A disagreement has arisen between the Panama National Assembly and the government regarding a proposed crypto law.
In April, Panama legislators passed a legislative draft aimed at controlling cryptocurrencies, including [Bitcoin](/news/article/jim-cramer-says-ignore-bitcoin-hype), in the country. 

Nevertheless, President Cortizo warned a few weeks later that he would only sign it if it incorporated extra Anti-Money Laundering (AML) regulations.

On 26 January, Panamanian President Laurentino Cortizo referred the crypto law enacted last year to the Supreme Court for examination, asserting that the [crypto](/news/article/best-cryptos-to-buy-now) bill contradicts fundamental aspects of the constitution and cannot be implemented. 

## What is the controversy with the Panama crypto bill?

In September 2021, a Panama crypto bill was introduced to align the nation with the digital economy, blockchain technology, cryptocurrency, and the internet. According to the legislation, Panamanians are allowed to use [cryptocurrency](/news/article/cryptocurrency-books-guide), including but not limited to Bitcoin and Ethereum, as a substitute form of payment for any commercial or civil transaction. 

The government's innovation authority would also examine blockchain or distributed ledger technology for digitising identity.
The Financial Action Task Force, which aims to enhance financial transparency and prevent money laundering, proposed legislation permitting private and public usage of cryptocurrency assets.

The Panamanian National Assembly approved the bill on 28 April, 2022, with a vote of 38 in favour and none against. With this, Panama could soon become the third country in the world to treat cryptocurrencies on equal footing with fiat currency.

A definitive statement from the president's office stated that the provisions of articles 34 and 36 in the bill, which establish administrative structures within the government, infringe upon the state's separation of powers and therefore are invalid. After partially rejecting the legislation in June, President Cortizo also expressed that the approval process for the bill was inadequate.

At the time, the president [stated](https://www.presidencia.gob.pa/Noticias/Ejecutivo-remite-a-la-Corte-Suprema-proyecto-de-ley-que-regula-uso-de-criptomonedas) that further amendments were needed to the legislation to align it with the latest regulations. It is now up to the Supreme Court to determine whether to declare Bill No. 697 unenforceable or to give it the green light with modifications.


yellow image of panama with crypto bitcoins falling from sky

Panama crypto bill Awaits Supreme Court verdict

Genesis Global Capital Inc. has joined the ranks of the FTX contagion victims. The crypto lender has filed for chapter 11 bankruptcy protection in the Manhattan federal court.

It has been struggling since the collapse of FTX in November 2022.

Genesis bankruptcy is a major setback for its parent company, [Digital Currency Group](https://dcg.co/) (DCG). Barry Silbert’s DCG relied on the business of this crypto lender, and now it is likely to face a liquidity crisis. 

According to the insolvency filing, the firm has more than 100,000 creditors. In addition, it has accumulated liabilities of $1 billion-$11 billion. It also includes the liabilities of the clients of the Gemini Earn program.

## Genesis bankruptcy - Official statement

The firm announced the bankruptcy through a [press release](https://www.businesswire.com/news/home/20230119005955/en/) on 19 January. It mentioned that the Chapter 11 filing would only be effective on its crypto lending business. However, its spot trading, derivatives, and brokerage businesses will carry on their operations.

In the official statement, the company announced that it has started "a court-supervised restructuring plan", which will allow it to find "a holistic solution".

The bankrupt lending business claims more than $150 million in liquidity. It plans to use this fund to back up its business operations and to use it for restructuring plans.

## Crypto crisis after the FTX collapse

Since the collapse of the [Sam Bankman-Fried](/news/article/former-ftx-ceo-sbf-arrested) exchange, the industry has been going through a meltdown. FTX contagion spread to several firms, including [BlockFi](/news/article/ftx-collapse-blockfi-suspend-withdrawals), 3AC, [Gemini](/news/article/gemini-crypto-exchange-falls-prey), Salt, and others.
 
Earlier, Genesis paused withdrawals from its customers' accounts. It affected the operations of the lending program of [Gemini and Genesis](/news/article/genesis-gemini-sec-takes-action). These firms are now facing a lawsuit from the Securities and Exchange Commission. Following this situation, it also [laid off 30% of its workforce](https://www.coindesk.com/business/2023/01/05/crypto-lender-genesis-lays-off-30-more-of-its-staff/). 

And now, it has filed for protection from bankruptcy. This could also affect DCG's businesses, as it may cause a further liquidity crisis.


red image of bankrupt newspaper and genesis logo

Genesis Bankruptcy: Crypto Meltdown Continues 

On 18 January, 2023, US authorities confirmed the arrest of a co-founder and major shareholder of Hong Kong-registered crypto exchange platform Bitzlato for facilitating and harboring money laundering criminals.

A Russian native currently living in China, Anatoly Legkodymov, was arrested in Miami on 17 January, 2022. 

He was booked under a section of the US Patriot Act aimed at preventing money laundering and terrorist financing. His charges included operating an unlicensed money exchange business.

Bitzlato is a crypto exchange platform [based out of Hong Kong](/news/article/is-crypto-legal-in-hong-kong) with global operations. The platform allegedly exchanged more than £500 million in cryptocurrency on the Hydra Market. The Hydra Market was the largest darknet marketplace in the world before it was shut down in April 2022. The crypto exchange co-founder also allegedly received £12 million in ransomware proceeds.

## Bitzlato labeled primary money-laundering concern 

The US FinCEN (Treasury's Financial Crimes Enforcement Network) previously named the crypto giant a "primary money-laundering concern".

This is among the most serious sanctions from the US anti-crime team as it usually works by cutting the target off financially around the globe.

The platform allowed users to sign up and operate by providing little to no personal information, making it a haven for criminals. It also allegedly posted ads on Russian-language sites telling users that they can sign up and start using the site by only providing their email address and nothing else. The company made it exceptionally easy for users to buy crypto for cash for a negligible fee and practically no personal information.

The seizure of Bitzlato does not come as a surprise. US law enforcement has been hard at work because the crypto community has been under a microscope since last year following [scandals in the industry](/news/article/how-to-avoid-crypto-scams). US authorities charged [FTX CEO Sam Bankman Fried in 2022 with eight counts of fraud](https://www.bbc.com/news/business-64036615) after the exchange filed for bankruptcy.

The operations of the Hong Kong-based exchange platform Bitzlato have been seized until the trial.


red image of bitzlato logo on red background

Bitzlato co-founder charged with laundering over £500m

Entering 'is crypto regulated' as a search term on Google returns 15.9 million results in 0.50 seconds. Entering the same phrase, is crypto regulated, into Yahoo brought forth thousands of search results.

The millions of results indicate that skeptics of the emerging industry are interested in what regulatory bodies worldwide have done and continue to do to ensure the safety of investor money.

While some regulatory agencies have made efforts, the lows and highs of the crypto finance sector have made it difficult for regulators to design a comprehensive global regulatory framework for this booming industry.

