Tornado Cash, the Ethereum-based non-custodial open source software project, has been sanctioned by the United States’ Treasury department.

The sanctions announced on Monday stop people in the US, and anyone subject to US jurisdiction, from using the cryptocurrency mixer.

All property, as well as interests in property, of Tornado Cash in the US or held by US persons are blocked and must be reported to the Office of Foreign Assets Control (OFAC).

The crypto tool enables users to mix their coins using its smart contract, obscuring the prior trail of coins exchanged over a transparent ledger. 

[The sanction](https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20220808) relates to the smart contract protocol. These actions have created a bad precedent for open-source software development. 

Following the US Treasury's announcement, it was discovered that Circle, the centralised issuer of stablecoin USDC, has also blocked [every sanctioned address](/news/article/crypto-russia) from using USDC. 

As tracked by internet readers, the number of [black-listed](https://dune.com/phabc/usdc-banned-addresses) USDC addresses now stands at 81.

These activities have prompted many to doubt the security of storing digital assets in a centralised location, even for non-criminals who want to employ privacy-enhancing techniques.

## Tornado Cash Co-creator's Github Account Suspended

Roman Semenov, the co-creator of Tornado Cash, had his GitHub (open source development repository) account disabled. He responded by questioning whether it is now illegal to create open-source code.

Considering the nature of the restrictions imposed this could disturb freedom-loving crypto fanatics. 
These activities also offer various tools in the so-called DeFi space which rely on centralised stablecoins and may have centralised development choke points.

As painful as it may seem, Bitcoin's spontaneous and decentralised nature is a reason why such open-source software exists today.

Open-source software will continue to function as intended, but with increased pressure on software/wallet/protocol developers, only the strongest and most truly decentralised networks will remain.

When considering the long-term case for Bitcoin, one of its most compelling value propositions is that it is an asset with no counterparty risk or dilution (devaluation) risk.
 



Tornado Cash Sanctioned by US Treasury

The [senate bill proposed on Wednesday](https://www.protocol.com/bulletins/senate-bill-cftc-crypto) by Michigan Democrat Sen. Debbie Stabenow and Arkansas Republican Sen. John Boozman is the latest attempt in Washington to establish more defined government laws for digital assets. Under this law, the Commodity Futures Trading Commission would be given power over the markets for Bitcoin and Ether, the two major cryptocurrencies.

The CFTC and the SEC have been wrangling for control of cryptocurrencies. Tensions recently heightened when the SEC classified a list of crypto tokens as securities in an insider trading lawsuit, triggering public criticism from Caroline Pham, a CFTC commissioner.

## Senate bill could give clarification

The senate bill proposed could give some clarification. It would give the CFTC direct authority over tokens classified as "digital commodities." According to the bill summary, this covers bitcoin and ether.

Online exchanges and other businesses that assist in token trading would have to register with the CFTC. The bill would also mandate the CFTC to verify crypto businesses, avoid abusive trading practices, have adequate financial resources and appropriate cybersecurity safeguards.

The bill also acknowledges the role of other financial bodies in regulating digital assets that are not commodities but act more like securities or means of payment.

The emphasis on Ether and Bitcoin as commodities is consistent with the views of SEC Chair Gary Gensler, who has stated that most other tokens are likely to be securities.

However, the bill only briefly mentions the classification and uses the examples of Bitcoin (BTC) and Ether (ETH), which the SEC previously classified as commodities. In addition, the law states that any crypto assets that are not deemed as securities by the SEC may bear the CFTC's commodities stamp.

Rostin Behnman, the head of the CFTC, has been vying for a new authority to oversee digital commodities spot markets, where the assets are traded directly. The new legislation would give that power. The bill states that the CFTC would have "exclusive authority over any account, agreement, contract, or transaction involving a digital commodities trade."

A broader [crypto regulation](/news/article/us-sec-regulation) bill submitted in June by Senators Kirsten Gillibrand and Cynthia Lummis considers the CFTC to play a leading role in crypto regulation. Gillibrand and Lummis recently admitted that the complete legislative package was unlikely to pass this year but that some provisions, such as those defining the function of the CFTC, may go through Senate committees.



Senate bill to strengthen CFTC's crypto authority

Israeli authorities implemented further restrictions on cash payments to combat illegal activity and promote the use of [digital payment methods](/news/article/mastercard-crypto-asia).

Due to the Law for the Reduction in the Use of Cash, which came into effect in January 2019, businesses and consumers in Israel are no longer allowed to make payments in cash.

People and businesses are encouraged to use digital payments, making it easier for the government to track illegal activity, tax evasion, and money laundering in the country's black market and elsewhere.

