Blockchain Traceability Developments for Automobile, Pharma and Art Industries
By: Simone O. Otenaike
Earlier this week, one of the world’s largest automobile manufacturers, in conjunction with its financial services arm and two other subsidiaries, launched a cross-group virtual organization. The new venture aims to use blockchain technology to offer contract digitization, more efficient supply chain management and record keeping, and improved financing methods through the digitization of rights to various assets.
In other supply chain industry news, late last week a report was released with results from the FDA’s DSCSA Pilot Project Program. The report provides details on BRUINchain, a blockchain-based system that reportedly meets all the key objectives of the Drug Supply Chain Security Act (DSCSA) for a pharmaceutical dispenser operating solely on commercial off-the-shelf (COTS) technology. The system reportedly scans the drug package for a correctly formatted 2D barcode, flags expired product, verifies the product with the manufacturer, and quarantines suspect and illegitimate products. The system was tested on real caregivers administering lifesaving medications to real patients at one of the busiest pharmacies in the United States. According to the report, the system successfully implemented product-tracing notifications that tracked and traced changes in custody of a drug. The system also reportedly demonstrated a 100% success rate with expiration detection and counterfeit detection. The paperwork time associated with such suspect product notifications significantly decreased from approximately one hour to less than a minute.
In another development, Nifty Gateway, a recent acquisition by Gemini Trust Co., announced plans to debut its marketplace for tradeable digital art this week. Customers will reportedly be able to buy and sell collectible digital art from famed artists through the blockchain-based marketplace. The authenticity of each piece will be verifiable through an immutable record made available through blockchain technology.
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Blockchain Identity and Privacy Solution Developments, Ethereum Used to Avoid Censors
By: Robert A. Musiala Jr.
Last week, ID2020, a nonprofit committed to improving lives through digital identity, announced its first two “certified digital identity solutions.” The ID2020 Certification Mark requires adherence to 38 technical requirements designed to promote development of ethical, inclusive digital identity solutions. ID2020 granted its Certification Mark to “know your customer” solution provider Kiva Protocol and decentralized cloud platform Gravity.Earth.
Also last week, a press release announced that users of the Brave web browser can now redeem the browser’s Basic Attention Token (BAT) for rewards offered by merchants participating in an online rewards program marketplace. The Brave browser allows users to earn BAT in exchange for opting in to viewing advertisements. In another recent press release, Brave announced that it has filed “a formal GDPR complaint” against a major U.S.-based technology company that hosts a popular Internet browser. According to the announcement, Brave filed the complaint with the Irish Data Protection Commission “for infringing Article 5(1)b of the GDPR, which sets forth the ‘purpose limitation’ principle,” which “requires that organizations must scrupulously ring fence data for specific purposes.”
In a final notable item, according to reports this week, a Chinese journalist recently posted an article on the Ethereum blockchain to avoid censorship restrictions in China. The article reportedly was censored due to content related to the coronavirus.
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Blockchain Payment Initiatives Introduced in India, Latin America, Thailand and US
By: Jordan R. Silversmith
Binance, the world’s largest digital asset exchange by trading volume and users, and WazirX, an Indian bitcoin exchange, have announced a joint initiative to support the growth and development of blockchain startups in India. Binance acquired WazirX in 2019 with the goal of developing and using blockchain technology in India. The initiative, “Blockchain for India,” will be backed by a $50 million fund and will aim to incubate and invest in startups aiming to solve industrial and social problems in India through blockchain. Binance also recently announced a new peer-to-peer (P2P) crypto trading system with five new Latin American fiat currencies. Users of the new platform can now buy and sell cryptocurrency directly with the Brazilian real, the Peruvian sol, and the Argentine, Colombian and Mexican peso.
On Wednesday, a Thai fintech company specializing in digital cross-border money transfers announced a new partnership with a U.S. blockchain technology company specializing in global payments. The Thai fintech company will reportedly use the U.S. firm’s blockchain services to process inbound payments into Thailand.
Also on Wednesday, CoinZoom, a Utah-based, FinCEN-registered cryptocurrency exchange, announced that it will offer its own debit card in partnership with a major U.S. financial services firm. According to reports, the card will allow holders to pay for goods and services by converting cryptocurrencies into U.S. dollars.
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New Cryptocurrency Anti-Money Laundering Rules Announced in Canada and Singapore
By: Veronica Reynolds
The Canadian financial regulator FINTRAC has announced that it will implement new guidelines related to cryptocurrencies as part of an overhaul to its Anti-Money Laundering (AML) rules. Starting June 1, 2020, companies will be required to report the type and amount of cryptocurrencies used in transactions or remittances valued at more than 1,000 Canadian dollars, as well as the source of and entities involved in such transactions. Additionally, companies dealing with 10,000 Canadian dollars or more in cryptocurrency activity will be required to register as a money services business.
Increased regulatory certainty emerged in Singapore this week as well, with the country’s Monetary Authority issuing a 73-page set of guidelines for digital payment token providers that details new AML and anti-terrorism requirements as they apply to digital currencies. The guidance includes cryptocurrency-related compliance requirements for risk assessment and mitigation, due diligence of customers, reliance on third parties, wire transfers, record keeping, and the reporting of suspicious transactions. The agency acknowledged the importance of the guidelines, even though “virtual assets activity in Singapore forms a small portion of global activity, and is not material compared to traditional financial activities in Singapore’s financial system.”
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DOJ Prosecutes Crypto Crimes, Analysis of Major Crypto Laundering Scheme Published
By: Joanna F. Wasick
On March 13, 2020, the United States Department of Justice (DOJ) announced the sentencing of 13 years in prison for a Long Island woman, Zoobia Shahnaz, for attempting to travel to Syria to join ISIS, and for giving more than $150,000 to a foreign terrorist organization. According to the DOJ, Shahnaz obtained those funds by fraudulently obtaining more than a dozen credit cards and then purchasing bitcoin and other cryptocurrencies.
Last week, the DOJ also announced the indictment of a Dutch national known as “Mr. Dark” for his operation of Dark Scandals, a site on both the Darknet and Clearnet that featured the actual rapes of adults and children. Law enforcement was allegedly able to trace payments of bitcoin and ether to the Dark Scandals site by following the flow of funds on the Bitcoin and Ethereum blockchains. In addition to the nine-count criminal indictment, there is a parallel civil forfeiture action, which identifies 303 cryptocurrency accounts.
This week, the DOJ announced the sentencing of two Canadian residents for conspiring to commit wire fraud and money laundering in a scheme to steal bitcoin. According to the DOJ, the defendants used a Twitter account to convince victims they were customer service representatives from a Hong Kong-based platform that provides cryptocurrency wallets. They would then steal cryptocurrency funds from the victim’s wallets.
Last week, CipherTrace, a blockchain analytics firm, published an article about how two Chinese nationals with ties to North Korea laundered over a hundred million dollars’ worth of stolen cryptocurrency to benefit the North Korean government. The individuals, Tian Yinyin and Li Jiadong, were charged by the DOJ earlier this month. The article goes through the step-by-step tracing analysis of the funds, including how the defendants used “peel chains,” an anonymizing technique that occurs when a large amount of bitcoin in one address is sent through a series of transactions in which a slightly smaller amount of bitcoin is transferred to a new address each time – in each transaction, some bitcoin “peels off” the chain to another address.
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