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Crypto Platforms Achieve Foreign Approvals; DOJ Seizes Crypto Ransomware Funds; CFTC Adds Crypto Firms to RED List; Crypto Fraud and Threats Continue


In this issue:

Foreign Regulators Approve Crypto Platforms; Ethereum Approaching PoS
DOJ Seizes $500K in Ransomware Crypto; CFTC Adds Crypto Firms to RED List
Fraud, Mixers, Ransomware and the Darkweb: Cryptocurrency Threats Continue

Foreign Regulators Approve Crypto Platforms; Ethereum Approaching PoS

By Keith R. Murphy

According to recent reports, several major cryptocurrency platforms have obtained regulatory approval from Italy’s Organismo Agenti e Mediatori (OAM) to offer their products and services to Italian customers in compliance with local regulations. The OAM had established set criteria to be met by companies offering cryptocurrency trading, custody or other services in the country. In related news, another major cryptocurrency exchange announced in a press release that it became the first company to be registered as a Virtual Asset Service Provider by the Central Bank of Ireland. 

According to recent reports, the Ethereum Network is approaching the merger phase of its planned transition from proof-of-work mining consensus to a proof-of-stake (PoS) network. The “Merge” could potentially occur on Sept. 19, although that is reportedly a “soft” deadline. The shift to a PoS network reportedly could result in a 99 percent reduction in Ethereum Network energy consumption.

For more information, please refer to the following links:

DOJ Seizes $500K in Ransomware Crypto; CFTC Adds Crypto Firms to RED List

By Michael A. Rivera

Earlier this week, the U.S. Department of Justice (DOJ) announced a complaint filing in the District of Kansas to forfeit approximately $500,000 in cryptocurrency to victims of a new ransomware scam. According to court documents, an FBI investigation into the ransomware strain, known as “Maui,” began last year after hackers used the ransomware to encrypt the files and servers of a Kansas hospital for over a week. After the hospital paid $100,000 in Bitcoin to the hackers to remove the ransomware from its system, it contacted the FBI about the attack. At this week’s International Conference on Cyber Security, Deputy Attorney General Lisa O. Monaco explained that the FBI was able to trace the ransom payment through the blockchain to money launderers based in China. According to the DOJ press release, after seizing one of the cryptocurrency accounts identified thanks to the Kansas hospital’s tip, the FBI was able to identify other victims of the Maui attack, including a healthcare provider based in Colorado. According to the DOJ press release, the funds are expected to be returned to victims of the ransomware attack.

In other recent developments, late last week the Commodity Futures Trading Commission (CFTC) announced that it added 34 unregistered foreign entities to its Registration Deficient List (RED List). Reportedly, the additions included multiple cryptocurrency industry firms. According to the CFTC, a firm is added to the RED List when the CFTC determines, from investigative leads and public inquiries, that the firm is not registered with the CFTC and appears to be acting in a capacity that requires registration, such as trading binary options, foreign currency or other products. In a statement, CFTC Commissioner Kristin Johnson said that U.S.-based customers transacting with unregistered entities, particularly those operating without oversight and beyond U.S. borders, may not receive the benefit of customer protections, safeguards and guardrails embedded in the CFTC’s oversight of the markets. The CFTC circulates the RED List, which was launched in 2015, to financial industry partners, including other regulators, consumer groups, industry participants, self-regulatory organizations, exchanges and industry associations.

For more information, please refer to the following links:

Fraud, Mixers, Ransomware and the Darknet: Cryptocurrency Threats Continue

By Lauren Bass

The FBI recently released a bulletin warning financial institutions and investors about a new cryptocurrency fraud scheme. According to the statement, cybercriminals have been using the names, logos and identifying information of legitimate investment firms to create fake mobile apps and websites in an effort to lure and defraud potential investors. The FBI cautions institutions and investors alike to be vigilant and verify any application before downloading it and providing sensitive information.

According to a recent Chainalysis blog post, use by illicit entities of cryptocurrency mixers – applications that obscure the flow of funds and complicate the tracing of cryptocurrency transactions – is at an all-time high. While mixers operating in the U.S. are required to register with FinCEN as money transmitters, few do, according to Chainalysis, and their lack of KYC processes makes them attractive to criminals looking to launder money.

While use of mixers may be up, use of darknet exchanges and ransomware sites may be down. According to reports, the recent decline in the value of BTC and other cryptocurrencies has led to a run on fiat reserves, which has caused some illicit exchange sites to shutter and others to scale back activities. 

For more information, please refer to the following links:


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