According to the Israeli Central Bank, 6,000 New Israeli Shekels (NIS) for business transactions and 15,000 New Israeli Shekels (NIS) for personal transactions will be the [new limit for cash payments](https://cointelegraph.com/news/israel-puts-the-brakes-on-cash-to-spur-digital-payments) effective August 1, 2022. Additional restrictions, such as a ban on storing more than NIS 200,000 shekels ($58,660) in cash in private residences, are expected shortly.

According to Tamar Bracha, the Israel Tax Authority's (ITA's) head of law enforcement, limiting the availability of cash will make criminal activity more difficult. As a result, "the goal is to reduce market cash fluidity, particularly because criminal organizations tend to rely on cash."

Some have interpreted it as a positive sign of the country's new limits on hard-cash transactions. According to Lark Davis, a crypto influencer with over a million followers on Twitter, Israel is neither the first nor the last country to impose such restrictions. According to the founder of Lyn Alden Investment Strategy, the trend "will probably continue to other countries in the future."

## Cryptocurrency regulation and CBDCs

Central bank digital currencies (CDBCs) are also being explored in the region, with the country first considering a CBDC at the end of 2017. After conducting a public consultation in May, the Bank of Israel released the results of the responses, which indicated strong support for further research into CBDCs and how they would affect the payments market, financial and monetary stability, and legal and technological issues.

In June, the Bank of Israel revealed that it had conducted its first technological experiment with a CBDC, examining user privacy and the use of smart contracts in payments. In addition, a framework for regulating digital assets is being developed in the country.

According to Oz Finance's Jonathan Shek at this year's Israel Crypto Conference in May, Israel's financial regulators have prepared a comprehensive and holistic regulatory framework for digital assets.

Shek hinted that it would happen soon, but he didn't give a specific date, saying that the Israeli government wanted to encourage the development of the crypto industry in their country if it was done responsibly.


Israel halts cash to encourage digital payments

The Law Commission of England and Wales, an independent body created to review and recommend law reforms if needed, confirmed it wants to broaden property rules to the crypto space, including non-fungible tokens as well.

According to the official consultation paper, the government had been asking for a complete review of  the law regarding cryptocurrencies in order to enable their development.

“The Commission’s proposals aim to deliver wider recognition and legal protections for digital assets, allowing a more diverse range of people, groups and companies to interact online and benefit from them,” the [announcement](https://www.lawcom.gov.uk/law-commission-proposes-reforms-for-digital-assets-including-crypto-tokens-and-nfts/) said.

Beside characterizing cryptocurrencies as personal property, reform would include crypto investors  being protected by law in case of losses in hacks or scams.

## Plenty of NFT investors

Commercial and Common Law Commissioner Sarah Green commented there are plenty of [NFT](/news/category/nft-news) investors nowadays who never ask “what happens when things go wrong?”.
“It's not clear at all what happens if you hack into my wallet and take my bitcoin or if ... this system fails and I can't access my Bitcoin,” Green asserted.

The seemingly crypto-friendly proposal is aimed, in part, at helping the U.K. government’s goal of turning the country into a global crypto hub, the commission said in a statement. The commission's proposals, however, would not apply in Scotland or Northern Ireland, which have their own legal systems.

The paper claims the law must acknowledge all unique features of digital assets, including NFTs, that will create a stable legal basis for the crypto industry and its users. With this transformation, the legal system can help create a legally safe environment for cryptocurrencies and the overall market.

This comes in the light of recent announcements by the UK’s Financial Conduct Authority (FCA) that confirmed it has some severe intentions to strengthen cross-border crypto-asset regulation.

It is expected that the UK will become a crypto hub, meaning being more collaborative and innovative when it comes to the supervision of cryptocurrencies in the future.


UK to assess new law defining crypto as property

Kraken exchange, one of the world's largest cryptocurrency exchanges, is under federal investigation for allegedly breaching United States sanctions by enabling customers in Iran and beyond to purchase and sell digital tokens.

Kraken, an $11 billion private entity that allows customers to purchase, trade, or hold multiple cryptocurrencies, has previously faced [regulatory action](/news/article/us-sec-regulation). The Commodity Futures Trading Commission fined the corporation $1.25 million last year for unlawful trading services. 

The cryptocurrency firm would be the largest US crypto business to face OFAC enforcement action. Sanctions on Iran, enacted by the US in 1979, ban the export of goods or services to people or companies in the country.

As the market for digital currencies has risen, the federal government has progressively clamped down on crypto firms. Tether, a stablecoin corporation, was penalised by the CFTC last year for false representations regarding its reserves. Simultaneously, the Justice Department charged an ex-employee of Coinbase, the largest cryptocurrency exchange in the US, with [insider trading](https://www.bloomberg.com/news/articles/2022-07-21/ex-coinbase-manager-arrested-in-us-crypto-insider-trading-case) earlier this month.

