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Congress wants to be notified of all crypto rewards payments by DOS

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Congress wants to be notified of all crypto rewards payments by DOS

Congress wants to be notified of all crypto rewards payments by DOS Monika Ghosh · 4 hours ago · 2 min read

The U.S. wants to understand how crypto is impacting sanctions enforcement and take strong measures to prevent evasion.

2 min read

Updated: September 20, 2022 at 3:57 pm

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Cover art/illustration via CryptoSlate

As the U.S. grows increasingly concerned about sanctions evasions via cryptocurrency, a new bill demands that Congress be notified of all crypto aid provided to Ukraine.

The bill, which the House of Representatives deliberated on Sept. 19, has been titled “Russia Cryptocurrency Transparency Act.”

The bill asks for the appointment of a Director of Digital Currency Security in the office of Economic Sanctions Policy and Implementation of the DOS. The Director will assess how cryptocurrencies impact the U.S. sanctions regime and develop and implement sanctions policies resilient to crypto.

The bill demands that the Secretary of State notify the Committee on Foreign Affairs and the Committee on Foreign Relations at least 15 days before paying out any crypto rewards. The bill refers to the Department of State’s (DOS) Rewards for Justice Program, which offers money for information that helps prevent acts of international terrorism.

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The bill asks the DOS to submit a report explaining why it chose to pay out rewards in cryptocurrency. It also requires the report to contain a list of all crypto rewards already paid by the DOS. The report should include evidence that explains why crypto payments make it more likely for whistleblowers to come forward than the U.S. dollar, according to the bill.

Additionally, the report tasks the Secretary of State with determining how the State Department’s use of crypto impacts the dollar’s status as a global reserve currency and if it could lead to more funds being used for illicit activities.

The bill also requires a report on the role of crypto and blockchain in providing humanitarian aid to Ukraine and promoting economic development. According to the bill, the report should include how blockchain and crypto can assist in providing support or resettlement of Ukrainian refugees and increase efficiency, accountability, and transparency in aid provided to Ukrainians.

The fear of Russian sanctions evasion

Additionally, the bill requires the Secretary of State, in consultation with the Secretary of the Treasury, to submit a report on the extent to which digital currencies can impact the effectiveness and enforcement of U.S. sanctions against the Russian Federation.

According to the bill, the report should include descriptions of efforts by the Russian Federation to use crypto and Web 3.0 tools to evade sanctions. It should also include an assessment of how the use or adoption of crypto could undermine national security, sanctions, and anti-money laundering efforts.

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Furthermore, the bill’s text states that the report should also include actions taken by the U.S. to work with the private sector in combating sanctions evasion.

The U.S. imposed sanctions on Russian targets in late February 2022, a few days after Russia attacked Ukraine. President Joe Biden mentioned the threat of Russians using crypto to evade sanctions in his executive order.

Lawmakers specifically asked crypto exchanges to comply with the sanctions and cut off service to all sanctioned targets. While some crypto exchanges were initially hesitant, they eventually bowed down. But a Chainalysis research showed that there is a lack of evidence to suggest crypto is being used to evade sanctions.

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Crime

South Korean court dismisses arrest warrant for Do Kwon’s aide

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South Korean court dismisses arrest warrant for Do Kwon’s aide

South Korean court dismisses arrest warrant for Do Kwon’s aide Christian Nwobodo · 2 hours ago · 1 min read

After interrogating Do Kwon’s aid, Judge Jin-pyo dismissed the arrest warrant saying “it is difficult to see the necessity and significance of the arrest.”

1 min read

Updated: October 6, 2022 at 8:32 pm

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Cover art/illustration via CryptoSlate

A South Korean District Court has dismissed the arrest warrant issued against the Head of General Affairs at Terraform Labs Yoo Mo, according to local news Yonhap.

Yoo Mo, who doubled as Do Kwon’s aide, was reportedly arrested in the early hours of Oct. 6, following an arrest warrant issued on Oct. 5.

Mo was accused of using bots to inflate the prices of the LUNA token, as well as violating the Capital Market Act.

Judge Jin-pyo argued that Mo may not have violated the Capital Market Act, as LUNA has not been classified as a security under South Korean law.

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“There seems to be room for legal dispute over whether the LUNA coin is an investment contract security under the Capital Market Act.”

After interrogating Do Kwon’s aide, Judge Jin-pyo moved to dismiss the arrest warrant against him saying “it is difficult to see the necessity and significance of the arrest.”

