FinCEN Penalizes ‘First’ Bitcoin Mixer, Helix, for Violating Anti-Money Laundering Laws

The Financial Crimes Enforcement Network charged Larry Dean Hamon, the founder, and CEO of bitcoin mixer Helix and Coin Ninja, for violations of the Bank Secrecy Act.

FinCEN imposed a penalty of $60,000,000.

Currently, he is being prosecuted in the US District Court for the District of Columbia on the charges of money laundering and operating an unlicensed money transmitting business, Helix, from 2014 to 2017.

FinCEN argues that as per its 2013 Guidance, exchangers and administrators of digital currencies are money transmitters under the BSA and obligated to register with it. As per the 2019 clarification, the same rules extended to the mixers of virtual currencies.

FinCEN’s report says between June 2014 to December 2017, Helix conducted more than 1,225,000 transactions with at least 356,000 BTC transactions.

“Mr. Harmon operated Helix as a bitcoin mixer, or tumbler, and advertised its services in the darkest spaces of the internet as a way for customers to anonymously pay for things like drugs, guns, and child pornography.”

The bitcoin mixing service allegedly laundered tens of millions of dollars in crypto for darknet markets like Agora, Abraxas, Hydra, Hansa, and Wall Street Market. Former darknet giant AlphaBay allegedly also had close ties to Helix as it laundered $27 million in Bitcoin for the now-defunct marketplace.

Besides circumventing BSA’s requirements, they failed to collect and verify customer names and addresses of over 1.2 million transactions. Helix also deleted the minimal customer information it collected, and Harmon was also engaged in transactions with fraudsters, narcotics traffickers, counterfeiters, and other criminals.

This action, which FinCEN said to be the “first” one against a bitcoin mixer, is the first time such activity is called “crime” by the Department of Justice (DOJ), which could mean further troubles for services using obfuscation to make bitcoin not traceable.

Read Original/a>
Author: AnTy

Canada’s Central Bank Seeks an Economist to Monitor Digital Currencies and FinTech

The Bank of Canada is hiring an economist for “Digital Currencies and Financial Technologies.”

As per the official page, Canada’s central bank is currently engaged in a “large-scale research program to analyze the risks and opportunities” of the new developments in the fintech sector.

The idea is to ride the wave of innovation in fintech that is transforming the landscape of currency, payments systems, and financial intermediation. “This is a program of major social significance and will require us to break new ground,” says the bank.

The key part of this program is the monitoring framework for money and payments and the “contingency planning” for a Central Bank Digital Currency (CBDC).

Earlier this week, Deputy Governor Tim Lane said the COVID-19 pandemic is accelerating public use of online services, which means the central bank must move quickly to research how a CBDC works.

CBDC “looking a lot more urgent”

Under this position, the economist will be monitoring and analyzing developments in electronic money and payments, including CBDCs, cryptocurrencies, stablecoins, crypto exchanges, and others, develop tools for analysis, develop a policy to help maintain Canadian monetary sovereignty, and work on the “the potential development of a CBDC.”

The job position is for a 3 year time period with the possibility of extension and permanence that requires the knowledge of Bitcoin, Ethereum, and other networks and have experience in handling and analyzing public blockchain data besides the usual master’s degree in the relevant field.

With the closing date of October 25, the security level required for the position of “FSS Analyst, CBDC” is “Secret.” Currently, there is no specific time frame for the launch of a CBDC, Lane said,

“The main point, I think, is this is all looking a lot more urgent because of the speed with which technology is evolving.”

On Wednesday, during the panel discussion on the future of money, Lane also said that they are talking to several companies, including tech companies, banks, and financial institutions that are developing products or advising on the related things, on issuing a CBDC.

Read Original/a>
Author: AnTy

SBI eSports Signs Pro FIFA and Super Smash Bros Ultimate Players; Will Be Paid in XRP

SBI eSports, a subsidiary gaming venture of Japanese financial giant SBI Holdings, has signed two professional players to its e-team. In an official announcement made on 16th October, the SBI e-sports subsidiary also revealed that they would be paying its player’s salaries in XRP.

Back in September, the firm revealed that they were planning on paying their player’s salaries in cryptocurrencies. The official announcement read,

“The company aims to raise awareness of the SBI Group by strengthening contact points with the digital generation, and to create synergies with the various financial services businesses of the SBI Group.”

The payment of salary in the digital token would be facilitated via SBI’s crypto-asset trading division called SBI VC Trade. However, the final decision to accept salaries in XRP tokens would lie in the players’ hands. The official signing read,

“Players will be paid in the crypto asset ‘XRP’ instead of Japanese yen based on the wishes of the player and the sponsorship contract with SBI VC Trade Co., Ltd.”