In the beginning, crypto projects such as Namecoin (NMC), Peercoin (PPC), Novacoin (NVC), Terracoin (TRC), Devcoin (DVC), and WorldCoin (WDC) were low-cap digital assets (had less than $2 billion as market capitalization) with less useful underlying infrastructure. Innovative technologies back current projects.

This is why projects such as Solana (SOL), Cardano (ADA), Ripple (XRP), Ethereum (ETH), TRON (TRX), Polkadot (DOT), Cosmos (ATOM), Algorand (ALGO), and Flow (FLOW) have market caps that range in the billions of dollars. 

As of the end of November 2022, the market capitalization of Bitcoin (BTC) alone was bigger than that of Samsung, Bank of America, Coca-Cola, PepsiCo, Oracle, Alibaba, Shell, Toyota, McDonald, Nike, and Morgan Stanley.

During the peak of the markets in November 2021, BTC's market cap was [higher](https://companiesmarketcap.com/) than Walmart and Visa and competed with Alphabet (Google), Microsoft, and Apple in terms of market value. 

The boom in crypto, which saw BTC and Ethereum rise to all-time highs (ATH) of [$68,789.63](https://coinmarketcap.com/currencies/bitcoin/) and [$4,891.70](https://coinmarketcap.com/currencies/ethereum/), benefitted a particular group in the decentralized finance (DeFi) sector. That group was cryptocurrency exchanges. 

Binance, FTX, Mandala Exchange, Upbit, MEXC, Coinbase, Bitrue, OKX, Gate.io, Crypto.com, Huobi, and CoinTiger saw record revenue generation due to the fear of mission out (FOMO) taking over the market in 2021. FOMO saw billions of dollars poured into the crypto industry, bringing at least 1,000% gains for several unsophisticated traders and investors (those that lack crypto knowledge and do not conduct fundamental or technical analysis before making decisions).

Blockchain technology and cryptocurrency were on a high throughout 2021, and another area, called DeFi, started attracting a new audience. The new audience was hard-working individuals fed up with the infinitesimal interest rates offered by traditional finance (TradFi).

While the real interest rate in the US was 2.3% in 2020, according to the [World Bank](https://data.worldbank.org/indicator/FR.INR.RINR?locations=US), the interest rate fell below zero in 2021. This could not be compared to the minimum annual percentage yield (APY) of 5% offered by DeFi lending platforms and certain exchanges through staking services. The boom in crypto lending led to the creation of several now-insolvent firms, such as Voyager and Celsius.

Millions of people have lost more than a trillion dollars since November 2021, with the current crypto market capitalization below $1 trillion a year later. Much blame has been placed on cryptocurrency exchanges and crypto lending firms. While these firms bear the lion's share of the responsibility, many potential traders ask 'is crypto regulated' in their jurisdiction so that they will not fall victim to investment losses due to the rapid collapse of crypto companies.

## Is crypto regulated by SEC in the United States?

Cryptocurrencies are found on a blockchain and can be stored in crypto wallets. They are primarily traded on a cryptocurrency exchange, of which there are two types: centralized exchanges (CEXs) and decentralized exchanges (DEXs).

The best way to differentiate them is compliance with rules and regulations. While CEXs comply with rules such as Know Your Customer (KYC), which helps prevent money laundering and combat terrorism financing, DEXs thrive on anonymity. They do not require users to submit any documents for review.

Despite this, CEXs record more volume than DEXs. A great example can be attributed to Binance. It is the largest CEX by volume, seeing more liquidity in the first two days of October (around [$66 billion](https://nomics.com/exchanges/binance/history)) than Uniswap, the largest DEX by volume, which recorded around [$42 billion](https://dune.com/queries/1847/3261) throughout the month. Such statistics by CEXs have made them the go-to platforms for several traders. 

The collapse of FTX in November, and the reduction of staff by others such as Crypto.com, Coinbase, BlockFi, Bybit, and Gemini in previous months, have led to calls for crypto regulation. 

Many industry experts have asked why the top regulator in the US, the Securities and Exchange Commission (SEC), maintains focus on the "cryptocurrency securities" relationship, with an eye on its case with Ripple, instead of drawing up a comprehensive regulatory framework that will answer the question is crypto regulated in America. 

In the US, Coinbase is the biggest exchange by trading volume and is a centralized exchange. The exchange has the necessary licenses for operations in more than 40 US states.

Despite this, Coinbase is not insured by FDIC, the Federal Deposit Insurance Corporation. The FDIC is an independent governing body created by US Congress in 1933 to maintain public confidence and stability in the country's financial system.

If the exchange with the most customers in the country is not insured due to "cryptocurrency" not being subject to the protections of the FDIC or Securities Investor Protection Corporation (SIPC), many people may lose hope in the crypto industry due to a lack of regulation.

Blame continues to be placed on the SEC, but the Commodity Futures Trading Commission (CFTC) has also been drawn into the 'is crypto regulated' trend.

In 2015, the [CFTC](https://www.cftc.gov/digitalassets/index.htm) said it classifies virtual currencies like BTC as commodities under the Commodity Exchange Act (CEA). In September 2022, SEC Chair [Gary Gensler](https://www.investopedia.com/gensler-on-crypto-6544288#:~:text=U.S.%20Securities%20and%20Exchange%20Commission%20Chair%20Gary%20Gensler%20said%20most,and%20other%20crypto%2Drelated%20issues.) affirmed his stance on classifying cryptocurrencies as securities. 

This is the reason why current CFTC Commissioner Summer K. Mersinger told crypto news portal [Coindesk](https://www.coindesk.com/policy/2022/11/28/regulating-crypto-not-a-one-agency-solution-cftc-commissioner-says/) on 28 November that crypto regulation is not a "one-agency solution". She admitted that the CFTC would need to work with the SEC in regulating the emerging sector. While she did not give a clear view about how the two agencies could regulate the industry, she assured stakeholders that the agencies would need to liaison with global regulators before regulations could be implemented.

Despite the delays in crypto regulation due to unclear CFTC crypto and SEC cryptocurrency rules, Chief Executive Officer (CEO) of Stifel Ron Kruszewski has called on the SEC to extend the customer protection rule to the crypto sector.

The Customer Protection Rule (Rule 15c3-3) was adopted in 1972 by the SEC in response to a congressional directive to create rules around the acceptance, custody, and use of customer securities. The rule requires broker-dealers to protect the securities that customers leave in their custody. It also ensures that, at any time, brokerage clients can withdraw assets, and a brokerage has to work to uphold it.

With such a rule in place, customers of bankrupt exchanges like FTX, and lending firms such as Voyager and Celsius, would have been protected from huge losses suffered from the halting of deposits and withdrawals.

## Is crypto regulated by the Europe Union?

In Europe, Germany leads the rest of the countries as the world's most friendly crypto nation. 

