The Russian Central Bank claims it is making significant progress in tackling peer-to-peer cryptocurrency exchanges. According to a recent financial stability review, the regulator states that high-risk transactions have dropped by 2.8 times compared to 2023. Efforts to combat illegal crypto circulation have involved close collaboration with commercial banks, leading to numerous blocked transfers tied to P2P platforms.
The Russian crypto market remains unregulated and fragmented despite tighter measures, with underground exchanges using fictitious accounts for settlements. While the Central Bank reports a 16 per cent decrease in Russians’ estimated crypto wallet balances since March, the overall volume of crypto transactions involving Russian investors has risen by 18 per cent in 2024.
The bank noted increased interest in global crypto platforms, with web traffic from Russian IPs soaring by over 56 per cent this year. Bitcoin remains the dominant choice for Russian holders, accounting for 69 per cent of wallet balances. Despite regulatory pressure, Russian traders continue to anticipate long-term growth in cryptocurrency values, driven by policy shifts in the US and trends like meme coins.
DMM Bitcoin, a Japanese cryptocurrency exchange, is preparing to wind down its operations after suffering a significant loss of $320 million in Bitcoin due to a hack in May. The breach, which compromised a private key linked to a wallet holding over 4,500 Bitcoin, forced the company to halt its restructuring efforts and focus on safeguarding customer assets. In response, DMM Bitcoin has arranged to transfer all customer accounts and assets to SBI VC Trade, a crypto exchange operated by financial giant SBI Group, with the transition expected to be completed by March 2025.
The company confirmed that customer assets, including Japanese yen and cryptocurrencies, will be secure during the move. Despite initial assurances that customer deposits would be protected, DMM Bitcoin was forced to suspend withdrawals, new account registrations, and trading following the attack. The company also pledged to compensate affected users by procuring an equivalent amount of Bitcoin, backed by its group companies.
The hack is one of Japan’s largest crypto breaches, second only to the $530 million Coincheck hack in 2018. Blockchain analysts have linked the breach to the Lazarus Group, a North Korean cybercrime organisation, suggesting similarities in laundering techniques. DMM Bitcoin, which launched in 2018, has also been facing challenges with its Web3 gaming project and stablecoin initiatives, ultimately leading to the decision to wind down its operations.
This attack is part of a broader trend of rising cyberattacks on cryptocurrency exchanges in 2024, including major breaches of other exchanges such as WazirX, BingX, and BtcTurk. The growing frequency of such incidents underscores the ongoing risks facing centralized crypto platforms.
South Korea’s crypto tax implementation has been postponed once again, with lawmakers agreeing to delay its launch until January 2027. The decision comes after extended negotiations between the ruling People’s Power Party (PPP) and the opposition Democratic Party (DP). The DP initially opposed the delay, proposing an alternative plan to raise the tax threshold for crypto traders, but later conceded to the government’s timeline.
DP floor leader Park Chan-dae stated the postponement allows more time for institutional preparations, echoing concerns from party leader Lee Jae-Myung about the current system’s readiness for taxation. The amendment will now move forward for approval in a plenary session. Lawmakers have faced criticism for repeatedly delaying the tax, which was first scheduled to take effect in 2021.
The DP’s focus now shifts to opposing other government tax plans, including changes to dividend income and inheritance tax. Meanwhile, crypto traders in South Korea have expressed frustration, describing the tax situation as chaotic. While many welcome the postponement, some argue that political mishandling has caused unnecessary uncertainty in the industry.
Russian President Vladimir Putin has signed a new federal law regulating crypto mining and granting legal recognition to digital currencies as property. The law, which will take effect on January 1, 2025, introduces a personal income tax of 13% to 15% on cryptocurrency sales, with mining operations exempt from value-added tax (VAT). It also mandates that mining infrastructure operators report their services to local authorities every quarter, with penalties for late submissions.
The legislation also recognises digital currencies as property, granting them legal status and allowing their use in cross-border transactions under Russia’s experimental legal regime. Crypto miners will be taxed progressively based on income, with a 13% rate on earnings up to 2.4 million rubles and 15% on income above that threshold. However, corporate profits from mining activities will face a higher tax rate of 25% from 2025 onwards.
Alongside the tax changes, Russia’s ongoing energy crisis has led to restrictions on mining activities in energy-scarce regions. Certain areas, such as Irkutsk and Donetsk, may face mining limits until 2031, which could have a significant impact on mining companies relying on cheap energy sources.
This regulatory clarity has contributed to a rise in demand for cryptocurrencies, reflected by an 8% increase in traffic to major exchanges in November. However, the energy-intensive nature of mining and regional restrictions remain key challenges for the industry.
Coinbase has announced it will end its USDC Rewards programme in the European Economic Area (EEA) on 1 December, citing the region’s incoming MiCA regulations as the reason. Customers eligible to earn rewards on their USD Coin balances can do so until 30 November, after which the service will cease. The EEA includes 30 nations, comprising 27 EU member states alongside Iceland, Norway, and Liechtenstein.
MiCA’s regulations, introduced in June, impose strict standards for stablecoin issuers, including a ban on offering interest for stablecoin holdings. The move has drawn criticism, with figures like Paul Berg, co-founder of Sablier, and Ripple’s David Schwartz calling the rules counterproductive to consumer interests.
