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🇮🇷 Iran revives Bitcoin mining in September
This week, the Iranian government announced that licensed bitcoin miners can resume operations in September after a summer ban.
On August 24, Tanvir, Iran’s state energy company, announced that the ban was introduced May on Bitcoin mining will be discontinued on September 22nd. Iran has previously asked miners to halt their activities to ensure energy-intensive mining does not deteriorate power outages during the summer months.
Continued mining in Iran comes with consequences for compliance with sanctions on crypto exchanges and financial institutions in the US and elsewhere.
Like Elliptical research showed that, before the May hiatus, approximately 4.5% of all Bitcoin mining took place in Iran. Since 2019, Iran has licensed bitcoin miners to operate in the country – many of them Chinese mining companies—which allows it to use energy resources that it normally finds difficult to export despite American sanctions. Our research suggests that Iran could generate revenues of up to $1 billion annually by using its energy resources for Bitcoin mining activities.
Crypto companies or financial institutions that process transactions mined in Iran could face sanctions violations if they pay fees to Iranian miners. Businesses outside of Iran also face sanctions compliance risks if they process transactions for miners based in Iran. Consequently, crypto exchanges and financial institutions must have solutions that can enable them to detect potential interactions with Iranian entities.
For example, Elliptic’s wallet overview and transaction tracking solutions it can be used by regulated financial institutions to detect and block deposits of cryptoassets from entities based in Iran, including miners.
Given the potential consequences of breaching sanctions compliance, it is critical that businesses have a comprehensive risk exposure disclosure program. To learn more, read our crypto sanctions guideand check out our latest webinar on how your business can successfully comply with sanctions measures. Contact us for a demo to discover how Elliptic can help your business navigate sanctions requirements.
🇸🇬Former head of ADGM takes helm at Binance Singapore
On August 23, crypto exchange giant Binance announced the appointment of Richard Teng as CEO of Binance Singapore, the latest appointment of a former senior regulator at the exchange. Teng, who previously worked at the Monetary Authority of Singapore (MAS) and the Stock Exchange of Singapore, was most recently the CEO of the Financial Services Regulatory Authority of Abu Dhabi Global Market. As with Binance’s previous appointment of a former US regulator Brian Brooksthe move signals that one of the crypto industry’s biggest players is looking to win the trust of regulators globally, as the industry comes under increasing scrutiny in Singapore and beyond. As we have noted beforea proactive, compliance-first approach to regulatory stakeholder engagement is critical for any crypto business looking to successfully scale.
🇺🇸Citigroup seeks regulatory approval to trade Bitcoin futures
In the latest sign that it is the convergence of cryptobanking is in full swing, the American banking giant Citigroup is allegedly plans to allow its institutional clients to trade bitcoin futures, subject to regulatory approval. The move would make Citi one of a number of large US banks – alongside them Goldman Sachs, JPMorgan, Wells Fargo and others—to enter the crypto space recently; and comes as the Commodity Futures Trading Commission (CFTC), the primary US regulator for derivatives trading, works to clarify the extent of its crypto jurisdiction. For any financial institution looking to offer crypto products and services, ensuring regulatory compliance from the outset is essential. To learn more about how your financial institution can embrace the benefits of cryptocurrencies while managing regulatory risks, watch our on-demand webinar, What your bank wanted to know about cryptocurrency… But was afraid to ask.
🇺🇸Congressional deal creates problems for crypto tax provisions
August 24 agreement among Democrats in the US Congress, the crypto tax language in a major infrastructure spending bill is likely to pass without amendments favored by the crypto industry. To ensure cooperation on separate budget bills, House Speaker Nancy Pelosi agreed to speed up a vote on the infrastructure bill at the behest of moderates in her own party, who have threatened to sabotage the budget measures if the infrastructure bill does not pass. The deal makes it highly likely that Congress will pass the infrastructure bill without any changes to the language that would require crypto transaction brokers to report user activity to the Internal Revenue Service starting in 2023 for tax reporting purposes — language that the crypto industry has discussed is so broad that it could burden miners and technology developers in the face of innovation. Some crypto lobbying groups remain hopeful that the industry can influence the legislative process – at least one senator seeks broader proposals for potential future legal solutions. But as Elliptic’s director of policy and regulatory affairs, David Carlisle, said noticedthe real fight over the future of cryptocurrency tax reporting is likely to occur during the regulatory process.
🇹ðŸ‡Thailand proposes cryptocurrency custody requirements
On August 25, the Securities and Exchange Commission (SEC) of Thailand suggested new requirements for cryptocurrency custody companies. The SEC’s proposed measures – which are in public consultation until September 22 – aim to strengthen investor protection by requiring crypto custodians to accurately account for client funds and prohibiting custodians from lending clients’ cryptocurrencies. At Elliptic, we provide many of the world’s largest cryptocurrency custodians and financial institutions with compliance solutions that will enable them to respond to new regulatory requirements in the crypto space. Read ours recent analysis steps that custodians can take to meet the regulator’s expectations, or contact us to learn more about how Elliptic can help your custodial business on its path to compliance.
🇯🇵Fresh Off the Liquid Hack, Japan to Strengthen Cryptocurrency Compliance Requirements
This week reports it has emerged that the Japan Financial Services Agency (JFSA) plans to strengthen investor protection and other regulatory requirements for crypto businesses. While the details of the measures remain unclear, the JFSA reportedly plans to introduce new compliance requirements for crypto exchanges by mid-2022. News of the planned regulatory review comes just as Liquid, a Japanese crypto exchange, was hit by a cybercrime hack that resulted in the theft of $94 million in cryptocurrencies. Be sure to read it Elliptic’s analysis of the Liquid hackwhere we describe how hackers laundered funds through decentralized exchange services (DEX).
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