The Financial Conduct Authority (FCA), UK’s financial regulatory body, has fined CB Payments Limited (CPBL), a Coinbase subsidiary, £3.5 million ($4.5 million) for inadequate anti-money laundering controls, marking it FCA’s first action against a crypto trading firm.
CBPL is a platform for trading cryptoassets within Coinbase Group and the FCA stated how after an FCA visit in October 2020, it voluntarily agreed to enhance its financial crime controls. The agreement required CBPL to halt accepting new high-risk customers until the issue was resolved. Nevertheless, the company continued providing e-money services to 13,416 such customers, with nearly a third of them depositing $24.9 million. The fund in turn facilitated various cryptoasset transactions through other Coinbase entities, amounting to approximately $226 million in total. The FCA reported that this repeated breaches of the voluntary agreement went undetected for about two years.
Despite these breaches, CBPL agreed to a resolution, receiving a 30% reduction on its fine—lowering it from £5 million to £3.5 million. Coinbase, for its part, reiterated its commitment to working with top financial regulators like the FCA to ensure their platform remains compliant, secure, and trusted by customers.
Former US President Donald Trump, who once called cryptocurrency a ‘scam,’ is now headlining the Bitcoin 2024 convention in Nashville. He will speak on the final day of the three-day event, joining other prominent figures such as Republican former candidate Vivek Ramaswamy, Senator Bill Hagerty, and Senator Cynthia Lummis. The convention also includes Democratic Representative Ro Khanna of California.
The cryptocurrency industry is bouncing back after significant setbacks in 2022, including the collapse of FTX. Proponents argue that crypto users are becoming a significant political force, with the Republican Party courting their votes by promising lighter regulation. The shift has seen major pro-crypto political action committees raise over $230 million to support favourable candidates.
Trump’s appearance at the convention marks a notable shift in his stance on crypto. He has recently criticised Democratic regulatory efforts and expressed support for increased bitcoin mining in the US. That support has been well-received by the crypto industry, which has faced increased scrutiny from the Biden administration. As the crypto community rallies around supportive politicians, Trump’s new embrace of the industry is seen as a strategic move to align with emerging political forces.
Ferrari announced on Wednesday that it will expand its cryptocurrency payment option for luxury sports cars to its European dealers starting at the end of this month. The Italian automaker introduced this payment method in the United States last year to cater to its wealthy clientele’s requests.
The company plans to extend this scheme to other international markets by the end of 2024, where cryptocurrencies are legally accepted. While many major companies have avoided cryptocurrencies due to their volatility, Ferrari’s move aims to meet its customers’ evolving needs.
In the US, Ferrari partnered with BitPay to facilitate bitcoin, ether, and USDC transactions, converting crypto payments into traditional currency to shield dealers from price fluctuations. Ferrari has not disclosed whether it will use the same payment processors in Europe or other regions.
Asia’s first inverse bitcoin exchange-traded fund (ETF), designed to allow investors to profit from a decline in cryptocurrency values, will launch in Hong Kong on Tuesday. The CSOP Bitcoin Futures Daily (-1x) Inverse Product, introduced by CSOP Asset Management, will debut on the Hong Kong Stock Exchange.
The new ETF aims to capitalise on the increasing demand for investment opportunities linked to volatile cryptocurrencies. After a batch of spot crypto ETFs launched in Hong Kong in April, bitcoin experienced a turbulent second quarter, falling over 12%. The inverse ETF allows investors to benefit from bitcoin’s price drops.
Bitcoin has been notably volatile, with its fluctuations in 2023 surpassing those of crude oil and the Nasdaq 100. Recent weeks saw a rebound in bitcoin’s value, trading around $67.400 following political developments in the US.
CSOP’s inverse bitcoin product will track the daily inverse performance of the S&P Bitcoin Futures Index. CSOP, which introduced Asia’s first bitcoin futures ETF in 2022, saw its market value rise to over $100 million earlier this year but has since decreased to approximately $58 million.
According to blockchain data, a major Cambodian payments firm, Huione Pay, received over $150,000 in cryptocurrency from a digital wallet linked to the North Korean hacking group Lazarus. The funds were sent between June 2023 and February this year from an anonymous wallet used by Lazarus to launder money stolen from three crypto companies through phishing attacks. The FBI reported that Lazarus stole around $160 million from Atomic Wallet, CoinsPaid, and Alphapo last year to fund North Korea’s weapons programs.
Huione Pay, based in Phnom Penh, stated it was unaware of receiving funds indirectly from the hacks and cited multiple transactions between its wallet and the source as the reason. The company declined to explain why it had received the funds or provide details on its compliance policies. Despite blockchain tools allowing companies to identify high-risk wallets, Huione Pay claimed it had no control over the anonymous wallet’s transactions.
The National Bank of Cambodia (NBC) prohibits payment firms like Huione Pay from dealing with cryptocurrencies due to risks like money laundering and financing terrorism. The NBC indicated it might take corrective measures against Huione Pay. Meanwhile, US blockchain analysis firms reported that Huione Pay was among several platforms receiving stolen crypto, which was converted into different currencies, including tether (USDT), to obscure the money trail. Southeast Asia has become a hotspot for high-tech money laundering and cybercrime operations, highlighting the need for stronger regulatory measures.
