Compliant Wednesday
Hey everyone,
Welcome to a new issue of Compliant Wednesday — your five-minute zero-knowledge rollup of crypto policy and regulation news. We batch the most relevant information, so you can stay compliant and decentralized.
In this week’s issue:
- US hearing on crypto crime and terrorism financing
- Binance settles with US regulators for record fine
- Doubts over need for a digital euro
- DOJ seizes $9M in Tether from romance scam
The US House Financial Services subcommittee held a bipartisan hearing on crypto and crime, with experts discussing the need for collaboration and regulation. A letter was also sent to the President and Treasury Secretary regarding fundraising by terrorist organizations using digital assets, citing a debunked article by the Wall Street Journal. The Blockchain Association also released a letter arguing that promoting a regulated digital asset industry is the best way to prevent misuse by bad actors.
Our take:
Collaboration between government, industry and law enforcement is key to preventing illicit activity while allowing innovation in crypto to flourish. However, a balanced regulatory approach is needed that does not stifle innovation with overregulation.
Read more here.
Binance pleaded guilty to charges of violating sanctions and money-transmitting laws, resulting in a $4.3 billion settlement with U.S. authorities. Founder Changpeng “CZ” Zhao will step down as CEO and a former Abu Dhabi regulator will take over.
Binance was accused of failing to maintain an anti-money laundering program, operating an unlicensed money-transmitting business, and violating sanctions laws. The $4.3 billion settlement is one of the largest penalties ever obtained from a corporate defendant by the U.S.
Binance’s founder, CZ, will pay a $50 million fine and be banned from any future involvement in operating or managing Binance.
Our take:
The days of the “move fast and break things” approach are over in crypto. Compliance and regulation have arrived. New all-time highs probably won’t arrive before the blockchain industry hasn’t cleaned up its compliance act.
Read more here.
Reservations and criticisms surround the potential issuance of a digital euro by the European Central Bank (ECB). Bank of Spain governor Pablo Hernández de Cos sees no pressing need for a digital euro due to the efficiency of current payment systems and concerns about its impact on financial stability and privacy.
Critics have raised concerns about the potential for a digital euro to strengthen state control and violate privacy. The ECB is proceeding cautiously with the project, but work is continuing in preparation for potential future implementation.
Our take:
The privacy implications of CBDCs need to be carefully considered before full-scale implementation. Policymakers should assess if concerns over privacy and control outweigh any marginal improvements a CBDC could bring over current systems.
Read more here.
The DOJ seized $9 million worth of tether (USDT) in connection with a “pig butchering” scam.
The scam involved luring victims in with traditional romance scams and requesting for them to send cryptocurrencies overseas. Tether has frozen $225 million worth of its stablecoin following a collaborative investigation with the DOJ and OKX. This serves as a reminder to cybercriminals that law enforcement will continue to develop the expertise needed to follow the money and seize it back for victims.
Our take:
Public-private partnerships to fight crypto-related crime are proving effective, but industry self-policing also needs to improve. Crypto companies should ramp up compliance efforts to curb illicit activities on their platforms. With the right compliance tools, this can be surprisingly easy!
Read more here.
And that’s a wrap! Drop us a comment which news you found the most interesting and we’ll see you back for Tech Adoption Friday!
