TRM Weekly Roundup | June 13, 2024

TRM Weekly Roundup | June 13, 2024

In this week’s edition of The Weekly Roundup, Ari Redbord , Isabella Chase , and Angela Ang take a closer look at these top stories across the cryptoverse:

  • Korean regulators report high numbers of VASP closures, with more expected
  • Snap, crackle, pop: Elections across EMEA
  • German authorities arrest man suspected of sending nearly 1,700 USDT to ISKP
  • Ireland increases number of licensed VASPs
  • Get ready for the June 30 MiCA deadline
  • Funds returned to Nirvana after July 2022 hack
  • Live with TRM’s policy team: Quarterly crypto policy roundtable, June 25 or 26

Read on for the full roundup ??


?????Korean regulators report high numbers of VASP closures, with more expected

Last Friday, the Financial Services Commission/Korea Financial Intelligence Unit (KoFIU) announced plans to strengthen user protection measures in case of business closures by virtual asset service providers (VASPs). The regulator highlighted an increase in VASP shutdowns due to worsening business conditions, noting that seven VASPs had ceased operations since May 2023, with three others suspending business for five to eight months.

With the Virtual Asset User Protection Act coming into force next month, the KoFIU anticipates more VASP closures due to increased regulatory compliance burdens.

In response, the regulator will consider conducting inspections of non-compliant businesses and taking strict action against illegal activities. Authorities also plan to issue new compliance guidelines for business closures and revise the Specific Financial Information Act to ensure businesses prepare wind-down processes in advance.


??????? Snap, crackle, pop: Elections across EMEA

The week started with France announcing a snap election. The announcement followed elections in the EU Parliament, where centrist parties maintained control but center-right and far-right parties gained support—if not as much as some expected. The week ends with analysts pouring over the manifestos of the UK’s two main parties, which were also published this week. So where does all of this election madness leave crypto assets?

For the EU, the elections will likely refocus the parliament slightly on pro-business issues, and might reduce attention on consumer protection and green issues. Key MEPs who have worked on digital asset portfolios were re-elected, smoothing the continued work on MiCA’s implementation. France's snap election, which will take place one week after the first MiCA implementation date, might disrupt firms seeking approval ahead of this date.

In the UK, the manifestos of the two main parties didn’t give away much on digital finance. The Conservative party’s manifesto focused on supporting small and medium-sized businesses and innovation, but made no direct reference to digital finance. Labor echoed support for small businesses and innovation but went further, calling out the impact of new technology on regulators and proposing a new Regulatory Innovation Office to help better equip regulators for the future.


???? German authorities arrest man suspected of sending nearly 1,700 USDT to ISKP

This week, German authorities announced the arrest of an individual with German, Polish, and Moroccan citizenship at the Cologne/Bonn airport related, in part, to his “transfer of nearly USD 1,700 in cryptocurrency to an address linked to the Islamic State Khorasan Province (ISKP).”

The individual, according to reports, applied for a position at the European Football Championship (held in Germany in June/July 2024). Over the last few months, ISKP has been encouraging its supporters to target sporting events, including major soccer/football matches.

Following the arrest, TRM observed ISKP quickly move funds on the blockchain. This is similar to ISKP’s on-chain behavior following the terrorist attacks in Moscow in March, which were attributed to the group. As TRM reported in March, ISKP continues to utilize cryptocurrency to fundraise and fund its activities around the world.

TRM Labs is currently tracking dozens of fundraising campaigns associated with terrorist groups around the world. We are committed to supporting law enforcement globally who are working tirelessly to thwart terrorist attacks, and continue to monitor the movement of funds.


?????Ireland increases number of licensed VASPs

This week, Ireland approved its 15th VASP. Crypto.com joins other industry leaders such as Gemini, Coinbase, and Ripple as fully licensed entities in the country.

Following seven authorizations last year and four so far this year, Ireland is accelerating its openness to the crypto asset sector. This is just in time, as MiCA implementation deadlines are fast approaching (see story below), and VASPs looking for an EU base to operate in and from must make up their minds soon.


???? Get ready for the June 30 MiCA deadline

The Markets in Crypto-Assets (MiCA) regulation is set to have a significant impact on Crypto Asset Service Providers (CASPs) across the European Union, with key provisions on stablecoins coming into effect on June 30, 2024.

What needs to happen by June 30? Here's a checklist for stablecoin issuers:

???Licensing and registration:

  • Obtain necessary EU regulatory licenses
  • Establish an office in an EU country and appoint a resident director

???Operational requirements:

  • Ensure stablecoins are fully backed by liquid reserves at a 1:1 ratio
  • Safeguard reserve assets through third-party custody

???AML and CTF compliance:

  • Implement robust AML and CTF measures, including customer due diligence
  • Set up procedures for reporting suspicious activities

???Transparency and disclosure:

  • Publish a detailed whitepaper with all necessary information and risk warnings
  • Share transparent pricing, cost, and fee policies

???Consumer protection:

  • Establish effective complaint handling procedures
  • Implement measures to prevent market abuse and insider trading

???Environmental impact:

  • Disclose the environmental impact of stablecoin activities

???Data security and marketing:

  • Develop strong data security policies
  • Ensure marketing communications comply with MiCA guidelines

???Compliance:

  • Hire experts knowledgeable in MiCA requirements
  • Continuously monitor regulatory updates
  • Onboard blockchain intelligence

???Regulatory engagement:

  • Maintain regular communication with EU regulators
  • Submit required reports and disclosures on time

??? For more on MiCA implementation, check out TRM Talks with the the EBA’s Elisabeth Noble here.

?? Funds returned to Nirvana after July 2022 hack

According to TRM Labs, late last week, about USD 2.6 million in cryptocurrency was returned to decentralized exchange Nirvana. Nirvana was the victim of a July 2022 hack, which resulted in the first-ever prosecution and?conviction?for a DeFi hack. TRM Labs is proud to have supported law enforcement throughout this investigation, and the victim during the?incident response.

TRM's global investigations team received an alert in TRM Detect, indicating that the stolen funds—in the stablecoin DAI—moved back to the exploited DeFi protocol.

In July 2022, Shakeeb Ahmed, a trained security engineer, carried out an attack on an unidentified cryptocurrency exchange by exploiting a vulnerability in one of the exchange’s smart contracts.

In addition, Ahmed, who pleaded guilty late last year in what is the first prosecution of a DeFi hack, attacked DeFi protocol Nirvana. Nirvana bought and sold its cryptocurrency token, ANA, and was designed so that when a user purchased a substantial quantity of ANA, the price of ANA increased. When a user sold a substantial quantity of ANA, the price of ANA decreased.

In this blog post, TRM takes an in-depth look at the hack and the investigation.

???Live with TRM’s policy team: Quarterly crypto policy roundtable, June 25 or 26

It’s been an action-packed first half of 2024 in crypto policy around the world. And our team of policy experts— Ari Redbord , Angela Ang , and Isabella Chase —are ready to dig into the details.

Join us for our quarterly policy roundtable on June 25 or June 26, where we’ll explore what’s changed, what’s new, and what’s on the horizon for global policy and regulation.

You’ll learn about:

  • The biggest stories that grabbed headlines in the first half of 2024
  • The hottest topics shaping the global policy agenda today
  • How the implementation of new regulations are shaping the industry as major deadlines loom—and whether these regulations are reducing rates of crime or increasing integrity

Sign up here.

Got questions or comments on these stories? Drop us a comment below ?? and we’ll see you next week!

Ari Redbord

Global Head of Policy and Government Affairs at TRM Labs

9 个月

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