to U.S. Senators lacks financial information: Report

Binance’s Patrick Hillman answered a letter from United States Senators requesting information on its operations in the country and its relationship with Binance.US.

Binance has answered a letter from United States Senators from early March requesting information about the crypto exchange operations in the country, including its balance sheet.

Hillman noted in the letter:

“Binance leverages both internal tools and tools from established third-party vendors to scan user transactions and profiles in real time […] between August 2021 and November 2022, Binance stopped over 54,000 transactions as a result of transaction monitoring alerts.“

According to the Senators, there is evidence that Binance and its American arm attempted to evade U.S. regulators, evade sanctions and facilitate the laundering of at least $10 billion. “What little information about Binance’s finances is available to the public suggests that the exchange is a hotbed of illegal financial activity,” the senators wrote in the letter.

Binance has previously stated that the two companies are separate entities with independent management and operations.

The U.S. Securities and Exchange Commission launched a probe into Binance.US in February regarding trading firms allegedly connected to Zhao. An investigative report has suggested that Binance was behind a transfer of roughly $400 million in funds from a Binance.US account to a trading firm managed by Zhao.

Sen. Warren calls out ‘sham audits’ while SVB threatens crypto bankruptcy

Contrasting Warren’s statements against crypto auditors, numerous members highlighted the ongoing collapse of Silicon Valley Bank (SVB), a Federal Deposit Insurance Corporation-insured bank.

United States Senators Elizabeth Warren and Ron Wyden asked the Public Company Accounting Oversight Board (PCAOB) to hold auditors accountable for failed crypto projects.

The PCAOB — a nonprofit overseeing the audits of public companies and other issuers — recently stated that proof-of-reserves (POR) are not equivalent to audits conducted under PCAOB auditing standards. POR is a method widely adopted by crypto exchanges to confirm the availability of users’ funds. However, Warren demanded stricter oversight:

“But let’s be clear: there’s more PCAOB needs to do so consumers aren’t left holding the bag when shady crypto firms collapse.”

The crypto community contrasted her statement as numerous members highlighted the ongoing collapse of Silicon Valley Bank (SVB) — a Federal Deposit Insurance Corporation-insured bank.

.@RonWyden and I called on @PCAOB_News to hold auditors accountable for sham crypto audits and I’m glad they’re taking this step to protect investors.

But let’s be clear: there’s more PCAOB needs to do so consumers aren’t left holding the bag when shady crypto firms collapse. https://t.co/cRJxwL2gBL

— Elizabeth Warren (@SenWarren) March 10, 2023

On the other hand, with SVB single-handedly contributing to the price instability of the Circle-issued USD Coin (USDC), Crypto Twitter questioned Warren’s stance around the collapse of a non-crypto-related bank.

Responding to Warren, Ari Paul, the founder of blockchain investment firm BlockTower Capital, highlighted how SVB is pushing crypto companies into bankruptcy, stating:

“The far larger non-crypto bank SVB just forced a lot of good companies into bankruptcy. Stop pretending your empire building helps people…this just keeps delivering unnecessary losses for both retail and institutional depositors.”

Tesla CEO Elon Musk shared a meme for the occasion, showcasing investors’ dilemma when it comes to trusting traditional banks and crypto businesses with their money.

pic.twitter.com/tTMWOHcUom

— Elon Musk (@elonmusk) March 11, 2023

As reported by Cointelegraph, the investor advisory from the PCAOB’s Office of the Investor Advocate reminded users not to rely solely on POR reports to confirm the existence of funds.

“When are you going to apologize for starting the Silvergate Bank run and plunging the nation’s banks into chaos?” asked an investor responding to Warren.

On March 11, Circle revealed that $3.3 billion was stuck with Silicon Valley Bank after a transfer request from March 9 did not go through.

1/ Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB.

— Circle (@circle) March 11, 2023

Adding to Circle’s statement, the firm’s chief strategy officer and head of global policy emphasized that “Circle is currently protecting USDC from a black swan failure in the U.S. banking system,” as he called for a rescue plan from the Federal Deposit Insurance Corporation (FDIC).

At the time of writing, $3.3 billion of the roughly $40 billion (8.24%) of USDC reserves remain with SVB.

American regulators are pushing hard against crypto: Law Decoded, Feb. 28–March 6

Crypto mining operators, custodians and Binance personally received a fine doze of the United States officials’ attention last week.

American lawmakers and regulators continue to compete in their creative efforts to propose anything but comprehensive game rules for the crypto industry.

Senators Edward Markey and Richard Blumenthal have penned a letter asking Meta CEO Mark Zuckerberg to deny young adults access to the firm’s metaverse platform. According to the two lawmakers, allowing teenagers between 13 and 17 years old entrance to the virtual environment posed “serious risks,” citing privacy concerns, eye strain and online bullying.

Along with his colleague Jared Huffman, Markey also announced the reintroduction of the Crypto-Asset Environmental Transparency Act in Congress. The bill would require crypto mining companies to disclose emissions for operations that consume more than five megawatts of power, and require the Environmental Protection Agency administrator to head up an interagency investigation of the impact of crypto mining in the United States.

