19 Burst results for "Ofac"
CipherTrace
OFAC updates its Specially Designated Nationals List
"2 a.m. Saturday, February 4th, 2023. Opaque updates its specially designated nationals list. On February 1st, 2023, the United States office of foreign assets control of updated its specially designated nationals SDN list, adding specific Ethereum and Bitcoin addresses along with several individuals and entities of which sits within the U.S. Department of the Treasury, administers, and enforces economic and trade sanctions based on U.S. foreign policy and the post OPEC updates its specially designated nationals list appeared first on cipher trace.
The Crypto Overnighter
"ofac" Discussed on The Crypto Overnighter
"And it's Wednesday, February 1st, 2023. And we're going to start with some legal news again today. U.S. district judge Paul englemere is the judge in charge of a class action lawsuit. In this lawsuit saw former coinbase customers accuse coinbase of selling them unregistered securities. In addition, it accused coinbase of failing to register as a broker dealer. Well, in a filing produced today, judge englemere rejected those claims. This is an Underwood versus coinbase global. The case found in the southern district of New York also named CEO Brian Armstrong as a defendant. Now, the judge decided to throw the case out because of the plaintiff's claims in their amended complaint. The judge said those changes added numerous allegations that directly contradicted their initial complaint. And while this is some good news for coinbase, their troubles aren't quite over. They're still named in other class action lawsuits, including in Georgia and in New Jersey. The UK peeled back the curtain on their impending legislation. On February 1st, the UK treasury published a consultation paper. In this paper is full of stricter rules for investing. So now we're getting our first look at what they want to do with crypto regulations. In its clear from the outset that this is intended to be a comprehensive framework. While some countries are introducing crypto legislation in stages, the UK government produced a broad framework. This document covers topics including regulations on crypto service providers and lending platforms, also there are sections on requirements, customer protection, disclosures, and preventing market abuse. Now, almost as if he were ignoring the previous year, the economic secretary to the treasury, Andrew Griffith, said that he hopes for clear, effective, timely regulation, and proactive engagement with industry. In the crypto industry seems to be giving the bill the nod of approval. Ian Taylor is the board adviser of crypto UK. He put out a statement that his group would be pushing for legislation that is quote fit for purpose. He said, as the voice of the UK's crypto sector, we welcome this positive step toward greater regulatory clarity. Given the provisions within the proposed legislation, consultation with the industry could not be more critical.
Bitcoin Audible
"ofac" Discussed on Bitcoin Audible
"The blockchains unanimously described themselves as, quote, smart contracting platforms, and the native coins as gas for paying for computation. Of course, we should look at how these assets are used, rather than taking statements made by their creators at the time of their creation as gospel. Not only might they be used as money regardless of these statements and accompanying design decisions, but as it happens, Ethereum developers have gone on to make centralized changes to optimize monetary policy to compete with Bitcoin as money. EIP 1559 and others, but we would argue that the centralization that enabled this change is self defeating. A similar problem in this regard is that all not just eth were pre mind to a greater or lesser extent. This is a touchy and sometimes overblown point given the purpose of a pre mine is typically to fund protocol development in exactly the same way as with a seed investment in a company. But this observation properly captures how these tokens came about and how they should be conceived of. They are securities. Their issuance and control are far too centralized to constitute credibly decentralized money, as is the scope of what they are intended to be quote spent on. One counter argument might be that the de facto state capture of Ethereum in gradually becoming more and more OFAC compliant could at the same time be said to give it practical grounds to become more accepted as money. Via state enforcement and more transparent than Fiat currencies in traditional finance also. However, the cost is, once again, explicitly the loss of decentralization. So whatever kind of money it is, it is not decentralized, and therefore can not contribute credibly to decentralized finance. Conceiving of eth and similar as first and foremost computational resources, IE gas tokens, which happen to have taken on vastly inferior monetary properties to Bitcoin, strikes us as more appropriate. Recall above we described them as pseudo money. Money that can only be redeemed for one computational service. That is, to whatever extent they were not centrally issued as securities. Which we again feel as appropriate. Why so serious? In part one, we have covered the conceptual criteria we feel is necessary to credibly capture decentralized finance. The reader might be wondering, are we just ruling out everything we dislike based on pedantic definitions and ignoring the reality of development in crypto DeFi?
