Crypto Developments Emerge in Payments, Trading, Staking and Accounting
By Lauren Bass
This week, a global financial services and payment technology firm announced that it has partnered with a major U.S. cryptocurrency custody and blockchain infrastructure firm to launch “a comprehensive suite of buy, hold and sell services for select crypto assets, augmented with proven identity, cyber, security and advisory services … for banks and fintechs.” According to a press release, the new program will “enable financial institutions to bring secure crypto trading capabilities and services to their customers.” The new “Crypto Source” program reportedly will operate with the cryptocurrency custody firm providing “crypto-asset trading and custody services on behalf of the banks” and the financial services firm providing “technology to integrate those capabilities into banks’ interfaces, resulting in a seamless experience for the consumer.”
In related news, Anchorage Digital and Provenance Blockchain recently announced the launch of a digital asset staking program for the HASH cryptocurrency. According to a joint announcement, “Anchorage clients will now be able to stake HASH and collect associated rewards for securing the network.”
In a final notable item, following a review of crypto accounting rules, the U.S. Financial Accounting Standards Board (FASB) recently voted in a “tentative Board decision” to make “fair value” the primary accounting method for measuring crypto assets. Per FASB, the decision is “tentative and may be changed at future Board meetings.” According to reports, this marks a major shift away from the current practice of labeling digital assets “intangible assets” and valuing them at their lowest price during any reporting period – a practice that has resulted in substantial impairment losses on balance sheets. Final adoption of the standard will likely not occur until early 2023.
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DOJ Targets Crypto Money Laundering and Fraud; Japan Issues Crypto Warning
By Joanna F. Wasick
On Wednesday, the U.S. Department of Justice (DOJ) issued a press release announcing the unsealing of a 12-count indictment in a New York federal court, which charged five Russian nationals with various criminal counts related to a global smuggling and crypto money-laundering network. Those five defendants are being charged with attempting to evade sanctions against Venezuelan oil producers and obtaining technology used in the U.S. F-22, an air superiority fighter. Also charged were two individuals who brokered illicit oil deals for a Venezuelan state-owned oil company as part of the scheme. As alleged, the defendants were criminal enablers for oligarchs who were “orchestrating a complex scheme to unlawfully obtain U.S. military technology and Venezuelan sanctioned oil through a myriad of transactions involving shell companies and cryptocurrency.”
Also on Wednesday, the DOJ announced that two Massachusetts men were sentenced for an extensive scheme to take over victims’ social media accounts and steal their cryptocurrency through various means, including computer hacking and SIM swapping. According to court documents, the defendants targeted executives of cryptocurrency companies and others who likely had large amounts of cryptocurrency and “had high value or ‘OG’ (slang for Original Gangster) social media account names.” Members of the conspiracy allegedly stole approximately $330,000 in cryptocurrency from at least 10 victims. The defendants were sentenced to slightly more than two years in prison.
Late last week, Japan’s National Police Agency and Financial Services Agency issued a statement warning Japanese crypto-asset businesses to stay vigilant for phishing attacks by the North Korean hacking group, Lazarus. The statement noted that the hacking group uses social engineering and impersonates executives of a target company to bait employees into clicking malicious links or attachments in order to gain access to the victim’s network. The statement also suggested that digital asset holders install security software, strengthen identity authentication mechanisms by implementing multifactor authentication, and not use the same password for multiple devices or services. Finally, the statement confirmed that several phishing attacks had been successfully carried out against Japanese-based digital asset firms, although no names or other such details were disclosed.
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