Crypto.com registers in the Netherlands, cleared to advertise services
The company received the green light from De Nederlandsche Bank to offer its services in the country.
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Značka: Netherlands
Binance refers users to Coinmerce as exchange exits the Netherlands
A reported “hundreds of thousands” of Binance users based in the Netherlands will have the opportunity to move their assets to Coinmerce for free as the exchange winds down.
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Binance is leaving the Dutch market: Here’s when
Crypto exchange Binance announced its departure from the Netherlands, with users asked to withdraw their funds as soon as possible.
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Queen Máxima of the Netherlands comes out in support of digital euro
Máxima Zorreguieta Cerruti, Queen of the Netherlands, said she was encouraged by the work the European Central Bank had accomplished in its efforts to launch a digital euro. Speaking virtually at a European Commission conference ‘towards a legislative framework enabling a digital euro for citizens and for businesses’ on Nov. 7, the queen said a digital euro could encourage financial inclusion among underserved communities by circumventing roadblocks including transaction fees and documentation requirements. According to the regent, a central bank digital currency, or CBDC, in the European Union could help reduce the cost of remittances, but may require policy reforms and safeguards “to address difficulties and risks.”“Public sector representatives have a duty to ensure that the financial system is open, inclusive, and responsive to the needs of all groups,” said the queen. “So let us envision that better future and build a digital euro that works for all Europeans.”As queen consort of the Netherlands since 2013, Máxima has sometimes used her platform to advocate for financial technology as a means of inclusion, specifically citing CBDCs. The Netherlands has been operating under a constitutional monarchy since 1814, with the monarch — in this case, King Willem-Alexander — largely holding a symbolic role as president of the country’s Council of State. Queen Máxima also serves as the United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development. Crypto has a new royal follower. Queen Maxima of the Netherlands has advocated for central bank digital currencies. That, and more stories making headlines in the world of cryptocurrencies pic.twitter.com/jQfkohmB86— Reuters (@Reuters) October 19, 2022Related: Blockchain tech offers multiple paths to financial inclusion for unbankedThe Netherlands was the host country for the Bitcoin Amsterdam conference in October, an event which drew in other members of royalty including Prince Philip of Serbia and policymakers including former European Parliament member Nigel Farage. U.S.-based crypto exchange Coinbase also announced its expansion to the Netherlands following regulatory approval from the country’s central bank in September.
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The state of crypto in Western Europe: Swiss powerhouse and French unicorns
Despite the turbulence that broke out in the crypto market this summer, there is an important long-term marker that should be considered in any complex assessment — the combination of adoption and regulation. The latest report by EUBlockchain Observatory, named “EU Blockchain Ecosystem Developments,” tries to measure this combination within the European Union, combining the data on each and every member country from Portugal to Slovakia. As the original report counts more than 200 pages, Cointelegraph prepared a summary with the intent to capture the most vital information about the state of crypto and blockchain in Europe. We started from a group of countries that are usually labeled as “Western European.” AustriaNumbers: 50 blockchain solution providers, $48.72 million (50 million euros) in total funds raisedRegulation and legislation: A registry for Virtual Asset Service Providers (VASPs) was established by the Financial Market Authority a year later, in 2020. Regulators have adopted an “overall non-restrictive approach” toward crypto and blockchain and crypto mining remains largely unregulated.Taxes: As is the case in most European countries, digital currency exchange is VAT-exempt. Capital gains from the sale of crypto are subject to a progressive income tax that amounts to up to 55% for individuals and 25% for corporations, but digital taxation policies may apply if the digital currency generates interest income and thus qualifies as an investment asset. Notable initiatives: In November 2019, the Austrian Blockchain Centre (ABC) was created to explore blockchain applications in the fields of finance, energy, logistics, public administration and the Internet of Things. ABC, currently involving more than 21 institutions and 54 companies in its public-private partnership model, aspires to become the world’s largest blockchain research center. Blockchain is also a key facilitator of the Smart City Vienna and Open Government Data initiatives.Local players: Bitpanda, a