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AML and KYC: A catalyst for mainstream crypto adoption

One of the quickest ways to ensure crypto’s mainstream adoption is by working with the regulators, which includes implementing effective and investor-centric KYC and AML tools.

For Satoshi Nakamoto, the creator of Bitcoin (BTC), the motivation to create a new payment ecosystem from scratch in 2009 stemmed from the economic chaos caused by the banking sector’s over-exuberant and risky lending practices mixed accompanied by the bursting of the housing bubbles in many countries at the time. 

“And who do you think picked up the pieces after the fallout? The taxpayer, of course,” said Durgham Mushtaha, business development manager of blockchain analytics firm Coinfirm, in an exclusive interview with Cointelegraph.

Satoshi recognized the need for a new monetary system based on equity and fairness — a system that gives back power into the hands of the people. A trustless system with anonymous participants, transacting peer-to-peer and without the need of a central entity.

Snippet from the Bitcoin whitepaper. Source: bitcoin.org

However, a subsequent market downturn — fueled by the initial coin offering bubble bursting — made the crypto industry realize the need to build credibility, authority and trust by proactively working with regulators and legislators. Enter Anti-Money Laundering (AML) and Know Your Customers (KYC) procedures.

Mushtaha started the discussion by highlighting how, unlike fiat currency, transactions in coins and tokens built on blockchain technology are far easier to trace using on-chain analytics and AML tools. Furthermore, introducing KYC procedures to identify and legitimize users across major crypto exchanges resulted in a far more robust financial system that became more impervious to money laundering and other illicit activity.

As a result, it effectively bolstered the sector’s image and enticed more people to trust their hard-earned money in the market. “I see the next bull market becoming a watershed moment, where the masses dive into crypto as fears dissipate and the sector grows exponentially,” he said.

Impact of KYC and AML on the evolution of finance

The early discussions and implementation of global AML and KYC legislation date back five decades, marked by the establishment of the Bank Secrecy Act (BSA) in 1970 and the global Financial Action Task Force (FATF) in 1989. “The risk scenario indicators developed in traditional finance over the past 50 years have been adopted into crypto and niche sectors of the industry, including decentralized finance,” added Mushtaha:

“Where we differ from traditional finance is our on-chain analytical processes. There are no blockchains in traditional finance, so they are missing a huge part of the jigsaw as the blockchain sector is not siloed.” 

Sharing insights into what today’s KYC and AML implementation looks like from a provider perspective, Mushtaha revealed that Coinfirm has over 350 risk scenario indicators that cover money laundering, financing of terrorism, sanctions, drug trade, ransomware, scams, investment fraud and more. 

With AML getting more sophisticated in the decentralized finance (DeFi) space, “We can now tell you whether your wallet was directly implicated in illicit activities or has inherited risk from another address by receiving assets from ill-gotten gains.” In addition, technology has evolved alongside the crypto ecosystem to provide risk profiles on wallet addresses and transactions based on on-chain analytics.

Declining use of cryptocurrencies in money laundering

Year after year, numerous reports have confirmed a consistent decline in the use of money laundering — with transactions involving illicit addresses representing just 0.15% of cryptocurrency transaction volume in 2021. Mushtaha believes that this finding stands to reason. 

“Those involved in illicit activity would be wise to steer clear of blockchain-related assets and stick to the tried and tested dollar. The United States dollar is still the most utilized and preferred currency for money laundering,” he said while adding that, in crypto, once a wallet address has been identified as holding assets that were earned through illegal activity, there’s little the criminal can do.

With present-day regulatory scrutiny ensuring crypto exchanges are KYC compliant, bad actors find it difficult to off-ramp crypto assets into fiat or spend them in open markets. Speaking about the various methods most commonly used to transfer illicit funds, Mustaha stated:

“Sure, they can try to make use of anonymizing techniques, like mixers, tumblers and privacy coins, but then their assets will be flagged and tainted for using them.”

As cryptocurrencies become more accepted and prevalent globally, criminals will turn to a black market in order to sell ill-gotten assets. Given the availability of marketplaces where money can be spent without KYC, it will be incumbent on future law enforcement agencies to crack down on such sites.