The two pro players signed by the SBI eSports include one of Japan’s top pros in the Nintendo Switch fighting game, Super Smash Bros, Ultimate player Kenji “Ken” Suzuki, and FIFA 21 player Subaru “Mikey” Sagano, who has represented the German soccer club 1. FC Nürnberg.

The signings made by the SBI e-Sports is one of a kind because of the digital asset salary clause, which was not only highlighted in the official announcement but also in the personal tweets made by the signed players.

SBI to Conduct a Security Token Offering for SBI eSports

The SBI Group is also set to conduct a security token offering for the eSports subsidiary expected to occur on October 30. The offering would see 1000 total shares up for grabs valued at 50,000 yen (about $475) per share.

SBI Group is a Ripple partner and one of the significant stakeholders in the digital asset firm.

Read Original/a>
Author: James W

FSB Publishes 10 High-Level Recommendations to Regulate ‘Global Stablecoins’

The Financial Stability Board (FSB) has released 10 high-level recommendations for regulation, supervision, and oversight of “global stablecoin” in its latest report on Tuesday.

The international body that monitors and makes recommendations about the global financial system says global stablecoins must adhere to all applicable regulatory standards before commencing operation.

While these so-called fiat-backed stablecoins have the potential to “bring efficiencies to payments and to promote financial inclusion,” they may also challenge the existing regulatory oversight and generate risks to financial stability, says the report.

As such, the 10 high-level recommendations have been made that follow the “same business, same risk, same rules” principle.

To enhance the cross-border payments commissioned by the G20, the FSB has agreed to complete the international standard-setting by December 2021. Necessary adjustments must be made by that time, too, and a framework consistent with the FSB recommendations must be enabled at the national level by July 2022.

The report came the same day the financial officials of the United States, Canada, Japan, Germany, France, Italy, and Britain said digital payments should be “appropriately supervised and regulated.”

Until adequate regulatory, legal, and oversight standards are set, no global stablecoin project should begin operation, said the G7, without explicitly mentioning Facebook’s Libra, which has been the one that pushed them into action.

The officials also called on all countries to implement FATF standards to reduce the exploitation of criminals’ financial services. The emphasis was put on coordinated response through information sharing and economic measures.

Read Original/a>
Author: AnTy

BTC Bull ‘Pomp’ Teams Up With TikTok Influencer Bryce Hall to Launch Capital University Podcast

Bryce Hall, a popular TikTok star, is all set to enter the financial realm with popular bitcoin proponent Anthony ‘Pomp’ Pompliano. Teaming up to launch a podcast called “Capital University,” unlike Pomp’s main podcast, which solely focuses on business and promoting bitcoin, this joint venture is focused on reducing the generational divide.

The podcast would be a different exchange of ideas for both the individuals, where Pomp would try to understand how social media influencers earn money. In contrast, Hall will try to learn tips on investments and building generational wealth through smart investment strategies. Hall said,

“I just want to highlight the power and importance of diversification. I do believe crypto is its own asset class and one worth exploring.

It is definitely the Internet’s version of gold with the caveat of having a known finite amount of units.”

Hall raises to fame through the popular short video sharing social media platform TikTok and boasts of around 25 million subscribers across various social media platforms and currently boasts of $2 million in net worth.

Hall also mentioned on Twitter that the new podcast would be a new learning curve in life, especially in terms of finances. He also opened up that currently, he does not hold any cryptocurrency, nor does he have any prior association within the crypto space.

The TikTok star might not have any crypto holdings at present, but given his association with Pomp, it would not be a big surprise if the young social media influencer does eventually invest in digital assets.

Several big shots have already agreed to come on the podcast, including Mark Cuban and Gemini exchange founders, Tyler and Cameron Winklevoss. Given Cuban as well as both of the brothers have made a name for themselves. They could also play a key role in helping the young influencer understand how digital assets work.

Hall also commented on his first guests for the podcast and said,

“When Tyler and Cameron Winklevoss are engaging with your tweets and direct messaging you, you better take what they say seriously and reevaluate your investment positions.” He continued,

“Right now, when you’re at the top, this is when you’re going to be making the most money. You just have to find a way to sustain it.”

Even though the Podcast officially launched yesterday, it has already soared to the number one business podcast in the world. This sudden rise was probably due to Bryce’s 25 million combined social media followers.

You can catch the first cut episode on YouTube here:

Read Original/a>
Author: Rebecca Asseh

Financial Firms & Law Enforcement Find Cryptocurrencies More Risky Than Opportunistic: Survey

Financial firms, government, and the private sector all see cryptocurrencies as risky, found a survey by the Royal United Services Institute think-tank and the Association of Anti-Money Laundering Specialists on Tuesday.

