Cryptocurrency Transactions Continue to Increase in Russia despite Sanctions

Audy Castañeda
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Cryptocurrency Transactions Continue to Increase in Russia despite Sanctions

Russia bets on cryptocurrencies despite sanctions.

The US FinCEN (Financial Crimes Enforcement Network) recently put financial institutions on notice to try to control possible sanctions evasions that Russia faces. After the increase in the intensity of the conflict in the invasion of Ukraine, cryptocurrencies seem to be playing a fairly active role in the economy of the country ruled by Putin. Despite the sanctions imposed by Europe and the United States, transactions continue to increase.

According to information from Cryptopolitan, as both the Russian ruble and the Ukrainian hryvnia have lost much of their value, numerous transactions have taken place between these coins and certain cryptocurrencies on Binance.

The research agency Kaiko, which deals with various problems between Russia and Ukraine, suggested that many people affected by the war had bought the USDT currency from Tether with the aim of avoiding devaluation.

According to Kaiko, it is possible that Russia will continue to increase the volume of these operations, mainly with the aim of evading the sanctions that are affecting the country’s economy. The ruble fell immediately after the first attacks on Ukraine, and its value continued to plummet in the following days. Despite this, cryptocurrency operations were fraught with volatility, and in the case of Bitcoin, it lost up to 11% of its value at the beginning of the month.

Thus, the aforementioned United States Financial Crimes Control Network (FinCEN) issued an alert to North American financial institutions to monitor any attempt to avoid the sanctions imposed after the Russian offensive.

The agency also warned foreign exchanges to remain vigilant for transactions carried out under jurisdictions with poor anti-money laundering regulations.

Coinbase Actions to Prevent Russian Cybercrimes

Meanwhile, the Coinbase platform has blocked around 25,000 virtual wallets of Russian users who allegedly carried out illicit activities. These users, around 0.2% of the exchange, relate to Russian individuals or entities involved in suspicious activity. The company claims to have identified them through its own investigations into cybercrimes in Russia.

Coinbase stresses that it fully supports sanctions as an intervention by government authorities. As far as the company is concerned, it explains that the compliance program consists of three steps. First, they block access to sanctioned accounts, detect evasion attempts, and finally, anticipate potential threats. Paul Grewal, the chief legal officer of Coinbase, argues that digital assets can offer sanctions advantages over fiat money. This is mainly because thanks to Blockchain technology, they can trace digital asset transactions; therefore, there is a permanent record, and they are public.

In addition, Coinbase underlines the fact that they are financial instruments with a relatively incipient use, which makes their use to evade sanctions less likely “The Russian Government and other sanctioned actors would need practically unattainable amounts of digital assets to significantly counter-current sanctions.”

Actions by Other Cryptocurrency Companies

Other cryptocurrency companies have begun taking steps to deter the use of cryptocurrencies based on sanctions recommended by the United States government. For example, Satoshi Labs, a Prague-based provider of cryptocurrency wallets, announced that it would stop shipping cryptocurrency wallets to Russia. Satoshi Labs representative Kristýna Mazánkov said that although Bitcoin (BTC) is apolitical, they have decided to restrict the delivery of crypto wallets to Russia because “company employees have connections to the conflict that make it personal.”

On the other hand, the New York State Department of Financial Services (DFS) announced the implementation of a Blockchain-based technology to reinforce ongoing global sanctions and to help identify Russian individuals and entities linked to DFS-licensed virtual currency businesses.

By Audy Castaneda

Banking Cybersecurity in Colombia has cost some 341,000 million Colombian Pesos

Audy Castañeda
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Banking Cybersecurity in Colombia has cost some 341,000 million Colombian Pesos

Colombian banks spend more than 300,000 million Colombian pesos on cybersecurity.

Cyber-attacks are one of the many common enemies that all financial institutions in the world have. Cybersecurity, therefore, is the maximum protection shield to repel computer criminals.

According to the United Nations Organization -UN-, every 39 seconds there is a computer attack, a situation that has increased since 2020, when virtual transactions began to increase, because of the confinement due to the Covid 19 pandemic.

Financial institutions, one of the preferred targets for cybercriminals, have begun to look more closely at the different virtual security solutions.

The Financial Superintendence of Colombia has published the Information Security and Cybersecurity indicators of the Colombian-banking sector, which report the investment in the security of Colombian banks in 2021, the number of attacks suffered, as well as the resolution of vulnerabilities and the cost of the attacks.

The report highlights that, during 2021, the Colombian banking system as a whole invested close to 341,000 million Colombian pesos (approximately 90 million dollars) in cybersecurity. We are talking about a considerable figure to improve the security of the networks.