Vienna-based trading platform, which market value exceeded $4 billion in 2021, Blockpit, a digital assets investment platform responsible for more than $500 million traded in 2017, and Conda, a crowd-investing platform for Austrian startups.BelgiumNumbers: 47 blockchain solution providers, 992 blockchain professionals. Regulation and legislation: According to the report, there are currently “no specific laws or regulations” in Belgium. In 2017, Financial Services and Markets Authority (FSMA) published a communication on an overview of the legislation and regulations that may apply to Initial Coin Offerings (ICOs) and crypto assets. At the same time, FSMA maintains a red list of fraudulent crypto companies. Nevertheless, utility token offerings are considered “a regular option” to raise capital. The FSMA characterizes crypto assets as investment instruments given that they may provide rights to revenues or returns, a means of storage and exchange given their convertibility into other assets or a utility token if they provide access to certain products or services. From May 2022, registration for VASPs and custodial wallets is obligatory. The providers must fulfill certain conditions including status as a legal entity and maintaining minimum capital of 50,000 euros.Taxes: Tax stands at 33% on any cryptocurrency income, depending on how the individual is investing. A mere increase of value over time escapes taxation, but the investor is obliged to prove their holding strategy. There is no specification on the required holding time. Notable initiatives: “Blockchain for Europe” represents international blockchain industry players at the EU level, with a primary focus on participation in the regulatory debate. HIVE Blockchain Society is a nonprofit blockchain association whose aim is to promote the understanding of distributed ledger technology and to inform the Belgian and international community about its developments.Local players: Keyrock, a company that develops crypto-asset financial infrastructure by means of scalable, self-adaptive algorithmic technologies, Credix, a decentralized credit marketplace powered by Solana blockchain technology, and Delta, a Bitcoin (BTC) and cryptocurrency portfolio tracker app.FranceNumbers: 160+ blockchain startups, $175.4 million (180 million euros) of fundraised revenueRegulation and legislation: France established a friendly legal framework for ICOs in 2016, allowing issuers to register cash vouchers directly into the blockchain. In 2017, the Financial Market Authority (AMF) launched the digital-asset fundraising support and research program UNICORN. France also authorizes the registration and transfer of unlisted securities using blockchain technology.Taxes: The country’s highest administrative court reduced the tax burden on profits coming from cryptocurrencies and set a flat rate tax of 30%. Notable initiatives: The public Deposits and Consignments Fund makes direct investments in crypto projects. The fund has invested $292.3 million (300 million euros) in blockchain and AI in the European Commission’s Investment Programme for the Future.Community self-organization: The French Digital Asset Association (ADAN) operates as a professional lobbying group on behalf of the industry. Local players: Ledger, leading global cryptocurrency hardware wallet provider, Coinhouse, a crypto asset management and transaction services company, providing staking, saving and custody services, and Sorare, a fantasy football gaming platform that uses blockchain technology based on Ethereum.GermanyNumbers: 343 blockchain startups Regulation and legislation: Since 2013, virtual currencies have been the “units of account.” In 2020, Germany introduced the concepts of “crypto asset” and “crypto custody.” The latter requires a license from the supervisory body BaFin. Virtual currencies are not considered legal tender in the country and are generally treated as investment assets or so-called “substitute currencies.”Taxes: In May 2022, Germany’s Finance Ministry has released new cryptocurrency tax guidelines with no tax payable on gains from BTC and Ether (ETH) sold 12 months after acquisition.Notable initiatives: In September 2020, the Deutsche Energie-Agentur announced the launch of the Future Energy Lab. It involves, among other things, the pilot projects related to the application of blockchain technology in the energy sector, such as the Blockchain Machine Identity Ledger (BMIL) and the Smart Contract Registry. The BMIL is a digital and decentralized directory for device identities.The same year one of the four electricity transmission system operators in Germany announced a multi-year strategic partnership with Energy Web that will focus on testing and validating the technological promises of blockchain-based solutions.Community self-organization: Established in 2017, the Blockchain Bundesverband is a non-profit association with more than 60 members. The association’s initiatives focus on education for decision-makers and the wider public. Based in Munich, the European Blockchain Association provides an independent, neutral platform for blockchain-related communities and