Coinbase had previously announced plans to delist non-compliant stablecoins by the end of the year, including Tether’s Euro-pegged EURT. Tether recently confirmed it will cease support for EURT and shift focus towards MiCA-compliant tokens, such as EURQ and USDQ. The new framework is set to fully take effect by 30 December.
Bitcoin exchange-traded funds (ETFs) have seen massive inflows, surpassing $1 billion in a single day. BlackRock’s Bitcoin ETF led the charge with $608 million, followed by Fidelity Wise Origin Bitcoin Fund with $301 million. Other funds, including Bitwise and ARK 21Shares, also contributed to the growing trend.
The surge comes as Bitcoin approaches the $100,000 mark, with analysts predicting it will break the milestone later this month. The cryptocurrency’s rally has been further boosted since Donald Trump’s re-election, with some comparing recent ETF inflows to record-breaking numbers seen on 7 November 2020.
Bitcoin ETFs now manage over $100 billion in assets, putting them on course to rival Satoshi Nakamoto’s estimated holdings. With the recent approval of options trading for Bitcoin ETFs by the SEC, BlackRock has already capitalised on this by introducing options trading earlier this month.
US federal authorities have broken up a significant cryptocurrency-based money laundering operation tied to international drug cartels. Nine individuals have been indicted in Florida for conspiring to launder money and running an unlicensed money-transmitting business, following a multi-agency investigation.
The network, active between 2020 and 2023, reportedly moved illicit funds from the US to drug cartels in Mexico and Colombia. Participants allegedly used cryptocurrencies, including mixers and black-market exchanges, to obscure transactions. Some acted as couriers, transporting cash across US cities before converting it into crypto.
Cryptocurrencies have increasingly been exploited for laundering cartel funds, leveraging their global reach and transaction anonymity. Authorities noted a rise in such schemes using crypto exchanges and shell companies to disguise illegal activities.
This case adds to a growing list of crypto-related laundering incidents, including a 2021 case involving $4 million in cartel funds and other operations tied to major crypto platforms. Regulators worldwide are intensifying efforts to tackle these abuses, emphasising the need for stricter oversight.
South Korean police have confirmed that hackers linked to North Korea’s military intelligence agency were behind a 2019 Ethereum cryptocurrency theft valued at 58 billion won ($41.5 million at the time). Hackers infiltrated a crypto exchange and stole 342,000 Ethereum tokens, which are now worth over 1.4 trillion won ($1 billion).
The stolen funds were laundered through three hacker-controlled crypto exchanges and 51 other platforms, according to South Korea’s National Police Agency. While the exchange targeted was not officially named, South Korea-based Upbit had reported a similar transfer to an unidentified wallet during the incident. The investigation, conducted with the FBI, used IP address analysis and asset tracking to trace the theft to groups reportedly tied to North Korea’s Reconnaissance General Bureau.
This marks the first confirmed instance of North Korean hackers targeting a South Korean crypto exchange. Previously, a UN report linked North Korea to nearly $3.6 billion in crypto heists from 2017 to 2024. South Korean investigators recovered a small fraction of the stolen assets, equivalent to 600 million won, which were returned to the exchange. North Korea denies involvement in such activities despite mounting evidence to the contrary.
Retail investors continue to dominate Bitcoin’s ownership, accounting for 88.07% of the circulating supply, according to The Block. Despite fears of institutional dominance, whales and institutions hold just 1.26% and 10.68% of Bitcoin, respectively, highlighting the strong grassroots presence in the market.
Adding momentum to Bitcoin, the historic launch of BlackRock’s Bitcoin ETF saw $1.9 billion in notional value traded on its debut day. This milestone signals growing institutional interest but also lowers barriers for everyday investors, ensuring Bitcoin remains accessible to the masses.
Bitcoin’s ownership distribution reflects its decentralised nature, with significant holdings by entities like Coinbase and even governments, though the bulk lies with retail holders. Critics arguing that Bitcoin is becoming centralised are contradicted by data showing financial products like ETFs increase accessibility while maintaining Bitcoin’s democratic ethos.
As Bitcoin edges closer to the $100,000 mark, its ownership by retail investors underscores its alignment with Satoshi Nakamoto’s vision for a decentralised financial future.
The United Kingdom is set to finalise a draft regulatory framework for crypto assets by early next year, according to Economic Secretary to the Treasury, Tulip Siddiq. Speaking at the Tokenisation Summit in London on 21 November, Siddiq outlined plans for a streamlined approach to regulating stablecoins, staking services, and cryptocurrencies. The new Labour government, under Prime Minister Keir Starmer, will present the framework, replacing earlier Conservative-led initiatives disrupted by a general election.
Siddiq emphasised the importance of removing legal uncertainties, particularly around staking services, which the government does not intend to classify as “collective investment schemes.” This move aims to avoid unnecessary restrictions. Stablecoin legislation, which began in 2023, will also be part of the new framework, though it was never anticipated before 2025.
The UK faces mounting pressure to establish itself as a competitive crypto hub, especially with the European Union’s MiCA regulations taking full effect this year and the US expected to adopt a more crypto-friendly stance under President-elect Donald Trump. Critics have often blamed the Financial Conduct Authority for the UK’s perceived regulatory hurdles, but the upcoming framework seeks to enhance clarity and foster innovation in the growing crypto sector.
