Tag Archive for: Currency

Meta Ventures into Virtual Currency with “Zuck Bucks”; Sky Mavis Raises $150m Following DeFi Hack

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In today’s ExchangeWire news digest: Meta ventures into virtual currency with the development of “Zuck Bucks” and NFTs; Sky Mavis raises USD$150m (£114.7m) just weeks after losing USD$615m (£469m) to crypto hackers; and JD.com founder, Richard Liu, steps down as its chief executive.

 

Meta explores creating virtual “Zuck Bucks”

Facebook-parent Meta has outlined plans to introduce virtual currency and lending services to its apps. Led by founder and chief executive,  Mark Zuckerberg, the company, which also owns Instagram and Whatsapp, is venturing into alternative revenue streams and features to bolster its digital presence. The move comes just months after the collapse of Facebook’s project to launch a cryptocurrency, which had been developed over a period of almost 3 years.

Meta Financial Technologies, the financial arm of Facebook, has been looking into the potential creation of a virtual currency for use in the metaverse. Referred to as “Zuck Bucks” by employees, the currency is unlikely to be blockchain based and will instead take the form of in-app tokens similar to those used in gaming apps, reports the Financial Times.

Meta is also believed to be exploring the creation of “social tokens” or “reputation tokens” to reward users on the platform, in addition to developing “creator coins”, which could be associated with influencers and notable content creators on Instagram.

Aside from its ventures into virtual currency, Meta is also reportedly in the very early stages of exploring traditional financial services, such as helping to provide small business loans at attractive rates. The company’s plans to integrate non-fungible tokens (NFTs) into its apps are said to be more developed, with Mark Zuckerberg confirming that Instagram would soon support NFTs, and an internal memo from Meta outlining a pilot to share and post NFTs on Facebook to launch in May this year.

Meta’s drive towards virtual currency follows months of legal troubles and uncertainty for the big tech giant. In February, Meta lost over USD£220bn (£168.2bn) of its market valuation following the news that users were leaving its apps for competitor platforms, such as short-form video app…

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FBI to form digital currency unit, Justice Dept taps new crypto czar

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WASHINGTON, Feb 17 (Reuters) – The U.S. Justice Department has tapped a seasoned computer crimes prosecutor to lead its new national cryptocurrency enforcement team and announced on Thursday that the FBI is launching a unit for blockchain analysis and virtual asset seizure.

The creation of the FBI’s “virtual asset exploitation” unit comes after the Justice Department’s largest-ever financial seizure earlier this month. It charged a married New York couple with allegedly laundering bitcoins now valued at over $4.5 billion that were stolen in the 2016 hack of the digital currency exchange Bitfinex.

U.S. regulators under President Joe Biden have been ratcheting up their scrutiny of the crypto industry in the wake of a series of high-profile cyberattacks last year on the largest U.S. fuel pipeline network and the world’s largest beef supplier. Ransomware groups often demand their fees in bitcoin.

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In some of those cases, the FBI has been able to track down and recover some of the ransom.

Cryptocurrencies rely on blockchain technology, a database shared across a network of computers, in which records are difficult to change once added.

In a speech at the Munich Cyber Security Conference in Germany, Deputy Attorney General Lisa Monaco announced that Eun Young Choi, a prosecutor who led the case against a Russian hacker who helped steal information about more than 80 million JPMorgan & Chase Co customers, will lead the department’s cryptocurrency enforcement team.

Choi, who most recently served as Monaco’s senior counsel, worked for nearly a decade as a cybercrime coordinator and assistant U.S. attorney in New York, according to her LinkedIn profile. the U.S. Attorney’s Office in New York.

“We are issuing a clear warning to criminals who use cryptocurrency to fuel their schemes,” Monaco said.

“We also call on all companies dealing with cryptocurrency – we need you to root out cryptocurrency abuses. To those who do not, we will hold you accountable where we can.”