KYC and AML tools can now correlate IP addresses with wallet addresses, and clustering algorithms do an amazing job at identifying associated addresses. Such measures would be difficult, even for state-level actors, to launder through exchanges outside their borders. Mushtaha added, “The Office of Foreign Assets Control (OFAC) has lists of identified addresses belonging to sanctioned persons and entities. The assets in those addresses are too hot for anyone to handle.”

Role of CBDCs in countering money laundering

Central bank digital currencies (CBDCs) could offer central banks a level of control never seen in fiat currency. Imagine all of the issues with fiat, like government manipulation and inflation, but now with the power of on-chain analytics. CBDCs will allow more granular scrutiny of users’ spending habits and central banks to freeze holdings, limit them, set expiry dates, automatically tax every transaction or even decide what can and can’t be bought with them. “Every merchant, financial institution and retail customer would also need to comply with KYC, thereby disincentivizing money laundering,” said Mustaha.

Libra, a permissioned blockchain-based stablecoin launched by Facebook’s parent company Meta, failed to gain traction when it was launched in 2019. Consequently, mainstream conversations around Meta’s crypto initiatives catalyzed numerous governments to try out CBDCs, with China being one the first to launch its CBDC.

Worldwide CBDC initiative overview. Source: atlanticcouncil.org

The possibilities for currency control are not the sole motivations for this wave of government-sponsored innovation. While pointing out that governments no longer follow the gold standard, Mustaha highlighted present-day inflation as a direct result of federal and central agencies printing money at will.

“The United States printed more dollars than ever existed before. And the result of that is rampant inflation that’s off the charts.” 

Moreover, Mustaha argued that increasing the interest rates too much, too quickly, would cause a catastrophic cascade of overextended debt-ridden financial institutions to collapse. As a result, CBDCs stand out as a solution for central banks, adding that “For the first time, central banks could destroy money as well as create it.”

Evolution of AML, KYC and technological advancements

Based on his extensive experience in the AML/KYC sector, Mushtaha stated that technology adapts to the evolution of regulations and not the other way round. Startup trading platforms that decide to integrate AML tools have the option to apply for a virtual asset service provider (VASP) and securities licenses. “Becoming compliant means a huge pool of opportunities becomes open to you. Funding in this space is only available to those focusing on compliance.” As a result, AML solution providers find themselves bridging the gap between the crypto world and the compliant financial system.

Mushtaha shared an instance working with a startup that is currently developing a nonfungible token (NFT)-based KYC solution using zero-knowledge Proofs. “The cleverness comes from their recognition that NFTs used for KYC don’t need to solve the double spend problem, so can be disengaged from the blockchain entirely. This then allows for private biometric data to be stored on the NFT and a zk-Proof to be sent to each platform where the individual wants to open an account.”

Although the solution is designed to perform as a centralized entity for storing the NFT information “most likely on a permissioned (publicly inaccessible) chain,” Mushtaha affirms it’s a step in the right direction as NFTs serve KYC use cases over the next decade as digitalization continues to permeate across industry verticals.

In terms of AML, new tools and advancements are coming out every month owing to the accelerated rate of innovation. According to Mushtaha, an in-house tool allows Coinfirm to analyze every wallet address that contributes assets to a smart contract-controlled liquidity pool, adding that “We can provide risk profiles for tens of thousands of addresses at a time.”

AI innovations focusing on algorithmically generated transaction-based user behavior pattern recognition will be a key trend. “The blockchain holds a wealth of behavior-related data, that can be used to analyse money laundering patterns, and then extrapolate risk profiles for wallet addresses that behave in these ways,” explained Mushtaha.

Machine learning tools, which have collected large pools of data sets over the years across the crypto landscape, will also be utilized to predict potential trade outcomes.

Governments monitoring cross-border crypto transactions

The FATF issued its revised guidance in October last year, where they labeled every crypto asset that preserves privacy or that doesn’t involve an intermediary of some kind as high risk. This is not surprising as the FATF’s explicit mandate is to eliminate “any threats to the integrity of the international financial system,” of which it considers cryptocurrencies to be one. Hence, the introduction of the Travel Rule in 2019 requires all VASPs to pass on certain information to the next financial institution in a transaction. 

When the rule gets applied to un-hosted wallet addresses held by private individuals, however, “The FATF seems to be laying the groundwork to apply the Travel Rule to these wallets if peer-to-peer transactions increase in the next few years, potentially imposing on privacy rights,” said Mushtaha.