organizations to discuss, develop and elaborate on shared work.Local startups: Iota Foundation develops an open-source protocol that supports data and value transfer between devices and humans, and BitsCrunch, a crypto-analytics company.The NetherlandsNumbers: 160+ blockchain startups, $360.5 million (370 million euros) of raised funds.Regulation and legislation: The central bank and the Dutch Authority for the Financial Markets (AFM) maintain a one-stop shop for regulatory information for startups called InnovationHub. There is also a regulatory sandbox for emerging technologies with a principles-based (rather than a rules-based) approach. Compliance is determined based on the intent of laws and regulations rather than their letter. A practice of partial authorizations, when a startup does not need to meet all the banking license criteria to obtain a license, is rather common. Notable initiatives: During the COVID-19 pandemic, Tymlez launched a project to support the government’s transparency in medical supply chains through blockchain technology. There are projects in agriculture such as Blockchain for Agri-food, financed by the Dutch Ministry of Agriculture, Nature and Food Quality to improve supply chains.Community self-organization: The report mentions meetup groups such as Blockchain Talks, Blockchain Netherlands, Food Integrity Blockchained, Permissionless Society Blockchains and Bitcoin Wednesday Amsterdam, as well as Ethereum Dev NL and Hyperledger Netherlands. Local players: Bitfury provides mobile Bitcoin mining data centers, Aurus, a gold-backed cryptocurrency on the Ethereum blockchain, and Finturi, a blockchain-powered trade finance platform.SwitzerlandNumbers: $247.48 billion (254 billion euros) of the total valuation of the top 50 companies in 2021, 877 blockchain solution providers.Regulation and legislation: In 2019, the Federal Council updated the existing framework conditions in relation to blockchain and crypto. In 2020, the Swiss Parliament passed the DLT blanket act, which selectively adapts 10 existing federal laws. In 2021, a license for DLT trading facilities was introduced.According to the Financial Market Supervisory Authority (FINMA), digital currencies are categorized based on their function and purpose as payment tokens, utility tokens and asset tokens.Taxes: Tax rules vary between the individual cantons. Digital currencies are generally treated as foreign currencies for the purposes of wealth taxation. Their exchange value is determined by the Federal Tax administration at the end of the year. Capital gains on digital currencies are exempt from income tax for individuals. Purchases with digital currencies are VAT exempt.Notable initiatives: Blockchain has been used for issuing digital self-sovereign identities and even voting on the regional level, while digital currencies are accepted for paying taxes and public services. The city of Zug, the capital of the so-called “Crypto Valley,” launched its blockchain-powered digital identity program in 2017. In 2021, the Swiss government started a public discussion on self-sovereign identities on the national level. In 2022, the city of Lugano acknowledged Bitcoin and Tether (USDT) as legal tender. Community self-organization: The Crypto Valley Association and Blockchain Federation are the major public entities for blockchain enthusiasts and entrepreneurs. There are also popular communities like the Swiss Association of Crypto Investors and the Bitcoin Association.Local players: Switzerland by far exceeds all the other nations in the list when it comes to globally acknowledged crypto companies. It’s enough to mention that such players as Cardano, Polkadot, Cardano, Solana, Cosmos and Tezos are based in this country. Key takeawaysDiscussing the report takeaways with Cointelegraph, Nikolaos Kostopoulos, senior blockchain consultant at Netcompany-Intrasoft and member of the EU Blockchain Observatory and Forum team, compared the European regulatory dialogue to the one that takes place in the United States, highlighting the role of France: “French regulators and policymakers are seemingly winning the course for a comprehensive, objective and holistic effort to establish the framework for a growing blockchain and digital assets industry. This effort is already validated by the decision of leading players such as Binance and Crypto.com which are heavily investing in their French HQ as their EU base, but also the fact that France is home to a few of the biggest EU blockchain startups.”While France’s regulatory efforts stay in a larger EU context, Switzerland still leads the way in terms of attracting startups and creating the most welcoming legal environment for them. Kostopoulos believes that this unique position can’t simply be explained by the country’s century-old tradition as a safe haven for big money. “There are numerous reasons that constitute Switzerland more advanced and progressive in comparison to countries such as Belgium or France. The country has established procedures, progressive financial legislation, human resources and infrastructure to support a framework to accelerate financial innovation,” he said.