## Lawsuit Accused Business in 2019

The Kraken exchange and the subject of sanctions came up in a November 2019 lawsuit filed by a former finance department employee who accused the business of earning money from accounts in sanctioned nations.

Jesse Powell, Kraken's exchange CEO, allegedly stated that he would contemplate breaching the law in various instances if the benefits to the firm exceeded the possible fines. 

However, it is believed Powell stated that the Kraken exchange regularly checks compliance with sanctions laws and, as a general rule, communicates to regulators even possible problems.  

That same year, OFAC began looking into the Kraken exchange, concentrating on the company's accounts in Iran. Sources alleged Kraken users had also created accounts in Syria and Cuba.

A lawyer from a renowned law firm that handles crypto regulations believes that as crypto moves without a bank or intermediaries, exchanges are liable for certain forms of financial regulatory compliance.




Kraken Exchange Under Investigation

If you ask Nikhil Rathi, the new chief executive, FCA crypto regulation may become a new item on its agenda. According to him, the UK’s Financial Conduct Authority (FCA), has some severe intentions to strengthen cross-border crypto-asset [regulation](/news/article/crypto-regulations). 

David Hamilton of Pinsent Masons commented on [Rathi’s recent speech](https://www.fca.org.uk/news/speeches/how-uk-will-regulate-future) on how the US and the UK had “agreed to deepen ties”, regarding financial development. He also added that both countries were “exchanging views on crypto-asset regulation and market developments”. 

“Intensive dialogue between our nations is essential to ensure we deliver consistent outcomes,” said Rathi. He added that since the UK had left the European Union, it got the rare opportunity to connect its regulation to today’s market challenges.

Rathi also confirmed FCA primarily invested in data and technology, and kept scanning 100,000 websites for fraud on a daily level.

“The US and UK will deepen ties on crypto-asset regulation and market developments – including relation to stablecoins and the exploration of central bank digital currencies,” Rathi concluded.

## FCA crypto regulation to be more innovative 

Recently, the UK, US and Singapore launched the International Organization of Securities Commissions (IOSCO) governance body on DeFi and crypto market integrity risks. 

Hamilton commented that Rathi’s speech was vital, especially if viewed in the context of the G20 Financial Stability Board’s (FSB) [announcement](https://www.fsb.org/2022/07/fsb-statement-on-international-regulation-and-supervision-of-crypto-asset-activities/) earlier this month on establishing a new regulatory framework for crypto supervision.

Hamilton also added that Rathi’s speech showed just how important it is for companies to have adequate policies and procedures to comply with the Money Laundering Regulations.
Rachael Preston of Pinsent Masons asserted the speech shows FCA’s intention to become an essential player of the regulatory game. 

“Expect to see a more collaborative, innovative and adaptive style of supervision in the future, with the FCA continuing to push the boundaries of the role of a financial regulator in modern society,” Preston said.

She also added that technology solutions will play a substantial leading role in the FCA’s transformation plans, and will be a key factor regarding its effectiveness. 
 
“The question is whether such an approach can deliver the right outcomes to what is an ever more complex, nuanced and user experience-led market,” Preston said.



FCA crypto regulation – new item in the UK-US financial co-lab

Daniel Shin, the co-founder of Terra Labs, was the subject of attention on Wednesday, July 20, as his home was invaded by prosecutors, according to a [news media report](https://www.msn.com/en-us/money/companies/south-korean-prosecutors-raid-terra-co-founder-daniel-shins-home-report/ar-AAZQNFF?fromMaestro=true).

The report said the raid came about due to investigators believing the crash of the algorithmic stablecoin TerraUSD (UST), which led to the market crash of May, was due to fraud on the part of the executives of the crypto company.

In May, [UST collapsed](/news/article/terra-luna-collapse). It was supposed to hold its peg against the United States Dollar (USD), like Tether (USDT), Circle's USDC, and Binance USD (BUSD), which continue to hover around $1.

This led to several exchanges and hedge funds falling victim to overexposure. Due to the impact of the crash in Terra, investors who poured liquidity into LUNA, the native asset of the Terra ecosystem, filed a complaint against co-founder Do Kwon and Terraform Labs.

Many of the investors' alleged that fraud and extensive violations of securities laws in the country led to them suffering irrecoverable losses.

A series of lawsuits have followed for other projects, with the high-profile case being the suing of self-proclaimed DogeFather Elon Musk by a Dogecoin investor for billions of dollars.

## Why is Daniel Shin being targeted? 

As an executive of Terra Labs, he is in a better position to know the activities that preceded the collapse of one of the most vibrant ecosystems in the crypto finance industry than many. Terra Labs had more than $30 billion in total value locked (TVL) before the market downturn, per DeFiLlama.

