USDC’s ‘Breakthrough’ Use-Case, US Govt. to Distribute Aid to Venezuela via the Stablecoin

With the support and licensing from the US Government, Circle is providing foreign aid through the USDC stablecoin to the people of Venezuela. Circle said,

“While this may be the first time, it will no doubt not be the last as global stablecoins firmly arrive on the world stage as a foundational infrastructure in the future of the international monetary system.”

USDC is the fastest-growing stablecoin of 2020, growing 500% in the past 8 months, with a market cap of over $2.8 billion.

In an announcement on Friday, Circle said it has been “approached” to help the “legitimate elected government of Venezuela” to distribute the financial aid to front-line medical workers in the country who, besides coronavirus, are also battling with hyperinflation, international sanctions, and economic collapse under the Nicolas Maduro regime who had launched his own oil-backed crypto petro.

After imposing sanctions on the Maduro regime, the US government seized Maduro and his government’s assets, which they now seek to get in the hands of the Venezuelans fighting COVID-19, for which they have turned to blockchain and fintech.

In collaboration with the Bolivarian Republic of Venezuela, led by President-elect Juan Guaido and U.S.-based fintech innovator Airtm, aid will be distributed by leveraging dollar-backed USDC.

The Guaidó government will basically use the seized funds to mint USDC, which will be then sent to Airtm, a blockchain-based bank and dollar-denominated payment platform that powers digital payments throughout North, Central, and South America.

The USDC will then be sent to Venezuelan healthcare workers’ accounts as AirUSD — Airtm’s stablecoin-backed dollar token.

“All of this is powerful, inspiring, and underscores the ability of the internet and digital currency to transform… how value and money moves,” said Circle adding that

“it marks a historic moment where in order to execute on US government foreign policy objectives, economic and political leaders have turned to stablecoins.”

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Author: AnTy

OFAC Blacklists Three Russians’ Crypto Addresses Linked to 2016 US Presidential Election

The Treasury Department of Foreign Assets Control, OFAC in short, announced sanctions for three Russian hackers involved in meddling in the 2016 Presidential elections. The statement further added cryptocurrency addresses attached to the Russian Troll group, Internet Research Agency, were also sanctioned.

The sanctions stretch to several crypto addresses, including Bitcoin (BTC), Ether (ETH), Litecoin (LTC), Zcash (ZEC), and Bitcoin SV (BSV). As of the publishing of the sanctions, “all property and interests in property of these targets that are subject to U.S. jurisdictions are blocked,” the statement adds. U.S. citizens are also prohibited from engaging in transactions with the listed persons.

The three sanctioned persons – Artem Lifshits, Anton Andreyev, and Darya Aslanova – are listed for controlling the crypto wallet accounts and dealing with the IRA. The statement reads,

“Russian nationals Artem Lifshits, Anton Andreyev, and Darya Aslanova, as employees of the IRA, supported the IRA’s cryptocurrency accounts. The IRA uses cryptocurrency to fund activities in furtherance of their ongoing malign influence operations around the world.”

OFAC first listed IRA operations using cryptocurrency in 2018, accusing the firm of participating in meddling in the 2016 U.S. Presidential election.

Russia is not the only nation the U.S. agency is focusing on. In November 2019, BEG reported OFAC was accelerating its efforts to sanction cryptocurrency addresses from two Iran nationals in relation to ransomware attacks within the country.

The list of Russian cryptocurrency addresses that have been blacklisted by the U.S. Treasury Department.

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Author: Lujan Odera

Upbit Blames South Korea’s Taxation and KYC Hurdles in Foreigners’ Frozen Funds Saga

Upbit crypto exchange woes are still on after it emerged that foreign clients to this South Korean firm are yet to withdraw their ‘frozen’ funds. The platform suffered a blow when close to $50 million worth of Ether was stolen upon a successful hack towards the end of 2019.

Most of the affected clients are from China with over 6,000 crypto traders’ assets being frozen; they cannot even withdraw using the Korean Won. This group has since concluded that Upbit may be on its way to insolvency and also understated the financial damage caused by November’s 2019 hack. So far, organized efforts to have Upbit act on its obligations have been futile.

Upbit’s Defense

The Korean crypto exchange came out to clear the air on why they are yet to release frozen funds. According to them, structural hurdles under the legalities of financial markets have mainly contributed to this situation.