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Post offices adopting NFTs leads to a philately renaissance
Philately? If you are a millennial, there is a good chance you used Google to find out that there is a word dedicated to collecting and studying postage stamps.This same search also paints the picture of a hobby in decline, as younger generations are increasingly preoccupied with their screens and the constant stream of dopamine hits served up by TikTok, Instagram, Twitter and other popular social media platforms.Two European postal services have looked to capitalize on the popularity of nonfungible tokens (NFTs) in recent years to reinvigorate the philately sector. Cointelegraph caught up with Netherlands’ PostNL and the Austrian Post Office (PostAG) at the Blockchain Expo in Amsterdam to delve into their collaborative effort that has successfully married post stamps with NFTs.PostAG philately head Patricia Liebermann and PostNL product manager Sacha van Hoorn are a vivacious duo that have kindled a working friendship that seems to be the backbone of the NFT-powered renaissance of post stamp collecting in both countries.Austrian Post Office (PostAG) Philately head Patricia Liebermann and PostNL product manager Sacha van Hoorn at the Crypto Stamp stand during the Blockchain Expo in Amsterdam.PostAG first explored the use of NFT post stamps in 2019 with real-world stamps issued with a digital twin NFT originally minted on the Ethereum blockchain. Over the next two years, Austria’s post office continued the project with near-field communication (NFC) chip functionality introduced in 2021 to further the functionality, verifiability and security of post stamps.Reflecting on the dimming interest in philately, Liebermann unpacked the initial idea and its quick uptake some three years ago:“In 2019, we invented the idea of having a physical stamp combined with an NFT, it was mind-blowing, and we were overwhelmed with all that feedback. And that’s why we said, okay, there is a target group out there who is interested in this new way of collecting.”Van Hoorn’s efforts to continue innovating PostNL’s post stamp offerings had already explored the use of augmented reality and artificial intelligence on stamps, but PostAG’s NFTs exploits led her to reach out to her Austrian counterpart. Knowing that development would take a significant amount of time and resources, a collaboration was formed:“So we actually decided to contact the Austrians because they were the first, and we really wanted to have their experience and their knowledge and ask them, how did you do it?”The partnership has culminated in a joint launch of a new edition of Crypto Stamps which is being labeled as a first-ever joint crypto stamp issuance. It is also the first edition of PostNL NFT stamps, with the stamps issued in a variety of respective colors of the Netherland and Austrian flags. The stamps also feature the respective countries’ national flowers, with tulips and edelweiss in the background of the PostNL and PostAG stamps.PostAG and PostNL Crypto Stamps on display at the RAI convention centre in Amsterdam.The physical stamps are produced by Austrian firm Varius Card, whose managing director Michael Dorner unpacked the latest security features in conversation with Cointelegraph. The fourth edition of the Crypto Stamps features invisible UV rays and forensic security. The NFC chips also provide cryptographic proof of any given stamp’s authenticity.Dorner also regaled recent conversations he had with older generation Austrians that were avid stamp users who were introduced to NFTs through PostAG’s Crypto Stamps. Unfamiliar with the digital collectibles, some grandparents inevitably asked their grandchildren to help them come to grips with the digital twin of their real world stamps.“They called up their grandchildren and said, ‘Do you know what an NFT is?’ and the grandchild says, ‘yes, what do you have?’ Suddenly they sat down together for dinner, they checked the crypto stamps and the kids were like, ‘Granddad, let’s check what color you have.’”All three individuals believe that the NFT-paired post stamps are leading to a philately renaissance, with Dorner describing the shift as the next generation of collectors:“Two generations with two completely different aspects come together, and they talk. And there’s you have this new community, you have this ‘collectors 3.0’. Like the young collectors, we all suddenly just started getting interested in stamps again.”These positive sentiments are also backed up by the popularity of each launch, with Dorner and Liebermann highlighting that all previous NFT-paired collections were completely sold out. While not giving an approximate number, Dorner estimated that 150,000 to 250,000 post stamps with NFT pairs had been sold since 2019 — suggesting the initiative could be one of the most successful NFT projects in the world. The latest edition of Crypto Stamps is minted on the Polygon blockchain.