In the early days of the week, authorities raided local cryptocurrency exchanges including Upbit and Bithumb.

In June, a travel ban was placed on many stakeholders, including former staff members of Terraform Labs.

Aside from Shin, co-founder Do Kwon is alleged to have evaded the paying of taxes and the government continues to investigate the crypto executive.
The two heads of the crypto firm are residents of Singapore, but it is unclear if they live there on a full-time basis.

With that said, the revival of Terra (LUNA) continues to see above-average liquidity. As of writing, LUNA was exchanging hands for $1.93 and had a trading volume of approximately $58.29 million, per data from CoinMarketCap..


Daniel Shin’s Home Raided by South Korean Authorities

The first case of Coinbase insider trading has resulted in charges. US prosecutors in Manhattan have charged a former product manager with wire fraud, according to the New York Times.

Product manager Ishan Wahi and his brother, Nikhil Wahi, were taken into custody in Seattle on Thursday. Another defendant, Sameer Ramani, remains at large, and the Securities and Exchange Commission (SEC) has filed civil accusations against him as well.

## Coinbase insider trading is the subject of an investigation by the SEC

Lawyers representing Ishan Wahi, 32, released a statement saying that he is "innocent of all crime and intends to defend himself forcefully."

Requests for feedback from Nikhil Wahi's lawyer were not immediately returned. A lawyer for Ramani was not immediately available to Reuters.

Prosecutors allege that[ Ishan Wahi divulged sensitive information](https://www.foxbusiness.com/markets/ex-coinbase-manager-charged-crypto-insider-trading-case) on upcoming Coinbase announcements about additional cryptocurrency assets that users would soon be able to trade on the exchange. He booked a flight to India after being summoned to Coinbase's Seattle headquarters by the company's security director, according to the report.

For the first time in insider trading of digital assets, an ex-NFT marketplace employee has been charged. Law enforcement prevented him from boarding that flight on May 16. The bond for Ishan Wahi was set at $1 million and his passports had to be surrendered.

Despite his alleged attempt to run, prosecutors did not urge that he be arrested. On August 2, he will appear in federal court in Manhattan.

A total of 25 crypto assets were allegedly bought and sold for a profit by Nikhil Wahi (26) and Ramani (33), it states in the related civil accusations, nine of which the SEC said it had classified as securities.

## Cryptoqueen added to FBI's list of top 10 most wanted

The SEC's investigation into Coinbase's listing of the coins deemed securities in the complaint is ongoing, according to an SEC official.
At least 14 times before Coinbase's statements in June 2021 and April 2022, Ethereum blockchain wallets were used to acquire the assets, according to prosecutors.

At least $1.5 million in ill-gotten gains were generated as a result of these transactions.

An internal investigation into the trading was shared with authorities, according to Coinbase's chief security officer Philip Martin. 

For breaking crypto news on Coinbase and more, go to [Latest Moni](/news).


Insider Trading Charges Filed Against Ex-Coinbase Manager

Binance is one of the world's major cryptocurrency exchanges. However, the firm has received criticism from authorities due to lack of necessary permissions.

The latest Binance news covers the exchange platform being [fined 3.3 million euros (£2.8million) by the Dutch Central Bank (DNB)](https://watcher.guru/news/heres-why-the-dutch-central-bank-fined-binance-for-3-3-million) in April 2022. The penalty was levied because the exchange provided services to Dutch nationals without being properly registered. The DNB's General Fine Setting Policy was used to calculate the amount to be paid as fine.

In a statement issued on Monday, the regulator stated that violations committed by Binance are punished by third-category penalties, with a base amount of €2 million (£1.7 million).

This basic amount was increased for Binance, with DNB outlining many reasons for doing so.

According to DNB, one of the reasons is that digital asset brokerage behemoth is not only the largest supplier of crypto services globally but also has a high number of consumers in the nation.

Since May 21, 2020, the Dutch Central Bank has mandated virtual asset service providers (VASPs) to be registered under the Anti-Money Laundering and Anti-Terrorist Financing Act.

According to the authority, Binance violated the registration regulations from May 21, 2020, until last December 1, 2021, when DNB finished its inquiry.

According to DNB, this is the major reason for the higher penalties because these offences are considered extremely serious.

DNB warned Binance in August 2021 that operating in the Netherlands without the appropriate legal registration "may increase the risk of customers becoming involved in money laundering or terrorist financing."

However, the DNB stated that it has reduced the punishment by 5%, partly because Binance has already submitted a registration application, which is presently being reviewed, and because the exchange has been "relatively transparent about its operations throughout the process."

