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This Week’s Crypto News: Is The UK The Next Crypto Hotspot? ?
April 4, 2023
This Week’s Crypto News: Is The UK The Next Crypto Hotspot? ?
April 4, 2023
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Last week in the crypto world we saw the UK government remain bullishly positive on the potential of cryptocurrencies ? Sam Bankman-Fried accused of bribing Chinese officials, and Binance getting hit with multiple charges by the CFTC ? Keep reading for more crypto news – exclusive from Punt Casino.
UK Government Bullish on Crypto Potential
The British government last week reinforced its positivity over the potential of the crypto space in its 2023-2026 Economic Crime Plan. Ever since now Prime Minister, Rishi Sunak, announced in April last year that he wanted the UK to become a crypto development hub, the government has been working on legislation that fulfills this prophecy while also ensuring that everything is done to minimize potential criminal activity.
The Economic Crime Plan laid out the government’s plans in this regard but notably struck an upbeat tone over the future of the crypto sector:
“A staged and proportionate approach to regulation recognizes that as challenging as it is, effective crypto asset regulation benefits everyone, including consumers and firms. That is why, following ongoing consultation, the government will set out ambitious plans to protect
consumers and grow the economy by robustly regulating crypto asset activities – providing confidence and clarity to consumers and businesses alike.”
This approach, which will include adopting regulations such as the Financial Action Task Force’s Travel Rule that limits crypto transactions through unregistered wallets to €/£1,000, is vastly different from the stance adopted by regulators in the U.S., which are doing their best to stamp out cryptocurrency use in all its forms.
Great Britain, on the other hand, has ambitions to “make the UK an attractive destination for crypto assets and crypto asset innovation in the world” according to the Economic Crime Plan, potentially mopping up any disaffected talent and companies from the other side of the Atlantic.
Sam Bankman-Fried Accused of Bribing Chinese Officials
Just when it seemed that the Sam Bankman-Fried case couldn’t get any broader (or weirder), U.S. federal prosecutors last week laid charges of bribing Chinese officials to his door.
The disgraced former FTX CEO, who already faces decades in prison on a litany of charges relating to his running of the exchange, has now been accused of paying officials $40 million to release around $1 billion in Alameda funds frozen on Chinese exchanges. The allegations have resulted in an extra 13 charges being added to his already extensive tab.
According to prosecutors, in early 2021 Chinese authorities froze certain Alameda trading accounts on two of China’s largest cryptocurrency exchanges. These accounts collectively held approximately $1 billion in cryptocurrency and were frozen as part of an ongoing investigation of a particular Alameda trading counterparty.
To regain access to the cryptocurrency in these accounts, Bankman-Fried and his associates explored various options, such as appealing directly to the exchanges in question and then retaining attorneys to lobby in China for the release of the funds.
When these didn’t work, the group allegedly tried to circumvent the Chinese authorities’ freeze orders by opening new accounts on the same exchanges and, using the personal identifying information of several unaffiliated individuals, attempted to transfer the cryptocurrency from the frozen accounts to these new accounts.
With all other avenues closed off, Bankman-Fried “discussed with others and ultimately agreed to and directed a multi-million-dollar bribe to seek to unfreeze the accounts” involving more than one Chinese official.
This resulted, prosecutors say, in cryptocurrencies worth $40 million being sent from Alameda’s main trading account to a private cryptocurrency wallet in November, 2021. At or around the time of the $40 million payment, the accounts were unfrozen and the money was released.
Bankman-Fried has yet to respond to the new charges, but if his previous responses are anything to go by then we can expect a firm rebuttal very soon.
Binance and CEO Hit With CFTC Charges
The biggest crypto story of the week was one that many in the space had seen coming for months, if not years – Binance and its CEO, Changpeng Zhao, were hit with charges from U.S. authorities regarding irregularities on the platform.
The CFTC suit targets Binance Holdings Limited, Binance Holdings (IE) Limited, and Binance (Services) Holdings Limited, alleging that the company has used “numerous other corporate vehicles through an intentionally opaque common enterprise.”
The agency claims that Binance has violated laws governing the offering of futures transactions; failed to register as a futures commissions merchant, designated contract market, or swap execution facility; employs inadequate supervision of its business; and has failed to implement proper know-your-customer (KYC) and anti-money laundering (AML) processes, contributing to an inefficient anti-evasion program.
As well as the entities being charged, Zhao and Samuel Lim, Binance’s former chief compliance officer, have also been charged on a personal level. According to the CFTC, Zhao has exhibited a “long-running failure to act in good faith concerning Binance’s misconduct” and, as a result, has been held responsible for all the various charges leveled at the platform, with the CFTC believing that he orchestrated many of the acts personally, such as encouraging staff to inform customers they could use VPNs to evade geo-location restrictions.
The agency also says that Zhao himself had approximately 300 Binance accounts which he used to conduct “proprietary trading activity on the Binance platform.” Lim, who left the company last year, has been charged with “aiding and abetting Binance’s violations”, such as attempting to “willfully evade or attempt to evade applicable provisions” of CFTC policies.
The demands made by the CFTC, which include reimbursing all U.S. customers and paying billions in restitution and fines, would bankrupt the company, with some believing that Binance will end up being kicked from the U.S., or may even go bankrupt. Others, however, have said that if Binance settles it may still be banned from serving U.S. customers, but it will still exist to serve other countries.
Zhao went on record to deny the charges, with a fuller rebuttal expected in a legal filing in the coming weeks, but the evidence, which included encrypted chats, has led many to believe that settlement is Binance’s only route forward.
? Trending stories
- Ethereum developers have confirmed that the protocol will upgrade on April 12, where stakers will be able to start collecting their locked rewards
- Terraform Labs CEO Do Kwon will face trial and possibly a prison term in Montenegro following his arrest for possession of fraudulent documents, before extradition can be considered
- Russian banks will soon test out the country’s CBDC for the first time, with corporate and retail tests to take place in the coming weeks
