The June Crypto Newsletter
Published 17/06/2024
The latest updates from around the world pertaining to crypto news, regulations, and industry insights.
$11 Million Identity Hack
Deepfake technology is nothing new; we’ve all been aware of it for many years. However, 2024 appears to be a breakthrough moment for its contribution towards fraudulent behaviors. Just a few days ago, in mid-June, a crypto exchange account was drained of $11 million by an advanced AI and deepfake fraud gang in Asia.
The exchange reported that a “coin-stealing hacking gang” has been using deepfake AI technology to impersonate their victims, bypassing facial recognition software. This allows them to gain access to their account and steal their funds.
This particular account was robbed of $11 million in just minutes.
-CoinTelegraph
Facial biometric technology is typically used to deter this kind of activity. However, on this occasion, malicious AI technology was stronger, emboldening the necessity for more powerful verification safeguards against fraudulent methodologies.
Details about this theft are currently scarce, but the theft reiterates a powerful reminder that financial institutions and crypto exchanges, among many others, must implement the toughest security and protection measures to help counter illicit finance, fraud, and theft.
The account was reportedly drained without a 2FA or email notification, suggesting that crypto exchanges must perform further due diligence when withdrawal requests, particularly significant withdrawal requests, are made. For more information about Identity Verification and Customer Due Diligence services, reach out to ComplyCube here.
Deutsche Bank and BitPanda Form a Groundbreaking Partnership
The first of its kind. Deutsche Bank, the largest bank in Germany, has formed a strategic partnership with BitPanda, the Austrian-based Centralized Exchange (CEX). BitPanda will make use of Deutsche Bank’s payment API, granting access to German IBANs and improving user experience and trust.
This is a seismic shift in the attitude of Traditional Financial (TradFi) institutions to crypto and blockchain-based platforms. BitPanda’s partnership suggests that the enhanced international regulations in Europe, known as the Markets in Crypto Assets Regulation (MiCA regulation), is producing a more hospitable environment for the intersection of TradFi and Web3 payment solutions.
Other recent notable crypto and TradFi collaborations include:
- Solana and Stripe
- Bitcoin options and the New York Stock Exchange
- Revolut and the creation of its own crypto exchange
Is the Crypto Industry Moving into the East?
The better phrasing of this question might be, is the crypto industry growing out of America? Certain data would tend to suggest that this might be true. A Coinbase report expressed the company’s concerns about a lack of ‘developer talent in the US’. The company, again, cited federal regulatory ambiguity as the driver behind this skill gap.
The Biden admin and Gary Gensler’s unrelenting persecution of Bitcoin and digital assets is pushing the industry overseas and causing America to fall behind.
-Cynthia Lummis
This comes from Senator Cynthia Lummis, who agrees that the US has been lagging on favorable crypto policies for some time now and that the country might be at risk of falling severely behind other financial hubs. Many Asian regions, notably in the Middle East and Southeast Asia, are passing favorable crypto legislation and attracting a wealth of blockchain developers and firms to their shores.
The Evidence
Hong Kong became the first mover in Asia to pass a crypto ETF and the first mover across the world to pass an Ethereum ETF. While these financial instruments did not garner the same levels of investment volume as their US counterparts, it evidenced a greater and more forward-thinking approach by the government towards its crypto industry.
Singapore needs no introduction as a financial or crypto hub, having substantially overtaken Hong Kong over the past couple of decades. Its financial industry is regulated by the Monetary Authority of Singapore (MAS), which has delivered clear instructions and regulations for the cryptocurrency industry. Such legislation has been a key driver of the region’s industry.
Furthermore, while the Indian government has certainly held a negative view on crypto and regulation, the government is slowly beginning to foster greater regulatory measures that will enable growth in the country’s currently untapped market. Advanced crypto regulation is anticipated for 2025, which could become a watershed year for the Indian crypto industry. South East Asia at large is also becoming a hot spot for Bitcoin mining, with firms establishing blockchain mining facilities in Malaysia, Indonesia, Laos, and Thailand.
This Could be a Straw Man, However.
While regulatory clarity currently eludes the American crypto industry, this could swiftly change. Toward the end of May, the Securities and Exchange Commission (SEC) abruptly passed a US-listed Ethereum ETF. In the weeks that followed, the chair of the SEC, Gary Gensler, acted as if this development had been on the calendar for years, indicating a substantial shift in policy. For more information on the Ethereum ETF, read our previous article below.
The US presidential elections are also just around the corner, and stances on crypto regulation could play a pivotal role in its outcome.
We want all the remaining Bitcoin to be made in the USA.
-Donald Trump
This portrays quite a conflicting stance on the crypto industry in the American government. The Biden Administration has held a firm stance against further cryptocurrency regulation and, by default, crypto adoption.
Such a sudden change in crypto decision-making would seem odd if there was not a major political landmark on the horizon. For this reason, regulatory clarity in the crypto industry, particularly from the SEC, could emerge rather quickly if the industry is deemed to have significant political weight.
Furthermore, on-chain data reports that America still remains a hub for the development of blockchain payment services, suggesting that the industry still has strong grassroots in the US.
ComplyCube News
ComplyCube’s regulatory tour of Asia has concluded. We finished it off in style with a deep dive on the crypto regulatory landscape of India.
Roughly 3% of the Indian population own a crypto account, which already equates to roughly 15 million individuals.
The crypto market potential in India is enormous and with increasingly hospitable regulations, a thriving Indian crypto market might not be too far away.
For more information, read our blog above! Make sure you follow us ComplyCube for more international AML, KYC, and IDV regulatory updates.