Unfortunately, the Financial Conduct Authority's (FCA) stiff stance on the highly-volatile industry has made the United Kingdom (UK) less of a crypto-friendly country.
 
In March 2022, the FCA warned residents of [illegal crypto ATMs](https://www.fca.org.uk/news/news-stories/warning-illegal-crypto-atms-operating-uk) operating in the country. In trying to limit UK residents’ exposure to virtual currencies, the agency warned ATM owners to shut their operations or face strong action by law enforcement. The [FCA](https://www.fca.org.uk/news/press-releases/fca-clamps-down-marketing-high-risk-investments-consumers) followed this by clamping down on the marketing of high-risk investments to consumers in August 2022.

While a cryptocurrency exchange such as Binance has had a hard time dealing with the FCA, Chanpeng Zhao’s innovation has received the regulatory nod in [France](https://techcrunch.com/2022/05/04/binance-france-regulatory-approval-europe/), [Italy](https://www.binance.com/en/blog/ecosystem/binance-obtains-regulatory-approval-in-italy-421499824684903920), [Cyprus](https://coingape.com/just-in-binance-expands-european-stronghold-with-new-license/#:~:text=Binance%20Gets%20License%20in%20Cyprus&text=The%20new%20license%20allows%20the,(AML%2FCTF)%20rules.), and [Kazakhstan](https://www.binance.com/en/news/flash/7226912). This shows that CEXs with the right whitepapers, assets, and Proof of Reserves (PoR) can weather the storm and be accepted by other European countries with different due diligent processes.

With that said, the [Markets in Crypto-Assets (MiCA)](https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2022)739221), first proposed by the European Commission (EU) in August 2020 and scheduled to take full effect in 2024, will establish agreed rules for all crypto assets at the EU level. This will bring some legal certainty for crypto assets not provided by existing legislation within the EU.

## Is crypto regulated in the Asian Pacific region?

In Asia, China has banned cryptocurrency use in all of its forms and has instead created and popularized the use of the country's national digital currency called the digital Yuan (e-CNY).

In trying to limit the use of cryptocurrency as a transactional currency and investment asset, authorities in [India](https://www.internationaltaxreview.com/article/2aubz4iwirgo9jk0avwg0/this-week-in-tax-indias-crypto-tax-may-kill-the-industry#:~:text=The%20Indian%20government%20has%20imposed,into%20effect%20from%20July%202022.) have imposed a 30% tax on capital gains accrued from crypto transactions in July 2022. 

Unlike China, crypto is legal in Japan. One of the best ways Japan’s [Financial Services Agency](https://complyadvantage.com/insights/japan-to-introduce-travel-rule-for-crypto-to-track-illegal-transfers/) (FSA) regulates crypto is by introducing a travel rule for crypto to track illegal transfers. The Travel Rule, scheduled to take effect in May 2023, will help reduce money laundering using cryptocurrencies.

Aside from the FSA, the [MAS (Monetary Authority of Singapore)](https://coingeek.com/singapore-rejects-over-100-licensing-applications-from-digital-currency-firms/) is one of Asia's top players and has a rigorous process regarding issuing virtual asset service provider (VASP) licenses. Despite receiving more than 170 applications for licenses, MAS has granted one to less than 10% of applicants, with many crypto companies still waiting for a positive outcome.

Aside from China, India, Japan, and Singapore, it is not uncommon to come across the question, 'is crypto regulated?' in [Australia](https://www.globallegalinsights.com/practice-areas/blockchain-laws-and-regulations/australia#:~:text=Australian%20law%20does%20not%20equate,perceived%20use%20for%20wholesale%20CBDCs.). As of January 2022, there is no legislation to tackle cryptocurrency as a discrete area of law in Australia. That said, cryptocurrencies can be captured within the existing rules of Australia. 

Cryptocurrency is not the only area in the crypto stratosphere without legislation in the country; blockchain and other distributed ledger technology (DLT) do not have a regulatory framework in Australia.

Despite their impact on centralized finance, Australia does not regard cryptocurrency as money. This is in direct contrast to the notion held by some countries that digital currencies can be equated with fiat currencies. While China has taken the lead in the creation of central bank digital currencies (CBDCs), Australia does not have plans to issue a retail CBDC in the near future.  

## Is crypto regulated in Africa?

Crypto regulation in Africa is largely non-existent. Despite the majority of Africans using crypto as a hedge against inflation, most central banks and local regulatory bodies do not have cryptocurrency laws.

The only African country that has given the green light for the use of crypto so far is the Central African Republic (CAR). 

The Central African country followed El Salvador to become the second country across the globe to legalize BTC as a legal tender. Much of this has been done to aid international trade due to African countries' consistently depreciating local currencies. 

African countries have not gone unchecked concerning cryptocurrency regulations. [The International Monetary Fund (IMF)](https://www.imf.org/en/Blogs/Articles/2022/11/22/africas-growing-crypto-market-needs-better-regulations) announced in November 2022 that the growing crypto market within the region needs better regulation. 

According to the IMF, the collapse of FTX and the tanking of the market should prompt central banks in African countries to set up cryptocurrency laws so that consumers can be protected from high volatility. The financial body said that the widespread acceptance and use of crypto could create macroeconomic instability within the region.

## Crypto regulation needed more than ever

While many expect the crypto finance industry to remain highly decentralized so that citizens can control all aspects of their financial lives, unending cases of fraud and scams have shed new light on regulations. Some industry experts have shared their views about crypto regulation. 

"The collapse of the FTX Derivatives Exchange has made the perfect case for regulators. Now they can claim that the emerging crypto ecosystem, despite its revolutionary propositions, needs urgent and comprehensive regulation. In reality, regulators worldwide have often maintained this stance, and crypto proponents are now forced to support the notion en mass.

“FTX deceived everyone, and despite the facade of good health that the company put up, many shady and unethical activities were going on in the background. 

Reporting and accountability standards amongst C-Suite executives are among the key regulatory frameworks that will need to be designed for crypto firms. However, it's more important than ever for the crypto community to point out that, even if FTX dealt with crypto, they were not crypto. They never were, nor is any one centralized company that offers it to their customers. Cryptocurrency exchanges are, if anything, more akin to banks than to cryptocurrencies or even Decentralized Finance.

“If you were to ask me, ‘should the FTX collapse increase centralized institutions' regulation?’ then the answer would be an unequivocal yes. These institutions need regulation, not the sovereign tools and technologies enabling users to eventually surpass them altogether,” Brian Pasfield, CTO of Fringe Finance, told [Moni Talks](/news).
Slava Demchuk, Co-founder of AMLBot, Founder of the AMLSafe app, and CEO of PureFi, also shed light on the current state of crypto regulation.

“The collapse of the FTX exchange will increase the necessity for cryptocurrency regulation. We strongly believe that this situation has become similar to the Subprime mortgage crisis in 2008. It would be the same tipping point for the crypto industry. Such a market condition will inevitably lead to stricter regulation for CEXs and VASPs in general.