The Breakdown
"ofac" Discussed on The Breakdown
"First, one of the most significant tipping points in the regulatory discussion this year happened when the office of foreign asset control or ofac sanctioned tornado cash. Tornado cash is a mixing service that adds privacy to crypto transactions by making it difficult to see inputs and outputs. The sanctions brought up some serious questions. In fact, I would argue that they were one of the most galvanizing actions the government has ever taken against crypto. One of the big questions was did ofac actually have the authority to sanction a smart contract. This was completely new territory and caught a lot of people off guard. We've seen sanctions in the past, but they've always been for individuals, but not for entire protocols or smart contracts. Another question was even if effect did have that authority. Is it technically feasible in the case of digital asset addresses are of course public, meaning that people could be sent tainted assets against their desires? That is in fact exactly what happened in the hours after the sanctions were announced. Last week, I had David Hoffman from bankless on the show to discuss the lawsuit that he coin center and others were party to against the treasury. The lawsuit was focused on the compliance requirements now placed upon him for life because he was dusted with tornado cash related eth as a prominent public figure. Anyway, this is obviously been a situation that people are watching closely, and this week we got some updates. The Department of the Treasury who runs and who is responsible for maintaining the sanctions list has delisted and re designated tornado cash. This is perhaps in response to legal challenges, but it also could be a measure to turn up rhetoric regarding North Korea. The first sanctions happened in August and again the big issue was that the quote unquote designated person being sanctioned appeared to be the actual smart contract that governs the operation of tornado cash rather than a person or organization as required theoretically by sanctions legislation. In what appears to be a step to rectify the situation, the treasury has clarified that the organization being sanctioned is the tornado cash organization. The treasury goes on to describe the organizational structure consisting of tornado cash's founders and developers, as well as the Dow formed around the service.
The Breakdown
OFAC Backtracks (Somewhat) on Tornado Cash Sanctions
"First, one of the most significant tipping points in the regulatory discussion this year happened when the office of foreign asset control or ofac sanctioned tornado cash. Tornado cash is a mixing service that adds privacy to crypto transactions by making it difficult to see inputs and outputs. The sanctions brought up some serious questions. In fact, I would argue that they were one of the most galvanizing actions the government has ever taken against crypto. One of the big questions was did ofac actually have the authority to sanction a smart contract. This was completely new territory and caught a lot of people off guard. We've seen sanctions in the past, but they've always been for individuals, but not for entire protocols or smart contracts. Another question was even if effect did have that authority. Is it technically feasible in the case of digital asset addresses are of course public, meaning that people could be sent tainted assets against their desires? That is in fact exactly what happened in the hours after the sanctions were announced. Last week, I had David Hoffman from bankless on the show to discuss the lawsuit that he coin center and others were party to against the treasury. The lawsuit was focused on the compliance requirements now placed upon him for life because he was dusted with tornado cash related eth as a prominent public figure. Anyway, this is obviously been a situation that people are watching closely, and this week we got some updates. The Department of the Treasury who runs and who is responsible for maintaining the sanctions list has delisted and re designated tornado cash. This is perhaps in response to legal challenges, but it also could be a measure to turn up rhetoric regarding North Korea. The first sanctions happened in August and again the big issue was that the quote unquote designated person being sanctioned appeared to be the actual smart contract that governs the operation of tornado cash rather than a person or organization as required theoretically by sanctions legislation. In what appears to be a step to rectify the situation, the treasury has clarified that the organization being sanctioned is the tornado cash organization. The treasury goes on to describe the organizational structure consisting of tornado cash's founders and developers, as well as the Dow formed around the service.