Top of the list is an internal Korean tax obligation under review; this came up after the authorities took a look of Upbit’s reports in December. The firm however highlighted that,

“Upbit has been working closely with the tax authority to ensure accurate taxation standards, and also with tax experts to review taxation standards by country.”

The other hurdle is a KYC process that has been prolonged despite Upbit submitting updated clients’ records upon request last year. New regulatory pressures from Korea’s regulator may have actually caused this delay given the financial attention and scrutiny triggered by Upbit’s hack.

Users who submitted their ID’s afresh are now wondering whether they are safe or more exposed? This is quite frustrating for them and only time can reveal if indeed Upbit is being truthful in its excuses.

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Author: Edwin Munyui

Germany’s Financial Authority, BaFin, Releases Guidelines For Foreign Crypto Custodians

  • Germany newly passed law set to grandfather an already operating foreign crypto firms despite lacking a license
  • However, those foreign firms that haven’t hit the German market yet are to be locked out till they apply for the licenses

Germany’s Financial Supervisory Authority (BaFin) through a memo released in January stipulated that they wouldn’t target firms holding crypto assets for German citizens and were operating without a license. To the contrary they would welcome them to the fold as similar German-based crypto custodians following a new law passed in Germany that took effect beginning of this year.

They must however have declared their willingness to get a license by March 30th and must have completed application of the same license by November 30th. This locks out those firms that hadn’t gotten into the German market yet after the law took effect as they have to acquire a license first if they are to operate there. The memo read,

“Before commencing new activity in relation to crypto values, the company must apply for a license in accordance with section 32 (1) sentences 1 and 2 KWG, also in conjunction with a legal regulation under section 24 (4) KWG”

Germany was prompted to pass the law in accordance to the EU’s Fifth Anti Money Laundering Directive (AMLD5). This meant that the crypto companies were obliged to illustrate compliance in accordance to the KYC and AML protocols.

Uncharted waters for Foreign Crypto firms

This process may baffle those who haven’t crossed paths with the German watchdog as Sven Hildebrandt, head of Distributed Ledger Consulting Group, explained. The laws passed are usually not thoroughly thought through and end with potential loopholes that can only be fixed by establishing administrative routines. He further added that with ample guidance if you had an idea of what you were doing then one ought to know how to go about the task now.

The Hildebrandt’s DLC Group which has been previously sought for advice by foreign crypto firms on how to go about the German regulations is now seeking authority from the German regulator in an attempt to become a compliance wing for companies that may lack financial muscle for the license applications.

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Author: Lujan Odera

Forex Firm Travelex Hacked By REvil, Hit With $6 Million Bitcoin Ransom Demand

Travelex, a foreign exchange firm was attacked by a group of cyber hackers who demanded ransom worth $6 million. The firm is the newest casualty in an ongoing explosion of ransomware attacks where hackers are looking for cryptocurrency payouts.

Demand for $6 Million Worth of BTC

The UK-based foreign exchange website, Travelex was forced to go dark after a ransomware attack that resulted due to a breach in its network. According to a BBC report, the attackers initiated the breach on New Year’s Eve and forced the company to power down its websites and systems.

It’s an attack whose timing was well coordinated as it occurred during a period when the majority of the company’s personnel were at home for the holidays. The firm currently operates in more than thirty countries. Its branches are 1,200 in total.

After the attack, many branches were forced to go old school and begin operating manually. Travelex posted a note on its official Twitter handle stating,

In its report to users, the foreign exchange firm noted that a ransomware gang going by the name Sodinokibi had taken responsibility for this attack. Additional reports noted that the gang had asked for a ransom amounting to $6 million that was to be paid in form of crypto.

The payment was to be made via a website that had a top-level domain, with its details indicating that it was registered in March 2019 in China.

Decryption Tools

The gang stated that it would provide the company with decryption tools that would make it possible for its IT personnel to disable the virus and regain access to all its files as soon as it had made payments.

Some studies have established that the frequency at which ransomware attacks are occurring may have had an effect on Bitcoin prices for the better part of 2019.

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Author: Daniel W

Firms Have Borrowed $8.2 Billion from the Blockchain Platform of a Chinese Forex Regulator

The Chinese regulator State Administration of Foreign Exchange (SAFE) runs a cross-border blockchain financing system and has helped firms with more than $8.2 billion.

The SAFE platform has helped small and medium-sized (SMEs) corporations and enterprises with this amount of money in only 8 months after being opened, reports the Economic Information Daily. Ever since it has been launched in March 2019, it has expanded its pilot financing program from 7 provinces to 17, having more than 160 banks joining its program.