The crypto exchange has been steadily expanding across Europe. Binance revealed last week that its Spanish subsidiary, Moon Tech Spain, has been registered as a VASP with the Bank of Spain.

Both France and Italy certified the crypto exchange as an official digital asset supplier in May of this year.

Read [Latest Moni](/news) for more crypto news. 



Binance news today: DNB fined Binance 3.3 million euros

It seems the crypto brokerage Genesis filed the claim against the bankrupt crypto hedge fund Three Arrows Capital (3AC) which allegedly owes it $1.2 billion. 

Genesis is not the only creditor who filed the claim. According to the sources familiar with the situation, co-founder of 3AC Zhu Su submitted $5 million claim, while Chen Kaili Kelly, the wife of another 3AC co-founder, Kyle Davies, filed a $66 million worth lawsuit.

Also, faltered crypto companies [Celsius Network](/news/article/celsius-bankruptcy-protection) and Voyager Digital are among others who lent money to Three Arrows. A crypto derivatives exchange Deribit also filed an $80 million claim.

Genesis Asia-Pacific earlier has confirmed its exposition to Three Arrows. On July 9 filing in Singapore, high court revealed there was a $2.36 billion loan to the fund. Genesis CEO, Michael Moro recently [tweeted](https://twitter.com/michaelmoro/status/1544733041045786626) about the whole situation admitting the loans to Three Arrows “had a weighted average margin requirement of over 80%." According to Moro, "once they were unable to meet the margin call requirements, we immediately sold collateral and hedged our downside”.

## Genesis reveals crypto Ponzi scheme

The company confirmed that since then, it has been collaborating with Digital Currency Group to find the optimal strategy for isolating the risk further. 

“DCG has assumed certain liabilities of Genesis related to this counterparty to ensure we have the capital to operate and scale our business for the long-term,” Moro said.

He added that both the DCG and Genesis balance sheets remain stable and that there is no remaining exposure to Three Arrows Capital.

There is still a legal question here of how a co-founder could at the same time be a creditor to his own company. It all adds up to the Ponzi scheme where old investors are funded with money from the newcomers.

When looking at the filings, it was reiterated that “3AC is insolvent and should be wound up” in different words. 

In an affidavit filed June 26, Charles McGarraugh, Blockchain.com’s Chief Strategy Officer, claimed that Kyle Davies wanted to borrow another 5,000 Bitcoin from Genesis, valued at approximately $125 million at the time. He said the reason for credit was “to pay a margin call to another lender.” 

Genesis crypto brokerage files $1.2B claim vs 3AC

US SEC chairman outlines what to expect from the authority regarding crypto regulation. SEC’s duties being the primary watchdog for securities, finance, and investments will expand. 

## Global cryptocurrency regulations

The need for crypto laws arose after a down market and the [collapse of Terra UST](/news/article/terra-luna-collapse), which caused investors to lose a massive amount of their investments. As a result, China openly prohibited the use of cryptocurrencies, while Russia prohibited its use as a payment alternative.

The US remained hesitant to finalise the proposed crypto regulations until Biden requested the crypto regulation draft from the US SEC authority. The regulation draft is submitted for review and is anticipated to be deployed shortly.

As the deadline for implementing crypto laws approaches, the SEC has geared itself for the duties that will fall on its shoulders soon. US SEC chairman spoke to Yahoo Finance about the details of their forthcoming duties once the laws are implemented.

## US SEC and cryptocurrency regulation

Gensler stated that the new cryptocurrency regulation would assist investors and customers by protecting them from any difficulties caused by service providers. Their primary focus areas, according to Gensler, will be exchanges, brokerage, and loans. He stated that they are contacting stakeholders to notify them of their needs.

While stating that they are open to conversations and discussions, he also invited exchangers, lenders, and other dealers to come and speak with them. 

He noted that Congress had given the SEC authority to change some laws to better safeguard investors, stating:

“We do have robust authorities from Congress also to use our exemptive authorities that we can tailor investor protection.”

They even have the authority, he claims, to request tokens for disclosures. He stated that the public has the right to comprehensive and honest disclosures, which would serve as their primary safeguard.

Because the SEC is obliged to cover tokens, stablecoins, and volatile coins, they will also have the power to consult with banking authorities and the CFTC. He has emphasised that Bitcoin is not a security coin and that the CFTC would decide the remainder of the coins and tokens status. He has also cautioned that many crypto coins will fail, so investors should exercise caution.







US SEC Chairman outlines crypto regulation

Paraguay crypto bill that regulates cryptocurrency mining and trading within the country, has finally been approved by the country’s Senate.