“It will include tighter control over exchanges' liquidity, stronger executive responsibility, etc. Conventional crypto-enthusiasts would not suffer from more severe regulation because they are already operating under specifically defined market rules. Moreover, we always used to say, crypto regulation follows the classical financial market, so the collapse of the exchange is just a reason for it.”

## Conclusion

Despite the numerous bankruptcies with the collapse of FTX as the headline of issues miring this emerging sector, blockchain technology and cryptocurrency is the new way of finance. Most traditional financial companies could adopt the blockchain technology infrastructure to scale transactions and rid themselves of the fragmented nature of the old systems.

Although crypto is not regulated globally, crypto regulation will see a significant spike in the number of cryptocurrency exchanges. This will result positively in the trading volume of centralized exchanges.

Many will complain about hidden risks due to the unpredictability of the market, but major developments in the industry prove otherwise. [CoinMarketCap](https://cointelegraph.com/news/coinmarketcap-launches-proof-of-reserve-tracker-for-crypto-exchanges) launched a new feature, called Proof-of-Reserve tracker, for crypto exchanges in November. PoR provides transparency of an exchange's cryptocurrency reserves via a verifiable auditing practice. With the new feature, users can access the total assets held by an exchange, its balance, and its public wallet address ownership.

Exchanges such as Bybit, Huobi, Crypto.com, OKX, Bitfinex, and Kucoin have released their PoRs to show their customers that their coins are in safe hands. 

Crypto regulation is needed. The right time may have come for the SEC, CFTC, European Union, MAS, and the African Union to pull the plug on this highly volatile industry.


yellow image of cryptocurrency statistics and clipboard with regulations on it

Is Crypto Regulated Across the Globe? 

Barry Silbert, the CEO of Digital Currency Group (DCG), has denied employing “bad faith stall tactics” in a duel pitting DCG against the Gemini Exchange’s Cameron Winklevoss, whose firm is trying to retrieve [$900 million](/news/article/genesis-brokers-owes-gemini) of deposits their clients placed with Genesis.

## Clients unable to access their funds

DCG is currently in the crosshairs of the rest of the crypto industry, and [rumors](https://www.bloomberg.com/news/articles/2023-01-06/barry-silbert-s-list-of-crypto-woes-starts-with-genesis-bankruptcy-angst?sref=ZTdRrSmf) about a looming Genesis [bankruptcy](https://www.reuters.com/technology/us-crypto-broker-genesis-says-it-is-working-avoid-bankruptcy-filing-2022-11-30/) and federal investigations are fueling the allegations. 

The contest with Winklevoss gravitates around allegations regarding a loan Barry Silbert extended to Genesis to the defunct crypto hedge fund Three Arrows Capital (3AC): 3AC owed Genesis [more than $1 billion](https://www.coindesk.com/business/2022/07/18/genesis-global-issued-236b-in-undercollateralized-loans-to-three-arrows-capital/) when it tanked last year. As the two crypto entrepreneurs continue bickering, Gemini’s clients have been unable to access their funds for at least six weeks. 

Genesis and Gemini partnered about two years ago. They launched a high-yield crypto product called Earn, through Gemini, that offered up to 8% ROI on customer deposits. Gemini exchange lent funds from Earn to Genesis, which the latter placed on numerous trading platforms and borrowers. The relationship flourished throughout 2020 and 2021 as the crypto market thrived, but matters went haywire in 2022 when the crypto market dithered, causing the Earn model to fall apart. 

Gemini halted all withdrawals last November at the height of the FTX crisis to the chagrin of more than 340,000 of its retail clients, some of whom are seeking legal redress.   

## Barry Silbert is the public face of DCG

Barry Silbert, the public face of DCG, has never shied away from using Twitter or interviews to opine on the crypto market. The career investment banker is among the pioneer investors in blockchain firms around 2013 and established DCG in 2015; the firm has so far invested in more than 200 crypto startups. 

According to [Forbes magazine](https://www.forbes.com/profile/barry-silbert/?sh=530f2a452950), the Emory University’s Goizueta Business School alumnus had a net worth of $3.2 billion and was the eighth-richest crypto investor in April 2022. 

Apart from Genesis, DCG's lending arm, the $10 billion company has a stake in digital asset manager Grayscale besides owning crypto mining firm Foundry Services, trade publication Coindesk, digital asset platform Luno global, and crypto index provider TradeBlock. Apart from its association with the defunct 3AC, Genesis joins the list of firms suffering from FTX [contagion](/news/article/gemini-crypto-exchange-falls-prey) as its derivative business is said to have had over $175 million locked in an FTX trading account.


red image of stock market with Cameron Winklevoss and Barry Silbert

Barry Silbert Rebuts ‘Bad Faith’ Claims

The [latest FTX news](/news/tag/ftx) could be positive for customers, investors, and lenders – $5B of assets, such as liquid cryptocurrency, liquid investment securities, and cash, have been recovered, according to Andy Dietderich, an FTX attorney.

Dietderich revealed this information to Judge John Dorsey in a Delaware bankruptcy court. The recovered assets do not include those confiscated by the Securities Commission of the Bahamas – where the crypto exchange is headquartered and former FTX boss Sam Bankman-Fried (SBF) was located at the time of his arrest.

## FTX news: who has been named in court filings?

Celebrities such as American football legend Tom Brady, Brazilian fashion model Giselle Bündchen (Brady's former wife), and CEO of the Kraft Group, Robert Kraft, were among those named in the hearings.

Most of FTX's investors and customers facing unfortunate losses have not been mentioned in court filings. At the time of writing, an estimated $8B of customer funds is missing (factoring in the latest recovered funds).

## FTX news: a timeline of events

Here is a timeline of events involving the cryptocurrency exchange and SBF:

•	On 11 November, 2022, FTX, valued at $32B just a year ago, [filed for bankruptcy](/news/article/ftx-bankrupt-who-to-blame).

•	On 12 December, 2022, [SBF was arrested](/news/article/former-ftx-ceo-sbf-arrested) in the Bahamas and extradited to the US.

•	On 13 December, 2022, US federal prosecutors announced eight criminal charges against SBF, including campaign finance violations, money laundering, and wire fraud. This includes allegations of using customer funds to settle debts at his crypto trading firm, Alameda Research, and indulging in other investments.

•	Co-founder of FTX Gary Wang and former head of Alameda Research Caroline Ellison (SBF's rumoured ex-girlfriend) have also been charged [over their purported role](/news/article/sam-bankman-fried-crypto-execs-admit-fraud) in FTX’s calamitous downfall.

•	On 22 December, 2022, SBF was released on a $250M bail bond – one of the largest in US history.

•	SBF, who was [once worth $26B](https://news.yahoo.com/sbf-once-worth-26-billion-092740219.html), pleaded ‘not guilty’ to each criminal charge against him.