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Coinbase enters the Netherlands with central bank approval
The United States-based cryptocurrency exchange Coinbase continues its aggressive expansion in Europe, with the latest regulatory approval coming from the land of tulips.Coinbase officially announced on Thursday that it had received registration from De Nederlandsche Bank (DNB), the central bank of the Netherlands. The regulatory approval allows Coinbase to offer its retail and institutional crypto products in the Netherlands.According to the official DNB records, Coinbase is one of the major international exchanges approved by the Dutch central bank to operate cryptocurrency services alongside smaller local crypto firms. Coinbase Europe Limited and Coinbase Custody International are listed on DNB’s public register as crypto service providers.The Dutch regulator is supervising Coinbase Europe and Coinbase Custody in compliance with the Anti-Money Laundering (AML), the Anti-Terrorist Financing Act and the Sanctions Act.“The crypto services of Coinbase are not subject to prudential supervision by DNB,” Coinbase said in the announcement. Financial and operational risks related to crypto services are not monitored, “and there is no specific financial consumer protection.”The news comes shortly after DNB published guidance dedicated to policy on sanctions screening for crypto transactions on Sept. 16. In the Q&A document, DNB warned about various risks associated with cryptocurrencies, including the anonymity.Coinbase’s entrance into the Netherlands comes in line with the company’s aggressive expansion plans in Europe. The crypto exchange initially announced its intention to expand its reach in Europe in June, citing the impact of a major decline on crypto markets.In July, Coinbase obtained the Crypto Asset Service Provider approval from the Italian AML regulator, Organismo Agenti e Mediatori. The exchange is planning to register in countries like Spain and France.According to the latest post, Coinbase now serves customers across almost 40 European countries through dedicated hubs in Ireland, the United Kingdom and Germany. “Additional registrations or license applications are in progress in several major markets, in compliance with local regulations,” the firm said.Related: Coinbase is fighting back as the SEC closes in on Tornado CashCoinbase’s global expansion comes amid the company facing many issues. The crypto exchange posted major losses over two consecutive quarters in 2022, with Q2 losses netting $1.1 billion. That was the largest loss since Coinbase listed its shares on the Nasdaq Stock Exchange in April 2021. In order to cut expenses, Coinbase cut 18% of employees in June.In July, U.S. authorities arrested a former Coinbase manager, alleging that the exec was involved in insider crypto trading. Another two lawsuits in the U.S. also claimed that Coinbase was making deceptive claims about its business practices.
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Tornado Cash saga highlights legal issues affecting the crypto market
Things have not been looking too good for the crypto market in recent months, with the market seemingly being gripped by one piece of bad news after another. To this point, on Aug. 8, the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued legal sanctions against digital currency mixer Tornado Cash.As per the regulatory body, since the platform’s inception in 2019, it has been used for a host of illicit money laundering activities estimated to be worth $7 billion. Of this sum, it is estimated that $455 million was controlled by the notorious Lazarus Group, a North Korean state-sponsored hacking group. Additionally, Tornado Cash was also used to launder over $96 million of ill-gotten funds derived from June’s Harmony Bridge hack and $7.8 million from this month’s Nomad heist.Before proceeding any further, however, it would be best to understand what exactly a cryptocurrency mixer is. Simply put, it is an offering that helps obfuscate potentially identifiable or tainted cryptocurrency funds with others to erase any trails linked with the assets, thus making it impossible for anyone to trace the tokens back to their original source.Creator arrest leads to public outcryOn Aug. 12, Alexey Pertsev, the creator of Tornado Cash, was arrested by Dutch authorities. According to a press release issued by the financial crime authority of the Netherlands — the Fiscal Information and Investigation Service — the arrest was made based on Pertsev being involved in the “concealment of criminal financial flows and facilitating money laundering.”While Tornado Cash can potentially be used by bad actors to hide criminal proceeds, it can and is also be used to facilitate a wide array of legitimate activities. The Dutch police have yet to make it clear as to which exact rules Pertsev broke, even though different media outlets have speculated and offered varying explanations as to why he was arrested. The Tornado creator has yet to be charged with any wrongdoing.Following Pertsev’s detainment, a mass of protesters gathered in Amsterdam’s Dam Square on August 20 to voice their displeasure with the handling of the matter. And, while the demonstrators did not directly comment on the legal issues surrounding the arrest, they did claim that Pertsev’s arrest signaled a dark future for the fast-growing Web3 ecosystem. Not only that, but they also believe that it could have a chilling effect on the Netherlands’ existing blockchain ecosystem.Mark Smargon, CEO of decentralized payment network Fuse, told Cointelegraph that while he is very disappointed to see a developer being arrested for simply having written a piece of code, to avoid such scenarios in the future, crypto finance entities — especially those who see mainstream adoption on the horizon — should be willing to meet regulators halfway to mitigate existing security issues while ensuring people’s rights to individual privacy.However, Abraham Piha, CEO and co-founder of Web3-focused firm Tomi, told Cointelegraph that government sanctions like these