The deputy chamber [approved the bill](http://www.diputados.gov.py/index.php/noticias/aprueban-con-modificaciones-proyecto-que-regula-la-industria-y-comercializacion-de-criptoactivos) but added some changes regarding electricity consumption in Paraguay. President Mario Abdo Benítez is now obliged to decide whether he will support, sanction or apply a veto to the bill.

Counting 7 million electricity users, Paraguay mostly depends on hydroelectric generation as the country also serves as a significant energy exporter. 

However, the electricity expenditure rose by over 100% in the last 12 years, while its generation is falling. The state power operator, Administración Nacional de Electricidad (ANDE), wants to urge a new consumption plan within the next few years. 

On the other hand, Paraguay’s central bank worries that the fact that cryptos are still not regulated as payment in the country could lead to halts in electricity consumption associated with crypto mining.

According to the bill, Paraguay’s Ministry of Industry and Commerce will be the governmental body that will regulate cryptocurrency-related services.

## Paraguay crypto bill tax excludes paying VAT

The bill, therefore, urges [crypto mining companies](/news/article/mining-company) to come up with a power consumption plan and present it to the national power body, which will be authorized to cut the electricity if the companies do not act according to these plans. Also, the bill defines that the payment for the power services is made in advance.

Furthermore, crypto miners won’t have to pay their VAT but are obliged to pay income taxes.
However, some lawmakers have shown their disapproval about the law's approval in its current form, with some calling for a presidential veto.

However, the bill was not approved easily. Senator Esperanza Martínez mentioned that the Guasu Front Bank did not comply with the project, adding that cryptocurrency is not an industry per se as it doesn’t process either raw material adding value, or employing people.

"Both versions are detrimental to the country," she said. 

Senator Enrique Bacchetta commented that he had voted for rejection at the time because this initiative did not produce jobs.




Senate approves Paraguay crypto mining bill

The South African crypto market is about to welcome a new regulatory framework. The South African Reserve Bank (SARB) has introduced amendments to its financial laws. According to the new regulations, [Bitcoin](/coins/btc) and other altcoins will now be identified as financial assets. 

The country has long discussed whether cryptocurrencies should be categorised as financial assets or only digital currencies. Now the SARB has finalised the regulations for cryptocurrencies and introduced a ruling for them to be considered assets. 

Previously, the South African crypto market was thriving on its own. This newly introduced framework by SARB will help in regularising the market. The Deputy Governor of SARB, Kuben Naidoo, believes that there is a need for a framework to regulate the market and promote the adoption of cryptocurrencies. 

In a webinar, he further acknowledged that SA Reserve Bank has changed its stance on [digital coins](/coins) and, tokens and is now working on its regularisation of disclosures. Moreover, he provided a timeframe of 12 to 18 months for the complete implementation of the framework. But, he assured us that KYC rules and authorisation of crypto exchanges were possible earlier. 

## Key points from South Africa’s crypto regularisation 

Here are some key points from recent crypto regularisation in South Africa:
1.	All cryptocurrencies are declared as financial assets.
2.	The services related to cryptocurrencies will fall under financial services.
3.	All crypto exchanges will be provided with a licence. 
4.	The Financial Intelligence Centre Act (FICA) will monitor the country's crypto market.
5.	FICA will also oversee tax evasion and money laundering issues related to cryptocurrencies.  

## The future of cryptocurrencies in South Africa

South Africa is one of the leading countries for adopting cryptocurrency. According to the research [report by Luno Global Exchange](https://discover.luno.com/research-the-state-of-crypto-in-africa/), around 13% of the country's population owns various cryptocurrencies. However, there was no monitoring policy for the industry before the recent announcement by the Reserve Bank. 

The rules SARB has now introduced can help in the growth of digital currencies across the country. It is expected that regularisation will lead to the mass adoption of crypto in South Africa. Moreover, it will provide a robust infrastructure for investment. Besides, it will mitigate the risks and bring financial stability to the country.




South Africa crypto embraces new regulatory changes

Even though we recently wrote about [Celsius’ possibility of getting back on track](/news/article/celsius-news-new-lawyers), the company has decided to file for bankruptcy protection.

According to the [official announcement](https://www.businesswire.com/news/home/20220713005911/en/Celsius-Network-Initiates-Financial-Restructuring-to-Stabilize-Business-and-Maximize-Value-for-All-Stakeholders), the faltered company filed voluntary petitions for Chapter 11 protection and announced the initiation of a financial restructuring.

Previously Celsius asserted it would focus on stabilisation of its business by restructuring in a way “that maximizes value for all stakeholders.” It then confirmed having $167 million in cash in order to support operations until everything is finished

The firm stated that the filing follows “the difficult but necessary decision by Celsius last month to pause withdrawals, swaps, and transfers on its platform to stabilise its business and protect its customers”. 