In an interview with BBC news before his arrest, Sam Bankman-Fried claimed he had "unknowingly" committed fraud. He did not want the events that unfolded to happen and admitted to being "not nearly as competent" as he thought.


ftx logo on red background with billions of dollars falling from the sky

FTX News: $5B of Assets Recovered

The governor of the French central bank, Francois Villeroy de Galhau, has called for stricter licensing criteria and requirements for crypto companies operating out of France. His comments come after taking into consideration the current turbulence in the crypto market.

During his speech on 5 January in Paris, the Bank of France governor stated that [France should not wait](/news/article/france-crypto-rules-under-pressure) for the upcoming crypto [laws in the EU](/news/article/eu-crypto-regulation-save-energy) to impose compulsory licensing for local digital asset service providers (DASPs).

The Markets in Crypto Assets Bill (MiCA) by the European Parliament lays out a crypto licensing order not expected to be put into force until 2024.

In a 5 January report from Bloomberg, the governor talks about the country's financial industry, stating that all the chaos in 2022 only points to one thing. That is, France should move to a compulsory licensing of DASPs instead of just a registration as soon as possible.

Presently, all crypto businesses that offer crypto custody and training must only register with the Financial Markets Authority (AMF), the country's market regulator.

## The French central bank governor urges for licensing after MiCA amendment proposed

The push for licensing comes after an amendment was proposed in December by Hervé Maurey, a member of the senate finance commission. The amendment called to eliminate a clause that allows companies to operate without a license.

Currently, the laws in France allow companies to operate without needing a license until 2026. This is to remain the same until MiCA passes a regime that does not allow companies to run unlicensed. 

Considerations regarding the amendment will begin in January in the parliament.

MiCA has been a work in progress for the EU parliament since September 2020. On 10 October, a European Parliament committee passed the [crypto framework](https://cointelegraph.com/news/european-parliament-committee-passes-mica-crypto-framework-in-landslide-vote) on Economic and Monetary Affairs as a result of deliberations between the European Commission, EU Council, and European Parliament.


yellow image of french central bank banque de france

French Central Bank Boss Urges Crypto Licensing

Silvergate bank declared on Thursday that it would fire at least 200 employees besides halting plans to develop a blockchain payments network. The drastic action is a consequence of its association with the recent [FTX fiasco](/news/article/ftx-bankrupt-who-to-blame). 

A Wall Street Journal (WSJ) [report](https://www.wsj.com/articles/silvergate-raced-to-cover-8-1-billion-in-withdrawals-during-crypto-meltdown-11672895207) stated that the crypto-focused Silvergate Capital Corp experienced a surge in withdrawals following the collapse of FTX. Consequently, the bank was forced to liquidate $5.2 billion in digital assets it held on its balance sheet leading to losses amounting to $718, which exceeded its cumulative profit since 2013.

## Silvergate Bank sells assets at steep loss

A corresponding 68% decline in deposits during Q4 2022 saw Silvergate's $11.9 billion deposits slashed to a paltry $3.8 billion on 31 December. The bank has been forced to downsize its workforce and sell off its assets at a steep loss to try and rein in costs amidst the ongoing industry downturn. 

The downfall of Sam Bankman-Fried’s FTX, once the world’s second-largest cryptocurrency trading platform, and his subsequent arrest in the Bahamas and [extradition to the USU](/news/article/sbf-agrees-to-return-to-us-for-fraud-charges) has rattled parts of the banking industry.

The events rippling across the budding sector have eroded some people's confidence in crypto platforms. Silvergate bank is among the institutions bearing the brunt. Crypto brokerage Genesis also seems to have 'caught a similar cold’ as it [announced](https://www.bloomberg.com/news/articles/2023-01-05/crypto-brokerage-genesis-eliminates-30-of-staff-in-latest-cuts?srnd=premium) on Thursday of plans to let go more than 60 employees representing at least 30% of its workforce.

## Bullish on crypto

The setbacks suffered by Silvergate haven't gone unnoticed by US regulators, with three Senators asking for more information in a letter addressed to the bank last December asking about the extent of customer losses as FTX went under.

The [letter](https://www.warren.senate.gov/imo/media/doc/Letter to Regulators re Banking System Exposure to Crypto.pdf) hints that there may have been a lapse in Silvergate’s capacity to monitor and report suspicious activity. The bank played a significant role in assisting FTX in transferring customer funds to Alameda. 

Despite the preceding, Silvergate has remained bullish on digital assets and claims to have sufficient funding to manage a "sustained period of transformation".

The bank [stated](https://www.businesswire.com/news/home/20230104005963/en/Silvergate-Announces-Select-Preliminary-Fourth-Quarter-2022-Financial-Metrics-and-Provides-Business-Update): “While Silvergate is taking decisive action to navigate the current environment, its mission has not changed. Silvergate believes in the digital asset industry.”

Silvergate bank said it remained committed to crypto and its recent moves were necessary to survive a tumultuous phase in the crypto economy.


red image of silvergate bank building with dollars falling

Silvergate Bank Loses $718m in Asset Sell-Off

IT and blockchain solutions firm Core Scientific has shut down 37,000 crypto mining rigs it had hosted for Celsius, a cryptocurrency lender. The two companies came to this mutual agreement because Celsius had [gone bankrupt](/news/article/celsius-bankruptcy-protection), and it could no longer afford the massive mining rig farm.

Core Scientific first brought up this complaint in October when it [claimed](https://cases.stretto.com/public/x191/11749/PLEADINGS/1174910202280000000005.pdf) that Celsius had not been keeping up with its due bill payments. The IT firm still managed to hold on to its initial hosting contract for a further two-month period, but eventually filed a motion to cancel the contract between the two companies on 28 December.

According to the information brought up in the court, holding on to the contract was neglecting Core Scientific of about $2 million per month in potential revenue. 

Furthermore, Core Scientific claimed to have covered around $7 million in bills left unpaid by Celsius, but it couldn't "shoulder the burden of Celsius’ unpaid costs” anymore. The rising energy costs due to the ongoing Russia-Ukraine crisis also played a role in Core Scientific’s decision.

Finally, the mining rigs, all 37,000 of them, were shut down on 3 January, 2023, with no plans of restarting them any time soon.

## But why hasn’t Celsius been able to pay its bills?

A few months ago, Celsius filed for bankruptcy; hence, it couldn't afford to pay for the 37,000 mining rigs. The main reason behind the firm's bankruptcy was the downfall of the crypto market itself, as it was tightly correlated with Celsius' business model.

When your main course of business relies on lending cryptocurrency to others on highly lenient loan terms, you’re bound to get hit hard if the value of those cryptocurrencies plummets. That’s exactly what happened to Celsius. With the [crypto market crash](/news/article/crypto-crash) in 2022, along with the entire [Terra Luna debacle](/news/article/terra-luna-collapse), it would’ve taken a miracle for Celsius to have survived.

