In this issue:
• Major Banks and Technology Firms Launch Stablecoin and Custody Products
• IRS CI Report Addresses Crypto; DOJ Targets Unlicensed Crypto Exchange
• New Data Quantifies Losses from Cryptocurrency Hacks and Scams
Major Banks and Technology Firms Launch Stablecoin and Custody Products
By Christopher W. Lamb
According to recent reports, a major European bank has launched its own stablecoin, “becoming the first big bank to offer digital tokens tracking the price of hard currencies to a wide range of investors.” The stablecoin, named EUR CoinVertible, will debut on a cryptocurrency exchange based in Luxembourg and “marks a significant step for a traditional financial institution into a part of cryptocurrency trading currently dominated by specialist digital asset firms.” According to reports, the “stablecoin had been built to be able to be used on different platforms and between various financial services players,” and token holders will “face no exposure risk to the French bank itself.”
According to a recent press release, a financial services company group based in Tokyo Japan has established a banking relationship with the issuer of the stablecoin USDC to promote the use of Web3 Services in Japan. According to the release, the relationship will allow the companies to work “towards the circulation of USDC and expanding the use of stablecoins in Japan.”
Other recent reports have indicated that Zodia Custody, a cryptocurrency storage provider backed by a major international bank, is joining Metaco’s network, which is “designed to handle the safekeeping and settlement of digital assets for institutions around the world.” According to the reports, the goal of integrating with Metaco’s network is to offer global sub-custody for financial institutions.
In a final recent press release, a major global technology company has announced a “new technology to help deploy cold storage solutions for digital assets.” The technology is “designed to address limitations of current cold storage offerings for digital assets, including the need for people to perform manual procedures for the execution of a cold storage transaction.” According to the release, the technology will help “mitigate[] the cost of the administration and reduce[] inherent risk of human interaction and errors, embracing the zero-trust approach” used in the company’s confidential computing solutions.
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IRS CI Report Addresses Crypto; DOJ Targets Unlicensed Crypto Exchange
By Joanna F. Wasick
The IRS Criminal Investigation team (CI) recently issued its 2023 annual report. CI reports that, with an increased use of digital assets in the mainstream economy, there was a related rise in digital asset tax investigations: “These investigations consist of unreported income resulting from failure to report capital gains from the sale of cryptocurrency, income earned from mining cryptocurrency, or income received in the form of cryptocurrency, such as wages, rental income, and gambling winnings.” The report also details CI’s role in government efforts to combat cybercrime and track the illicit use of cryptocurrencies.
On Dec. 6, the U.S. Department of Justice announced that Anatoly Legkodymov, the founder and majority owner of the Bitzlato cryptocurrency exchange, pleaded guilty to operating an unlicensed money-transmitting business that transported and transmitted illicit funds. As part of his plea agreement, Legkodymov agreed to dissolve Bitzlato and to release any claim over approximately $23 million in seized assets. “As alleged, Bitzlato advertised a safe haven for fraudsters, thieves, and other criminals to launder illicit proceeds – but their business model didn’t account for federal law enforcement,” said Deputy Attorney General Lisa O. Monaco. “We are dismantling and disrupting the cryptocrime ecosystem using all tools available – including criminal prosecution.”
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New Data Quantifies Losses from Cryptocurrency Hacks and Scams
By Lauren Bass
Last month cryptocurrency thieves reportedly stole $363 million in various exploits, scams and hacks, making it the most “damaging” month in 2023. According to reports, November’s figures surpass the previous record of $329 million set two months earlier, in September, and bring the total cryptocurrency losses incurred this year to $1.7 billion.
Much of this illicit activity is reportedly coming from cyber thieves based in North Korea. According to a recent cyber threat analysis, since 2017 North Korean “threat actors” have stolen close to $3 billion worth of cryptocurrency from global marks – and a whopping $1.7 billion in 2022 alone.
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