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Regulation

EU narrows Russia’s options further with crypto sanctions

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EU narrows Russia’s options further with crypto sanctions

EU narrows Russia’s options further with crypto sanctions Oluwapelumi Adejumo · 7 hours ago · 1 min read

The EU says its sanctions will potentially weaken Russia’s industrial capacity to continue its war in Ukraine.

1 min read

Updated: October 6, 2022 at 4:28 pm

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Cover art/illustration via CryptoSlate

The European Union (EU) commission has imposed a new wave of sanctions on Russia over its invasion of Ukraine, according to an Oct. 6 press statement.

“(All) existing prohibitions on crypto assets have been tightened by banning all crypto-asset wallets, accounts, or custody services, irrespective of the amount of the wallet (previously up to €10,000 was allowed).”

The new sanctions are the eighth set of measures imposed by the union to cut Russia’s economic growth and military success. According to the commission, the sanctions are “proof of its determination to stop Putin’s war machine and respond to his latest escalation with fake ‘referenda’ and illegal annexation of Ukrainian territories.”

Other sanctions

The EU’s sanctions also extend to the scope of services that can no longer be provided to the government of Russia or its citizens within the country. These services include IT consultancy, legal advisory, architecture, and engineering services.

The sanctions also place €7 billion in import restrictions on Russian products like vehicles, steel, ceramics, etc. Also, it was revealed that the  G7 agreement on Russian oil exports would be implemented starting Oct. 6.

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According to the commission, its previous sanctions against the Putin-led country had proven effective. The sanctions have damaged Russia’s ability to manufacture new weapons and repair existing ones and hindered its material transportation.

Russia is embracing crypto alternative

Several reports revealed that the Russian authorities are increasingly leaning towards using crypto for international payments. Russia’s Prime Minister Mikhail Mishustin had stated that the country’s financial system might have to adjust to the new economic reality.

Meanwhile, crypto use remains hazy in Russia. President Putin signed a law on July 14 that banned using cryptocurrencies as a local means of payment. Apart from that, the country blocked global crypto exchange company OKX on Oct. 4 without giving any reason.

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approval

EU Council Endorses Markets In Crypto Assets (MiCA) Legislation

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EU Council Endorses Markets In Crypto Assets (MiCA) Legislation

Council of the EU, one of the European Union’s legislative bodies, has approved the proposed regulatory framework for the European crypto space. It’s now up to European lawmakers to approve the Markets in Crypto Assets package before its final adoption.

Comprehensive Crypto Regulation Moves Closer to Adoption in EU

The Committee of Permanent Representatives (COREPER) has approved the final version of the Markets in Crypto Assets (MiCA) legislation, according to a document published by the Council of the European Union after a meeting on Oct. 5. The committee is made up of the heads of missions of the EU member states in Brussels.

COREPER prepares the agenda for the ministerial meetings of the Council and is authorized to take some procedural decisions. The European Parliament has been informed about the endorsement in correspondence to the Committee on Economic and Monetary Affairs (ECON) which is expected to meet and vote next week.

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In a letter, COREPER Chair Edita Hrda confirms that “should the European Union adopt its position at first reading… the Council would, in accordance with Article 294, paragraph 4 of the Treaty, approve the European Parliament’s position and the act shall be adopted in the wording which corresponds to the European Parliament’s position.”

The approval of the draft MiCA package in committee comes after the three main institutions in EU’s complex legislative process – the Parliament, Council and Commission – reached consensus earlier this year on the text of the sweeping proposal to regulate the bloc’s crypto economy. They also agreed on a set of anti-money laundering rules for transactions involving crypto assets.

MiCA should come into force following the completion of the approval process and its publication in the European Union’s Official Journal, expected towards the end of 2022. However, many of its provisions will become applicable in late 2023 or by mid-2024.

The legislation aims to regulate the activities of issuers of crypto assets and providers of related services while protecting customers and investors across the Union. Previous attempts to revise it in the Parliament, including a controversial proposal to ban the provision of services for cryptocurrencies relying on energy-intensive mining methods like Bitcoin, sparked reactions in the crypto industry and community on the Old Continent.

This week, the members of the European Parliament called for introducing effective and uniform taxation rules of crypto assets in the member states. A non-binding resolution adopted with the votes of a large majority of European lawmakers also suggested to employ blockchain technology in the fight against tax evasion and to offer small and occasional crypto traders a simplified tax treatment.

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Tags in this story

approval, COREPER, council, Council of the EU, Crypto, crypto assets, Cryptocurrencies, Cryptocurrency, ECON, endorsement, EU, EU Council, european commission, European Parliament, European Union, Legislation, Markets, MiCA, Regulation, rules

What effects on Europe’s crypto space do you expect from the MiCA legislation? Share your thoughts on the subject in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

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