Crypto Law Updates from UK and Taiwan, DB Partners with SC on Blockchain Interoperability, and Safereum Rug Pull

UK Passed Law to Seize Crypto Crimes

Legislators in the United Kingdom have successfully passed a new law permitting the confiscation and freezing of cryptocurrencies if they are found to be utilized for illicit activities. According to official data on the U.K.'s parliamentary acts website, the Economic Crime and Corporate Transparency Bill is anticipated to receive royal assent on 26 October, marking the conclusion of its legislative journey through both houses of parliament. The bill, introduced on 22 September 2023, is designed to bolster the government's ability to combat cryptocurrency-related crimes such as cybercrimes, scams, and drug trafficking.

This law introduces groundbreaking measures that empower U.K. authorities to proactively target organized criminal networks and individuals seeking to exploit the country's open economic landscape. Furthermore, it enhances Companies House's capabilities to verify company directors' identities, remove fraudulent entities from the company registry, and share vital information with criminal investigation agencies. Additionally, law enforcement agencies gain expanded authority to seize, freeze, and recover cryptocurrency assets. These changes collectively aim to create a level playing field for businesses, maintaining the U.K.'s status as a world-class center for business growth and prosperity.

The bill received royal approval and officially became law on Thursday, equipping law enforcement agencies with a valuable tool to confiscate and freeze cryptocurrency used in criminal activities, covering a range of offenses from drug trafficking to cybercrimes. Experts note that this development is particularly valuable in time-sensitive cases, given the ability to seize cryptocurrency without a formal conviction.

Deutsche Bank and Standard Chartered to Collaborate on Blockchain Interoperability

Deutsche Bank and SC Ventures, a division of Standard Chartered, are collaborating on a system to facilitate communication between blockchain-based transactions, stablecoins, and central bank digital currencies (CBDCs). This approach is akin to the SWIFT messaging layer used in traditional banking infrastructure.

Through a series of tests, the banks are using the Universal Digital Payments Network (UDPN), a permission blockchain system with validator nodes operated by a consortium of banks, financial institutions, and consultancies. Developed by GFT Group and Red Date Technology, the system allows transactions to flow across various networks, including those supporting stablecoins on public blockchains and CBDCs.

While previous attempts by banks and institutions to create consortia for managing blockchain-based transactions have had limited success, the creators of UDPN claim it serves as an interoperability bridge between different blockchain networks. It also adheres to decentralized digital identity standards (DIDs), creating a regulated and bank-friendly environment.

In essence, UDPN facilitates transactions within a permissioned network, yet it operates without the need for a central organization to define a SWIFT message format, resembling certain aspects of decentralized finance (DeFi) within this framework.

Taiwan Moved Forward with Cryptocurrency Regulation Law

The Legislative Yuan of Taiwan has taken a significant stride toward regulating the cryptocurrency sector by passing the first reading of a proposed crypto law. Co-authored by Yung-Chang Chiang and 16 other lawmakers, this legislative initiative mandates that all cryptocurrency platforms operating in Taiwan must secure a permit. Non-compliance could result in regulatory orders to cease operations. While Taiwan's Financial Supervisory Commission (FSC) had earlier issued guidelines for the crypto industry to establish self-regulatory rules, these measures lacked legal enforceability.

The primary objective of this proposed law is to establish a regulatory framework that not only offers oversight but also introduces legal enforceability for crypto businesses. The move came after Yung-Chang Chiang, a member of Taiwan's Legislative Yuan, expressed intentions to have the initial draft of the law ready for parliamentary review by November 2023 or even earlier.

Under this new special law, regulatory authorities would gain the power to impose administrative penalties on operators violating self-regulation rules. The legislation addresses the critical need for legal enforceability within the cryptocurrency sector, a significant enhancement over the previous non-binding self-regulatory guidelines.

Safereum Rug Pull Shook DeFi Community

The DeFi community was rocked by the recent Safereum exit scam, which sent shockwaves throughout the decentralized finance space. In a series of suspicious transactions, the developers of Safereum sold tokens amounting to roughly $1.27 million in exchange for over 700 ETH, causing a devastating 94% crash in SAFEREUM token prices in a matter of hours. This incident highlighted the inherent risks associated with DeFi investments and underscored the urgent need for regulatory oversight to safeguard investors.

Moreover, the Safereum's official channels, including its Twitter account, website, and Telegram channel, fell silent, leaving investors in a state of uncertainty and distress. This alarming event serves as a stark reminder of the importance of due diligence and vigilance in the DeFi sector.

The Safereum rug pull, which absconded with almost $1.3 million from investors, serves as a stark reminder of the need for vigilance within the DeFi space, particularly when dealing with projects led by anonymous teams. With scams like this increasingly targeting uninformed retail investors through social media promotions, the calls for regulatory scrutiny and investor protection are growing louder. To address these issues, comprehensive blockchain AML (Anti-Money Laundering) compliance solutions like Scorechain can help you mitigate illicit crypto risks and crimes.

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