DAO library, US Treasury sanctions smart contract for crypto mixer, Iran paying import with crypto, Moonbirds NFT to move to open IP license; EU Travel rule & MiCA - Chainalysis
CryptoLaw Newsletter #61
US Treasury sanctions crypto mixer. Can you stop a smart contract?
DAO library: a wealth of resources on decentralized organizations
High-profile influencers receive warning letter about shilling NFTs
Iran reportedly using crypto to pay for import orders
The US CFTC and SEC propose new disclosure rules for large hedge funds on crypto exposure
What you need to know about the EU’s Travel Rule and MiCA
How do you sanction a smart contract? The US Treasury sanctioned “notorious” crypto mixer Tornado Cash and added 45 associated ethereum wallet addresses to its list of sanctioned entities. Mixers are used to obfuscate the identity of people sending and receiving crypto funds. Proponents call it a useful privacy-enhancing measure, critics see it as a tool for money laundering and other shady behaviour. In response to the Treasury’s announcement, crypto companies such as stablecoin issuer Circle blacklisted the sanctioned addresses and web3 service providers such as Alchemy and Infura blocked access to Tornado Cash’s front-end. However, sanctioning the mixer doesn’t mean it will stop running, although it will make it harder for users to use the tool. Tornado Cash is an open source project running on a smart contract, which will continue to execute transactions regardless of the sanctions. Users can still connect directly to that smart contract to funnel transactions through Tornado Cash, even if specific user applications block the mixer’s services. An anonymous user decided to protest by sending ETH tokens from Tornado Cash to prominent figures.
DAO library. Interested in DAOs? You’ll find a wealth of DAO materials on the DAO Collective Research site. From legal entity analysis (mostly US focused) to treasury management and governance, the DAO library offers both basic explainers and links to various resources.
High-profile influencers including Gwyneth Paltrow, Eva Longoria, Floyd Mayweather, Tom Brady, DJ Khaled and Paris Hilton received a warning from a US consumer watchdog about promoting NFTs without the required disclosures.
Iran reportedly paid for an import order with crypto and may plan to use crypto as a way to bypass US sanctions.
Bank of Thailand plans to pilot its retail CBDC by the end of the year.
Nigerian stock exchange NGX plans blockchain-based stock settlement next year.
A Chinese bank has issued the first e-renminbi loan backed by IP as collateral.
Coinbase’s claim that the SEC refuses to create new rules is unfounded, according to an representative of INX, which conducted a regulated ICO in the US.
Thailand’s SEC approved four more crypto companies.
Crypto exchange Binance distances itself from WazirX after a regulator in India accused the latter of facilitating money laundering. It was believed Binance owned at least a partial equity stake in WazirX, but Binance’s CZ denied that, saying the deal had never been completed.
Canadian regulators are investigating crypto lender Celsius together with US colleagues.
Crypto investing is “highly hazardous”, Singapore’s regulator repeated. The comment came after crypto company Hodlnaut paused withdrawals. The regulator rescinded its in-principle approval of the company’s license as a digital asset service provider.
Blackrock partners with crypto exchange Coinbase to bring crypto (bitcoin, for now) to institutional investors.
Cryptoassets in the metaverse can increase systemic risk, according to a Bank Underground blog of the Bank of England.
US: An ICO from 2017 violated US securities laws, according to the US SEC. The token issuer, Bloom, faces a $31 million fine if it does not register its tokens as securities. /// The CFTC and SEC propose to amend reporting rules for large hedge funds with crypto exposure: crypto would no longer be included under “cash and cash equivalents” but would need to be reported under a different category. /// A Californian regulator ordered crypto lending firm Celsius to stop offering securities in the state.
Academic corner: Defining the Regulatory Perimeter for Stablecoins in Canada, by Ryan Clements. “This article is the first scholarly work to provide a detailed assessment of the jurisdictional perimeter, and risk-informed regulatory design principles, for fiat-backed stablecoins in Canada.”
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