The Breakdown
"ofac" Discussed on The Breakdown
"What's going on guys? It is Saturday, November 12th, and that means it's time for the weekly recap. Before we get into that, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review or if you want to dive deeper into the conversation. Come join us on the breakers Discord. You can find the link in the show notes or go to bit LY slash breakdown pod. All right guys, so again, sorry to disappoint, but as of recording, this is Wednesday, November 9th. I still don't know
CoinDesk Podcast Network
"ofac" Discussed on CoinDesk Podcast Network
"It is Saturday, November 12th, and that means it's time for the weekly recap. Before we get into that, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review or if you want to dive deeper into the conversation. Come join us on the breakers Discord. You can find the link in the show notes or go to bit LY slash breakdown pod. All right guys, so again, sorry to disappoint, but as of recording, this is Wednesday, November 9th. I still don't know anything. I still can't say anything. So obviously it's quite clear what the big story of the week is. But at the moment, I must continue to remain quiet on that particular story. That said, there were a few other important stories, things that would be covered this week normally as the title for an entire show. And so I wanted to use the weekly recap to do a couple of those stories. First, one of the most significant tipping points in the regulatory discussion this year happened when the office of foreign asset control or ofac sanctioned tornado cash. Tornado cash is a mixing service that adds privacy to crypto transactions by making it difficult to see inputs and outputs. The sanctions brought up some serious questions. In fact, I would argue that they were one of the most galvanizing actions the government has ever taken against crypto. One of the big questions was did ofac actually have the authority to sanction a smart contract. This was completely new territory and caught a lot of people off guard. We've seen sanctions in the past, but they've always been for individuals, but not for entire protocols or smart contracts. Another question was even if effect did have that authority. Is it technically feasible in the case of digital asset addresses are of course public, meaning that people could be sent tainted assets against their desires? That is in fact exactly what happened in the hours after the sanctions were announced. Last week, I had David Hoffman from bankless on the show to discuss the lawsuit that he coin center and others were party to against the treasury. The lawsuit was focused on the compliance requirements now placed upon him for life because he was dusted with tornado cash related eth as a prominent public figure. Anyway, this is obviously been a situation that people are watching closely, and this week we got some updates. The Department of the Treasury who runs and who is responsible for maintaining the sanctions list has delisted and re designated tornado cash. This is perhaps in response to legal challenges, but it also could be a measure to turn up rhetoric regarding North Korea. The first sanctions happened in August and again the big issue was that the quote unquote designated person being sanctioned appeared to be the actual smart contract that governs the operation of tornado cash rather than a person or organization as required theoretically by sanctions legislation. In what appears to be a step to rectify the situation, the treasury has clarified that the organization being sanctioned is the tornado cash organization. The treasury goes on to describe the organizational structure consisting of tornado cash's founders and developers, as well as the Dow formed around the service. However, they were also explicit in saying that none of the founders developers are members of the Dow were sanctioned as individuals, which is definitely dancing in some strange gray areas. The legal issue now turns to whether or not the smart contracts deployed by tornado cash developers can properly be classified as their property. Sanctions only prevent U.S. citizens from participating in dealings with a sanctioned person's property or interest in a property. The TC smart contracts are immutable once deployed, but the treasury still seems to be framing the situation as one where the TC organization is providing ongoing services which can be withdrawn. As mentioned before, coin center is currently conducting a lawsuit against the treasury, which seeks to dismiss the sanctions against tornado cash. Coin centers head of research Peter van Walt tweeted today repealed the tornado cash designation that coin center is challenging in court, and then replaced it with a new one. Nothing they've announced changes our strategy in the lawsuit. There's also a new FAQ about the entity being sanctioned, which creates more questions than answers. These developments underscored the arbitrary and capricious nature of treasury's actions and their continued misunderstanding of the technology. Now, from the treasury's note in discussing the implications of the sanctions, they seem to imply that the current censorship of Ethereum blocks by U.S. based validators is required to avoid penalty, and noted that quote, any foreign financial institution that knowingly facilitates a significant transaction or provides significant financial services for any of the individuals or entities designated today, could be subject to U.S. correspondent or payable through account sanctions. The announcement also leaned heavily into discussions of TC by North Korean state sponsored hackers Lazarus group, stating quote, tornado cash, an entity that provides virtual currency mixing services, obfuscated the movement of over $455 million stolen in March 2022 by the O fact designated DPRK controlled Lazarus group in the largest virtual currency heist date. They also explicitly reference the connection with North Korea's nuclear program. Quote, this action is part of the United States ongoing efforts to limit the DPRK's ability to advance its unlawful weapons of mass destruction and ballistic missiles program that threaten regional stability and follows numerous recent DPRK ballistic missile launches. Now, one of the critiques of this entire saga has been that the treasury appears to be making rules for crypto technology that it doesn't sufficiently understand. For example, this round of sanctions appears to include an Ethereum testnet address in its list of prohibited wallet addresses. Michael lulin a blockchain security specialist who sits on the board of the Texas blockchain council tweeted, if you check out the tornado cash contracts list, you'll notice a match on gourley. So opak is now sanctioning a deposit TC address on a testnet because the DPRK is trying to launder fake USD C tokens, seems like they just copy pasted the TC docs without understanding any of them. Not looking good for their case. Even if I believe that the US Treasury had the legal authority to do what they're doing, which I don't, I would still be absolutely infuriated with the level of incompetence with which they have gone about it.