Bitcoin surged to a two-week high on Monday following the attempted assassination of US presidential candidate Donald Trump. Trump, who was shot in the ear during a rally in Pennsylvania, is recovering well, according to his campaign. The attack is seen by some investors as boosting his chances of winning the upcoming election, leading to increased trades betting on his victory.
The cryptocurrency saw an 8.6% rise, reaching $62,508, with a session high of $62,698, marking a 47% annual gain. Ether also experienced a boost, climbing 6.8% to $3,322. Trump has criticised Democratic efforts to regulate the crypto sector and positioned himself as a pro-crypto candidate, which has resonated with the market.
Market analyst Tony Sycamore from IG noted that the assassination attempt has significantly bolstered Bitcoin, adding that the cryptocurrency could see further gains. Trump is set to speak at the Bitcoin 2024 conference in Nashville on 27 July, a move likely to keep the crypto market’s focus on his campaign. Despite a rocky start to July, Bitcoin’s recent rebound suggests it could approach $65,000 by the end of the week.
Taiwan’s central bank has announced no set timeline for launching a digital currency, emphasising that the process will be extensive and complex. Despite this slackening, the bank plans to hold public hearings next year to educate the public about digital currency. The central bank has been developing a pilot program for a government-run digital currency to enable people to use digital wallets for payments without needing debit or credit cards.
In a report to parliament, the bank noted that while there is no timetable for issuing the digital currency, ongoing research and experimentation are already enhancing the payment system’s efficiency and innovation. The bank stressed the importance of widespread communication about the currency’s introduction, highlighting the need for public hearings and forums.
Why does it matter?
Globally, 134 countries, representing 98% of the world’s economy, are exploring digital versions of their currencies, with many in advanced development stages. Proponents argue that digital currencies offer new functionalities and alternatives to physical cash, though concerns about government surveillance have sparked protests in some countries.
The first half of 2024 saw a significant surge in cryptocurrency thefts, with over $1.38 billion stolen by 24 June, compared to $657 million during the same period in 2023, according to blockchain researchers TRM Labs. The increase in stolen crypto, driven by a few large-scale attacks and rising crypto prices, highlights the growing motivation among cybercriminals. Ari Redbord, global head of policy at TRM Labs, noted that while the security of the crypto ecosystem hasn’t fundamentally changed, the higher value of various tokens has made crypto services more attractive targets.
One of the year’s largest thefts involved $308 million worth of bitcoin stolen from Japanese exchange DMM Bitcoin. Large-scale losses remain relatively rare, although cryptocurrency companies face hacks and cyberattacks frequently. The theft increase comes as crypto prices rebound from the lows following the 2022 collapse of FTX, with bitcoin reaching an all-time high of $73,803.25 in March.
Bitcoin experienced a significant drop to a two-month low recently, driven by uncertainty surrounding the US presidential elections and the impact of supply from a defunct Tokyo-based crypto exchange. The cryptocurrency fell over 2% to $57,843, its lowest since 2 May, marking a loss of more than 6% this week.
The market has been under pressure, particularly after the first debate between US presidential candidates Joe Biden and Donald Trump, which raised concerns about potential candidacy changes that could affect crypto policies. Market analyst Josh Gilbert from eToro highlighted the speculation that a new candidate might not be as crypto-friendly as Biden.
Bitcoin had surged earlier in the year, reaching a record $73,803.25 in mid-March following the US exchange-traded funds launch. However, the cryptocurrency has since lost over 21% of its value. Political uncertainties in France and Britain and the changing dynamics of the US election have contributed to this decline.
In addition, reports that Mt. Gox, a former leading crypto exchange, is repaying its creditors have created anticipation that these creditors might sell their bitcoins, further impacting the market. Despite the current downturn, some analysts, like Tony Sycamore from IG, believe that bitcoin could still retest its March highs and reach up to $80,000. Meanwhile, Ether also declined, trading over 1% lower at $3,213 and down more than 22% from its mid-March highs.
Russia’s central bank has advised businesses to adopt ‘multiple choice solutions,’ including cryptocurrencies and other digital assets, to manage payments with foreign partners amidst Western sanctions related to Ukraine conflict. The sanctions have severely impacted Russia’s trade with non-sanctioning countries like China, India, the UAE, and Turkey. Key financial institutions, such as the Moscow Stock Exchange and Russia’s SWIFT alternative, have been targeted, exacerbating the challenges for the Russian economy.
Elvira Nabiullina, the central bank governor, highlighted at a financial conference in St Petersburg that the main economic hurdle is the disruption in payment systems. She noted that new financial technologies offer unprecedented opportunities, prompting the central bank to relax its stance on cryptocurrencies for international payments. Businesses have become innovative and discreet in finding solutions, often not disclosing their methods even to the authorities.
Nabiullina also discussed ongoing efforts to establish a new global payment system independent of Western institutions, noting that countries like Russia and its BRICS partners are feeling increasingly vulnerable relying on a single international payment framework. The proposed BRICS Bridge payments system aims to integrate the financial systems of member nations, though progress has been slow and complex.
Adding to the discussion, Andrei Kostin, head of Russia’s second-largest lender VTB, emphasised the sensitivity of international payment mechanisms. He suggested that such information should be classified as a state secret to prevent quick countermeasures from Western entities, implying that Western diplomats closely monitor Russian financial strategies.