are scary if one starts looking at them objectively:“Tornado existed only because most blockchains were not private enough. If successive updates of Ethereum or Bitcoin include protocol integrations like Mimblewimble, will the next step be to block them as well? This act is yet another reason to push for Web3, a free web, controlled by users and not by some big brother governments.”A spokesperson for crypto policy think tank Coin Centre noted that the nonprofit is considering taking the matter to court since it believes that the core argument prohibiting the platform from operating is unjustified. Not only that, but the independent body also believes that the Treasury’s actions may have exceeded its statutory authority.Was Tornado’s forced shutdown unconstitutional?In a recent interview with Bloomberg, Jesse Powell, CEO of digital-asset exchange Kraken, argued that the Treasury Department’s actions to shut the Tornado Cash could be “unconstitutional,” stating that people have a right to privacy and thus, it will be interesting to see if the regulatory body’s assertions can hold any sort of ground in a court of law. He further stated that the subsequent removal of Tornado’s native code repositories was a “totally unnecessary step.” Recent: Ethereum Merge prompts miners and mining pools to make a choiceFollowing the sanctions, USD Coin (USDC) stablecoin issuer Circle decided to block all Tornado Cash addresses, to which Powell reacted: “Having a digital currency that’s so controlled and able to be controlled by maybe unconstitutional government action is a little bit scary.”Kenny Li, co-founder and core developer for Manta Network — a privacy-preservation protocol — told Cointelegraph that the Treasury’s decision to sanction Tornado Cash is far-fetched and extreme even though in the past, certain individual crypto wallet addresses have been subject to the same treatment. But, in most cases, he said, there was a clear case of fraud, hacks or a Ponzi scheme:“In this case, smart contract addresses are being blacklisted. Smart contracts aren’t people. Not only that, but people forget that Tornado Cash is a protocol, not a person or an entity, which means it will continue to run regardless of the sanctions. It is time that we realize privacy and anonymity aren’t the same, and Web3 is all about privacy.”On the subject of people moving their USDC to other stablecoins following Circle’s decision to block Tornado Cash wallet addresses, Li noted that, unfortunately, there has been an increase in the number of platforms blacklisting wallet addresses maintained via Tornado Cash. He pointed out that the move was due to Circle’s status as a regulated platform, thus obliging it to comply with any sanctions issued by a government body whose jurisdiction it operates under. Lastly, he believes that Circle’s actions of blocking the movement of millions of dollars worth of USDC can potentially inhibit innovation within this space. Li concluded:“No one wants their funds to be blocked, especially for activities they aren’t involved in. That said, there’s no certainty that tomorrow Tether won’t block addresses that have touched Tornado Cash. Ultimately, this action from the Treasury will likely instigate a domino effect, most of which is yet to be felt.”Human rights violations brewing?One aspect of Pertsev’s detention that has drawn public attention is that since his arrest, he has reportedly been denied visits of any sort, including those from his wife, Ksenia Malik. In recent correspondence with Cointelegraph, Malik said, “He’s kept in prison as if he were a dangerous criminal,” despite simply “writing open source code.”With Dutch authorities continuing to bar any contact with the outside — not even “one short call” — several rallies are being organized to support him. Decentralized finance aggregator 1inch tweeted that the arrest stands to establish a dangerous precedent, one that could potentially “kill the entire open-source software segment” if developers are continued to be held accountable for any misuse that emanates as a result of the software they create.Decentralized finance aggregator 1inch tweeted that the arrest stands to establish a dangerous precedent, one that could potentially “kill the entire open-source software segment” if developers are continued to be held accountable for any misuse that emanates as a result of the software they create.1/ Is it really a crime to be an open-source #blockchain developer nowadays ⁉️Stand up for the right to build open-source software!Help Alex Pertsev get out of jail!Sign the petition: https://t.co/r5sdHaYKCN#FreeAlex #OpenSourceNotACrime #DeFiWhy is it important⤵️ pic.twitter.com/CqqD4Ds8AQ— 1inch Network (@1inch) August 18, 2022Despite the heartfelt sentiments of the open-source development community, it is pertinent to highlight a recent report from blockchain security platform SlowMist, which found that approximately 74% of all funds stolen from the Ethereum network over Q1 and Q2 of this year made their way to Tornado Cash, with researchers noting:“The platform accounts for most of the initial funding for these security incidents. There have also been reports of withdrawals from exchanges, trading platforms, and personal wallets to fund these security incidents.”Lastly, it should be noted that despite the outpouring of public support for Pertsev, his arrest hasn’t been entirely disapproved of by members of the global finance arena. For example, in a recent interview, venture capitalist Kevin O’Leary stated that platforms like Tornado Cash — which are advertised as “privacy tools” — have created a culture where it is fine to tinker around with federal regulations. Recent: Ethereum advances with standards for smart contract security auditsIn his view, Pertsev’s arrest was necessary and that it’s fine to have “sacrificed him” because it will, in his view, help introduce a high degree of stability within the market in the long run. Therefore, moving forward, it will be interesting to see how legal issues such as these continue to be dealt with by regulatory agencies across the globe.