Markets Daily Crypto Roundup
"ofac" Discussed on Markets Daily Crypto Roundup
"Bitcoin is up slightly, getting back most of what was at one time a more than 5% gain. It's best single day return, albeit briefly, in two weeks. Quote, Bitcoin continues to display strong resilience in the face of a broader risk averse move in financial markets. Craig earlham, a senior market analyst at the foreign exchange brokerage oando wrote in an investor update, continuing. Given it's the ultimate risk asset, this is quite surprising, and perhaps even encouraging. End quote, traditional markets, meanwhile, are reeling this morning as science that there's no easy fix for the global economic challenges that we face become harder to ignore. With activity slowing, or even contracting, inflation still persistent, and central banks ratcheting monetary conditions tighter. But back to crypto, Arthur Hayes, a former chief at crypto exchange bitmaps, wrote in his latest blog post that he thinks that ether that's the second largest cryptocurrency will outperform Bitcoin following last week's successful completion of the much anticipated merge. Quote, the price of eth continues to get smoked due to deteriorating U.S. deal liquidity, but give the changes in the supply and demand dynamics time to percolate. Check back in a few months and I suspect you'll see that the dramatic reduction in supply has created a strong and rising floor on the price. And let's stick with the number two token for a moment. In the years and months leading up to the Ethereum blockchain's historic shift last week to a more energy efficient system, transaction miners working for rewards in the network had accumulated nearly $341 million worth of the native token ether. Now, about a week after the merge, some crypto analysts are warning that minor sales of their hordes could become a source of near term downward pressure on the cryptocurrency's price, but the market already down 19% in the past month, quote, miners dumping their eth is an overhang that will have to get through over the coming months in order to resume up only mode, but it will happen. Lucas Campbell editor of the bankless newsletter wrote on Monday. Ethereum miners sold a net 16,000 eth between September 12th and the 19th. The merged by the way took place on the 15th. The decline reduced the miners combined balance to about 245,000 ether, or $319 million worth of press time. According to the head of research at into the block, the decline in balances can be attributed to quote miners moving onto other chains. They're taking profits from their eth holdings, he said. It's also possible that some miners may have sent some ether to exchanges to handle an AirDrop of new tokens from a splinter blockchain that aimed to continue on with the Ethereum blockchains now abandoned proof of work system. They continued. That effort has since mostly fizzled. Ethers price had soared in the weeks before the merge as some traders also jockeyed for that AirDrop while others speculated that the ship might lead to a surge in institutional investment. But when the merge actually took place, the cryptocurrency's price briefly rose, then suddenly plunged in what analysts call a buy the rumor sell the fact market reaction. Quote, if miners had accumulated Ethereum at a profit or they need to pay their electric bills, they would be incentivized to sell at a profit, especially with the expected and increased actual volatility, so the director of blockchain market research at quantum economics continuing for the first time, these miners have no future business relationship with Ethereum. End quote. Now if we zoom out and take a look at how DeFi is adapted to the crypto winter in the pre collapsed days of 2020 ones bull market, Alex mashinsky, he's the CEO of now the collapse Celsius network said the 8.8% yield made unstable coin deposits was the so called true value of the dollar. Fast forward to this month, just a year later, Celsius has filed for bankruptcy protection and some of the surviving decentralized financer defined lending protocols have less yield than bonds, and in some cases even savings accounts. According to DeFi prime, the average yield one can expect from lending a USD C stablecoin via DeFi protocols is just under 1%, aave and compound, meanwhile, are paying less than half a point and just under three quarters of 1%, respectively. In just early April, ave was paying depositors 2.67%. Rates for other digital assets on the two protocols honestly aren't much better be by rate and data aggregator, put