“Without a pause, the acceleration of withdrawals would have allowed certain customers—those who were first to act—to be paid in full while leaving others behind to wait for Celsius to harvest value from illiquid or longer-term asset deployment activities before they receive a recovery”.

Celsius hiring new directors

Celsius CEO Alex Mashinsky added that he believes this was the right decision for the clients and the company itself. 

“We have a strong and experienced team in place to lead Celsius through this process. I am confident that when we look back at the history of Celsius, we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company,” he concluded.

Last week, the firm replaced its legal advisers Strauss Hauer & Feld LLP with newly appointed Kirkland & Ellis LLP. The company still hasn’t filed for bankruptcy and hopes that pairing up with Kirkland & Ellis LLP could represent a shift in the overall strategy.

Analysts mostly agree the move was expected. The firm also hired new directors: David Barse, the Chief Executive Officer of XOUT Capital, and Alan Carr, founder and managing member of Drivetrain, LLC, a professional fiduciary services firm.

With more than 100,000 creditors and the largest unsecured claim of $81 million from Caymans Island-based Pharos Fund, the filing also mentions FTX CEO Sam Bankman-Fried’s trading firm, Alameda Research, as a creditor with a $12 million unsecured loan.



Celsius filing for bankruptcy is imminent

The latest Celsius news is that just 28 days [after it halted withdrawals for its users](/news/article/celsius-crypto-freezes-withdrawals), the troubled crypto lender decided to hire a new law force to help its restructuring process.

According to [sources](https://www.wsj.com/articles/troubled-crypto-lender-celsius-hires-new-restructuring-lawyers-11657473712), the company replaced its lawyer advisers Strauss Hauer & Feld LLP with newly appointed Kirkland & Ellis LLP. The company still hasn’t filed for bankruptcy and hopes that pairing up with Kirkland & Ellis LLP could represent a shift in the overall strategy.

Celsius, which was managing almost $11.8 billion in assets for its 1.7 million users as of May, decided to pause all withdrawals last month, explaining that "extreme market conditions" led to this decision.

As sort of a buffer, Celsius proposed high-yield loans of up to 18% on deposits and reiterated its users "will continue to accrue rewards" during Celsius’s “half-time”.

"We are taking this necessary action for the benefit of our entire community in order to stabilise liquidity and operations while we take steps to preserve and protect as diligently in order to face all challenges," the company said.

Be it as it may, Celsius isn't the only crypto firm collaborating with Kirkland & Ellis. Voyager Digital, which recently filed for chapter 11 bankruptcy, also went with the company to try to solve the issues of its clients' wanting to withdraw funds from the company.

Celsius, however, hasn't been in an enviable situation. An ex-crypto money manager has sued the company on charges that Celsius used client funds to cover its deficits in the lending business. According to Arkham Intelligence, that manager is said to have cost Celsius $61.2 million in liquidations.

The company has allegedly also approached Alvarez & Marsal for restructuring options and, in late June, it fired John Stephen Dubel, founder of restructuring services provider Dubel & Associates, after only eight days of service.

In last week's Celsius news it was confirmed that the company had managed to repay its debt to Maker, giving back 41.2 million in DAI that unlocked 21,962 in wrapped Bitcoin (WBTC), worth around $440 million.

Blockchain intelligence firm Nansen revealed that Celsius now has a total of $213 million in outstanding debt; 63% of this falls to Aave and 35% to Compound.


Celsius News: Troubled Firm Hires New Lawyers

The Singapore crypto scene is one of the main attractions in the unregulated digital currency landscape due to the country’s friendliness towards the new financial revolution. 

Unfortunately, the country’s regulator’s tightening on digital finance in[ June](https://cointelegraph.com/news/brutal-and-unrelentingly-hard-singapore-regulator-s-clampdown-on-crypto) contradicts Tharman Shanmugaratnam, a senior minister in the Cabinet who saw a lot of positives in digital assets in the sovereign island country and this has sent shockwaves across the markets. 
On Thursday, June 23, the central bank and financial regulator of one of Asia’s booming economies pledged to be unrelentingly hard and brutal on any transgression from major stakeholders in the digital currency industry. 

These comments were made by Sopnendu Mohanty, the Chief Fintech Officer of the Monetary Authority of Singapore (MAS) who explained in an interview with the Financial Times (FT) which was highly monitored by [MoniTalks. ](/news)

The Fintech Officer also criticized market participants who believe the country is losing its status as a friendly state for alternative finance. 
He responded that his country should not be friendly with decentralized finance because it can only deal with actors in a real economy and not some “unreal economy”.