Another group of Senators — Elizabeth Warren, Chris Van Hollen and Roger Marshall — have sent a letter to Binance CEO Changpeng “CZ” Zhao expressing concern over several areas of Binance’s activities. The Senators requested information from the company, including its balance sheet. The trio claim there is evidence that the company attempted to evade U.S. sanctions and facilitated the laundering of at least $10 billion.

The United States Securities and Exchange Commission chair Gary Gensler has again backed a proposed rule that would extend asset custody rules to more cryptocurrencies, saying investors need more protection. The proposed rule would require written agreements between advisers and custodians, add requirements for foreign institutions serving as custodians, and explicitly extend the safeguard rules to discretionary trading.

France on the verge of passing stringent crypto firm licensing laws

The French National Assembly has voted to legislate stricter licensing rules for new cryptocurrency firms to harmonize local laws with proposed European Union standards. The vote was passed with 109 votes (60.5%) in favor to 71 (39.5%) against. The French Senate has already passed the bill, which now goes to President Emmanuel Macron, who has 15 days to either approve it or send it back to the legislature.

If passed, the new law would oblige French-based cryptocurrency service providers to comply with stricter Anti-Money Laundering rules, show that customer funds are segregated, adhere to new guidelines on reporting to regulators, and provide more detailed risk and conflict of interest disclosures as a means to strengthen consumer protection.

One more free economic zone for digital assets in the UAE

Ras Al Khaimah (RAK), one of the seven emirates that comprise the United Arab Emirates, is set to launch a free zone for digital and virtual asset companies as the country’s approach to the industry continues to attract global crypto players. The RAK Digital Assets Oasis (RAK DAO) will be a “purpose-built, innovation-enabling free zone for non-regulated activities in the virtual assets sector.”

The free zone will be dedicated to digital and virtual assets service providers in emerging technologies, such as the metaverse, blockchain, utility tokens, virtual asset wallets, nonfungible tokens, decentralized autonomous organizations, decentralized applications and other Web3-related businesses.

Proposed South Dakota amendment would prohibit cryptocurrencies, but not CBDCs

Legislation has been introduced in the American state of South Dakota to amend the Uniform Commercial Code to limit the definition of money to exclude cryptocurrencies. Central bank digital currencies (CBDCs) would still be considered money under the proposed new definition. The 117-page amendment, introduced into the state House of Representatives by Republican Mike Stevens, defines “money” as “a medium of exchange that is currently authorized or adopted by a domestic or foreign government.”

Sen. Elizabeth Warren and colleagues demand to see Binance’s balance sheets

Three United States senators have written a letter to the CEOs of Binance and Binance.US with a long list of objections to the companies’ perceived policies and actions.

Three United States senators led by Elizabeth Warren have sent a letter to Binance CEO Changpeng “CZ” Zhao and Binance.US CEO Brian Shroder expressing concern over a number of facets of Binance’s activities and requesting information from the companies that includes their balance sheets.

Crypto skeptic Warren’s cosigners were fellow Democrat Chris Van Hollen and Republican Roger Marshall. They claimed there is evidence that the companies attempted to evade U.S. regulators, evade sanctions and facilitated the laundering of at least $10 billion, and lack transparency.

“What little information about Binance’s finances is available to the public suggests that the exchange is a hotbed of illegal financial activity,” the senators wrote, concluding:

“Your companies’ apparent attempts at evading the enforcement of anti-money laundering laws, securities laws, information reporting requirements, and other financial regulations cast serious doubt on the stability and legitimacy of Binance and its related entities, and on your commitment to your customers.”

The senators requested documents and other information. At the top of the list is “all Binance and Binance subsidiary balance sheets from 2017 to the present.” In addition, they ask for copies of Anti-Money Laundering and similar policies, documentation of the relationship between Binance and Binance.US and other information, as well as explanations of various news reports. They gave the addressees two weeks to respond.

As the letter made clear in its 59 footnotes, Binance has been the object of intense press scrutiny and a certain amount of negative speculation. CZ, a prolific tweeter, has responded to some reports personally. It was reported in February that Binance was preparing to settle outstanding regulatory and law-enforcement issues in the United States and would possibly be subject to penalties.

A bipartisan group of senators—Warren, Van Hollen and Marshall—accused the world’s largest crypto exchange, Binance, of being “a hotbed of illegal financial activity” and asked the company to respond to a list of questions. https://t.co/1JNCluT1b0

— Paul Kiernan (@pkwsj) March 2, 2023

Crypto Council for Innovation lawyer to testify at US Senate ‘crypto crash’ hearing

Linda Jeng will appear as a witness alongside law professor Yesha Yadav and Duke Financial Economics Center policy director Lee Reiners.

United States lawmakers with the Senate Banking Committee have announced three witnesses scheduled to appear before a hearing on “crypto crashes” scheduled on Feb. 14.

