financing terrorism
Yesterday, The Wall Street Journal revisited terrorism-financing-via-crypto themes echoed in previous pieces (1, 2) as well as last week’s Bloomberg article showing Russian cryptocurrency exchange Garantex continues to thrive in spite of sanctions.
Payments using the stablecoin Tether are at the root of both stories as Brian Nelson, U.S. Treasury’s undersecretary for terrorism and financial intelligence, tells the Wall Street Journal in a statement, “Russia is increasingly turning to alternative payment mechanisms to circumvent U.S. sanctions and continue to fund its war against Ukraine.” Read the WSJ article.
what you should know: There appear to be two key areas of concern for the crossroads of digital assets and money laundering: Russia and Hamas.
At a House Financial Services (HFS) hearing about FinCEN (Financial Crimes Enforcement Network) in mid-February, Nelson appeared as a witness where House Majority Whip Tom Emmer (R, MN) reminded Nelson of a November letter he and a bipartisan group of members had sent to the White House and U.S. Treasury regarding getting data on digital assets involvement in Hamas and terrorist financing.
The Majority Whip said to Nelson at the hearing: “Treasury has the data to paint the correct narrative” on digital assets and Emmer openly wondered why Treasury didn’t offer a more informed opinion. Nelson seemed to claim they did offer an informed opinion. More highlights from the hearing are here.
financing terrorism – Tether
Tether, the company, didn’t respond to the reporters for the WSJ article yesterday, but did synchronize its release of Tether’s “Completion of System Organization Control (SOC) 2 Type 1 Audit.” The company made a case for cleaning up its anti-money laundering act by explaining in a blog post about the new audit: “The SOC 2 Type 1 audit examination is a gold standard in security compliance developed by the American Institute of Certified Public Accountants (AICPA), and underscores Tether’s position as an industry leader committed to delivering a secure experience.” See the blog post.
Tether CEO Paolo Ardoino, who has been aggressively and publicly pursuing a compliance strategy for the company and the world’s largest stablecoin, said in the post, “This independent validation of security controls is vital for Tether, demonstrating our commitment to being the world’s most trusted and compliant stablecoin.”
On March 12, Tether trumpeted its coordination with the Department of Justice (DoJ) and Federal Bureau of Investigation (FBI), in the seizure of approximately $1.4 million worth of Tether in tech support scam.
more tips:
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- SOC Report Type 1 vs. Type 2 | SOC 1, 2, 3 Reporting Definitions (2012) – Marcum LLP
April Fools
“The [SEC] deserves more funding for crypto enforcement…. April Fools!” – Majority Whip Tom Emmer on X yesterday
Rep. Nickel on Dem support
Rep. Wiley Nickel (D, NC), a consistent supporter of crypto regulation among House Financial Services Democrats, appeared on Tony Edward’s Thinking Crypto podcast which was released yesterday. Nickel stressed his interest in getting more Democratic support for the current stablecoin [H.R.4766] and digital asset market structure bills [H.R.4763] awaiting a House Floor vote.
Rep. Nickel told Edward, “For me, as a moderate Democrat, I’m trying to do all I can to boost the score of Democrats on these issues (the two bills) when they get to the Floor so that we have the momentum to get it done through the Senate. That’s the main task ahead for me. How can we continue to get more Democrats aboard? [and] making the case – the progressive case – for why crypto is so good… We need to do everything we can to support this emerging blockchain industry. It has a chance to change the lives of all of our constituents in a really positive way.” See the podcast on YouTube.
what you should know: Rep. Nickel was one of four Democrats who supported both the stablecoin and digital asset market structure bills at last July’s markups. Reps. Jim Himes (CT), Josh Gottheimer (NJ) and Ritchie Torres (NY) were the other three Democrats.
op-ed: Bitcoin as currency
In an op-ed on CoinDesk, CEO Zac Townsend of bitcoin-denominated and Bermuda-based insurance company Meanwhile goes beyond the usual argument for Bitcoin – “a store of value” – and promotes Bitcoin as a currency with his own company as a relevant use case.
Townsend writes, “We operate a life insurance company like any other. But instead of being in a currency with depreciating purchasing power — like dollars, euros, yen, Swiss francs, or pound sterling — our currency is bitcoin, which is appreciating as a store-of-value.” Read more. He argues for the “Bitcoin Standard” – which is also a popular book by Saifedean Ammous.
Binance board
Cryptocurrency platform Binance announced a board of directors for the first time as its former CEO and founder Changpeng “CZ” Zhao awaits sentencing later this month. Zhao and Binance plead guilty in November to violating US anti-money laundering and sanctions laws.
According to Bloomberg, former Barbados ambassador to the United Arab Emirates, Gabriel Abed, was named chairman [of the Binance board]. Current Binance CEO Richard Teng and three company execs – Heina Chen, Jinkai He, and Lilai Wang – also joined. Two outside members are “Arnaud Ventura, managing partner at investment firm Gojo & Co, and Bayview Acquisition Corp. CEO Xin Wang,” says Bloomberg.
17 days until the halving
Grayscale explains The 2024 Bitcoin “Halving” – today at 1p ET. on X
still more tips
Argentina Unveiled Mandatory Registry For Bitcoin And Crypto Platforms – Forbes
Arrested Tornado Cash dev Roman Storm motions to drop ‘fatally flawed’ charges – The Block
Memes, Pumps, Blunders: Absurd Crypto Spectacles Make a Comeback – Bloomberg on Yahoo