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A new International Monetary Fund (IMF) working document proposed the implementation of a Crypto-Risk Assessment Matrix (C-RAM), which would allow participating countries to better identify risk indicators in the digital asset space.
Additionally, the author’s proposal to Burca Hacibedel and Hector Perez-Saiz – by name “Assessment of macro-financial risks of crypto-assets” – seeks to provide the means by which regulators can respond to and mitigate any identified risks.
The three-step approach outlined in this paper includes:
- Using a decision tree to assess crypto macro criticality or potential to impact the macro economy.
- Looking at indicators that can be compared to those used to monitor the traditional financial sector.
- Identification of global macro-financial risks that affect systemic country risk assessments.
The IMF – previously involved in the use of digital assets and the potential development of central bank digital currencies (CBDCs) – is active in global financial thought leadership and plays a major role in shaping global regulatory policy.
The CFTC charges Cryptobravos with operating a fraudulent digital asset trading scheme
Commodity Futures Trading Commission September 29 filed civil enforcement proceedings in the U.S. District Court for the District of New Jersey, charging Or Patreanu of Israel, Snir Hananya of Italy, Elijah Samson of Germany, Artem Prokopenko of Ukraine, and Expected Value Plus Ltd., a Seychelles company operating under the names of Trade2Get, Coinbull, Cryptonxt, Tradenix, Cryptobravos, Nittrex and Pinance.
According to the lawsuit, the named defendants allegedly engaged in fraudulent solicitation and misappropriation of tens of millions of dollars from hundreds of victims, claiming they would trade cryptoassets on behalf of the named individuals.
According to the CFTC: “Cryptobravos agents misrepresented, among other things, that they would use customer funds to trade bitcoin and other digital asset products for customers; Cryptobravos would generate risk-free returns for its clients; and clients could withdraw their funds at any time.”
It added: “As alleged in the complaint, the defendants did not trade bitcoins or other digital asset products for customers, and did not earn returns for customers through trading. Instead, the complaint alleges, Cryptobravos accepted client funds and refused to return them, often after encouraging clients to withdraw all their money from their retirement accounts or take out loans to make additional deposits or to pay non-existent taxes or fees.”
The move represents a major regulatory crackdown against an alleged group of global fraudsters and could help bring to justice several individuals and entities that have tried to defraud vulnerable people.
Brazil is stepping up crypto regulation
Brazil’s central bank – Banco Central do Brasil – is stepping up its regulatory initiatives for digital assets, as cryptocurrency-related activity grew by 44.2% from January to August 2023, resulting in an increase in transaction value of approximately $7.4 billion.
Stablecoins have been a particular concern of Brazilian regulators and lawmakers, with the mainstream adoption of US dollar-backed coins by mainstream retailers becoming common across the country.
At the same time, officials in Brazil continue to push forward with Drexa, a Brazilian CBDC project that would allow the efficiency benefits of blockchain technology to be realized while keeping financial activity under the control of centralized government authorities.
Compliance Financial Services EMEA
