US

Two individuals indicted for $25M AI crypto trading scam: DOJ

Defendants David Gilbert Saffron and Vincent Anthony Mazzotta Jr. allegedly solicited users’ deposits for investment and used them for lavish personal expenditures.

The United States Department of Justice (DOJ) has indicted two individuals for allegedly operating a $25-million artificial intelligence (AI) crypto-trading Ponzi scheme.

According to the Dec. 12 announcement, Australian national David Gilbert Saffron and Los Angeles resident Vincent Anthony Mazzotta Jr. are accused of operating trading programs that “falsely promised to employ an artificial intelligence automated trading bot to trade victims’ investments in cryptocurrency markets and earn high-yield profits.”

After receiving users’ deposits, however, the two individuals allegedly spent the money on “private chartered jet flights, luxury hotel accommodations, private mansion rentals, a personal chef, and private security guards.”

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Don’t panic: Only 11 of 330 Elizabeth Warren’s bills have ever passed

Support for the Digital Asset Anti-Money Laundering Act is growing in Congress, but most bills sponsored by legislators never become law.

Senator Elizabeth Warren’s crypto Anti-Money Laundering bill has been causing a massive stir in the crypto industry. But some have pointed out that the senator’s bills have a track record of not going anywhere.

According to data from the bill-tracking platform GovTrack, Warren has introduced 330 bills during her 11 years as a senator. Ten of them were eventually folded into other bills and only one rather obscure bill has ever been enacted as is.

This was the National POW/MIA Flag Act, which requires the prisoner of war/missing in action flag to be displayed alongside the United States flag on certain Federal property.

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Don’t panic: Only 11 of Elizabeth Warren’s 330 bills have ever passed

Support for the Digital Asset Anti-Money Laundering Act is growing in Congress, but most bills sponsored by legislators never become law.

United States Senator Elizabeth Warren’s crypto Anti-Money Laundering bill has been causing a massive stir in the crypto industry. But some have pointed out that the senator’s bills have a track record of not going anywhere.

According to data from the bill-tracking platform GovTrack, Warren has introduced 330 bills during her 11 years as a senator. Ten were eventually folded into other bills, and only one relatively obscure bill has ever been enacted.

This was the National POW/MIA Flag Act, which requires the prisoner of war/missing in action flag to be displayed alongside the U.S. flag on some federal property.

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House Committee passes bill to ‘preserve U.S. leadership’ in blockchain

The pro-crypto bill is one of many before Congress that aims to promote the country’s deployment and use of blockchain technology.

A United States House Committee has unanimously passed a pro-blockchain bill, which would task the U.S. commerce secretary to promote blockchain deployment and thus potentially increase the country’s use of blockchain technology.

On Dec. 5, the House Committee on Energy and Commerce voted 46-0 to pass H.R. 6572, the Deploying American Blockchains Act of 2023, in a session aiming to clear 44 pieces of legislation.

The 13-page blockchain bill would direct Secretary of Commerce Gina Raimondo to “take actions necessary and appropriate to promote the competitiveness of the United States related to the deployment, use, application, and competitiveness of blockchain technology or other distributed ledger technology.”

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House committee passes bill to ‘preserve US leadership’ in blockchain

The pro-crypto bill is one of many before Congress that aims to promote the country’s deployment and use of blockchain technology.

A United States Congress committee has unanimously passed a pro-blockchain bill, which would task the U.S. commerce secretary with promoting blockchain deployment and thus potentially increasing the country’s use of blockchain technology.

On Dec. 5, the House Committee on Energy and Commerce voted 46–0 to pass H.R. 6572, the Deploying American Blockchains Act of 2023, in a session aiming to clear 44 pieces of legislation.

The 13-page blockchain bill would direct Secretary of Commerce Gina Raimondo to “take actions necessary and appropriate to promote the competitiveness of the United States related to the deployment, use, application, and competitiveness of blockchain technology or other distributed ledger technology.”

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US needs to regulate stablecoins to keep a strong dollar: Stellar CEO

The United States and the greenback will suffer if stablecoin regulations are not rolled out this year, Stellar Development Foundation’s chief has claimed.

United States financial regulators are tightening their grip on the crypto industry and the U.S. dollar has also been under pressure with countries distancing themselves from dollar hegemony, but the chief of Stellar says stablecoin regulation may solve that.

In an April 11 Bloomberg interview, Denelle Dixon, the CEO and executive director of the Stellar Development Foundation, spoke about the prospects of regulating dollar-pegged digital assets in the United States.

Dixon said she was very optimistic that there would be some form of stablecoin regulation in the U.S. by the end of the year because “they want to set the standard.”

