Stablecoin, Wallet Products Launch; German Bank Launches Crypto Services
By Joanna F. Wasick
Circle, a global fintech firm and issuer of the USDC stablecoin, has announced new smart contract functionality to allow holders of BUIDL, a tokenized fund issued on the Ethereum blockchain, to transfer their shares to Circle for USDC. Introduced this past March- by a major U.S. investment management firm, BUILD allows around-the-clock transfers to other preapproved investors and is invested in cash, U.S. Treasury bills and repurchase agreements. According to a press release, Circle’s smart contract provides BUIDL holders with a near-instant, 24/7 BUIDL off-ramp and enables the “frictionless transfer of BUILD shares for USDC to Circle on the secondary market.”
Kraken, a U.S.-based cryptocurrency exchange, recently released the “Kraken Wallet,” a self-custodied, open-source wallet. Features include (1) comprehensive portfolio tracking, (2) multichain support and (3) and 24/7/365 support. The wallet also offers “WalletConnect integration,” which Kraken says allows secure access to thousands of “the latest and most popular” dApps. The Kraken Wallet is being offered to Kraken clients and nonclients alike.
A prominent German bank recently announced a partnership with crypto firm Bitpanda, which will provide the bank with an “investing-as-a-service” infrastructure and provide the bank’s corporate clients with cryptocurrency services to custody and trade bitcoin, ether and other digital assets. “We are convinced that crypto assets will establish themselves as a building block for further business models,” said Dr. Jürgen Harengel, an executive at the German bank. “With the cooperation, we are creating the technical and regulatory basis at an early stage to best support the individual crypto strategies of our corporate customers.”
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US Senators Introduce Stablecoin Legislation; WEF Publishes Report on CBDCs
By Keith R. Murphy
According to a press release, U.S. Senators Cynthia Lummis and Kirsten Gillibrand recently introduced the Lummis-Gillibrand Payment Stablecoin Act with the goal of creating a clear regulatory framework for payment stablecoins. The release identifies key aspects of the proposed bipartisan legislation, including that it (1) protects consumers by requiring stablecoin issuers to maintain one-to-one reserves and prohibiting unbacked, algorithmic stablecoins; (2) prevents illicit or unauthorized use of stablecoins by issuers and users; and (3) creates federal and state regulatory regimes for stablecoin issuers that preserve the dual banking system. Senator Gillibrand is quoted in the release, stating among other things that a stablecoin regulatory framework is critical to maintain the U.S. dollar’s dominance, to protect consumers, and to address money laundering and illicit finance.
According to a recent press release, the World Economic Forum, in collaboration with an international information technology and consulting firm, released a report addressing the transformative potential of wholesale central bank digital currency (wCBDC) in the modernization of financial markets. The release notes that use of wCBDC is already materializing, and it “advocates for collaboration among central banks, commercial banks and financial market infrastructures to use wCBDC to address interbank payment and securities transaction challenges.” Among other analyses, the report states that nearly all of the global economy’s central banks are researching, experimenting or deploying central bank digital currency, and wCBDC, as a form of central bank money (CeBM), could create new economic models and integration points and preserve the role of CeBM as a credit risk-free instrument by offering a foundational layer for digital payments.
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Enforcement Actions Target Crypto Hacks, Cryptojacking, Pig Butchering Scams
By Christopher Lamb
According to a recent press release by the U.S. Department of Justice (DOJ), Shakeed Ahmed, who previously pled guilty to computer fraud, was sentenced to three years in prison for “hacking two separate decentralized cryptocurrency exchanges and stealing cryptocurrency worth over $12 million.” According to the release, Ahmed “carried out an attack on a decentralized cryptocurrency exchange … in which he used fake pricing data to generate approximately $9 million worth of inflated fees,” which he subsequently withdrew and used to extort the decentralized exchange (DEX). Ahmed carried out a second attack on another DEX “using sophisticated techniques, including token-swap transactions” among others. According to the release, this marks the first-ever conviction for hacking a smart contract.
A second DOJ press release announced the indictment of Charles O. Parks III, also known as “CP30,” for “operating a large-scale illegal ‘cryptojacking’ operation.” According to the release, CP30 “defrauded two well-known providers of cloud computing services out of more than $3.5 million worth of computing resources in order to mine cryptocurrency worth nearly $1 million.” The indictment charges CP30 with “wire fraud, money laundering and engaging in unlawful monetary transactions in connection with the scheme.”
According to another press release by the Brooklyn Kings County District Attorney’s Office, their Virtual Currency Unit has “successfully disrupted a pig butchering operation that defrauded people from across the United States out of millions of dollars.” According to the release, “[a]n analysis of cryptocurrency transactions and domain registry records [] led to the identification of … victims and a network of about 80 domains linked to this … scheme.” The combined total loss, according to the release, is more than $1 million.
In a final development, the Australian Securities & Investments Commission (ASIC) announced that it “commenced civil proceedings against blockchain mining companies NGS Crypto Pty Ltd, NGS Digital Pty Ltd and NGS Group Ltd (NGS Companies) and the sole directors of those respective companies” for “target[ing] Australian investors to invest in blockchain mining packages with fixed-rate returns.” According to the release, more than 450 Australians have invested approximately $41 million USD through the NSG Companies. The Australian Federal Court has appointed receivers for the digital currency assets of the NGS Companies to prevent dissipation of the assets.
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Etherscan Advertisements Tied to Crypto Wallet Drainer Scam
By Robert A. Musiala Jr.
According to recent reports, advertisements on Etherscan, the popular Ethereum blockchain explorer, have been identified as part of a phishing campaign in which the advertisements direct users to websites that prompt users to link their crypto wallets, which enables the scammers to withdraw the victims’ crypto funds. The phishing advertisements have reportedly also been identified on several popular Internet search engine sites.
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