About 60% of respondents said cryptocurrencies were a risk rather than an opportunity with illicit usage the main concern.

The survey that maps out mainstream global views towards cryptos suggests an uphill struggle for the industry to achieve wider acceptance. Countries across the world are still grappling with how to regulate cryptocurrencies with the EU planning to introduce new rules by 2024.

The survey was based on over 550 responses from law enforcement, financial watchdogs, financial institutions, and legal and insurance firms along with the cryptocurrency industry.

Nearly 90% of respondents from financial firms said they were worried about digital currencies being used to launder money, while more than 80% are concerned about their usage to circumvent the financial system.

“All respondents accept that cryptocurrencies are vulnerable to criminals,” the survey’s authors said.

While the mainstream views about crypto are still marred by the potential criminal usage of crypto, according to blockchain analysis from Chainalysis, it is as low as 1% of all transactions. Not to forget the fact that major banks, including JP Morgan just recently, in one of its many over the years, have been involved in the illicit usage of trillion dollars and precious metal manipulation.

Only a fifth of respondents said they viewed cryptocurrencies as an opportunity, with one of the potential benefits cited was the extended access to financial services, the research found.

Read Original/a>
Author: AnTy

Low Financial Literacy Investors Twice As Likely to Own Crypto vs Market Gurus: Bank of Canada

A new study released by the Bank of Canada has revealed that folks with lower financial literacy are more likely to own Bitcoin than those with higher literacy levels. The paper’s main point of the research was the use of ‘Cash Alternatives’ in Canada throughout 2019; some of the points highlighted include the adoption of cryptocurrencies and the possibility of a Central Bank Digital Currency (CBDC).

According to the report, cash payments in Canada decreased from 54% to 33% between 2017 and 2019 as more people opted for credit or debit cards instead. It highlights that this trend was mainly fueled by the rise of e-commerce, hence ease of making digital payments. Nonetheless, most Canadians are still using cash within the local Point-of-Sales (PoS).

Crypto Ownership Demographics

With cryptocurrencies getting more hype by the day, the survey revealed that at least 89% of Canadians have heard of Bitcoin. Out of these, 5% percent own BTC while another 1.6% have portfolios in other crypto assets such as Ether and Litecoin. As for the gender and age demographics, the groups which were mostly aware or own Bitcoin fall under young, male, university-educated, or high-income Canadians.

While those demographics may seem to favor financial literate folks, the research revealed that BTC ownership is more correlated to the less financially aware Canadians, ranking the sample into three where 47% had high financial literacy followed by the medium at 35% and finally low at 18%. Interestingly, 8% of the latter group said they own crypto assets compared to 4% of the highly financially aware.

However, awareness is still high among the more financially literate, with around 93% having heard of crypto assets instead of only 72% at the lower financial literacy group. While the digital payments space may be booming, the researchers noted that at least 86% of Canadians have no plans of shifting from cash.

Read Original/a>
Author: Edwin Munyui

US FinCEN Set to Upgrade AML Guidelines in Wake of Evolving Illicit Financial Crimes

  • The US Financial Crimes Enforcement Network (FinCEN) has issued an advanced notice of proposed rulemaking (ANPRM) to amend its anti-money laundering (AML) guidelines, ensuring that all covered financial institutions maintain an efficient AML program.
  • This includes crypto entities that run under the Money Service Business (MSB) licenses, amongst other approvals, to offer this line of service to US residents.

According to the announcement on September 17, FinCEN is seeking feedback from stakeholders affected by changes to the AML requirements. This bureau of the US Department of the Treasury has since issued 60 days for interested stakeholders to have commented on prospectus regulatory amendments.

FinCEN noted that this move is particularly important in the combat of evolving illicit financial crime and will therefore set the stage for more solid AML practices,

“The regulatory amendments under consideration are intended to modernize the regulatory regime to address the evolving threats of illicit finance, and provide financial institutions with greater flexibility in the allocation of resources, resulting in the enhanced effectiveness and efficiency of anti-money laundering programs.”

Upon implementation, the prospectus changes will affect compliance and reporting by US domiciled financial institutions. FinCEN highlighted that the amendments are expected to be detailed enough, such that there is clear clarification on risk assessment methods, coupled with the consideration of oversight requirements under the US Bank Secrecy Act and AML priorities.

Crypto Businesses Amongst the Targets!