“If we want a strong U.S. dollar globally, a USD stablecoin is the way to see that happen.”

President Joe Biden’s administration has already highlighted the need for a stablecoin regulatory framework, but Dixon said that needs to be pushed through Congress.

“If we don’t do something in the U.S., we’re going to be in this bifurcated world where we have legislation outside the U.S. that’s friendlier to crypto,” Dixon said, adding:

“There will be companies outside the U.S. and there will still be the issue that U.S. consumers will want to leverage this technology.”

Dixon was optimistic about stablecoin regulation “only because we don’t have a choice,” saying the focus should be more on the utility and value to users than on the tech stack.

“Stop talking about the technology and start demonstrating the utility,” she added.

Stellar is a decentralized cross-border payments network powered by the Lumens (XLM) token. It was created as a modified fork from Ripple’s codebase in 2014.

Related: Stablecoins are solution to crypto’s banking problem, exec says

Stablecoins currently represent around 10.5% of the entire crypto market capitalization with $133 billion in circulation. Dixon hinted that it was paramount that stablecoins are regulated and accepted in America as the vast majority of them are pegged to the U.S. dollar.

Market leader Tether (USDT) has issued $14 billion in USDT so far this year, strengthening its market share to 60% with its circulation of $80 billion.

The gains come at the expense of Circle’s USD Coin (USDC) and Binance’s Binance USD (BUSD) stablecoins, both of which have seen considerable declines in supply this year.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

‘Surgical removal’ of crypto will only weaken USD dominance, commentators say

A day after Coinbase received an SEC Wells notice, industry commentators weighed in on what recent regulator actions mean for America’s crypto future.

The United States’ crackdown on cryptocurrencies and firms will only serve to stifle crypto-related innovation and “weaken” the country, said industry pundits in the wake of Coinbase’s recent Wells notice.

On March 22, crypto exchange Coinbase became the latest crypto firm to receive a “legal threat” — in the form of a Wells notice, just a month after stablecoin-issuer Paxos received its own in February. Some suggest there could be more to come.

Mati Greenspan, the chief of crypto research firm Quantum Economics said he believes U.S. regulators have been unfriendly to crypto “since the beginning.”

The recent collapses of crypto and startup-friendly banks, including Silvergate, Silicon Valley Bank (SVB) and Signature Bank have been viewed by some as being part of a scheme by regulators to un-bank the crypto sector, dubbed “Operation Choke Point 2.0.”

Meanwhile, a March 20 economic report from the White House turned into a scathing review of the merits of crypto assets, spending almost an entire chapter debunking its “touted” benefits.

Greenspan told Cointelegraph that the rumored action could be underway as crypto is seen as a “threat” to the U.S. dollar’s dominance in global trade — a major and long-standing benefit to the U.S.

However, as more are beginning to use crypto for cross-border remittances globally, he warned a crackdown on crypto in the U.S. could actually have the opposite effect on the dollar:

“The surgical removal of cryptocurrencies from the U.S. banking system will only isolate the United States further and weaken the dollar’s position as the global reserve currency.”

Adrian Przelozny, CEO of crypto exchange Independent Reserve told Cointelegraph the recent banking sector woes were not due to “any failure in crypto” but caused by banks managing their risks in an “irresponsible way.”

“The White House would be better served to review the practices in the banking industry,” he added.

Speaking about the most recent action against Coinbase, Przelozny said the “adversarial environment for the crypto industry” in the U.S. will push the related “jobs, investment and future innovation” offshore.

“Singapore, Hong Kong and potentially Australia” who are eyeing the benefits of the industry may prove a better home for it and those countries “will reap the economic benefits,” Przelozny said.

Related: Banks and the Fed have a problem — What about crypto?

The exact reasons the regulator is targeting Coinbase are still unclear. The SEC have declined to comment on the matter.

Michael Bacina, a lawyer and partner at Piper Alderman agreed that a “regulation by enforcement model” will “drive crypto-asset innovation offshore,” and added:

“This is a strange position to adopt given the losses many faced in the last 12 months arose from collapses involving unregulated offshore structures.”

Bacina said for years the industry has asked for clarity on how to comply. He pointed to the recent “telling” comments made by the judge in Voyager Digital’s bankruptcy case which “observed that there is no clear guidance from regulators.”

He added until governments lay out the path to regulatory compliance, offshore jurisdictions will continue to harbor crypto firms “which will cost jobs and raise the risk for consumers and investors.”

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

‘Surgical removal’ of crypto will only weaken USD dominance, commentators say

A day after Coinbase received a Wells notice from the Securities and Exchange Commission, industry commentators weighed in on what recent regulatory actions mean for America’s crypto future.