interest for Bitcoin at 0.01% on compound. Ether meanwhile is paying out 0.21%, while aave is it just under one percentage point. In contrast, the current one year treasury bond is paying more than 4%, up almost a full point from just early August. Currently sitting at its highest level since 2007. That's as the Federal Reserve continues to make what will be recognized as historic moves in their efforts to quote control inflation. Quote, if the fed remains hawkish, we're likely to see markets test lower lows and remain muted until inflation figures appear to start improving. And the CEO of cryptocurrency hedge fund manager bit bull capital told coin desk in a statement. But the story behind the low returns in DeFi is the utilization rate, a measure of how much of the available supply of capital is being used by borrowers. Across all protocols and assets, it's at near historic lows, launching data from aave shows that utilization of USD C is at 21% down from around 90% this time last year. On compound, it's around 34% and compound doesn't make its historical data easily available so it's harder to compare that one. And in that case, while utilization has dropped to just 47%, currently higher than USD C, it's still lower than the pre Ethereum merger rate of around 63% from just one month ago. Interest rates for borrowers, meanwhile, are back at around 2.7%. Now, with all of that said, this isn't to say you can't chase the tokens. There's just not much of it available. Centralized lending or C 5 protocol maple finance is still paying out double digit interest to depositors to put their USD C and available lending pools. But if there's one thing that we've hopefully learned from the crypto lending collapse earlier this year, it's that high yields, especially from centralized entities, often have risks, which are sometimes poorly disclosed. So be careful. Looking at the crypto market more generally, the coin desk market index has been roughly flat over the past 24 hours. Today's crypto coverage comes courtesy of coin desk markets analysts, Jocelyn Yang, Sam Reynolds, and managing editor Brad county. Bitcoin is currently trading at $18,631 that's down almost 2% over the last 24 hours, while ether is trading at 1281 bucks per token. That's up a little bit more than one quarter of one percentage point over the same time period. According to the coin desk price index. And traditional markets, U.S. stock features tumbled the dollar surged and treasury yields again hit their highest level in over a decade, but check your bank account. Are you getting interest yet? It's interesting question. Meanwhile, futures tab of the S&P 500, the Dow Jones Industrial Average and the tech heavy NASDAQ 100 fell between 1.3% and 1.5% before the opening bell on Friday, putting the three main indexes on track for our fourth consecutive day of losses overseas the pan continental stocks Europe 600 slid by 2.5% in the UK, the FTSE 100 fell by 2.2%, and the Dax dropped 2.6%, putting Germany's benchmark stock index on course for its lowest close since late 2020. Take a look at currencies for a moment, The Wall Street Journal's dollar index, which measures the U.S. currency against a basket of its peers, rose 8 tenths of 1% as the Euro and British pound tumbled to new multi decade lows, and the dollar picked up the dirty shirt bid we told you about before. The Japanese yen, meanwhile, fell three tenths of 1% against the U.S. dollar, resuming its sell off just one day after Japan directly intervened in the foreign exchange market, publicly buying yen and selling dollars for the first time in 24 years. We'll have more to tell you about that in an original piece out on Thursday of next week. Stocks in Asia also declined Hong Kong sang sang index lost 1.2% while in Mainland China, the Shanghai composite index flip by just under three quarters of 1%. In Japan, the nika two two 5 lost over half a point. And commodities markets Brandt crude, that's the global benchmark for oil fell 2.8% over the last 24 hours currently trading at around $87 per barrel. Gold meanwhile continues to fall trading 1.7% down on the day currently sitting in $1652 per Troy ounce. Today's traditional markets coverage starts from The Wall Street Journal and market watch. Stay tuned after the breakaway record a few quick headlines we're tracking today with links to the full articles and the show notes for this episode as always. Then after the headlines, what could possibly go wrong trying to make an open-source smart contract illegal? We'll be right back.
