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June 23, 2020

15 Guilty in Crypto Crime Ring | South Korea Eyes CBDC | New Regs Inbound | FCA Notice to Cryptoasset Businesses

  • International Organizations Collaborate to Charge Global Crypto Crime Ring
  • South Korean Central Bank Forms an Advisory Group to Research Digital Currencies
  • Lead US Bank Regulator Talks Cryptocurrencies with Cointelegraph 
  • UK’s Financial Conduct Authority Reminds Cryptoasset Businesses of Registration Requirements
  • On the Blog: Simplifying Global Payment Compliance with PayID and TRISA
  • Upcoming Events
  • CipherTrace in the News

15 Plead Guilty After Implication in International Crypto-Crime Ring

On June 16th, Vlad-Călin Nistor—the owner of crypto exchange CoinFlux—and 14 of his associates entered guilty pleas for their involvement in an international cryptocurrency scam. According to the U.S. Department of Justice, this crime ring is responsible for fraudulent online auctions used to launder money through Nistor’s cryptocurrency exchange, where they would exchange cryptocurrency for fiat and then deposit the funds into bank accounts under the names of CoinFlux employees and family members.

Regarding the investigation, Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division commented, “Today’s modern cybercriminals rely on increasingly sophisticated techniques to defraud victims, often masquerading as legitimate businesses.” However, he continued, “These guilty pleas demonstrate that the United States will hold accountable foreign and domestic criminal enterprises and their enablers, including crooked bitcoin exchanges that swindle the American public.”

The real danger, though, may come from other nation-state actors who seek to replicate this behavior by using cryptocurrency exchanges to cover their tracks. Attorney General Benczkowski highlighted this danger in his press release, stating that, “this time [a cryptocurrency exchange] was being used by criminal fraudsters, but there are definitely parallels in what we’ve already seen from nation-state actors.”

Why It Matters: This case demonstrates how cryptocurrency exchanges can be abused to launder funds, highlighting the importance of Travel Rule regulations. Exchanges with poor KYC or in regions with weak AML controls make trusting and sharing this evidence even harder.

Read the full article in Nextgov here:


South Korean Central Bank Forms an Advisory Group to Research CBDCs

On June 15th, the central bank of South Korea officially formed a legal advisory group to research the implementation of digital currencies into the economy. This group will advise the Bank of Korea on legislative matters relating to a Central Bank Digital Currency (CDBC).

The Bank of Korea said in a statement that a CBDC will not be issued “in the near future” because strong demand for cash still exists, but they did launch a pilot program to test the digital won. This program, launched in April and scheduled to run until December 2021, will be used to identify technical and legal provisions related to the use of CBDCs.

Why It Matters: Central banks around the world appear to have accelerated their digital currency research efforts. France’s central bank began experimenting with digital euro in April. The European Central Bank recently said it is working on a “retail central bank digital currency.” Cambodia’s central bank is also aiming to go live with a digital currency this year. This ramping up of CBDC interest around the globe should spark more serious conversation about implementation of technical solutions for compliance, security, and privacy.

Read The Block’s coverage here:


New Lead US Bank Regulator Gets Serious About Cryptocurrencies

On June 17th, only days into his term as head of the Office of the Comptroller of the Currency (OCC), Brian Brooks spoke with the news site Cointelegraph on how he hopes to update legacy systems with crypto technology. Before his appointment, Brooks was running Coinbase’s legal team—experience which informs a great deal of what he identifies as areas for improvement.

According to Brooks, the delays regarding COVID-19 direct aid payments amplified the need for change in the financial system. He told Cointelegraph, “The banks did a heroic job of [distributing aid]…but they were trying to do so through a portal run by the Small Business Administration that was built on COBOL in the 80s.” He envisions a future where aid could be distributed through a digital payment network like Ripple, a stablecoin system, or central bank digital currency.

Regarding the government’s role in crypto, Brooks expressed, “there’s a strong role for the government to play in establishing audit standards, reserve standards, notice of withdrawal type of standards on issuers of stable coins and the networks that generate stablecoins.”

Why It Matters: As more individuals with an understanding of the cryptocurrency space take on influential positions in government and banking, we will see more progressive perspectives on the utility of cryptocurrencies.

Read Cointelegraph’s coverage here:


FCA Issues Notice to UK Cryptoasset Businesses

According to the Financial Conduct Authority’s (FCA) new crypto money laundering regulations, existing businesses have until June 30, 2020, to register with the FCA and apply for priority review of their business. Companies that fail to apply by that date may encounter registration processing delays. Any companies not registered with the FCA will have to cease trading on January 10, 2021.

Any new UK cryptoasset businesses that began operations after January 10, 2020, must register with the FCA before conducting business.

For more information and to find out how to register, visit


On the Blog: Simplifying Global Payment Compliance with PayID and TRISA

In June of 2019, the FATF updated their recommendations that require VASPs to share specific sender and receiver information for cryptocurrency transactions over a specific threshold. Known collectively as the “Travel Rule,” the new requirements will force VASPs to address a significant technological and governance challenge: how to comply with regulators, while simultaneously preserving the cornerstone values of crypto—privacy and security.

In response to the new regulatory hurdle, CipherTrace designed and donated the Travel Rule Information Sharing Architecture (TRISA)—an open-source, decentralized solution to information sharing between VASPs.  However, for any solution to work globally, it must include cross-platform user interoperability. This is why TRISA is excited to add PayID to its list of supported platforms, further enabling the interoperability needed for universal Travel Rule compliance for the entire PayID community.

Read more:


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