The United States’ crackdown on cryptocurrencies and crypto firms will only serve to stifle crypto-related innovation and “weaken” the country, industry pundits say in the wake of Coinbase’s recent Wells notice from the Securities and Exchange Commission.

On March 22, the crypto exchange became the latest crypto firm to receive a “legal threat” — a Wells notice — just a month after stablecoin-issuer Paxos received its own in February. Some suggest there could be more to come.

Mati Greenspan, the chief of crypto research firm Quantum Economics, said he believes U.S. regulators have been unfriendly to crypto “since the beginning.”

The recent collapses of crypto and startup-friendly banks, including Silvergate, Silicon Valley Bank and Signature Bank, have been viewed by some as being part of a scheme by regulators to un-bank the crypto sector, dubbed “Operation Choke Point 2.0.”

Meanwhile, a March 20 economic report from the White House turned into a scathing review of the merits of crypto assets, with the paper spending almost an entire chapter debunking crypto’s “touted” benefits.

Greenspan told Cointelegraph that the rumored action could be underway as crypto is seen as a “threat” to the U.S. dollar’s dominance in global trade — a significant and long-standing benefit to the U.S.

However, as more are beginning to use crypto for cross-border remittances globally, he warned a crackdown on crypto in the U.S. could actually have the opposite effect on the dollar:

“The surgical removal of cryptocurrencies from the U.S. banking system will only isolate the United States further and weaken the dollar’s position as the global reserve currency.”

Adrian Przelozny, CEO of Australian crypto exchange Independent Reserve, told Cointelegraph that the recent banking sector woes were not due to “any failure in crypto” but caused by banks managing their risks in an “irresponsible way.”

“The White House would be better served to review the practices in the banking industry,” he added.

Speaking about the most recent action against Coinbase, Przelozny said the “adversarial environment for the crypto industry” in the U.S. would push the related “jobs, investment and future innovation” offshore.

“Singapore, Hong Kong and potentially Australia” — who are eyeing the benefits of the crypto industry — may prove a better home for it, and those countries “will reap the economic benefits,” Przelozny said.

Related: Banks and the Fed have a problem — What about crypto?

The exact reasons the regulator is targeting Coinbase are still unclear. The SEC has declined to comment on the matter.

Michael Bacina, a lawyer and partner at Piper Alderman, agreed that a “regulation by enforcement model” would “drive crypto-asset innovation offshore,” adding:

“This is a strange position to adopt given the losses many faced in the last 12 months arose from collapses involving unregulated offshore structures.”

Bacina said for years, the industry has asked for clarity on how to comply. He pointed to the recent “telling” comments made by the judge in Voyager Digital’s bankruptcy case that “observed that there is no clear guidance from regulators.”

He added that offshore jurisdictions would continue harboring crypto firms until governments lay out the path to regulatory compliance, “which will cost jobs and raise the risk for consumers and investors.”

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

‘Home’ regulator could solve crypto’s ‘fragmented supervision’ issue: Comptroller

During a speech at a banking conference in DC, acting comptroller Michael Hsu said FTX was an example of why a “consolidated home country supervisor” is needed.

Cryptocurrency firms operating multiple entities in different countries should be overseen by one consolidated “home” regulator to stop them from playing “games” aimed at skirting regulators, the acting head of the United States banking regulator has opined.

Michael Hsu, the Acting Head of the Comptroller of the Currency (OCC) made the comments in prepared remarks for the Mar. 6 Institute of International Bankers conference in Washington, D.C.

The OCC is a bureau within the Treasury Department that regulates U.S. banks and aims to ensure the safety of the country’s banking system. It has the power to permit or deny banks from engaging in crypto-related activities.

In his speech, Hsu provided “useful lessons for crypto” from traditional banking on how to maintain trust globally.

He claimed unless a crypto firm is regulated by one entity, those operating with businesses in multiple jurisdictions will “potentially play shell games” by arbitraging regulations and would subsequently be able to “mask their true risk profiles.”

“To be clear, not all global crypto players will do this. But we won’t be able to know which players are trustworthy and which aren’t until a credible third party, like a consolidated home country supervisor, can meaningfully oversee them.”

“Currently, no crypto platforms are subject to consolidated supervision. Not one,” he added.

The bankruptcy of crypto exchange FTX was used as an example of why the space needed a “home” regulator. Hsu compared the exchange to the equally-defunct Bank of Credit and Commerce International (BCCI) — a global bank that was found to be involved in a litany of financial crimes.

Hsu said the “fragmented supervision” of both firms meant no one authority or auditor could develop a “consolidated and holistic view” of them as they operated across countries with no framework for information sharing between authorities.