To many firms in the space, this is a complete turnaround from what cabinet minister Shanmugaratnam said in October 2021. 
At the peak of the markets during the first month of the last quarter of 2021, he pointed out that digital tokens may have a role in future finance that goes beyond illicit finance and pure speculation. 

He added that the country was laying the foundation for becoming a crypto-technology hub which will make it easy for tokenization, trading, and custody services to be provided by companies. 

With that said, Chief Fintech Officer, Sopnendu Mohanty believes the current financial crisis can be attributed to the world being lost in private currency. 

As a result, the Asian state has enacted a painfully slow due diligence process that grants licenses to businesses associated with the digital currency market. 

Singapore crypto became a mainstay in the space because firms enjoyed low taxes. 

Unfortunately, the view in which the minister sees a place for crypto in the Asia hub has been replaced by regulations that aim to pave the way for the introduction of central bank digital currency (CBDC) which could be launched in the next three years. 


Singapore Regulator’s Clampdown on Crypto

Commenting on crypto tax, UK Conservative MP Matt Hancock said that the country needs to be more liberal in its approach to regulation. He argued it should introduce an “attractive” regime so it can maintain its position as the cryptocurrency hub of Europe. 
“The tax and regulatory regime needed to be dealt with quickly”, Hancock stated.

His words were heard by the ex-Chancellor Philip Hammond who said England is slowly trotting after its competitors regarding the regulation of digital assets since some countries, such as Korea, already decided on a [crypto tax](/news/article/south-korea-crypto) that would be optimal for consumers.
He stated the UK must activate itself quickly since, for now, it doesn’t look like it will maintain its position as a global cryptocurrency center.
 “It isn't too late for us to catch up and recover, but we are getting very close to the point where it will be too late,” he said and added development around legislation of the whole digital asset industry moves pretty slowly. 

Hammond stated that the FCA should have been faster in employing the industry experts. “We need the industry, to provide us with the talent to work up the regimes we need to introduce,” he said.


## Crypto tax, UK free zone

Still, there are more possibilities and reasons why we think the UK could become the real global hub when it comes to cryptocurrencies. Let's look at the advantages of being headquartered in the UK Channel Islands. The [Isle of Man](https://www.digitalisleofman.com/sectors/blockchain/) gives investors a pretty good opportunity for their crypto-based, with 0% standard rate of corporate tax, no capital gains tax and personal tax rates that are among the lowest in Europe.

The self-governing British Crown dependency has been a famous IT and financial hub for years and with it being more welcoming towards the cryptocurrency industry – UK Channel Islands seem like an attractive home to the crypto participants.

Also, according to a new PwC Channel Islands report, one in five British citizens already own cryptocurrency. With that in mind and Tether recently [launching a stablecoin pegged to the British pound](/news/article/best-crypto-exchange-uk)  - these are supportive signs that the UK that bodes well for the future prospects of the UK being a crypto hub.



UK tax environment supportive for crypto hub 

Elon Musk, the CEO of Tesla and SpaceX, was sued for $258 billion by a [Dogecoin](/coins/doge) investor on Thursday, alleging him of operating a pyramid scheme to support the cryptocurrency.
 
Plaintiff Keith Johnson filed a case in federal court in Manhattan accusing Musk, electric vehicle firm Tesla Inc, and space tourism company SpaceX of racketeering for promoting Dogecoin and pushing up its price, only to see it plummet.
 
## Plaintiff Keith Johnson's Statement

"Defendants were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading," 

"Musk used his pedestal as World's Richest man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure and amusement."
 
According to the complaint, Warren Buffett, Bill Gates, and others have [questioned the worth of Bitcoin](https://news.sky.com/story/elon-musk-sued-for-258bn-over-claims-he-ran-a-pyramid-scheme-to-promote-dogecoin-12635334). Tesla, SpaceX, and Musk's lawyer did not immediately respond to the request for comment.

Johnson's lawyer did not reply to requests for comment on what proof his client has or expects to have that indicates the dog focused meme coins worthless, and the defendants conducted a pyramid scheme.

Johnson is claiming $86 billion in damages, which he claims represents the fall in Dogecoin's market value since May 2021 and wants it tripled. He also demanded Elon Musk and his firms be barred from marketing Dogecoin, and a judge to decide that trading Dogecoin is illegal under federal and New York law.

According to the lawsuit, the selloff of Dogecoin began around the time Musk presented the NBC show ‘Saturday Night Live’ and, playing a fictitious financial expert on a ‘Weekend Update’ segment, called cryptocurrency "a hustle." Tesla said in February 2021 that it had purchased $1.5 billion in bitcoin and had temporarily accepted it as payment for vehicles.

Dogecoin was trading at around 5.8 cents on Thursday, down from its top of almost 74 cents in May 2021.




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