A more prudent approach, according to Mustaha, would be to harmonize the mostly fragmented implementation approaches of the existing Travel Rule across jurisdictions, making cross-border transactions more straightforward while also focusing on VASP compliance.

Crypto entrepreneurs’ role in countering money laundering

Given the availability of off-the-shelf AML solutions designed to tailor-fit each VASP’s particular requirements, Mustaha believes “there really is no excuse anymore” for neglecting compliance. It is also incumbent on VASPs to establish comprehensive educational materials for their users as the world prepares for frictionless mass adoption.

Mushtaha believes that crypto entrepreneurs are in a unique position to help write the next chapter of the global financial system, and they should understand that AML compliance isn’t an impediment to their success — but a catalyst. “Most retail investors want to navigate this space safely, managing their risks while transacting,” he recommended. “And giving these investors peace of mind should be a VASP’s priority.” 

Working toward a regulatory future

KYC and AML are necessary elements of today’s macro economy and are important components of the crypto space. Mustaha disagrees with the belief that regulations erode anonymity. 

“Regulations will drive mass adoption, but it’s incumbent on the players in this space to proactively put forward the framework for regulation that encourages innovation while disincentivizing illicit activity. There is a need to strike a balance where one can monitor money laundering while maintaining a user’s privacy. These are not mutually exclusive goals; you can have both.” 

And, to investors, Mustaha advised the age-old adage, “do your own research.”

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Russia plans to roll out digital ruble across all banks in 2024

Bank of Russia started CBDC testing in 2022 and expects to implement an official banking rollout in the year of presidential elections in 2024.

The Bank of Russia continues working towards the upcoming adoption of the central bank digital currency (CBDC), planning an official digital ruble rollout in a few years.

According to the Bank of Russia’s latest monetary policy update, the authority will begin to connect all banks and credit institutions to the digital ruble platform in 2024. That would be an important year for Russia as the country is expected to hold presidential elections in March 2024 and incumbent President Vladimir Putin has the constitutional right to get re-elected.

By that time, the central bank expects to complete “real money” customer-to-customer transaction trials as well as testing of customer-to-business and business-to-customer settlement.

In 2023, the Bank of Russia also intend to conduct beta testing of digital ruble-based smart contracts for trades by a limited circle of participants.

The bank pointed out that it expects to proceed with the CBDC rollout in a gradual manner, unlocking new different trials and features year by year. As soon as the Federal Treasury is ready, the digital ruble will also feature consumer-to-government, business-to-government, as well as government-to-consumer and government-to-business payments, the Bank of Russia said.

The central bank also expects to introduce the offline mode for the digital ruble by 2025 alongside integration of non-bank financial intermediaries, financial platforms and exchange infrastructure.

“The phased process of introducing the digital ruble will provide market participants with the opportunity to adapt to new conditions,” the Bank of Russia noted.

The Bank of Russia will also cooperate with other central banks developing their own digital currencies to carry out cross-border and foreign exchange operations with digital currencies, the authority added.

Related: ‘Token will defeat cryptocurrency’: Russia debuts palladium-backed coin

As previously reported by Cointelegraph, Russia debuted its first digital ruble trials in February 2022, following its official CBDC roadmap released last year. The Bank of Russia previously formed a group of twelve banks to test the digital ruble, including major banking giants like Sber, VTB, Tinkoff Bank and others.

While keeping up with CBDC rollout plans, Russia has been somewhat lagging behind its targets to regulate the crypto industry. President Putin urged to adopt crypto regulation multiple times before Russia adopted its crypto law “On Digital Financial Assets,” which didn’t change much as it still lacks many regulation aspects like cryptmining, taxation and others.

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South Korea’s financial watchdog wants to ‘quickly’ review crypto legislation: Report

The FSC will reportedly “make institutional supplements that will take a balanced approach to blockchain development, investor protection and market stability" on bills proposed.

The chair of South Korea’s Financial Services Commission said the regulator plans to expedite its review of 13 bills pending in the country’s National Assembly related to digital assets.