Bitcoin Audible
"ofac" Discussed on Bitcoin Audible
"Think some penny token that somebody holds for three days expecting to double their money and dump it is going to do anything in regards to that goal? And it's also kind of ironic that the anti maxis have gotten so aggressive, really kind of gone into overdrive. I mean, I guess this is the bear market. It happens every bear market. But when crypto is really kind of in the quicksand of learning hard lessons for bad long-term planning, you know, tornado cash from sure a lot of you know this, but tornado cash, which is a perfectly ethical tool. It is simply a means of protecting the privacy of your money. It is merely a tool to disable the simple public tracking of your money on the blockchain because these are open systems. Tornado cache was on Ethereum as a smart contract on Ethereum that just mixed all the coins together so that people couldn't just look up all of your history and all of your potential transactions in and out of your account. This is being attacked by regulators and government agencies, and that is despite the fact that tornado cash already bent the knee and went OFAC compliant a couple of months ago. And this is not unexpected. This is an obvious outcome of centralized systems. This was, this should have been thought of as the clear and present future of how government was going to treat these systems and that if you didn't build them to resist this, then you didn't build them to do anything at all. You simply wasted all of your time and money unless of course you're just trying to sell a token and get out, but centralized Bitcoin mixers have the exact same problem. This is not unique. And yet now Ethereum is literally having to have the discussion about the fact that the handful of exchanges that host the majority of the stake, in other words, they controlled the consensus of the entire Ethereum ecosystem, will censor this at the base layer. We'll censor the entire smart contract from being executed. That they will be OFAC compliant. Now I don't think this
CoinDesk Podcast Network
"ofac" Discussed on CoinDesk Podcast Network
"One of the largest exchanges in the U.S., FTX U.S. is also the only leading exchange that supports both Ethereum and Solana NFTs. When you trade NFTs on FTX, you pay no gas fees. Download the FTX app today and use referral code breakdown to support the show. Then there are the other guys. For many crypto critics and antagonistic regulators, the boogeyman of boogeymen tether. USD T now before we just ascribe the same take as those critics have. Let's be clear that tether has been on a steady path towards inside the systeming. Much of this was forced via settlement with the New York attorney general, but ultimately the outcome remains the same. We're now getting regular reserve attestations. And on top of that, a move away from the more questionable reserves within those attestations. Specifically, there has been a focus recently on tether's commercial paper holdings. Some of that has been good faith concern in that short term corporate debt represents a black box on those balance sheets that we just don't know who's dead it represents. Then again, because this is tether some of the critique has been outlandish, like when people were accusing tether of having fraught Chinese real estate developer debt on their books just because it might. People have also been concerned about who was doing tether's reserve attestation, saying that the firm was too closely tied to tether. Well, last week, tether announced that BDO Italia would be taking over its regular attestations from MHA Cayman. In a press release they wrote the decision to work with the BDO organization represents tether's promise to deliver, considerable transparency for those holding tether tokens, providing updates about issued tokens and reserves on a daily basis, supplemented by monthly assurance opinions. This monthly piece is key, they're moving from a quarterly attestation schedule to a monthly attestation schedule. In their first report, one of the most notable aspects was that tether had reduced its commercial paper holdings 58% over the last quarter to 8.5 billion. That's compared to 28.8 billion in treasury bills, 5.4 billion in cash, and 6.8 billion in money market funds. But the reason people have really been discussing tether for the last couple of days has to do with their response to the O factor tornado sanctions. Yesterday they published a post basically saying that at this time they were not going to blacklist these addresses. The post reads, tether works closely with law enforcement worldwide to assist in investigations, including freezing addresses. We're in almost daily contact with key law enforcement officials and pride ourselves on the timeliness with which we respond to their requests. When tether receives an applicable or legitimate request from a verified law enforcement agency to freeze a privately held wallet, the company complies with the freeze. So far, opaque has not indicated that a stablecoin issuer is expected to freeze secondary market addresses that are published on SDN list or that are operated by persons and entities that have been sanctioned by. Further, no U.S. law enforcement agency or regulator has made such a request, despite our near daily contact with U.S. law enforcement, whose requests always provide precise details. We've already stated that this is the protocol we are following. Unilaterally freezing secondary market addresses could be a highly disruptive and reckless move by tether. Even if tether recognizes suspicious activities on such an address, completing a freeze without the verified instruction of law enforcement or other government agencies might interfere with ongoing and sophisticated law enforcement investigations. In fact, in our dealings with law enforcement, we are sometimes made aware of addresses potentially related to crime and are specifically instructed not to freeze the addresses without the explicit request from law enforcement, as this could alert suspects of the law enforcement investigation. Cause liquidations or abandonment funds, and jeopardize further connections that might have been established. Tether has not been contacted by U.S. officials or law enforcement with a request to freeze the addresses sanctioned by ofac. But as noted above, tether normally complies with requests from U.S. authorities being in contact with them on an almost daily basis. For example, we have been cooperating on various freezes with U.S. law enforcement, including in the last two weeks after the opac public disclosure about tornado cash, and no specific request has been put to us related to freezing relevant tornado cash addresses. We would expect the same process of detailed communication and coordination even in this case. It is also worth mentioning that tether is not a U.S. person, does not operate in the United States or onboard U.S. persons as customers. However, tether does consider opaque