At the time of publication, the U.S. Senate Banking Committee’s hearing titled “Crypto Crash: Why Financial System Safeguards are Needed for Digital Assets” had witnesses including Vanderbilt University law professor Yesha Yadav; Duke Financial Economics Center policy director Lee Reiners; and Linda Jeng, a lecturer at Georgetown University Law Center’s Institute for International Economic Law.

The hearing will be one of the first in the 118th session of the U.S. Congress exploring the regulation of cryptocurrencies following a 2022 market crash and the collapse of major exchanges including FTX.

The crypto advocacy group Crypto Council for Innovation, or CCI, announced Jeng would become its chief global regulatory officer and general counsel in July. She also previously worked in a similar role at the Circle- and Coinbase-founded Centre Consortium. According to a CCI spokesperson, Jeng will be testifying under her professorship rather than as a representative of the crypto advocacy group.

As a former regulator, I strongly believe in the important mission of regulators to protect consumers and ensure financial stability. But the recent wave of banking agency statements is worrying for the future of the US financial s…https://t.co/yCcKYoGL05 https://t.co/fcv3xoGtWq

— Linda Jeng (@LindaJeng1) February 3, 2023

U.S. lawmakers will be gathering to discuss events in the crypto space and potential regulatory solutions for the first time in two months following a hearing exploring the collapse of FTX. That Dec. 14 hearing featured testimony from Hollywood star and outspoken crypto critic Ben McKenzie, law professor Hilary Allen, Shark Tank star Kevin O’Leary and the Cato Institute’s Jennifer Schulp.

Former FTX CEO Sam Bankman-Fried was originally scheduled to appear at a House Financial Services Committee on Dec. 13, but he was arrested in the Bahamas before he could fulfill that promise. The exchange’s current CEO, John Ray, was the sole witness at the hearing, and later testified under oath at an FTX bankruptcy hearing on Feb. 6.

The Crypto Council for Innovation and Jeng did not immediately respond to a request for comment by Cointelegraph.

Arizona senator doubles down on crypto amid the winter of discontent: Law Decoded, Jan. 23-30

Even though this winter continues to stress test the case for Bitcoin advocation, some lawmakers strive to put their names on the crypto hot list.

Even though this winter continues to stress test the case for Bitcoin (BTC) advocation, some lawmakers strive to put their names on the crypto hot list among the likes of United States Senators Cynthia Lummis and Pat Toomey. State Senator Wendy Rogers, 68, introduced two bold bills in the Arizona legislature. One focuses on making BTC legal tender in the U.S. state. If passed into law, BTC will have the same status as the U.S. dollar, becoming an accepted medium of exchange for debt payment, public charges, taxes and dues in the state. The bill is not Rogers’ first attempt at making BTC legal tender, with a similar bill defeated in 2022.

Rogers also participated in introducing a bill that seeks to make crypto a tax-exempt property in the state. Alongside Senators Sonny Borrelli and Justine Wadsack, Rogers proposed to let Arizona residents decide on amending the state’s constitution regarding property taxes. Should the measure pass the legislature, voters could choose to make digital currencies — specifically tokens that are not “a representation of the United States dollar or a foreign currency” — tax-exempt.

Though not so bold, another important bill was introduced to the New York State Assembly. The bill would allow state agencies to accept cryptocurrency as a form of payment for fines, civil penalties, taxes, fees and other payments charged by the state. The bill does not obligate state agencies to accept crypto as payment, but it does clarify that state agencies can legally agree to accept such payments and that the courts should enforce these agreements.

The fate of crypto legislation will be decided by Panama’s Supreme Court

Panamanian President Laurentino Cortizo sent the crypto legislation passed last year to the high court for review, claiming the so-called “crypto bill” is unenforceable and violates the constitution’s core principle. President Cortizo also argued that the bill had been approved through an inadequate procedure following his partial veto of the legislation in June 2022. At the time, the president argued that the bill needed more work to comply with new regulations recommended by the Financial Action Task Force to improve fiscal transparency and prevent money laundering.

South Korea to deploy cryptocurrency tracking system in 2023

South Korea’s Ministry of Justice has announced plans to introduce a crypto-tracking system to counter money laundering initiatives and recover funds linked to criminal activities. The “Virtual Currency Tracking System” will be used to monitor transaction history, extract information related to transactions and check the source of funds before and after the remittance. While the system is slated to be deployed in the first half of 2023, the South Korean ministry shared plans to develop an independent tracking and analysis system in the second half of the year.

US securities regulator probes Wall Street over crypto custody

The United States Securities and Exchange Commission (SEC) has been probing traditional Wall Street investment advisers that may offer digital asset custody to its clients without the proper qualifications. Much of the SEC’s efforts in this inquiry examine whether registered investment advisers have met the rules and regulations around the custody of client crypto assets. By law, investment advisory firms must be “qualified” to offer custody services to clients and comply with custodial safeguards set out in the Investment Advisers Act of 1940.