Zhiyuan Sun
According to The European Union Agency for Law Enforcement Cooperation, commonly known as Europol, on March 15, the agency seized assets of cryptocurrency mixer ChipMixer for its alleged involvement in money laundering activities. Total assets seized include 1,909.4 Bitcoin in 55 transactions amounting to 44.2 million euros ($46 million). Decentralized finance analyst ZachXBT previously alleged on Nov. 25, 2022, that the hacker(s) of defunct cryptocurrency exchange FTX laundered 360 BTC ($5.9 million) using ChipMixer after an $372 million exploit.
In addition, the ChipMixer website has been shut down after authorities seized four servers hosting the application. Europol claims that the application laundered over 2.73 billion euros since its inception in 2017. According to law enforcement officials:
“ChipMixer, an unlicensed cryptocurrency mixer set up in mid-2017, was specialised in mixing or cutting trails related to virtual currency assets. The ChipMixer software blocked the blockchain trail of the funds, making it attractive for cybercriminals looking to launder illegal proceeds from criminal activities."
The investigation and subsequent enforcement was coordinated by the Belgian Federal police, the Federal Criminal Police Office of Germany, the Central Cybercrime Bureau of Poland, the Cantonal Police of Zurich Switzerland, the U.S. Federal Bureau of Investigation, the U.S. Department of Homeland Security, and the U.S. Department of Justice. Law enforcement stated that "a large share of this is connected to darkweb markets, ransomware groups, illicit goods trafficking, procurement of child sexual exploitation material, and stolen crypto assets." Deposited funds in ChipMixer would be turned into “chips," or small tokens with equivalent value, which were then mixed together to anonymize the initial trail of funds.
"Ransomware actors such as Zeppelin, SunCrypt, Mamba, Dharma or Lockbit have also used this service to launder ransom payments they have received. Authorities are also investigating the possibility that some of the crypto assets stolen after the bankruptcy of a large crypto exchange in 2022 were laundered via ChipMixer."
Europol facilitated the information exchange between national authorities for the operation. The entity said it "also provided analytical support linking available data to various criminal cases within and outside the EU, and supported the investigation through operational analysis, crypto tracing, and forensic analysis."
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Turner Wright
Tom Emmer, the majority whip of the United States House of Representatives, has reiterated concerns that the federal government is “weaponizing” concerns around the banking industry to go after crypto.
In a March 15 letter, Emmer called on Federal Deposit Insurance Corporation chair Martin Gruenberg to answer questions as to whether the government corporation has specifically instructed banks not to provide services to crypto firms, or suggested doing so may be an “onerous” task. The Minnesota representative cited claims from Signature Bank board member and former U.S. Representative Barney Frank, who reportedly called the FDIC moving against Signature a “strong anti-crypto message” rather than being based on concerns about the bank’s solvency.
“These actions to weaponize recent instability in the banking sector, catalyzed by catastrophic government spending and unprecedented interest rate hikes, are deeply inappropriate and could lead to broader financial instability,” said Emmer.
Emmer also targeted the administration of Joe Biden, accusing policymakers of attempting to “choke off digital assets” from the U.S. financial system. The Minnesota representative made similar claims prior to the collapse of Silicon Valley Bank and Signature Bank, in addition to speculating the U.S. government could “easily weaponize” a central bank digital currency as a surveillance tool.
For many in the space, the recent banking crisis began with Silvergate’s parent company announcing on March 8 that it would “wind down operations” for the crypto bank. Silicon Valley Bank followed on March 10 with its own failure after a run on deposits. USD Coin issuer Circle reported $3.3 billion of its reserves in the bank, causing the stablecoin to temporarily depeg from the dollar.
Some lawmakers and those in the space have suggested that the shutdown of Signature Bank could have been a targeted move by government officials against crypto, with Representative Frank reporting that “there was no insolvency based on the fundamentals” at the time. The New York State Department of Financial Services reportedly said on March 14 that closing the bank had “nothing to do with crypto,” citing the firm’s failure to provide “reliable and consistent data” to the regulator.
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Luke Huigsloot
The Reserve Bank of Australia and Treasury have been holding private meetings with executives from Coinbase, with discussions revolving around the future of crypto regulation in Australia.
Responding to Cointelegraph’s request for comment, an RBA spokesperson confirmed recent reports that these private meetings had occurred, stating that Coinbase met with the RBA’s Payments Policy and Financial Stability departments this week “as part of the Bank’s ongoing liaison with industry.”
Coinbase vice president of international policy Tom Duff Gordon, who was reported to have flown in for the meetings, also confirmed to Cointelegraph that meetings took place with Treasury in Canberra and Sydney.
Gordon said that the meetings touched on the government’s token mapping efforts, and Coinbase also “shared insights on global best practices concerning licensing and custody.”
The Australian Treasury's token mapping exercise was announced on Aug. 22, and is aimed at categorizing digital assets in a way to work them into existing regulatory frameworks.
A consultation paper was released by the Treasury on Feb. 3, for which the Treasury sought feedback from the crypto industry.
Gordon praised efforts from the Treasury, noting that “The Australian Treasury teams continue to impress us with their high level of sophistication and active involvement,” adding:
“The Australian Treasury’s token mapping exercise provides one of the most detailed and thoughtful papers we have encountered on the topic, setting a strong foundation for their forthcoming draft rules for crypto exchanges and custodians.”
Gordon expressed his desire to see the rules “later this year,” adding that he appreciated “the Treasury’s comprehensive groundwork.”
In contrast, Coinbase co-founder and CEO Brian Armstrong has been critical of the approach to crypto regulation in the United States, echoing accusations that the Securities and Exchange Commission (SEC) is “regulating by enforcement” and claiming that the SEC wants firms to register with them despite there being no way to register.
Documents recently obtained by the Australian Financial Review under freedom of information laws suggested that crypto legislation in Australia could be dragged out past 2024 and beyond, however, as final submissions to the cabinet are not expected until late in the year.
Coinbase expanded to Australia on Oct. 4, 2022, with Coinbase Vice President of International and Business Development Nana Murugesan telling Cointelegraph at the time that the exchange was “very impressed with the open door that we’ve received in Canberra and with different policymakers.”
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This Daily Dose was brought to you by Cointelegraph.