sanctions as part of its world class compliance program. We'd like to note that other digital asset providers, for example, paxos, a New York regulated stablecoin that issues BUSD and USD P and accounting for around 20 billion of the total cryptocurrency market capitalization haven't frozen tornado cash wallets. We believe that, if made without instructions from U.S. authorities, the move by USD C to blacklist tornado cache smart contracts was premature and might have jeopardized the work of other regulators and law enforcement agencies around the world. It should also be noted that die an algorithmic stablecoin that accounts 36% of its reserves in USD C around 3.4 billion USD also didn't proceed with any freeze. Basically tether is saying that it is not sufficient for O fac to make this announcement. We need to see U.S. law enforcement request these freezes explicitly. They also draw particular attention to the fact that they are not a U.S. entity and that it doesn't service any U.S. based clients. Speaking with The Washington Post, however, Scott Anderson, a former State Department adviser, now with the brookings institution said, quote, the restrictions generally apply to all U.S. nationals or corporations or any person or organization in or doing business in the United States or any transactions touching the United States. I don't know whether tether falls within that scope or not, but if there is a chance that they are their employees might, non compliance could carry real legal risk. Many have also seen this as just tether poking the bear. An unnamed former senior official for O fact told The Washington Post that tether was playing with fire. Quote, it's never a very good idea to test fact. Right now it's a particularly bad time for any crypto related company to do that. It looks like that's what they're doing. However, to get a sense of the general crypto sentiment, just look at developer sudo's response to that quote. LMFAO off it has never been a better moment to challenge opaque.
CoinDesk Podcast Network
"ofac" Discussed on CoinDesk Podcast Network
"They conclude, as we are so close to long held goals of legal and regulatory certainty for crypto in the U.S., UK Europe and other democratic nations, we should resist the urge to retreat to the shadows and bring the financial privacy debate to the light of day. Basically, they're saying this is emblematic of, but not the only instance of a fight which is much larger. A fight for the normalization of privacy on the Internet and a discussion of where the goals of crime fighting ends and people's rights needs to begin in the context of these new technologies. Now you'll notice that this blog post didn't address the actual blacklisting of addresses directly, but Jeremy allaire did about a week later on an appearance on odd lots. He said there that circle is subject to global AML and terrorism financing compliance and auditing standards. Quote, under a binding court order from a competent jurisdiction in the U.S., we have the ability to block an address from transacting. That has happened, I believe, 18 times in the history of USD C and the vast majority of those are specific addresses that ofac has deemed to be sanctioned addresses. We have a statutory obligation to prevent transactions from happening. A lair, however noted that many of the more complex legal obligation scenarios such as a non U.S. nation state requesting the freezing of a foreign nationals wallet, quote, have not been pressure tested. This is an opportunity a lair said for policymakers to really figure out what are the inherent values of an Internet financial system and what obligations do different entities have. Now here I think it's important to put into context the role USD C is trying to play in this larger ecosystem. They're extremely focused and have always been on being a stablecoin player that could work within the existing financial system. A force that helps the beltway establishment understand that these technologies are not just some nefarious wild west for criminals. Their belief is that financial innovation in America has tended to come from the private sector, but then been formalized and integrated by the government. And that's kind of how they've positioned themselves. My read on what they're trying to do now is to use some of the capital they've accrued to really start asking questions about the efficacy of the BSA and KYC regimes and try to push the discussion in a way where the values embedded in the crypto system are enshrined. Basically, like their approach or not, they are the inside the system folks. In times like these, security of your assets should be your number one priority. If you want to offset risk as much as possible and still stay in crypto, you need to trusted partner by your side. Nexo is a security first
CoinDesk Podcast Network
"ofac" Discussed on CoinDesk Podcast Network
"And so you see what comes down to it. The proof is in the pudding. 250 year dresses are blocked from the front end of uniswap thing can still operate in the back end and in different ways. But you just saw labs, the known entity operating this front end can no longer be said to be supporting these bad guys that have been identified by ofac. And that's something whether it's being broadcast to the world or is happening in slack conversations. That's happening across the space as we speak. How do we do this in a way that complies with the letter of the law? Avoids us going to jail, but also doesn't sacrifice the big ideals on which crypto is founded. And I think it's really interesting to see this conversation unfold on Twitter and on GitHub as teams reckon with it. But also it's a will for his final thoughts. As this conversation is happening on the base layer with L ones, not just with applications. It's happening with what transaction do I include on my blockchain? Should validators or minors be able to block different transactions based on the components and those transactions? Have they been touched in the past by an address or a wallet that affect doesn't like? How deep does it have to go to regulating my chain and to protect myself as a validator or as a minor? These are new questions that everyone's going to have to grapple with. Luckily, a lot of people back in the day, like early 2010s, started looking at this stuff. And came to some decisions, and there's some chains that are around like zcash, and monero that have really grappled these questions deeply. But now we have some new projects like tornado cache or some of these other DeFi applications like uniswap that have been built in the last few years that are really in the forefront of this and all those developers are feeling the burn from pushing forward with their novel, centralized finance products. Zach, I'll kick it to you though as we head into break. Let's head into break. We'll take a quick break and then we'll go back to tornado cash, discussing a small protest over actions against an open-source developer.