“By seemingly being everywhere and structuring entities in multiple jurisdictions, they were effectively nowhere and were able to evade meaningful regulation.”

In his reasoning for advocating such oversight, Hsu expressed that arguments in the Bitcoin (BTC) whitepaper were “elegant” but crypto “has proven to be extraordinarily messy and complex.”

He added peer-to-peer payments are “virtually nonexistent” and crypto has primarily become an alternative asset class dominated by trading activity that relies on intermediates for it to “operate at any scale.”

“The events of the past year have shown that trust in those intermediaries can be quickly lost, large numbers of individuals can be hurt, and knock-on effects to the traditional financial system can result.”

Hsu said the international bodies that identified the necessity for a “comprehensive global supervisory and regulatory framework for crypto participants” might look to the lessons learned from the BCCI case.

Related: Treasury Secretary Janet Yellen calls for ‘strong regulatory framework’ for crypto activities

The Financial Stability Board (FSB), the International Monetary Fund (IMF), the International Organization of Securities Commissions (IOSCO) and the Bank for International Settlements (BIS) were the bodies Hsu named in particular.

The FSB, IMF and BIS are currently working on papers and recommendations to establish standards for a global crypto regulatory framework

“Trust is a fragile thing. It is hard to earn, and easy to lose,” Hsu stated.

“Regulatory coordination and supervisory collaboration can help mitigate the risks of losing that trust. We have learned this the hard way in banking. I believe it contains useful lessons for crypto.”

‘Home’ regulator could solve crypto’s ‘fragmented supervision’ issue: Comptroller

During a speech at a banking conference in DC, acting comptroller Michael Hsu cited FTX an example of why a “consolidated home country supervisor” is needed.

Cryptocurrency firms operating multiple entities in different countries should be overseen by one consolidated “home” regulator to stop them from playing “games” aimed at skirting regulators, the acting head of the United States banking regulator has opined.

Michael Hsu, the acting head of the Comptroller of the Currency (OCC), made the comments in prepared remarks for the March 6 Institute of International Bankers conference in Washington, D.C.

The OCC is a bureau within the Treasury Department that regulates U.S. banks and aims to ensure the safety of the country’s banking system. It has the power to permit or deny banks from engaging in crypto-related activities.

In his speech, Hsu provided “useful lessons for crypto” from traditional banking on how to maintain trust globally.

He claimed that unless a crypto firm is regulated by one entity, those operating with businesses in multiple jurisdictions will “potentially play shell games” by arbitraging regulations and would subsequently be able to “mask their true risk profiles.”

“To be clear, not all global crypto players will do this. But we won’t be able to know which players are trustworthy and which aren’t until a credible third party, like a consolidated home country supervisor, can meaningfully oversee them.”

“Currently, no crypto platforms are subject to consolidated supervision. Not one,” he added.

The bankruptcy of crypto exchange FTX was used as an example of why the space needed a “home” regulator. Hsu compared the exchange to the equally-defunct Bank of Credit and Commerce International (BCCI) — a global bank that was found to be involved in a litany of financial crimes.

Hsu said the “fragmented supervision” of both firms meant no one authority or auditor could develop a “consolidated and holistic view” of them as they operated across countries with no framework for information sharing between authorities.

“By seemingly being everywhere and structuring entities in multiple jurisdictions, they were effectively nowhere and were able to evade meaningful regulation.”

In his reasoning for advocating such oversight, Hsu expressed that arguments in the Bitcoin (BTC) white paper were “elegant,” but crypto “has proven to be extraordinarily messy and complex.”

He added peer-to-peer payments are “virtually nonexistent” and crypto has primarily become an alternative asset class dominated by trading activity that relies on intermediates for it to “operate at any scale.”

“The events of the past year have shown that trust in those intermediaries can be quickly lost, large numbers of individuals can be hurt, and knock-on effects to the traditional financial system can result.”

Hsu said the international bodies that identified the necessity for a “comprehensive global supervisory and regulatory framework for crypto participants” might look to the lessons learned from the BCCI case.

Related: Treasury Secretary Janet Yellen calls for ‘strong regulatory framework’ for crypto activities

The Financial Stability Board (FSB), the International Monetary Fund (IMF), the International Organization of Securities Commissions (IOSCO) and the Bank for International Settlements (BIS) were the bodies Hsu named in particular.

The FSB, IMF and BIS are currently working on papers and recommendations to establish standards for a global crypto regulatory framework

“Trust is a fragile thing. It is hard to earn, and easy to lose,” Hsu stated.

“Regulatory coordination and supervisory collaboration can help mitigate the risks of losing that trust. We have learned this the hard way in banking. I believe it contains useful lessons for crypto.”