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From Singapore’s MAS chiding 3AC for reportedly providing false or misleading information to Russian lawmakers drafting a law that could see digital assets issuers be exempted from VAT, the past week was quite interesting for crypto. Happy reading!

Singapore’s Financial Regulator Rebukes 3AC for False Information

Last week saw the Monetary Authority of Singapore (MAS) add to 3AC’s woes as it rebuked the troubled crypto firm for allegedly providing false information to the regulator after exceeding its allowable assets under management (AUM) threshold as a registered fund management company (RFMC).

MAS says 3AC was registered in 2013 as an RFMC that’s not to have more than 30 qualified investors and no more than S$250 million AUM. Instead, it moved its AUM to an offshore entity in the British Virgin Islands in 2021 and notified MAS on 29 April 2022 that it will cease activity in Singapore by 6 May 2022.

Some creditors, including Blockchain.com and Deribit, recently sought the liquidation of 3AC at a court in the British Virgin Islands. Teneo Restructuring is to handle the 3AC insolvency.

MAS’s statement came before BitMEX founder Arthur Hayes tied the 3AC saga to the current bear market and stated that the firm’s default ‘blew a whale shark-sized hole in many of the largest centralized crypto lending businesses’ making them functionally insolvent.

Hayes says the withdrawal of credit from the crypto ecosystem caused a generalized market crash of Bitcoin, Ether, among others.

EU Crypto Regulation Update

Late last week, the EU announced the first rules that will ensure that crypto-assets can be traced like traditional money transfers. The tracing of crypto-asset transfers is to help identify and prevent money laundering, terrorist financing, and other crimes while suspicious transactions will be blocked, the new legislation says.

The legislation also extends to the implementation of the Travel Rule (TR), the anti-money laundering policy that requires intermediary companies to collect information on their customers. That is, the information of the source of the asset and its receiver traveling with transactions over $1,000, while crypto assets service providers like exchanges are expected to provide such information to competent authorities e.g. a court only upon request. The TR will not apply to P2P transfers.

The EU took the TR recommendations from the Financial Action Task Force (FATF) which is made up of 37 member states that are combatting money laundering and terrorist financing.

Hacked: British Army’s Twitter and YouTube Accounts Promote Crypto

The British Army’s Twitter and YouTube accounts were briefly hacked to post about cryptocurrencies and non-fungible tokens (NFTs).

With more than 360,000 followers, the Twitter account was used to make several posts about NFTs while their YouTube account (with 177,000 subscribers) was renamed ‘Ark Invest’ — after an American investment management firm that has an interest in ETFs and cryptocurrencies — and showed several videos about cryptocurrencies.

Control was later regained by the British Army which tweeted that an investigation has been instituted to know more about the incident.

Still on hacks and cryptocurrencies, a crypto economy analytics firm, Coincub published a report that puts North Korea as the global leader in crypto crime. Based on at least 15 documented instances of crypto crimes, the report says about 7,000 hackers have carried out profitable cyberattacks for North Korea to raise an estimated $1.59 billion.

North Korea is followed by the US and Russia in the Coincub crypto crime ranking.

Grayscale Disappointed, Sues SEC Over Denial of Spot Bitcoin ETFs

The US Securities and Exchange Commission (SEC) rejected Grayscale’s application to convert the world’s largest Bitcoin investment vehicle: Grayscale Bitcoin Trust (GBTC) to a spot Bitcoin ETF. Its CEO, Michael Sonnenshein, says they are deeply disappointed and disagree with the SEC’s decision to continue denying spot Bitcoin ETFs from coming to the U.S. market.

While the SEC is unsatisfied about preventing market manipulation and other concerns, Grayscale thinks the ETF will unlock billions of dollars of investor capital and further bring the Bitcoin fund into the U.S. regulatory perimeter.

As a result, Grayscale says it has filed a petition before the Court of Appeals for the District of Columbia Circuit to challenge the SEC’s decision to deny the conversion.

Its legal team believes they have a compelling case to be resolved as the SEC seems to be “acting arbitrarily and capriciously” in violation of one of its regulatory provisions.

Russian Lawmakers Want VAT Exemption for Digital Assets Issuers

In what could be in alignment with Russia’s interest in cryptocurrencies, the country awaits final approval for a draft law that would see issuers of digital assets and cryptocurrencies exempted from value-added tax.

The draft bill also establishes tax rates on income earned from the sale of digital assets. It wants Russian companies to pay 13% tax while foreign companies pay 15% as against the current 20% rate on transactions like standard assets.

Lawmakers at the State Duma last week approved the draft bill but are waiting on the upper house for a review and President Vladimir Putin’s signature to make it a law.

Since Western sanctions were levied on Russia following its invasion of Ukraine, the country’s attitude towards cryptocurrency seems to have changed.

The Central Bank of Russia recently made it clear that it is not against the use of cryptocurrencies in international transactions but on the home front as it claims they pose some risks to retail investors.

A lawmaker had earlier said they were considering accepting Bitcoin as payment for Russia’s oil and gas exports.

Remember, you can always follow us on Twitter (https://twitter.com/ProBit_Exchange/) and Telegram (https://t.me/ProBitGlobalOfficial) for more info including notes on new crypto gems that are about to break out onto the big stage. You can also ask questions on any crypto-related topic that seems unclear.

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