February 5, 2021

CipherTrace

Crypto Criminals Face the Heat | India and the Philippines Explore Crypto | UK, Swiss Regs | The Tail Wags the Dogecoin

49 Year-Old Ontario Man Who Laundered $13 Million in Bitcoin Faces 25 Years in Prison
India’s Reserve Bank Open to Explore Digital Currency and The Philippines’ Central Bank Announces New Crypto Guidelines
Quick Read: German Police Seize $60 Million in Bitcoin
Quick Read: Former UK Cyber Official Wants More Crypto Regulation
Quick Read: Swiss Crypto Exchange Granted Securities House License by FINMA
On the Blog: Crypto Gets the GameStop Treatment

Guilty Plea in Case of Money Launderer Who Operated Unlicensed MSB

A 49-year-old man by the name of Hugo Sergio Mejia from Ontario, California pled guilty to running an unlicensed money service business for two years that saw $13 million worth of bitcoin exchanged illegally. Mejia advertised his company on a couple of different websites, posted on encrypted messaging apps, and met with clients in-person.

Mejia was caught when a member of law enforcement posed as a potential client and made five transactions, totaling $250k, exchanging bitcoin for cash. After his arrest, Mejia agreed to forfeit all of the assets that he received through his illegal activities, which included crypto, cash, and silver coins and bars. He faces a maximum of 25 years in prison.

Why it Matters:

Law enforcement across the United States has been ramping up investigations of cryptocurrency crimes and employing increasingly sophisticated means of building cases. Blockchain analysis tools, like CipherTrace Inspector, allow investigators to trace the cryptocurrency payments used in undercover operations and uncover where criminals consolidate illicit funds or off-ramp crypto to fiat.

Read more in Finance Magnates:

https://www.financemagnates.com/cryptocurrency/news/man-who-laundered-13-million-in-bitcoin-pleads-guilty/

India, The Philippines Make Moves to Embrace Crypto

After studying digital currencies back in 2018, the Reserve Bank of India (RBI) has now acknowledged interest in exploring a central bank digital currency (CBDC). The bank created a department to study the “desirability” of a CBDC to see if it would reduce the cost of printing banknotes. In a booklet the bank published last week, RBI found that although digital payments are gaining popularity because of smartphones in metropolitan areas, the remote parts of India would need an offline option for digital payments. A pilot of an offline payments program will be underway through March of 2021.

The central bank of The Philippines has announced new guidelines for cryptocurrency businesses in the country. The rules now require companies to apply for an operating license, raise a minimum capital of 50 million PHP ($1.04 Million USD)—$207,770 USD if not providing custody services—and follow strict AML rules. Even though the central bank has been pro-digital currency for some time, the country has seen some cases of digital currencies being used to fund terrorist attacks committed throughout Southeast Asia. The Philippines has yet to make a firm decision on whether to develop a CBDC, stating they would like to do more research.

Why it Matters:

Though India is behind on CBDC development compared to neighboring China, concerns about access to digital payments in remote areas with low internet connectivity should be further explored. The new enforcement rules in The Philippines demonstrate the slow but steady roll-out of compliance measures around the globe.

Read more in The Block and Coin Geek:

https://www.theblockcrypto.com/post/92550/india-central-bank-rbi-exploring-digital-currency?utm_source=newsletter&utm_medium=email&utm_campaign=2021-01-30

https://coingeek.com/philippines-issues-new-fatf-aligned-digital-currency-guidelines/

Quick Read: Police seize $60 million in bitcoin! Now, where’s the password?

German prosecutors confiscate 1700 BTC worth $60 million, but fail to crack the hardware wallet. After serving two years in prison, the crypto-jacking fraudster is now at large.

https://ciphertrace.com/220m-in-bitcoin-encrypted-forever-on-ironkey/

Quick Read: Former UK Cyber Official Advocates for Stricter Crypto Regulations

Ciaran Martin, the former head of the UK’s National Cyber Security Centre, is advocating for laws to be enacted to prevent the increasing number of ransomware attacks involving payment in bitcoin. While the British government does have strict laws about paying ransoms to terrorists, cybercriminals are not included unless they are part of terrorist networks. While being interviewed for The Guardian, Martin said that, due to the lack of laws barring these types of payments, insurance firms feel that paying ransoms is simply a quick resolution. However, without knowing it, these firms are “indirectly funding organized crimes in ransomware incidents.”

Quick Read: Swiss Crypto Broker Receives FINMA License

Switzerland has been diligent in enacting regulations that keep pace with developments in cryptocurrency. Crypto Broker AG, the brokerage division of Swiss-based Crypto Finance Group, recently announced that they received a securities house license from the Swiss Financial Market Supervisory Authority (FINMA). This license gives them the ability to trade with more banks, expand their business capabilities, and start exploring the use of regulated security tokens.

On the Blog: Small Investors Pump Dogecoin

The market volatility created when Redditors from r/wallstreetbets banded together to buy stock in GameStop (GME), AMC (AMC), and Bed, Bath, and Beyond (BBBY) through the Robinhood app spilled over into the cryptocurrency world when Dogecoin, a token established in 2013 to satirize the growth of altcoins, caught Reddit’s eye.