According to a Thursday report from South Korean news outlet Edaily, Financial Services Commission chair Kim Joo-hyun said a task force consisting of private experts and government ministries will “quickly” review proposed legislation on cryptocurrencies. Kim, addressing the Digital Assets Committee, added that the financial watchdog would “make institutional supplements that will take a balanced approach to blockchain development, investor protection and market stability."

“Even before legislation, we will introduce self-regulation efforts for the industry and do our best to protect investors,” said Kim. “Efforts are being made internationally to stabilize the education system and reduce the risk of consumer protection without impeding technological development.”

The financial watchdog chair’s comments followed reports South Korea planned to establish a comprehensive framework on cryptocurrencies by 2024 called the Digital Asset Basic Act. Following the crash of Terra (LUNA) — now renamed Terra Classic (LUNC) — many reports suggested South Korean authorities had ramped up investigations and enforcement efforts, including a plan to launch the Digital Assets Committee aimed at providing investor protection and listing criteria. Prosecutors in South Korea also reportedly raided seven crypto exchanges in July.

Related: South Korea postpones 20% tax on crypto gains to 2025

Under South Korea President Yoon Suk-yeol, who took office in May, the country has taken steps toward becoming a more crypto-friendly regulatory environment amid a market downturn and the controversy surrounding the collapse of Terra. Do Kwon, the co-founder of Terraform Labs, has reportedly faced legal scrutiny and calls to attend a parliamentary hearing on the matter.

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Web3 helps Taiwan secure information against cyberattacks

In an effort against Chinese cyberattacks, Taiwan employs Web3 technology for decentralized file sharing post-Pelosi visit.

The Taiwanese Ministry of Digital Affairs (MODA) plans to implement decentralized technology into its web portal in an effort against cyberattacks. InterPlanetary File System (IPFS) is a Web3 technology that government officials will employ for decentralized file sharing.

IPFS identifies content through file hashes, which allows files stored by multiple parties to be found anywhere and can be accessed by simple HTTP.

This development comes after the controversial visit of United States House Speaker Nancy Pelosi to Taiwan, despite warnings from mainland China.

Since the visit, government websites have faced multiple attacks sourced from the mainland. This includes a distributed denial-of-service (DDoS) attack rendering the sites inaccessible.

Pelosi’s visit to Taiwan not only rocked the boat geopolitically speaking but also made waves in the crypto market. Bitcoin rose to its daily resistance of $23,500 on Aug. 3, the following day.

Related: ‘Nobody is holding them back’ — North Korean cyber-attack threat rises

However, the new MODA site is getting a makeover through the implementation of Web3 technology and currently has files and the original site index available on IPFS.

Taiwan’s Digital Minister Audrey Tang told official state media that until now, the MODA site has not been attacked since it debuted on the same day the Chinese military began its drills.

Tang said the site uses a combination of Web3 and Web2 tools.

“It uses a Web3 structure, which is tied to the global blockchain community and the global Web2 backbone network. So if it can be taken down, everything from Ethereum to NFTs will be taken down, which is unlikely.”

According to officials in Taipei, Taiwan saw nearly 5 million daily cyberattacks or at least scans for system vulnerabilities last year.

The implementation of Web3 technology is a positive step toward emerging technology implementation. Though Tang did highlight the risks of other Web3 assets like crypto in activities such as money laundering.

Related: Decentralized finance faces multiple barriers to mainstream adoption

Taiwan’s relationship with crypto ebbs and flows. Recently, the country indirectly banned buying cryptocurrencies with credit cards after the chief financial regulator compared cryptocurrencies to online gambling.

Nonetheless, the country, like many others around the world, is piloting its own central bank digital currency (CBDC). Currently, it's distributing its digital currency to five Taiwanese banks for distribution.

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US Treasury sanctions USDC and ETH addresses connected to Tornado Cash

The protocol was at the center of some recent hacks and exploits in decentralized finance, including the alleged theft of $455 million by the North Korea-affiliated Lazarus Group.

The United States Treasury Department has added more than 40 cryptocurrency addresses allegedly connected to controversial mixer Tornado Cash to the Specially Designated Nationals list of the Office of Foreign Asset Control, or OFAC.