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Dutch authorities arrest suspected Tornado Cash developer
Authorities in the Netherlands have arrested a developer that is suspected to be involved in money laundering through the crypto mixing service Tornado Cash.The Fiscal Information and Investigation Service (FIOD), an agency in the Netherlands responsible for investigating financial crimes, officially announced on Friday an arrest of a 29-year-old man in Amsterdam.The man has allegedly been involved in facilitating criminal financial flows and money laundering through the decentralized Ethereum mixer Tornado Cash, the authority said.The FIOD pointed out that it doesn’t rule out multiple arrests in the case, noting that its Financial Advanced Cyber Team (FACT) launched a criminal investigation against Tornado Cash in June 2022.According to the FACT, Tornado Cash has allegedly been used to conceal large-scale criminal money flows, including crypto hacks and scams.“These included funds stolen through hacks by a group believed to be associated with North Korea. Tornado Cash started in 2019, and according to FACT it has since achieved a turnover of at least seven billion dollars,” the announcement notes.The news comes shortly after the United States Treasury Department placed dozens of Tornado Cash addresses in the list of sanctions by the Office of Foreign Asset Control (OFAC) on Aug. 8. Major cryptocurrency firm and the USD Coin issuer, Circle, subsequently froze 75,000 USDC linked to OFAC-sanctioned addresses.Due to sanctions, it became illegal for any U.S. persons and entities to interact with Tornado Cash’s smart contract addresses. Penalties for willful noncompliance can range from fines of $50,000 to $10,000,000 and 10 to 30 years imprisonment.Related: Tornado Cash co-founder reports being kicked off GitHub as industry reacts to sanctionsBased on Ethereum, Tornado Cash is a tool allowing users to obfuscate their crypto transactions to protect their anonymity by scrambling information trails on the blockchain. Ethereum co-founder Vitalik Buterin claimed that he used Tornado Cash to donate funds to Ukraine to protect the financial privacy of the recipients.
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Binance fined $3M over illegal operations in the Netherlands
Major global cryptocurrency exchange Binance is facing a penalty in the Netherlands after failing to obtain regulatory approval to operate in the country.The central bank of the Netherlands (DNB) has fined Binance Holdings 3.3 million euros ($3.3 million) for offering local crypto services without registration with authority. The Dutch central bank officially announced Monday that the regulator imposed the administrative fine in April 2022.The DNB pointed out that any company offering crypto services in the Netherlands is obliged to register with the central bank in compliance with the Money Laundering and Terrorist Financing Prevention Act. The regulator also mentioned that the DNB previously issued a public warning to Binance on Aug. 18, 2021.According to the announcement, the DNB applied a bigger penalty to Binance due to the platform’s large trading volumes. According to the regulator, Binance had a “very large number of customers in the Netherlands,” while its daily trading volumes amounted to “$13.7 billion.”The increased penalty was also due to prolonged violations by Binance, the DNB stated. According to the bank, the violations occurred from May 2020 — when the DNB introduced the registration obligation — until the bank closed the investigation in December 2021. “DNB, therefore, considers these violations to be very serious,” the regulator noted.The central bank also mentioned that Binance submitted an application to register, and the registration process is now being addressed. As the exchange has moved to comply with the law and has been transparent about its business operations, the DNB reduced the total amount of the fine by 5%, the announcement notes.Related: Binance gets VASP registration for its Spanish subsidiary from the Bank of SpainA spokesperson for Binance told Cointelegraph that the company reached a critical milestone in meeting Dutch regulatory requirements through a locally established entity, Binance Nederland BV. The event marks a long-awaited pivot in our ongoing collaboration with the Dutch Central Bank as well as the firm’s growing engagement with global regulators, the representative said, adding:”While we do not share the same view on every aspect of the decision, we deeply respect the authority and professionalism of Dutch regulators to enforce regulations as they see fit. With this now behind us, we can continue pursuing a more traditional operating model in the Netherlands.”Binance did not directly confirm or deny to Cointelegraph whether the firm has paid the fine so far or not. According to the announcement, Binance objected to the fine on June 2, 2022.