One-Third of Chinese Lenders Providing Forex Services

Since November 29th, almost 1,600 companies, most of them SMEs, have become part of the SAFE program and started sharing their financial bookkeeps with over 160 banks. One-third of the lenders in China are providing Forex service. SAFE’s deputy director Zhang Xin said the platform will be advanced to make foreign exchange receipts and cross-border trade settlements easier. This is what the blockchain analyst Cao Yin declared about the initiative:

“The traditional financial processes, which require a lot of human labor to carry out information verification and authorization, leave a lot of room for financial fraud, but as the blockchain system promises a decentralized and encrypted track of each capital flow, it leaves potentially little to no space for human mediation.”

Aside from having a reliable trust mechanism, the SAFE platform offers real-time supervision and reduced processing time for any transaction. Zhang said transactions are now taking in place in 15 minutes, as opposed to the 1 or 2 days like they did before.

SAFE Platform to Be One of the Most Influential Chinese Blockchain Projects

The cross-border blockchain platform run by SAFE is at the moment the only state organ to file a Cyberspace Administration of China blockchain record. It’s set to become one of the most influential blockchain projects in the country, together with the central bank’s Greater Bay Area blockchain trade and finance platform.

After President Xi Jinping has endorsed the blockchain, more government authorities and enterprises in China have started hurrying to implement the new technology. Earlier in November, China has launched a blockchain identification system for cities.

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Author: Oana Ularu

China’s State Administration of Forex (SAFE) Extends Cross-Border Pilot to Leverage Blockchain Tech

China’s State Administration of Foreign Exchange (SAFE) has recently taken a move to help leverage blockchain technology so that better cross-border financial services are offered, reports local news outlet Global Times.

To be more specific, their cross-border financing blockchain platform pilot now covers up to 19 provinces and cities, which has increased from their original decision to cover nine. According to the news outlet, SAFE’s endeavor is deemed the most scalable in the country, as it has the ability to provide accounts receivable financing services from exports, and ensures that companies taking part in cross-border related businesses have been verified.

As of the end of October, the introduced system has supposedly completed 6,370 transactions as well as giving out $6.8 billion in loans. Thus far, they’ve been able to secure 1,262 companies as clients, most of which consists of small and medium-sized businesses.

Having spoken to Global Times Analyst, Cao Yin shared that this is definitely a milestone for them, especially considering the gap in traditional financial processes and that of the blockchain system.

More specifically, he shared:

“The traditional financial processes […] leave a lot of room for financial fraud. But as the blockchain system promises a decentralized and encrypted track of each capital flow, it leaves potentially little to no space for human mediation.”

In addition to allowing users to retort to a financial service that isn’t with a traditional financial institution, SAFE’s system is deemed crucial for Chinese exporters because it promotes real-time supervision and is time-efficient (i.e. processing time from one to two days to simply 15 minutes) among other improvements.

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Author: Nirmala Velupillai

US Treasury Blacklists BTC and LTC Wallet Addresses Said To Be Owned by 3 Chinese Drug Kingpins

The government of the United States, via the Treasury Department’s Office of Foreign Assets Control (OFAC), has decided to blacklist three crypto addresses this week. According to the institution, the owners of these crypto addresses were guilty of money laundering and drug smuggling.

According to the OFAC, Fujing Zheng, Xiaobing Yan and Guanghua Zheng were all determined as “drug kingpins”. All their U. S.-related assets were frozen, as well as their email accounts.

As you cannot simply seize the assets of a crypto wallet, the addresses of several Bitcoin wallets and one Litecoin wallet related to the Chinese criminals were blacklisted. This means that no organization that does not want to break the U. S. law can transact with them.

The OFAC affirmed that these people used Bitcoin in order to launder the money from their crimes and put it into banks that were based in either China or Hong Kong.

Sigal Mandelker, from the financial intelligence unit of the government, affirmed that these three people were involved in a significant international operation of drug trafficking. He also affirmed that they were directly responsible for the opioid crisis that is affecting the United States by shipping hundreds of packages full of drugs to the country.

This is only the second time that the entity decided to blacklist a wallet. Doing this is still considered somewhat rare, mostly because the government is not so used to deal with crypto yet. The first time that something like this happened was in November 2018 when two Iranian men were accused of being related to a ransomware scam.

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Author: Hank Klinger