In a Monday announcement, OFAC effectively barred U.S. residents from using Tornado Cash and placed 44 USD Coin (USDC) and Ether (ETH) addresses connected to the mixer on its list of Specially Designated Nationals. The department alleged that individuals and groups had used the mixer to launder more than $7 billion worth of crypto since 2019, including the $455 million stolen by the North Korea-affiliated Lazarus Group. The protocol was also at the center of some recent hacks and exploits in decentralized finance, including a $375-million attack on Wormhole in February and a $100-million hack on Horizon Bridge in June. 

“Despite public assurances otherwise, Tornado Cash has repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors on a regular basis and without basic measures to address its risks,” said Brian Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence. “Treasury will continue to aggressively pursue actions against mixers that launder virtual currency for criminals and those who assist them.”

The Treasury Department took similar steps against cryptocurrency mixer Blender.io in May. According to OFAC, the mixer allegedly processed $20.5 million out of approximately $620 million stolen from the play-to-earn game Axie Infinity's Ronin Bridge — roughly 173,600 ETH and 25.5 million USDC. Under OFAC sanctions, firms and individuals have their assets blocked and “U.S. persons are generally prohibited from dealing with them.”

Related: US Treasury Dept sanctions 3 Ethereum addresses allegedly linked to North Korea

Tornado Cash announced in July that it had fully open-sourced its user interface code as part of its goals toward complete decentralization and transparency. The mixer’s website included a compliance tool that allowed users to show the source of any transaction.

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US ethics advisory on federal employee’s crypto has basis in legislation

The Office of Government Ethics reminded federal agency ethics officers of current law and extended its interpretation of the law to mutual funds.

When the United States Office of Government Ethics (OGE) released its Legal Advisory 22-04 on July 5, most attention was given to its conclusion that federal employees who own any amount of cryptocurrency or stablecoins whatsoever may not participate in regulation and policymaking that concerns crypto. The legal advisory (LA) raised some eyebrows, as de minimis exemptions, threshold amounts below which assets holdings are permissible, are common in the government. The LA is more comprehensible when seen in a larger context.

What they were thinking

The OGE does not grant interviews, so it was fortunate that a video of OGE Senior Associate Counsel Christopher Swartz discussing the LA appeared on the office’s YouTube channel the day after Cointelegraph made an inquiry. Swartz discussed several points in detail, emphasized that the LA is an interpretation of current law to aid in its application to federal employees and “understand the law as it exists.” The OGE has no position on digital assets in general.

The OGE issued an advisory in 2018 on federal employees’ disclosure of crypto assets. In light of the growing adoption of cryptocurrency by the public and federal employees, Swartz explained:

“We realized it was now ripe for us to revisit this area, make sure we have established ground rules particularly as it relates to the conflicts of interest law, which is a criminal law.”

The law Swartz was referring to dates to 1962 and “prevents federal employees from participating in any particular matter in which they have a financial interest,” according to Swartz. It is intentionally broad and “agnostic” in regard to the details. There is no substantiality element in the law, that is, a de minimis exemption, to allow federal employees to hold small amounts of anything.

Related: US Congressional hearing on digital asset regulation focuses on disclosure

Under the law, the OGE has the authority to waive the conflict of interest laws for all employees or classes of employees when the financial interest is too remote to affect the expected services of the employees. Agencies can provide exemptions on a case-by-case basis in consultation with the OGE.

The OGE created some exemptions in 1996. Publicly traded equity in a company that engages in crypto services is already covered by an exemption, for example. The LA specifies that a registered mutual fund with exposure to crypto derivatives, such as futures, might have one of two exemptions: a per se exemption for diversified mutual funds or a de minimis exemption of $50,000 for sectoral funds.

No OGE exemption covers crypto, the LA states, because crypto does not qualify as a publicly traded security. “This is true even if individual cryptocurrencies or stablecoins constitute securities for purposes of the Federal or state securities laws,” the LA states.

Cryptocurrency is not a publicly traded security

The definition of “publicly traded security” is narrower than that of “security,” the LA notes. The LA does not relate to the larger question of which cryptocurrencies or stablecoins are securities, nor does it address reasons for the lack of an exemption. 

Nonetheless, Aitan Goelman, partner at Zuckerman Spaeder and former director of the Commodity Futures Trading Commission (CFTC) enforcement division, told Cointelegraph:

“If I were a lawyer representing Ripple, I think I would bring the OGE’s opinion up, even though the OGE take pains to distinguish its definition of publicly traded securities from the definition of securities under [the] Howey [test].”

