Remitano Hack, Hong Kong Warns Crypto Firms Using Banking Terms, Deutsche Bank To Offer Crypto Custody, Malta's Crypto Rulebook
Crypto Exchange Loses $2.7M in Hot Wallet Breach
On September 14, cryptocurrency exchange Remitano fell victim to a hack resulting in suspicious withdrawals, confirming a breach later on. Approximately $2.7 million worth of cryptocurrencies were illicitly withdrawn in the attack. Tether took swift action, freezing one of the addresses linked to the attacker, potentially safeguarding around $1.4 million worth of customer funds.
Crucially, Remitano assured users that their funds were unaffected by the incident and anticipated that deposits and withdrawals would resume within 48 hours. While Bitcoin, Bitcoin Cash, and Litecoin transactions remained operational, some other networks might experience temporary unavailability.
Experts suspect the involvement of the Lazarus Group, a sophisticated hacking outfit believed to have ties to North Korea. These incidents highlight the alarming trend of hot wallet breaches due to compromised private keys.
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Hong Kong central bank warns against crypto firms using banking terms
The Hong Kong Monetary Authority (HKMA) has issued a stern warning regarding cryptocurrency businesses that employ banking terminology, potentially violating the region's banking laws. According to HKMA, only licensed institutions are permitted to engage in banking or deposit-taking activities in Hong Kong, as stipulated by banking regulations.?
Consequently, the HKMA has cautioned the public against entities using designations such as crypto bank, digital asset bank, or offering banking services, as these practices may infringe the law. It is also unlawful for entities, excluding authorized institutions, to incorporate the term "bank" in their business names or descriptions and to represent themselves as banks conducting business in Hong Kong. Furthermore, facilitating deposit-taking activities without the necessary license is considered a breach of the law.
It is crucial for the public to exercise caution and be aware that crypto firms not recognized as banks in Hong Kong are not under the supervision of the HKMA, and any funds entrusted to them are not protected by the Hong Kong Deposit Protection Scheme. Therefore, due diligence is essential when engaging with cryptocurrency-related businesses operating in the region.
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Deutsche Bank Enters Crypto Custody Service for Institutional Customers
Deutsche Bank has embarked on a transformative partnership with Swiss crypto company Taurus to provide cryptocurrency custody services to institutional clients. This represents a noteworthy departure from the traditionally conservative Deutsche Bank. For the first time, the bank will securely safeguard a limited array of cryptocurrencies and tokenized traditional assets for its clients, bridging the divide between conventional finance and the digital asset domain.
The scope of the bank's cryptocurrency custody service extends beyond cryptocurrencies themselves. Deutsche Bank is also set to offer secure custody solutions for tokenized versions of traditional financial assets. Tokenization, a process that converts assets such as stocks and bonds into digital tokens, is gaining momentum due to its potential to augment liquidity and transparency in traditional markets.
This partnership underscores the shifting dynamics within the financial sector, where venerable institutions like Deutsche Bank are acknowledging the potential of cryptocurrencies. This move not only lends legitimacy to digital assets but also indicates a growing acceptance among institutional investors. While Deutsche Bank's initial offerings in the crypto space may be conservative, its reputation for reliability could inspire other institutions to explore the crypto arena with heightened confidence, thus further propelling the mainstream adoption of cryptocurrencies and tokenized assets.
Malta Consults Public on Aligning Crypto Rules with EU MiCA Regulation
Starting last Monday, Malta's Financial Services Authority (MFSA) has initiated a public consultation process regarding proposed changes to its rulebook governing cryptocurrency companies. The primary objective of these revisions is to align Malta's cryptocurrency regulations with the European Union's Markets in Crypto Assets regulation (MiCA), slated to take effect in 2024. MiCA represents a landmark development as the world's first comprehensive crypto regulation introduced by a major jurisdiction. It will enable crypto service providers to operate seamlessly across the EU with a single license, simplifying compliance and fostering cross-border expansion.
As an EU member, Malta is determined to harmonize its crypto rules with MiCA standards to ensure a smooth transition for Virtual Financial Assets (VFA) Service Providers within its jurisdiction. Malta has long been recognized for its progressive legal framework, proactively anticipating EU norms. It serves as the home to prominent crypto companies such as Crypto.com and OKCoin, further reinforcing its status as a crypto-friendly hub.
The public consultation period, which extends until September 29, allows industry stakeholders and the wider crypto community to contribute their insights, thereby shaping the future regulatory landscape in Malta. This move underscores Malta's commitment to cultivating a transparent and compliant crypto ecosystem in line with evolving EU standards, positioning it as a reliable destination for crypto businesses seeking EU market access.
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Scorechain provides a blockchain analytics and transaction monitoring platform for crypto 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 branches, digital assets, customers onboarding, audit and law firms, and some LEAs.
Scorechain’s platform provides identifying data and risk assessment for 30+ blockchains. The platform connects to different sources and block lists to provide risk scoring on crypto assets, transactions, addresses, and entities. The risk assessment methodology applied by Scorechain has been verified and is fully customizable to fit all jurisdictions. Customers can monitor infinite possibilities of risk scenarios with a wide range of parameters provided so businesses under the scope of the crypto regulation can report suspicious activity to authorities with enhanced due diligence.