## A bad year for miners!

2022 served as a horrendous year for the crypto industry, especially for miners. Along with the market crash of major cryptocurrencies, the Russia-Ukraine crisis has also led to increased power costs. Both of these reasons combined have led many crypto miners to lose significant value in their share price.


red image of core scientific ceo and closed sign

Core Scientific Shuts Celsius Mining Rigs 

United States financial regulators have issued their first-ever combined warning to banks regarding cryptocurrency risks and the potential dangers of crypto markets and digital assets.

The regulators warned the financial institutions to guard against fraud, legal uncertainty, and deceptive disclosures by digital asset companies. [A notice was also sent to banks over the "contagion risk" posed by the sector](https://www.bbc.com/news/business-64159452).

It comes less than two months after the trading platform FTX went offline, which sent shockwaves across the cryptocurrency market. The joint statement from the Federal Reserve and Federal Deposit Insurance Corporation, alongside the Office of the Comptroller of the Currency, stated that they were closely watching the activity of banking organizations regarding cryptocurrencies.

According to the statement, "The events of the previous year have been characterized by high volatility and the exposing of weaknesses in the crypto-asset industry."

The authorities also stated that it was "very likely inconsistent with safe and sound banking procedures" to issue or hold tokens stored on public, decentralized networks.

## US regulators issue warning to banks on cryptocurrency risks

In addition, banks were encouraged to take action to prevent issues in the digital asset market from spreading to the broader financial system.

"Risks associated with the crypto-asset sector that cannot be mitigated or managed mustn't move to the financial system," it continued.

"The banking system is not a suitable environment for these risks."

The statement released on Tuesday follows several months of reluctance by watchdogs of the US financial industry to publish universal recommendations on cryptocurrencies, even though institutions have requested clearer advice from authorities.

[The failure of the FTX exchange](/news/article/is-crypto-dead) in November sent shockwaves through the sector. It was the second-largest cryptocurrency exchange in the world, serving as the gateway for millions of consumers to enter the market for digital assets.


sign pointing to safe or risky over red image of american flag and cryptocurrency coins

Cryptocurrency Risks Warning Issued to US Banks

On 15 September, 2022, South Korean prosecutors announced they had requested the international crime agency Interpol to issue Terra Labs co-founder Do Kwon a [red notice](https://www.coindesk.com/business/2022/09/26/interpol-issues-red-notice-for-do-kwon-report/).

The red notice is an international call to arms for all law enforcement agencies to locate and apprehend a person for extradition or similar legal actions.

Putting Do Kwon on the list makes him a man of interest to all law enforcement agencies anywhere in the world, making it difficult for him to hide.

On 19 September, South Korean prosecutors put out an arrest warrant for Kwon. This comes after they launched an investigation into Kwon and some associates at TerraLab after the fall of Terra Luna, which caused investors to lose $60 billion.

## Why was the red notice issued?

According to South Korean prosecutors, reaching out to Interpol for help was a reaction to the TerraLab co-founder's lack of cooperation with the investigation launched after the disastrous collapse of Luna.

## Do Kwon red notice 'hoax'?

Through all of this, Kwon has maintained that the red notice is an elaborate hoax. According to Kwon, the red notice is disputed since he hasn't received any official message.

It isn't only him who thinks this way. Some people also believe the Do Kwon red notice might just be South Korea's way of putting a target on Kwon's back.

## Where is Do Kwon now?

In the months since South Korean prosecutors asked Interpol to put Do Kwon on the infamous red list, the wanted co-founder has been nowhere to be found. Ironically, Do Kwon has made several tweets debunking the allegations that he is on the run and in hiding.

South Korean prosecutors have, however, maintained that Do Kwon has refused to make himself available to face the charges levelled against him in his home country.

Although Do Kwon was said to be in Dubai in October, no one has been able to confirm his whereabouts despite him being a guest on several podcasts. That was until 11 December, when it came to light that [Do Kwon had moved to Serbia](/news/article/do-kwon-hiding-in-serbia) from Dubai. The South Korean authorities are now in talks with Serbia's law enforcement agencies to gain cooperation in apprehending Kwon.



red notice mark on image of Do Kwon, Terraform labs founder. 

Do Kwon Red Notice Explained

In Binance news, a US Drug Enforcement Administration (DEA) investigation has found that a drug cartel operating in several countries used Binance to move millions of dollars in illegal profits.

## DEA tracks Cartel using exchange in latest Binance news

According to a [Forbes](https://www.forbes.com/sites/thomasbrewster/2022/12/19/mexican-drug-gang-money-laundering-over-binance-crypto-exchange/) report, popular crypto exchange Binance is the subject of a DEA investigation alleging that a Mexican-based international drug cartel used the exchange to funnel millions of dollars in profits.

The report said that the DEA, with help from Binance to identify the suspects, was able to track the gang, which dealt in methamphetamine and cocaine. The gang had operations in the US, Mexico, Europe, and Australia.

The report noted, "Between $15 and $40 million in illicit proceeds may have been funnelled through Binance".

The investigation began in 2020 following a search warrant. Several DEA informants using the crypto exchange localbitcoins.com communicated with users who offered crypto for cash.

The method used by the gang was as follows: a user sends [BTC](/coins/btc) or USDC to the seller's account and then meets in person to take the cash. The DEA identified the Mexican national as Carlos Fong Echavarria.

The report mentioned that the suspect misrepresented the source of the funds, claiming they were coming from family eateries and cattle farms. The arrest was made in 2021 after DEA agents confirmed that the account was used to launder funds.

Matthew Price, Binance's senior director of investigations, told Forbes that the blockchain was key.

He said this was an example of where blockchain transaction transparency "works against criminal actors", adding, "The bad guys are leaving a permanent record of what they're doing."

## Binance under the spotlight

The exchange has been under the spotlight lately. However, its CEO, Changpeng Zhao, reaffirmed in a recent [tweet](https://twitter.com/cz_binance/status/1605828931105435648?s=20&t=V_WM8ww3-B-TTZrIrpbaOA) that "crypto is not a good tool for illicit activities, unlike cash".

In a May blog post, Binance [said](https://www.binance.com/en/blog/ecosystem/crypto-and-money-laundering-an-inconvenient-truth-421499824684903925) that the exchange had helped the US Drug Enforcement Agency seize over 100 accounts connected to illegal drug dealers.

A recent [Reuters report](https://www.reuters.com/markets/us/us-justice-dept-is-split-over-charging-binance-crypto-world-falters-sources-2022-12-12/) also noted that Binance might be the subject of a probe by the US Department of Justice. However, a company spokesperson said any DOJ investigation is fueled by false insinuations.



red image of money laundering with binance logo

Binance News: DEA Uses Exchange to Track Cartel

According to a South Korean intelligence agency statement, state-backed North Korea hackers have stolen an estimated $1.2 billion in crypto assets over the last five years.

