NFT Sales Launch, Fintech Firms Launch Crypto Initiatives, NY DFS Approves Crypto Firms, CFTC and IRS Target Crypto Crimes, DeFi Project Hacked

BakerHostetler
Contact

BakerHostetler

NFTs Make Headlines, Global Payments Firm Launches Cryptocurrency Unit

By: Veronica Reynolds

Nonfungible tokens (NFTs) rule the blockchain world this week, with numerous high-profile campaigns making headlines. Digital artist Beeple sold a JPG file for almost $70 million through Christie’s auction house, reportedly making the piece “the third most-expensive work sold by a living artist at auction.” The National Basketball Association (NBA) partnered with Dapper Labs, based in Canada, to create NBA “top shots” – NFTs sold as collectible highlight videos. A LeBron James top shot has reportedly sold for $200,000. Finally, the band Kings of Leon will reportedly be the first to release an album as an NFT. Three types of NFTs will be offered by the band – a special album package; a live show package, which includes perks such as a lifetime’s worth of front-row seats; and an exclusive audiovisual art package. NFTs operate as digital certificates of ownership that are nonduplicable for assigned digital assets, providing buyers proof of ownership and authenticity.

In other news, a global digital payments platform announced plans this month to launch a business division dedicated to cryptocurrency, with a mission to “advance the utility of digital currencies.” As part of this initiative, the payments platform announced an agreement to purchase a cloud-based digital asset security infrastructure provider in order to “accelerate and expand its initiatives to support cryptocurrencies and digital assets.”

For more information, please refer to the following links:

Cryptocurrency Payment Options Expand Across the Globe

By: Robert A. Musiala Jr.

According to a recent press release, a U.S.-based luxury hotel group has partnered with BitPay, a cryptocurrency payment processor, to begin accepting bitcoin, ether and other cryptocurrencies as payment for its hotel services, making it the first U.S. luxury hotel group to accept cryptocurrency.

Another recent press release announced that U.K.-based fintech firm Wirex, in partnership with a major U.S. financial services firm, has launched a debit card that will allow users to make online and point-of-sale purchases with cryptocurrencies.

In a development from Switzerland, the country’s largest department store chain will reportedly begin selling bitcoin gift cards beginning April 1. The “Cryptonow” gift cards will be offered in partnership with the subsidiary of Bitcoin Suisse, a major Swiss cryptocurrency exchange.

And in news from New Zealand, fintech firm Techemynt has launched $NZDs, the first New Zealand dollar stablecoin. Each $NZDs is backed 1-to-1 by the New Zealand dollar. According to a press release, “$NZDs was deployed on the Ethereum blockchain by Blockchain Labs, using the robust FiatToken framework developed by Centre.”

For more information, please refer to the following links:

Cryptocurrency Firms Achieve NY DFS Approvals, IRS Launches Crypto Initiative

By: Keith R. Murphy

A major U.S. cryptocurrency services company, BitGo, recently obtained a New York Trust license authorizing it to operate as a regulated qualified custodian under New York State Banking Law, according to a recent news release. The newly issued charter from the New York State Department of Financial Services (NY DFS) enables the company to provide digital asset custodial services to New York clients. According to another recent announcement from NY DFS, Bakkt Marketplace LLC has been awarded a BitLicense, which allows the company to offer New York customers the ability to buy and sell cryptocurrencies.

According to recent reports, the Internal Revenue Service has commenced “Operation Hidden Treasure,” a new initiative to discover, track and pursue cryptocurrency tax evaders. The joint operation consists of agents from the civil Fraud Enforcement Office and from the Criminal Division who are trained in cryptocurrency and virtual currency tracking. The agents, along with specialist vendors, will reportedly analyze blockchain and crypto transactions to identify and hold would-be tax evaders liable for failing to report cryptocurrency income on their tax returns.

For more information, please refer to the following links:

CFTC Action Targets Crypto Market Manipulation, DeFi Hacked for $31 Million

New York federal court charging a businessman and computer programmer, and his former employee, with engaging in a cryptocurrency “pump-and-dump” scheme, in which they allegedly accumulated positions in cryptocurrencies, deceptively promoted them through social media as valuable long-term investments and then sold their holdings as prices sharply rose, resulting in profits in excess of $2 million. The CFTC’s acting director stated: “Manipulative and fraudulent schemes, like that alleged in this case, undermine the integrity and development of digital assets and cheat innocent people out of their hard-earned money…. Financial innovation is constantly breaking new ground, and the CFTC’s enforcement efforts must keep up.” The enforcement action is the first brought by the CFTC for a manipulative scheme involving digital assets.

Late last week, Swedish citizen Roger Nils-Jonas Karlsson pleaded guilty in a California federal court to securities fraud, wire fraud and money laundering in connection with a cryptocurrency scheme that defrauded more than 3,500 victims of over $16 million. According to the July 2019 indictment, Karlsson used a website to lure potential investors to purchase $100 shares of an investment plan, instructed them to send funds to a virtual currency exchange and falsely promised an eventual payout of gold. Karlsson later admitted that he had no way to pay off the investors; the funds were transferred to his personal bank accounts and used to purchase expensive homes and a resort in Thailand.

Only one day after launching on the Binance Smart Chain, Meerkat Finance, a decentralized finance (DeFi) project, announced late last week that it was the victim of a hack in which a smart contract vault was compromised and $31 million in cryptocurrency was taken. The funds were further transferred to multiple new blockchain addresses. On-chain data reportedly shows that the hacker(s) drained the funds by altering Meerkat’s smart contract that contains the project’s vault business logic by using the original Meerkat deployer’s accounts.

For more information, please refer to the following links:

Written by:

BakerHostetler
Contact
more
less

BakerHostetler on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.