FTX hack, digital Yen, crypto Tax in Kenya, and national exchange in Russia

FTX hack: what happened

On November 11, FTX suffered a hack, only hours after it had filed for bankruptcy. Ryne Miller, FTX US general counsel, then confirmed on Twitter that the team was pausing trading and withdrawal functions due to unauthorized access to certain assets.?

The hackers used the address 0x59ABf3837Fa962d6853b4Cc0a19513AA031fd32b to steal funds from FTX and FTX US. The address 0x59ABf3 was, at some point, one of the richest Ethereum addresses. They stole in total $566 million across several crypto assets.

Following the funds, Scorechain identified several DEX swaps. For instance, the hackers sent 50,000 ETH to an intermediate address 0x866eeecd1f248d1a0a2e0263f13594a6b8b7c01a before swapping 49,990 ETH? for renBTC on 1inch, a decentralized exchange.

The hackers also sent 195,000 ETH to 13 different wallets, as shown below. The Scorechain team was made aware of the movements, thanks to the real-time alert notification system.

Read more here.

Japan to start experiments on a digital Yen

Japan is looking to explore central bank digital currencies (CBDCs). According to Nikkei, The Bank of Japan (BoJ) will begin trials of the digital yen as a proof of concept in early 2023.

For this, it has partnered with several large banks to experiment CBDCs. As part of the experiment, the BoJ expects to work with major private banks and other organizations to detect and resolve any issues related to customer deposits and withdrawals in bank accounts. The experiments will look at the possibility of operating a CBDC during natural catastrophes and without access to the internet, for instance.

The experimentation should be running for two years, and the BoJ should decide whether to issue a digital yen or not in 2026.

CBDCs are coming strong at the center of the attention of worldwide governments as most of the big economies are trying to develop a national digital currency, for example, the digital euro, digital yuan, and digital dollar.?

Proposed crypto taxation in Kenya

A proposed amendment of the Capital Markets Bill would make crypto exchanges and wallets subject to taxation in Kenya.

According to a Business Daily report, if the bill were to be approved, it would require crypto investors in the country to pay taxes on capital gains to the financial regulator, the Kenya Revenue Authority. Investors would also have to share details of their crypto ownership with the regulator.

The bill will designate cryptocurrencies as securities, provide for the licensing of individual crypto traders and create a centralized electronic register of transactions in digital currencies in the country. It will also impose consumer protection measures and guarantees of privacy.

If the bill is approved, it would be the first time crypto assets are under regulations in the country.

Russia to launch a national crypto exchange

The Russian government is preparing to open a national crypto exchange to tackle money laundering and tax evasion.

Russian lawmakers are planning to launch a national crypto exchange. The State Douma is working on an amendment to the Digital Financial Assets law. They consulted in mid-November with market stakeholders, presumably Russian crypto industry players. Furthermore, the Ministry of Finance and the Central Bank of Russia, known for their hard stance towards crypto assets, also support this initiative.

As local news reported on November 23, the State Duma of the lower house of the Russian parliament plans to revise the regulations, which will allow the creation of a national crypto exchange. Meanwhile, lawmakers are considering an initiative to join the market at the end of the year. Even though the central bank had previously taken a negative stance on the digital asset industry several times and asked the government to ban cryptocurrencies, the Russian Finance Ministry and the Russian Central Bank finally agreed to create a national trading platform.

About Scorechain

Scorechain is a Risk-AML software provider for cryptocurrencies and digital assets. As a leader in crypto compliance, the Luxembourgish company has helped over 200 customers in 45 countries since 2015, ranging from cryptocurrency businesses to financial institutions with crypto trading, custody branch, digital assets, customers onboarding, audit and law firms, and some LEAs.

Scorechain solution supports Bitcoin analytics with Lightning Network detection, Ethereum analytics with all ERC20 tokens and stablecoins, Litecoin, Bitcoin Cash, Dash, XRP Ledger, Tezos, Tron with TRC10 and TRC20 tokens, and BSC with BEP20 tokens. The software can de-anonymize the Blockchain data and connect with sanction lists to provide risk scoring on digital assets, transactions, addresses, and entities. The risk assessment methodology applied by Scorechain has been verified and can be fully customizable to fit all jurisdictions. In addition, 300+ risk-AML scenarios are provided to its customers with a wide range of risk indicators so businesses under the scope of the crypto regulation can report suspicious activity to authorities with enhanced due diligence.