“The OGE’s opinions are very influential at the agencies,” Goelman continued. 

All the experts consulted by Cointelegraph agreed on the agency’s high moral authority and absence of political agenda.

Philip Moustakis, counsel in the Seward & Kissel blockchain and cryptocurrency practice groups and a former member of the SEC asset management unit, told Cointelegraph in an email, “I don’t think there is any subtext to be read at all.”

The experts also agreed that the LA would be observed throughout the government, even though the OGE has no enforcement powers to go with its regulatory authority. As a matter of fact, it seems that ethical standards are already widely observed. The LA’s interpretation and detailed commentary on how disclosure requirements apply to mutual funds may be new, but ethics requirements are not.

“Employees of the Securities and Exchange Commission are already required to report their securities holdings,” Moustakis said.

Elizabeth Boison, partner at Hogan Lovells and former Department of Justice (DOJ) prosecutor and member of the department’s National Cryptocurrency Enforcement Team, told Cointelegraph:

“Before the regulators provided clarity on this rules, this is what the regulators were doing any way. […] Even absent guidance, we would talk about this issue [at the DOJ] and we were generally not holding it.”

Goelman observed that the perception of corruption has been a political issue recently, and the LA contributes to a reduction in the perception of financial impropriety in government.

The downside of the OGE LA

When asked what it would take for the OGE to publish a regulation to create an exemption to allow de minimis cryptocurrency holding, Goelman replied simply “motivation.” Swartz dismissed the argument that the prohibition on owning crypto would discourage people from pursuing government careers, saying the OGE had developed ways to help “remove the financial entanglement” of new federal employees. Nonetheless, there are arguments in favor of policymakers holding crypto. 

One of the things a regulator has to understand is how these things work,” Boison said. She named Know Your Customer procedures and setting up wallets as examples of activities where real-life experience is valuable to regulators. She suggested the creation of a “sterile, sanitized lab” setting where regulators could go through the motions of the procedures.

Related: Know thy customer: The future of KYC in crypto

LA 22-04 was followed 10 days later by another crypto-related advisory, this time on disclosure of nonfungible token (NFT) holdings. Fractionalized and collectible NFTs worth $1,000 or more must be reported if “held for investment or production of income,” as well as NFT investments that produce over $200 in profits during a reporting period.

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Legendary Investor Jim Rogers Issues Stern Warning Against Investing in Crypto Assets – Here’s Why

Legendary Investor Jim Rogers Issues Stern Warning Against Investing in Crypto Assets – Here’s Why

Investing legend Jim Rogers is issuing a warning to investors saying that crypto assets could one day be fully controlled by the government. In a new interview with Bloomberg Crypto, Rogers says that digital currencies will one day become “government money,” meaning that bureaucrats and politicians will dictate how they can be used. “A lot […]

The post Legendary Investor Jim Rogers Issues Stern Warning Against Investing in Crypto Assets – Here’s Why appeared first on The Daily Hodl.

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US lawmakers request crypto firms provide info on diversity and inclusion

“There is a concerning lack of publicly available data to effectively evaluate the diversity among America’s largest digital assets companies," said the letter.

A group of five lawmakers from the United States House of Representatives has requested data on the diversity and inclusion practices of 20 major firms dealing with cryptocurrencies and Web3.

In a Thursday notice, House Financial Services Committee chair Maxine Waters along with Representatives Joyce Beatty, Al Green, Bill Foster and Stephen Lynch penned a letter requesting U.S.-based crypto firms provide information on “how and whether the industry is working toward a more equitable environment for everyone.” The lawmakers sent letters to 20 companies including Aave, Binance.US, Coinbase, Crypto.com, FTX, Kraken, Paxos, Ripple and Tether as well as venture capital firms Andreessen Horowitz, Haun Ventures and Sequoia Capital.

“There is a concerning lack of publicly available data to effectively evaluate the diversity among America’s largest digital assets companies, and the investment companies with significant investments in these companies,” said the lawmakers. “We believe transparency is a critical, first step to achieving racial and gender equity.”