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Dutch bank ING sells digital asset tool Pyctor to GMEX
ING Group, Dutch multinational banking and financial services corporation, has spun out its digital asset business Pyctor to multi-asset trading infrastructure firm GMEX.GMEX has acquired ING’s institutional-grade digital asset custody solution Pyctor in a multi-million dollar deal, the companies said in a joint announcement on Monday.The Pyctor offering compliments GMEX’s MultiHub service, an institutional cross-platform business launched last year with the mission to bridge the gap between centralized finance (CeFi) and decentralized finance (DeFi), GMEX CEO Hirander Misra told Cointelegraph.Pyctor expands MultiHub with a number of digital asset-focused capabilities, including smart contract features, post-trade custodial and institutional network capabilities like fragmentation of private keys.Pyctor is also designed to support regulatory compliance, including a major Anti-Money Laundering framework by the Financial Action Task Force (FATF) referred to as the Travel Rule. “There is a market need for this type of offering built by a bank for banks, asset managers and corporate clients, which can now operate in a neutral environment for institutional participants,” Misra said. Institutions are increasingly seeking to expand their capabilities into digital assets trading and settlement in a way that is interoperable with existing CeFi systems and asset classes, the CEO added, stating:“This calls for the need for hybrid finance, or HyFi, which delivers a hybrid digital market infrastructure solution with interoperability of multiple blockchains and API integration into traditional systems to ensure a cohesive approach.”ING started Pyctor as a project incubated out of its innovation arm ING Labs in Amsterdam in 2018. Pyctor’s technology manages private keys by fragmenting and distributing them among blockchain nodes hosted by regulated institutions. ING completed Pyctor’s first proof of concept in 2019 and then formed a working group for sandbox trials, including participation from major global banks and firms like BNP Paribas, Citi, ABN AMRO, Societe Generale, Invesco, UBS, State Street, Forge and others.Related: JPMorgan trials blockchain for collateral settlement in after-hours tradingAs previously reported by Cointelegraph, ING has been working on proprietary cryptocurrency custody technology tools since at least 2019 alongside many other blockchain-related activities. In 2021, ING conducted a trial of a DeFi peer-to-peer lending protocol with the Netherlands Authority for the Financial Markets.
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Dutch University set to recover more than twice the paid BTC ransom in 2019
Netherland-based Maastricht University (UM) is set to recover nearly €500,000 worth of Bitcoin (BTC) after the police authorities managed to solve the infamous ransomware attack in December 2019.In 2019, a ransomware hack targeted the said university and froze all its research data, emails and library resources. The hackers demanded €200,000 in BTC and the university decided to pay the said amount fearing losing critical research data.The Dutch Public Prosecution Service (DDPS) managed to track down one of the crypto wallets associated with the hack in 2020 to Ukraine and froze funds in the account valued at only €40,000 at the time. In the next two years, the DPPS managed to secure the contents of the account including nearly one-fifth of the stolen BTC. The value of the part ransom recovered by the authorities has reached €500,000, more than double the amount university paid two and a half years ago, thanks to the price surge of the top cryptocurrency during the bull run in 2021.Related: Chainalysis launches reporting service for businesses targeted in crypto-related cyberattacksThe university in its official statement said that even though the monetary value of the recovered ransom is higher, it cannot undo the damages done by hackers. The university in an official blog post said:“The Netherlands Public Prosecution Service was able to seize cryptocurrencies worth approximately €500,000 which may be made available to UM. This is still less than the damages incurred by the university, but it is a nice sum to be used to support students in need.”The seized funds are currently with the DPPS and a legal proceeding has been initiated to transfer the funds to the university. The executive board of the university has decided to utilize the recovered fund to help students in financial need.The seizure of crypto funds by authorities highlights the importance of a decentralized and transparent public ledger system used by BTC and crypto in general. While critics often portray crypto as an opaque and anonymous system preferred by criminals, research data indicate that less than 1% of current crypto in circulation is associated with illicit activities. Even stolen and ransom crypto funds are often tracked down and recovered. For example, the United States authorities managed to recover $2.3 million in crypto from the Colonial Pipeline ransom.
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