More on the Report

Perhaps the most interesting fact is that during all of 2021, the banking sector in Colombia received 1,362 million attacks. This implies considerable pressure on the Colombian banking system. It is worth noting that 21 important incidents were generated, which did not imply an interruption of the services or affectation to the assets of the users. The incidents, from their beginning to their correction, had an average duration of 6.85 days.

The sector has carried out different ethical hacking tests to find vulnerabilities and corrected 99.05% of them within the same quarter when first detected.

An interesting fact is the cost to the banks of all these attacks. According to the report, there is a cost of 75,000 million Colombian pesos in 2021 (about 19 million dollars) for unauthorized operations. This means that the users were fraudulently impersonated or any other incident that led to the generation of a transaction not authorized by the user.

What Financial Institutions Can Do

Banks and other institutions that are part of the financial system find cybercrime one of their greatest current challenges.

Although in general terms financial institutions are doing their job well and investing more and more in cybersecurity, the key is not to relax and always have the support of cutting-edge technology supplied by expert security manufacturers.

One of the options offered by the market is authentication and risk management solutions, where financial entities have access to reliable identity platforms, which are capable of detecting threats such as Trojan viruses, malware, phishing attempts, and any suspicious behavior and thus block and track attacks immediately.

In addition to this, other state-of-the-art cybersecurity solutions allow identity verification. This helps to improve overall security and user experience while complying with current legal guidelines and regulations, an issue that is strictly compliance.

It is advisable to opt for solutions from manufacturers with experience and recognition in the market that offer proven effectiveness above 93% in document analysis, in addition, that their implementation is simple and highly reliable, and lastly that they are easily adaptable to the needs of any entity regardless of its size. Solutions with these specific advantages and characteristics have managed to attract the attention of a large part of the world system.

The concept of cybersecurity has changed. Currently, its implementation plays a leading role in the decisions of any global financial institution, so being alert and working to always be ahead of cybercriminals is a general obligation and a differential value that users have learned to increasingly appreciate.

By Audy Castaneda

“Decentralized Finance is Key to Financial Inclusion”: NUM Finance COO Claims

Audy Castañeda
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0
“Decentralized Finance is Key to Financial Inclusion”: NUM Finance COO Claims

The percentage of unbanked Latin Americans is significantly high.

The Chief Operating Officer (COO) of NUM Finance, Santiago Migone, spoke with Cointelegraph en Español about various topics such as Blockchain, Bitcoin and current markets.

Migone, who leads the same people who created nuARS, a cryptocurrency tied to the value of the Argentine peso, said that Blockchain technology would help financial inclusion by presenting the opportunity to integrate those who are outside the system by offering them the same or more opportunities than the traditional system.

“The percentage of unbanked Argentines is significantly high, the same thing happens in Latin America. In addition, many people are left out of the financial system because they do not meet requirements (such as not having a formal address), not have financial education, or access to services,” Migone said.

“Blockchain technology can open doors to people who were never able to save, ask for loans or make transactions before. New use cases are constantly created, existing processes are facilitated and an ecosystem is formed in which new opportunities always emerge,” he explained.

Migone also explained that those who previously could not have access to loans or financing can now do so from their cell phone, without intermediaries, and with minimum requirements. “This is what we mean by financial inclusion: favoring the entry to safe, fast, fair, quality, and low-cost financial services or products for all segments of the population,” he added.

In this sense, Migone clarifies that decentralization and, consequently, decentralized finance, are key in this aspect, given that by not having institutions involved, there are no more entry barriers, high-interest rates, censorship, or discrimination against investors.

“Although one point against it is the difficulty in incorporating this technology, there are attentive communities willing to always help. But above all, it is essential to educate users so that they adopt the technology and make prudent choices within the network”, he highlighted.

Bitcoin and Ether as a Store of Value for Argentines

During the conversation, Migone talked about the Argentine context where the devaluation of the peso has been increasing and many people cannot buy dollars. In his view, cryptocurrencies such as Bitcoin and ether have started to become reserves of value or escape routes from inflation.

“Although both are solid, pioneering projects with a large market capitalization, the high volatility and the risk that one assumes when depositing their savings in this type of asset should not be overlooked,” he said.

He also mentioned that both currencies are acquired at an exchange rate very similar to the dollar: cash with settlement (CCL), and that also one of the most famous options, and perhaps more practical in recent times to access the crypto dollar was through the different stablecoins are offered in the market (DAI, USDT, USDC, BUSD, among others).

