Estonia, one of the European Union’s most crypto-friendly countries, is cracking down on hundreds of licensed crypto companies in response to a $220 billion money laundering scandal, according to Bloomberg. Estonia was among the first EU countries to license crypto companies but has been forced to clamp down after hundreds of billions of dollars of dirty money was detected in the Estonian unit of Denmark’s largest lender Danske Bank A/S. It’s put the country at the center of Europe’s biggest money laundering scandal.
The French cybersecurity company Nigma Conseil and the Austrian Institute of Technology (AIT) have revealed to have collaborated on developing a new blockchain forensics tool. The agreement was signed on Feb. 25 to work on e-Nigma, a proposed compliance tool.E-Nigma provides its users with a way of conducting due diligence investigations in response to Know Your Customer (KYC) and Anti-Money Laundering (AML) regulation. Like other similar tools, it monitors and organizes blockchain transactions.The platform provides several advanced features such as risk scoring and wallet clustering. It is able to identify addresses with real-life identities by scraping through both the clear and dark web. It builds on the open-source cryptocurrency forensics platform provided by AIT, GraphSense. AIT is a government-owned research institute headquartered in Vienna. The technology was built as part of an AIT-led program called TITANIUM, which was formed to investigate transactions in “underground markets.” The program was awarded a 5 million euro ($5.4 million) grant by the European Union to mitigate cryptocurrency crime.Fabien Tabarly, CEO of NIGMA Conseil, commented on the collaboration: “The synergy between a leading European academic research institute and our team of developers has been instrumental in implementing the most innovative tools to fight financial crime in virtual currencies.”Blockchain forensicsE-Nigma is working in a competitive field, with similar solutions being provided by companies like Chainalysis, Elliptic and CipherTrace. As money laundering regulations around the world turn more stringent, many companies in the cryptocurrency and traditional finance sectors are turning to blockchain forensics tools. Chainalysis recently announced its collaboration with both Bitfinex and Tether, helping the service provider maintain compliance.Elliptic has turned its focus on banks, with a compliance tool letting them understand the true risk from cryptocurrency exchange transactions.
First, the third quarter saw growing awareness of perhaps the biggest clampdown on virtual asset transactions to ever impact crypto exchanges as well as banks and other financial institutions. After months to absorb its implications, these businesses are coming to grips with the fact that in just seven months they will need to comply with the so-called FATF funds Travel Rule. In a major challenge to business models and user privacy, among other changes this rule requires virtual asset service providers (VASPs) to securely transmit (and store) sender and receiver information whenever cryptocurrency moves. At the same time, US regulators emphasized that a similar Travel Rule which has long applied to fiat funds transfers—also applies to cryptocurrency transactions. This has left firms struggling to find a technical solution in time to avoid potentially severe penalties or blacklisting. It will no doubt have implications as regulators seek to have KYC information shared globally.The Blockchain Security Company
Dark DAO operators can further muddy the waters by launching attacks on choices the vote buyers actually oppose as potential false flag operations or smear campaigns; for example, Bob could run a Dark DAO working in Alice’s favor to delegitimize the outcome of an election Bob believes he is likely to lose. The activation threshold, payout schedule, full attack strategy, number of users in the system, total amount of money pledged to the system, and more can be kept private or revealed either selectively or globally, making such DAOs ultimately tunable for structured incentive changes.Because the organization exists off-chain, no cartel of block producers or other system participants can detect, censor, or stop the attack.
Tracing bitcoins has long been easy in theory: The blockchain’s public record allows anyone to follow the trail of coins from one address to another as they’re spent or stolen, though not always to identify who controls those address. But that tracing becomes far dicier when Bitcoin users put their coins through a “mix” or “laundry” service—sometimes in the form of an unregulated exchange—that jumbles up many people’s coins at a single address, and then returns them to confuse anyone trying to trace their path. In other cases, users bundle together their transactions through a process called Coinjoin that gives each spender and recipient deniability about where their money came from or ended up.For companies like Chainanalyis, Coinfirm, and Ciphertrace that offer to trace stolen or “tainted” coins—and who generally don’t make their methodology public— that leaves limited options. They can either treat any coin that comes out of a mix that includes tainted coins as fully “dirty,” or more reasonably, average out the dirt among all the resulting coins; put one stolen coin into a mix address with nine legit ones, and they’re all 10 percent tainted. Some academics have called this the “haircut” method.But Anderson argues that haircut tracing quickly leads to enormous parts of the blockchain being a little bit tainted, with no clear answers about how to treat an infinitesimally unclean coin. Often the fraction can be so small it has to be rounded up, leading to artificial increases in the total “taint” recorded.But when Anderson mentioned this problem in January to David Fox, a professor of law at Edinburgh Law School, Fox pointed out that British law already provides a solution: An 1816 precedent known as Clayton’s Case, which dealt with who should be paid back from the remaining funds of a bankrupted financial firm. The answer, according to the presiding judge, was that whoever put their money in first should take it out first. The resulting first-in-first-out—or FIFO—rule became the standard way under British law to identify whose money is whose in mixed-up assets, whether to resolve debts or reclaim stolen property.
We won! Legalised marijuana on the blockchain concept was awarded by police in the public safety track of the blockchain hackathon 2018! #bc1718 #TNO @ministerieJenV @VNGemeenten @gem_groningen @blockchaingers https://t.co/gCCuWSRLz8 pic.twitter.com/trs6PHciYs
— Arnout de Vries (@ADeVries23) April 9, 2018
We won! Legalised marijuana on the blockchain concept was awarded by police in the public safety track of the blockchain hackathon 2018! #bc1718 #TNO @ministerieJenV @VNGemeenten @gem_groningen @blockchaingers http://www.blockchaingers.org
Ads for cryptocurrencies, ICOs, wallets and exchanges will be blocked from June to prevent scams, following Facebook’s move in January
This paper furthers the discussion on the “leisures of blockchains” by examining the case of blockchain narcotization in Potcoin, with the attendant challenges of legality, economics, legitimacy, technology, and its grounding in cryptoanarchist thought.
As cryptocurrencies gain popularity, the issue of how to regulate them becomes more pressing. The attractiveness of cryptocurrencies is due in part to their decentralized, peer-to-peer structure. This makes them an alternative to national currencies which are controlled by central banks. Given that these cryptocurrencies are already replacing some of the “regular” national currencies and financial products, the question then arises: should they be regulated? And if so, how? This paper draws the legal distinction between cryptocurrencies which are in fact currency and those which are securities disguised as currency. It further suggests that in cases where a token is indeed a security, regular securities regulation should apply. In all other cases anti-fraud measures should be in place in order to protect investors. Further regulation should only be put in place if the cryptocurrency starts increasing systemic risk in the general financial system.