Monaco also announced the creation of a new international virtual currency initiative, and said the department will be aggressive about disrupting cyber threats, even at the…

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OFAC Targets Virtual Currency Exchange for Allegedly Facilitating Ransomware Attack | Ballard Spahr LLP

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First Post in a Two-Part Series on Recent OFAC Designations

On September 21, 2021 OFAC issued its first sanctions designation against a virtual currency exchange by designating the virtual currency exchange, SUEX OTC, S.R.O. (SUEX) “for its part in facilitating financial transactions for ransomware variants.”  Although this is a unique development, the broader and more important issue for any financial institution or company facing a ransomware attack is the continuing problem encapsulated in OFAC’s six-page Updated Advisory on Potential Sanctions Risks for Facilitating Ransomware Payments, which OFAC released in conjunction with the announcement of the SUEX designation.  The Updated Advisory illustrates a “Catch 22” scenario, in which a victim that halts a ransomware attack by making the demanded payment then may find itself under scrutiny from OFAC on a strict-liability basis if it turns out that the attackers were sanctioned or otherwise had a sanctions nexus.  The Updated Advisory states that OFAC will consider self-reporting, cooperation with the government and strong cybersecurity measures to be mitigating factors in any contemplated enforcement action.

OFAC has been busy.  Tomorrow, we will blog on a more traditional action announced by OFAC right before the SUEX designation:  OFAC’s designation of members of a network of financial conduits funding Hizballah and Iran’s Islamic Revolutionary Guard Corps-Qods Force.  This designation is notable for the targets’ alleged use of gold as a vehicle to launder illicit funds through front companies.

The Blacklisting of SUEX

According to OFAC, over 40% of SUEX’s known transaction history is associated with illicit actors.  As a result, SUEX is prohibited from transacting with U.S. persons or transacting within the United States, and financial institutions and other persons that engage in certain transactions or activities with the sanctioned entities and individuals may expose themselves to sanctions or be subject to an enforcement action.  OFAC issued the designation pursuant to Executive Order (E.O.) 13694, entitled “Blocking the Property of Certain Persons Engaging in Significant Malicious…

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US says 3rd-largest cryptocurrency is a security, not currency

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In a significant move, the US Securities and Exchange Commission (SEC) has sued both the founder and current CEO of tech company Ripple for raising more than $1.3 billion through an “unregistered securities offering” after selling their cryptocurrency called XRO, which is touted as the third-largest cryptocurrency by market value.

The lawsuit which said that XRO is a security not currency, claimed that Ripple’s former CEO and founder Christian Larsen and its current CEO Bradley Garlinghouse violated securities laws by selling XRP over a seven-year period starting in 2013.

According to the suit, the “illegal securities offering” created an information asymmetry that let Ripple sell XRP to investors who only knew what Larsen and Garlinghouse chose to tell them, The Verge reported on Tuesday.

“According to Garlinghouse, it’s a virtual currency, which means the SEC has nothing to do with it”.

The SEC has previously ruled that Bitcoin and Ethereum are currencies.

“Also, the Justice Department treated XRP as a currency in 2015, when Ripple settled a suit over its business”.

XRP, however, differs from Bitcoin and Ethereum as the rest of the two cryptocurrencies are created through a “mining” process which is ongoing.

“Ripple started XRP by creating 100 billion units all at once” and this may be why the US SEC has called it a security, not a currency.

The pandemic-hit 2020 has seen a meteoric rise in the price of cryptocurrencies.

Bitcoin scaled to a fresh high of $24000 mark this week. So far this year, the largest cryptocurrency has gained over 233 per cent, primarily driven by surge in demand from large investors.

Ethereum (ETH) also peaked at $673 on December 17.

Cryptocurrency exchange CoinDCX on Tuesday said it raised Rs 100 crore ($13.9 million) in its series B round led by Block.one. Compiling all three rounds of funding this year, CoinDCX has raised close to $19.4 million, to date.

–IANS

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