Market News

Finally, Migone spoke about Bitcoin and pointed out that the variation in the prices of an asset reflects the flow of information and market expectations. “Lately, prices have been greatly affected by the current macroeconomic context: the Fed’s rate hike, armed conflicts (Russia and Ukraine), among others,” he said.

“This uncertainty perceived by the market exponentially affects the price of these instruments, given their high volatility. However, with the news of the Russian troop withdrawals from Ukraine, most of the world’s assets are reacting positively,” concluded Migone.

By Audy Castaneda

China Tightens Measures against Digital Currencies: up to 10 years in prison for any cryptocurrency exchange

Audy Castañeda
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0
China Tightens Measures against Digital Currencies: up to 10 years in prison for any cryptocurrency exchange

The Asian giant has intensified measures against digital currencies, considering them illegal since September 2021. Meanwhile, cryptocurrency miners continue their activity flouting China’s bans.

China’s Supreme People’s Court has ruled that cryptocurrency fundraising is now a criminal offense in the Asian giant. The sanction, details the statement issued by the court, will vary depending on the value of the amount collected. This measure comes five months after the Chinese central bank declared illegal all activities related to cryptocurrencies, from transactions between companies and individuals to the advertising of these, as well as the issuance and commercialization of tokens and the activity of mining farms.

The tightening of the current legislation, which is one of the strictest in the world along with Turkey, has emerged for one reason: to control the flow of capital and financial transactions that take place in the Chinese economy. Cryptocurrencies have burst into the sector as a volatile financial instrument, without any type of control by the institutions. However, in the statement, the court argues the new measures as a movement in favor of transparency, the protection of citizens, and the fight against money laundering.

Five months ago, the Chinese central bank already declared illegal any activity related to virtual currencies, both transactions between companies and individuals, even affecting their advertising. After that legislative change, online and face-to-face activities related to this sector stopped in China. There was a prohibition to trade tokens, as well as to mine farms, which forced miners based in China to move abroad. That massive migration was one of the biggest hash rate drops in the Bitcoin network in several years since a large part of the mining was ‘centralized’ in this country. The total control has been progressive since if we go back to 2013, the government already vetoed that banks could trade with Bitcoin.

It seems that one of the first steps that the Chinese government is taking is to eliminate any alternative for its citizens despite cutting the economic activity of a growing sector such as the crypto sector of its own nation.

China did not see favorably that cryptocurrencies escaped the control of institutions, more so being such a volatile financial instrument. However, the court excuses the new measures, arguing that this is the only way to achieve a higher level of transparency, in addition to a more effective fight against money laundering in accordance with the regulations. The number of sanctions that the Chinese government will impose on violators of the regulations has stood out for their severity, ranging from fines to several years in prison.

Up to 10 Years in Prison for Using Cryptocurrencies

As detailed in the statement, the penalties will vary depending on the value of the amount collected. When the fundraising exceeds 100,000 yuan (14,000 euros), it is a “large amount.” If it exceeds 50 million yuan (7 million euros) or involves 5,000 people, it is an “extremely serious” offence, which could end with 10 years in prison. The fines could reach 79,000 dollars (70,500 euros).

The new legal interpretation, which came into force on March 1, punishes “cryptocurrency transactions”, with the aim, according to the statement, of “fighting crimes of illegal fundraising and maintaining national financial security and stability.”

While the Chinese government hides behind transparency as the basis for adopting the new measures, it continues to invest in its own digital currency: the digital yuan (e-CNY).

In this way, the Chinese government plans to create a centralized model that grants absolute control of the cryptocurrency market in China. This digital yuan first appeared at the Winter Olympics in Beijing and has been in the testing phase for a couple of years. Although the use of this currency will become more popular over time, the truth is that it is not having matching the success of its competitors. It has more limited access compared to other cryptocurrencies, its non-volatile value, and due to the indeterminate level of control that the Chinese government plans to maintain over the asset in the long term. Will the digital yuan ever replace the fiat yuan? That remains to be seen.

Since the arrival and internationalization of cryptocurrencies, such as Bitcoin or Ethereum, many countries have undertaken legislative initiatives to control the use of this type of currency. At the European level, the European Union (EU) is seeking to strengthen the surveillance of these assets with the creation of new money-laundering controls to supervise companies in the crypto industry. However, China and Turkey are the countries that have the toughest legislation regarding activities related to cryptocurrencies.

By Audy Castaneda

PayPal CEO Favored the Benefits of Digital Assets and Blockchain Tech

Jenson Nunez
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PayPal CEO Favored the Benefits of Digital Assets and Blockchain Tech

For Dan Schulman, CEO of PayPal, the discussion should Stop aiming at the price of digital assets and instead reinforce their efforts on the technological contribution that these and Blockchain would provide to the financial sector in general.