According to a sample letter, the House representatives requested diversity and inclusion data and policies from the 20 firms starting in January 2021. The inquiry seemed to be made in response to investigations from the House Financial Services Committee in 2020 and 2021 that concluded “there is still much work to be done to increase diversity and inclusion” at major banks and investment firms. The lawmakers asked the companies to respond by Sept. 2.

Related: US lawmakers ask about EPA, DOE monitoring of crypto mining emissions, energy consumption

Data from other groups seemed to support the conclusions of U.S. lawmakers. A 2020 report from Digitalundivided showed Black women and Latina entrepreneurs received less than 1% of venture capital investments, and Crunchbase reported that 0.9% of female company founders in fintech raised venture capital funds. 

“By default, Web3 is very much dominated by men, and we do not see many female-focused brands getting into the space right now,” said Jenny Guo, co-founder of metaverse platform Highstreet. “But, similar to the tech industry, more and more women creatives will join the industry with time.”

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Kosovo Renews Crypto Mining Ban Amid Rising Energy Prices

Kosovo Renews Crypto Mining Ban Amid Rising Energy PricesThe government of Kosovo has adopted measures tailored to maintain energy supply in the coming months, including a ban on cryptocurrency mining. The move comes amid a sharp increase in import prices and the restrictions can be extended for up to six months. Authorities in Kosovo Reinstate Ban on Cryptocurrency Mining The executive power in […]

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Blockchain.com wins registration next to parent firm on the Cayman Islands

Blockchain.com is working to seek registrations in countries like Italy, France, Spain, The Netherlands and cities like Dubai.

Blockchain.com, one of the oldest Bitcoin (BTC) infrastructure firms, is strengthening regulation and compliance efforts by securing registration in the Cayman Islands.

The blockchain wallet and cryptocurrency exchange platform Blockchain.com is expanding operations in the Cayman Islands after receiving registration from the Cayman Islands Monetary Authority (CIMA).

Issued on July 6, the registration officially authorizes Blockchain.com to provide custodial services, operate an exchange, and offer over-the-counter crypto brokerage services for institutional clients under the CIMA’s regulatory framework.

Blockchain.com’s chief business officer Lane Kasselman pointed out that the Cayman Islands is an important jurisdiction for the company’s business as the local community and regulators have fostered a “robust blockchain business ecosystem.”

Kasselman also told Cointelegraph on Tuesday that the Cayman Islands is a country that homes Blockchain.com’s parent firm, Blockchain Group Holdings, stating:

“Cayman Islands is a key jurisdiction for us — our parent company is domiciled there and it is a recognised global financial services hub.”

The latest registration is part of Blockchain.com’s broader commitment to global compliance and regulation in every jurisdiction of the platform’s presence, including the United States. It also intends to help Blockchain.com further support institutional clients, which account for roughly 50% of the firm’s revenue.

Headquartered in London, Blockchain.com currently holds money transmitter licenses in the majority of the U.S. states and continues to pursue more regulatory approvals in the country. The firm is also working to seek registrations in countries like Italy, France, Spain, The Netherlands and cities like Dubai.

“As we expand globally, it’s even more important to seek regulatory approvals in key markets to demonstrate our commitment to compliance, work with regulators on thoughtful oversight, and slowly build towards the ultimate goal — a permanent regulatory framework for crypto,” Kasselman said.

The news comes amid crypto companies increasingly expanding global regulation efforts, with many industry companies receiving new registrations and approvals all over the world each day.

Related: Singaporean financial watchdog to consult public on stablecoin regulation

The aggressive compliance efforts are coming amid the ongoing bear market for crypto as Bitcoin has been staying far below its all-time high above $68,000 for nearly nine months so far. According to many experts, Bitcoin and the broader crypto industry needs more regulation in order to make assets less volatile.

Blockchain.com’s CBO is also confident that regulation is a key component of the industry’ success. He said that moving from a startup ecosystem to a "forever industry" requires taking regulation seriously, learning how to compromise and valuing the efforts of policy makers, adding:

“The only way to achieve a permanent regulatory framework for crypto is for industry leaders and regulators to work together to ensure consumer protection and investor trust."

In March 2022, Blockchain.com raised millions of dollars in a funding round from the venture capital firm Lightspeed Ventures and investment management firm Ventures and Baillie Gifford & Co. The funding reportedly increased the company’s valuation from $5.2 billion to $14 billion.

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