Analysts and experts have confirmed that North Korea is supporting a number of fraudulent activities and cybercrimes in order to gain access to foreign currency to help its failing economy, which has been harmed by [UN sanctions](https://www.armscontrol.org/factsheets/UN-Security-Council-Resolutions-on-North-Korea) and the aftereffects of COVID-19.

South Korea's National Intelligence Service confirmed that North Korean hackers are among the best at stealing crypto assets, owing to the country's focus on cybercrime as an alternative way to aid its failing economy since the height of United Nations economic sanctions in 2017.

In 2017, the United Nations imposed harsh sanctions on North Korean exports such as textiles and coal. The UN, along with its member states, repatriates North Korean workers abroad. The country's economy was unable to withstand harsh sanctions and the aftermath of the COVID pandemic.

According to South Korea's National Intelligence Service, North Korea crypto hackers are responsible for hacking $1.2 billion in crypto assets in the last five years, with more than $626 million in 2022 alone. It was also confirmed that approximately $78 million of the stolen funds originated in [South Korea](/news/article/south-korea-crypto).

## More attacks expected

According to intelligence obtained by the South Korean Government, North Korean hackers will most likely undertake additional cyberattacks this year to gain access to South Korean technologies and private information on national security and weaponry.

Official state diplomats from South Korea, the United States, and Japan joined forces earlier this month to intensify efforts to combat the cybercrime carried out by North Korea. 

According to UN experts, the country will step up its efforts to steal hundreds of millions of dollars from crypto platforms and other financial institutions.

Despite the fact that North Korea's economic situation remains dire, the government conducted a record number of missile tests in 2022. Experts and analysts believe it has a way to gain leverage and improve its weaponry to negotiate with world powers.


red image of hacker with cryptocurrency and North Korean statues falling

North Korea Crypto Hacks Worth $1.2 Billion 

Two top officials of Sam Bankman-Fried's cryptocurrency empire have admitted to committing fraud. [The Southern District of New York US Attorney announced on Wednesday night](https://www.nytimes.com/2022/12/21/technology/ftx-fraud-guilty-pleas.html) that two former employees of Sam Bankman-Fried crypto businesses had pled guilty to federal criminal fraud charges and are collaborating in prosecuting the disgraced crypto entrepreneur.

Gary Wang, 29, founded the exchange FTX, and Caroline Ellison, 28, ran the cryptocurrency hedge fund Alameda Research. They played pivotal roles in the development of the global Sam Bankman-Fried crypto empire, which he launched with the creation of Alameda and FTX.

Following last week's fraud complaints against Mr. Bankman-Fried, two federal regulatory agencies, the Commodity Futures Trading Commission and the SEC (Securities and Exchange Commission), filed civil fraud charges against Mr. Wang and Ms. Ellison and Mr. Wang on Wednesday.

## Facing further legal trouble as former employees plead guilty to fraud

[Mr. Bankman-Fried is in detention](/news/article/former-ftx-ceo-sbf-arrested) in the Bahamas after agreeing to be extradited to face trial in the US. The 30-year-old is in an especially precarious legal position due to the criminal and civil allegations leveled against the former top executives.

The US Government has accused him of perpetrating a massive fraud lasting for years that led to FTX filing for bankruptcy last month.

Two of his closest advisors are now helping federal prosecutors with their investigation. The friendship between Mr. Bankman-Fried and Mr. Wang and Ms. Ellison extended beyond that of close colleagues. He lived with them in a lavish condominium on Paradise Island, the Bahamas, where FTX was headquartered.

Prosecutors and regulators have filed charges against Mr. Bankman-Fried, alleging that he misappropriated billions of dollars from his customers to fund his activities. These include purchasing real estate in the Bahamas, trading cryptocurrencies at Alameda, funding political campaigns, and investing in other cryptocurrency companies. They say he bilked crypto trading company clients, financiers, and lenders.


Sam Bankman-Fried's Crypto Execs Admit Fraud

Sam Bankman-Fried, the detained founder of the bankrupt crypto exchange FTX, reportedly signed documents on 20 December that will see SBF handed over to Federal Bureau of Investigation (FBI) agents and taken to the United States, where he will face criminal charges.

Bankman-Fried was [reported](https://cointelegraph.com/news/sbf-signs-extradition-papers-set-to-return-to-face-charges-in-the-us) to have agreed to be [extradited](/news/article/former-ftx-ceo-sbf-arrested) to the US just hours after his lawyer told a judge in the Bahamas that he was not ready to consent.

## SBF is to be taken to the US to face criminal charges

According to Bahamas Acting Commissioner of Corrections Doan Cleare, Bankman-Fried signed his surrender documents on Tuesday. Today, SBF will sign separate papers finalising his waiver of rights to fight extradition at the Magistrate's Court in Nassau.
[Bankman-Fried](/news/article/sam-bankman-fried-lost-billions) is expected to be accompanied by FBI agents on a private flight back to the US, where he faces eight counts in an accusation by the US Attorney for the Southern District of New York. 

According to the [New York Times](https://www.nytimes.com/2022/12/20/technology/sam-bankman-fried-bail.html), Bankman-Fried's legal team is negotiating with federal prosecutors to allow him to be released on bail if he is extradited to the US.

According to sources, the agreement, which requires the approval of the federal judge overseeing the SBF case, could include highly restrictive conditions such as home custody and electronic monitoring.

## Allegations on SBF 

The Department of Justice has accused SBF of campaign finance violations, commodities and securities fraud, conspiracy to commit wire and money laundering, and wire fraud.

If found guilty of all charges, he could face up to 115 years in prison.

[The Commodity Futures Trading Commission and SEC (Securities and Exchange Commission) have filed additional charges](/news/article/ftx-boss-denied-bail-in-bahamas) against the founder of FTX for allegedly breaking commodity laws and defrauding investors.

After three years of rapid growth, FTX and numerous related companies filed for bankruptcy last month. The exchange was worth US$32 billion at its peak.

Authorities in the Bahamas and the US continue to investigate the involvement of SBF in FTX's collapse last month. The exchange was headquartered in the Bahamas.



SBF Agrees to Return to US to Face Fraud Charges

According to recent reports, authorities were alerted of the FTX's fraud before it made headlines. [Co-CEO Ryan Salame alerted Bahamian authorities](https://cointelegraph.com/news/ftx-bahamas-co-ceo-ryan-salame-blew-the-whistle-on-ftx-and-sam-bankman-fried) a few days before FTX filed for [bankruptcy](/news/article/ftx-bankrupt-who-to-blame) in November.

He alleged that founder Sam Bankman-Fried might have defrauded investors by [transferring money](https://cointelegraph.com/news/alameda-had-unfair-trading-advantage-special-access-to-ftx-funds-cftc-filing) to his sister company, Alameda Research.

## Ryan Salame takes on FTX and Sam Bankman-Fried

Contrary to the vast majority of market rumours, one of the company's top executives, not Changpeng Zhao (CZ) of Binance, was the one who brought down SBF and FTX. The declaration made on Wednesday is the first time an insider's turn against Bankman-Fried has been acknowledged publicly.