Dan Schulman, CEO of PayPal, stood again in favor of Bitcoin, digital currencies, and Blockchain, highlighting the benefits these technologies could provide to the economic environment beyond listing the leading exponents in the markets.

This information came from Schulman during an interview for the CTech media during the Axis Tel Aviv event. The manager dismissed the importance of the price and gave credit to the usefulness of these assets when it came to payments.

According to Schulman, the benefits of cryptocurrencies and Blockchain technology will impact the way traditional finances work, which many users label as the evolution of money in times like these.

The PayPal manager took advantage of the space to clarify the panorama and shared his thoughts about how governments and administrations in various countries issue their digital currencies.

The manager expressed that the crossing between CBDC, stablecoins, digital wallets, and the improved use of digital currency payments is not only fascinating but one that, according to him, will bring new light to a significant sector in the economic environment.

PayPal and its Relationship with Digital As25sets

Although Schulman stands for crypto assets, this stance seems similar to PayPal’s perspective since the company prepares its users to use these assets through its products and services.

Since October 2020, PayPal officially included the possibility of exchanging fiat money for Bitcoin and other crypto-assets from its network. This property is currently only active for customers in the US and the UK while the company tries to find more secure ways to bring these services to different markets.

Users cannot deposit or withdraw crypto assets from their PayPal accounts. In this regard, the company highlighted that they are working to activate this possibility shortly; they also said they have contemplated including supportive services for other assets. Possible contributions with central banks and other entities registered in legislation are under current development.

Schulman commented that he’s delighted to discover how crypto and digital ledger technology could serve as a helpful tool for the financial system in the future. Schulman firmly believes buying and selling crypto is one of the most significant interests of digital assets.

Schulman expressed that users think of crypto as an asset class, but the fascinating thing about digital currencies is what kind of utility they can provide in payments.

By: Jenson Nuñez

UK National Crime Agency Calls to Regulate Cryptocurrency Mixing Technology

Jenson Nunez
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UK National Crime Agency Calls to Regulate Cryptocurrency Mixing Technology

The NCA requested digital assets mixing technology regulation, considering that criminals can use this method to legitimize illegal operations.

According to a report in the Financial Times, the UK’s National Crime Agency (NCA) urged for regulation of crypto assets mixing technology able to cover traceable operations carried out on the blockchain, according to a report in the Financial Times.

Criminals can execute cryptocurrency mixers to disguise the origin of the digital currency through multiple parties contributing many inputs to operations like a transaction, vanishing the exact details of its origin.

In an interview, Gary Cathcar told Financial Times that this procedure could help provide a layering service, churning out criminal cash that covers its origins and audit trails, similar to how criminals can use the cash business to legitimize cash through the banking system.

The NCA clarified it is currently looking for regulation that would need mixers to comply with money laundering policies, periodic client checks, and audit trails of funds housed on their networks.

According to CoinDesk, CoinJoin usage reached a peak, valued at 65,000 BTC ($2.5 billion) in January 2021, which runs parallel to at least 0.35% of total Bitcoin operations that month.

Stronger Measures in the UK

The UK has experienced some crackdowns impacting the crypto environment. on Friday, March 11, the UK Financial Conduct Authority (FCA) ordered all crypto ATM operators to immediately suspend their ATM services to customers.

ATMs must comply with registration in the FCA, and none so far are complying with that rule. It is not the only action the FCA has made lately regarding digital assets. Just this month, it reported that it was leading an investigation of at least 50 cryptocurrency companies and managed to review more than 300 cases linked to digital currencies.

The financial watchdog led fifty investigations, including “criminal investigations” into companies that operate with digital currencies and have not registered with them. The cases got opened after the FCA struggled with thousands of complaints about deceiving attacks.

Most scams reported to the FCA included crypto-asset scams, boiler rooms, and recovery rooms,” reads the body’s consumer investment data review statement. The FCA also added in a separate entry detailing the complaints, there was an increase in crypto fraud reports.

On the other hand, the United Kingdom highlighted in January that it would further apply stricter rules on cryptocurrency advertising to prevent misleading encouragements and protect customers from false promotions.

Wasabi Wallet Bans

Crypto exchanges and wallet developers such as Wasabi have responded to crypto-assets mixing by suspending all financial operations from services that work with CoinJoins.

According to a Coindesk report, a Wasabi developer highlighted that the move was necessary to prevent attackers and deceivers from using the service and keep the company out of unspecified troubles. The decision highlights the challenges experienced by centralized companies providing services built to make interaction with a decentralized ecosystem easier.

By: Jenson Nuñez

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