With a decade gone by since crypto made a debut, regulators appear to be paying more attention now that the trend is no longer a hype but a threat to traditional financial ecosystems. One of the areas that have proved incredibly difficult for oversight agencies is crypto in money-laundering and terror-financing activities.

It, therefore, comes as no surprise that FinCEN is joining its counterpart agencies like the IRS, which recently issued a $625,000 bounty for anyone who would crack Monero’s anonymous ecosystem. Going forward, more financial oversight authorities are likely to take a similar route as crypto gradually goes mainstream.

Read Original/a>
Author: Edwin Munyui

Aave & Synthetix Dominate FTX’s DeFi Index; Replacing Maker & COMP

  • Aave (LEND) continues to lead the decentralized financial (DeFi) sector, accounting for the highest 17.82% share of the marketplace.
  • This dominating DeFi lending protocol, which has a total locked value (TVL) of $1.52 billion, is now the second most weighted digital asset in the derivatives platform FTX’s DeFi Index.

FTX’s DeFi perpetual contracts were launched in mid-June with Compound (COMP) and Maker (MKR) having the dominant position with 20% share each, which has now fallen to 11.2% and 6.1%, respectively.

It makes sense, given that while COMP and Maker were hot at the beginning of this DeFi craze but now as the market grows, other projects are gaining strength.

While Maker saw the biggest reduction in its weightage in FTX’s DeFi Index, Kyber Network (KNC), 0x (ZRX), Augur (REP), and Bancor (BNT) also recorded a lower end single-digit decrease.

Meanwhile, emerging projects like Kava, Loopring (LRC), and REN registered a jump in their weightage.

However, the biggest gainer has been Synthetix (SNX), the 6th largest DeFi project with just over $745 million in deposits, as per analyst Ceteris Paribus.

Together LEND and SNX account for 46.6% of FTX’s DeFi Perpetual contracts.

Since the launch of the DeFi futures contract in mid-June, LEND and SNX are the biggest gainers while Maker has actually suffered losses.

The DeFi PERP is currently trading at $2,607 with a volume of $3.2 million, up from around $1,200 level it was at during the launch but down from nearly $3,500 high on Sept. 1st.

Read Original/a>
Author: AnTy

FATF Releases Red Flag indicators To Identify Money Laundering Using Crypto

  • The Financial Action Task Force (FATF) releases report on how to identify possible red flags in crypto money laundering rings across virtual asset service providers, or VASPs in short.
  • The regulator highlights a number of ways that crypto exchanges can stop and curb illegal and illicit activity.

The report titled, Virtual Assets – Red Flag Indicators of Money Laundering and Terrorist Financing, outlines several red flags including those arising from irregular transaction patterns, anonymous transactions, arising from senders and receivers and sources of wealth profiles of the crypto users.

One of the red flags arises from the size and frequency of transactions whereby a money launderer could make multiple high frequency transactions over a period of 24 hours or staggered and regular transactions which stop shortly after they are made. Moreover, transferring virtual assets to exchanges with low or non-existent AML/CFT rules is also considered a red flag.

User profiling is also an excellent way of noticing possible money laundering and terrorist financing. Here, exchanges are tasked with checking on the transactions made and comparing it with the user’s profile.

This arises when a user deposits an unusual amount to their wallet which does not match the traders profile or recent transactions. This could signal the deposit is subject to checks of money laundering, scamming or a money mule. The report reads on transaction patterns as a red flags stating,

“Conducting a large initial deposit to open a new relationship with a VASP and funding the entire deposit the first day it is opened, and that the customer starts to trade the total amount or a large portion of the amount on that same day or the day after, or if the customer withdraws the whole amount the day after.”

Also quick deposits and withdrawals of full balance of virtual assets in a short period of time raises eyebrows.

Virtual asset accounts with no logical business explanation making frequent deposits and transfers off the exchange to less KYC friendly exchanges poses a red flag. Accumulation of funds from several unrelated exchanges or wallets sending small amounts to one virtual asset account before fully withdrawing the funds may be a money laundering scheme.

Regulators should also follow users who use anonymity enabled public cryptocurrencies and privacy coins such as Monero, Zcash and Dash closely, the report states. Also the exchange of public and transparent crypto coins such as Bitcoin for the anonymity enhanced cryptocurrencies also raises questions on the actions of the trader.

FAFT has pushed through KYC/ AML regulations and compliance rules for VASPs across the globe in a bid to curb money laundering and terrorist financing using crypto. The “Travel Rule” recommends that the 200 countries that follow it, say to mandate VASPs such as custodians and crypto exchanges to retain and share any information on possible illicit and illegal trades happening on their platforms.

Read Original/a>
Author: Lujan Odera