According to Bahamian court documents filed on 14 December, Ryan Salame, the former co-CEO of FTX Digital Markets (FDM), informed the SCB (Securities Commission of the Bahamas) on 9 November that the company was sending client funds to its sister trading company Alameda Research.

Salame claimed that the transfer was neither authorised nor approved by clients and that the money was intended to compensate for Alameda's financial losses. Furthermore, he disclosed to the SCB that only three people had the authority to transfer client assets to Alameda: the engineer Nishad Singh, the former CEO Sam Bankman-Fried, and Zixiao “Gary” Wang, the other co-founder of the company.

Salame claimed that he informed Bankman-Fried and Alameda executives that it was against "normal corporate governance" for client funds to have been mixed with Alameda's.

Following that, Christina Rolle, executive director of the SCB, requested an [investigation](/news/article/ftx-exchange-under-investigation) from the commissioner of the Royal Bahamas Police Force because the information “may have held misappropriation, theft, fraud, or some other crime".

The following day, 10 November, the [SCB froze FDM's assets](https://cointelegraph.com/news/bahamas-securities-regulator-freezes-ftx-assets) and suspended its registration in the country. A provisional liquidator was appointed by the Bahamian Supreme Court to try to save the company's assets.
According to the filings, Salame is believed to be in Washington, DC, and has not spoken publicly since the exchange's downfall.

His most recent public tweet was on 7 November, when he responded "lol" to Binance co-founder Yi He after He explained why the exchange [sold its FTX Token FTT holdings](/news/article/ftx-vs-binance-liquidate-funds).

## The collapse of FTX has had an absurd impact on the industry

Mixing SBF's companies' funds was a significant issue in the FTX scandal. In recent weeks, another former executive from FTX's affiliated companies is thought to have been assisting authorities.

On 4 December, images purportedly showing Alameda CEO Caroline Ellison in a coffee shop near the US Attorney's Office fueled rumours. Following the company crash, the cryptocurrency community believes she may have made a deal with authorities. 

Bankman-Fried is, to date, the only person charged in connection with FTX and Alameda so far. He is [accused](/news/article/ftx-boss-denied-bail-in-bahamas) of money laundering, political campaign finance violations, and wire and securities fraud.

Bankman-Fried, Wang, Singh, and Ellison are said to have run a "wirefraud" group chat on Signal, the encrypted messaging app, to send sensitive information about FTX and Alameda's operations. Bankman-Fried denied any knowledge of or participation in the group.


red image of ftx logo on mobile phone. Ryan Salame sitting in foreground. 

Co-CEO Ryan Salame Exposes FTX Truth

France is under pressure to fix a loophole in upcoming crypto legislation that would give an extended grace period to encourage digital asset businesses to set up shop in the nation with less regulatory monitoring.

Hervé Maurey, a member of the Senate's key finance committee, has offered an amendment to legislation that would remove a provision allowing registered crypto firms to operate in the country without a complete regulatory licence until 2026.

His action puts more pressure on the French Government and regulators over the country's crypto-friendly posture. More rigid EU standards will take effect in 2024, but France plans to keep its existing framework in place for another 18 months.

Critics' fears have grown this year as the values of popular tokens have plummeted, worsened by the collapse of  [Sam Bankman Fried's cryptocurrency enterprise, FTX,](/news/article/ftx-boss-denied-bail-in-bahamas) last month. On Tuesday, US authorities charged Bankman-Fried with crimes, including fraud.

## France crypto position

France has attempted to position itself as one of the most appealing nations for crypto businesses to set up their office, bringing companies such as exchange operator Binance to Paris.

The existing approach permits crypto firms to register in the country without obtaining a full licence, allowing them to operate with limited oversight.

## France crypto firms need to get a licence from regulator

Hervé Maurey’s plan would require corporations to get a licence from the French regulator, the [Autorité des Marchés Financiers (AMF)](https://www.amf-france.org/en), beginning in October next year. Licencing, as opposed to registration, protects consumers and forces corporations to reveal more information about their financial health and control mechanisms. There are more than 50 cryptocurrency firms registered, but none have been awarded a licence.

According to critics, the France crypto existing setup may lead customers to believe regulators actively control crypto enterprises. "The safety afforded by this registration is deficient, if not non-existent," said Thierry Philipponnat, a former AMF board member who left in October.

The Senate approved the proposal on Tuesday. It will be considered by France's parliament in January next year. So far, the French Government has resisted the document, claiming that hastening regulatory requirements could scare away investors.

According to France's Adan, the proposed revisions indicate that the country is "renouncing its desire" to become a crypto centre, and the government is "abandoning an industry of the future" as a result of [FTX's](/news/article/former-ftx-ceo-sbf-arrested) failure.



yellow image of Eiffel tower with crypto falling

France Crypto Rules Under Pressure

A [judge in the Bahamas has refused bail for Sam Bankman-Fried](https://www.bbc.com/news/technology-63967010.amp), the founder and former boss of the bankrupt crypto exchange FTX. According to the most recent sources, he will be detained by Bahamian authorities following his [arrest](/news/article/former-ftx-ceo-sbf-arrested) on 12 December, 2022.

Joyann Ferguson-Pratt, the judge in the case, has scheduled an extradition hearing for 8 February, 2023. The hearing was arranged in response to the decision to deny the former FTX boss bail.

## Ex-FTX boss in court

During the hearing, the attorney for the former FTX boss asked the judge whether SBF might be released on a $250,000 bond. The lawyer argued that his release is required since he requires daily medication.

Prosecutors in the Bahamas resisted the proposal, claiming it violated a treaty with the United States. The attorneys also stated that defendants should be imprisoned while extradition procedures were underway under the treaty provisions.

Bankman-Fried notified the judge that he would not forgo his right to contest the extradition. He then hinted that he could desire to stay in the Bahamas on purpose.

Bankman-Friend, wearing a blue suit without a tie, dropped his head and hugged his parents when the judge ruled that his danger of flight was "very severe". The judge ordered him to be detained in the Bahamas until 8 February.

## Allegations on FTX boss

After the Royal Bahamas Police was informed of a secret indictment by US prosecutors, they arrested SBF on Monday. The arrest was sparked by an unsealed indictment which included eight charges against SBF. These included conspiracy and wire fraud, for allegedly abusing billions of dollars in client payments before his cryptocurrency empire's stunning collapse last month.

Furthermore, the [SEC](/news/article/sec-crypto-enforcement-warning), CFTC, and the US Department of Justice filed complaints against Bankman-Fried on Tuesday for suspected securities and commodities fraud. Bahamas government officials are conducting civil and criminal investigations against him and FTX.

The day's events concluded a remarkable fall from grace for SBF, who created a fortune worth more than $20 billion as he rode a cryptocurrency boom to grow FTX into one of the world's largest exchanges.


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