HASHR8
"ofac" Discussed on HASHR8
"Podcast. Thank you so much for joining us. It's cool to have you on. I've seen some of your stuff in the past, including some of the things you've written for coin desk about ofac sanctioning, and that's why I wanted to have you on as an expert in the field when someone who predicted a lot of things that we saw this week with tornado cash and its impact potentially for Bitcoin miners and the Bitcoin network. Thanks so much for having me. It's a pleasure to be here. Sometimes it's good to be able to anticipate things coming. But I didn't quite see this one coming. Yeah, it's definitely a crazy one because it's on the smart contract level, right? Which I don't think a lot of people anticipate is something like that happening. It has blacklisted some addresses in the past, especially some Bitcoin ones. You can not interact with and to correct me if I'm wrong, my understanding is that it's a lot of things to do with terrorism, so like Hamas assets or addresses that they use for garnering Bitcoin funds or other terrorist networks out there.
CoinDesk Podcast Network
"ofac" Discussed on CoinDesk Podcast Network
"That's a very different perhaps even unprecedented thing for ofac to do. Versus again in sanctioning a person or an entity. Or indeed an address as kind of a public key that is in a way just another alias for the person themselves. So as I've been reflecting on this, I've had kind of like this cascading set of thoughts as it relates to this. And the first is this feels like it opens them up to legal challenge that other types of action against tornado cash or any other mixer might not have. So it's like the surface layer it's like, okay, why would you open yourself up to, I mean, this is the type of thing that could have long drawn out protracted legal battles. And in fact, it sort of, it feels inevitable to me that this type of issue, the precedent that we had before was inevitably going to be challenged once again in this new cycle of privacy technologies. So it's not all that surprising that we would see an example of this. But again, from a practical standpoint, first question is like, why do this in this way when it opens you yourself up to such legal challenges? But then my second thought was it seems like maybe they don't care in the sense that legal challenges take a really long time to play out. And it's quite clear that part of what they're going for is also signaling power. Like, yes, they want specifically North Korea to stop being able to use this particular tool, but more broadly. I mean, they made this clear in the connection with blender and all these sort of things. They want people to think twice before engaging in any of this type of activity. And they said that much more explicitly than seems almost couscous in some ways. They were kind of very out with that. And so it feels to me like it's a localized and a more generalized action where it's fine with them that they'll go fight the legal battles because it doesn't matter even in some ways if they lose them. They haven't cut themselves off from other types of kind of activity or ways to prohibit this type of mixing activity. And two in the short term and medium term, which is really where the focus is. Like the effect is the same, right? No legal challenge is going to be mounted that quickly. I think you're touching on a bunch of different interesting dynamics here. One of which is this action that they've taken, they surely know they surely know better than I do, that this is unprecedented. For them to put a smart contract on the SDN list. And they also can surely then predict the degree of complexity in terms of enforcement in terms of the legality of this action in terms of the precedent that it's setting. All of the complexity here, not even to mention, of course, things that were probably watching closely may be more closely than they are right now of people sending tornado cash transactions to Jimmy Fallon's eth address and sprinkling dust from tornado cash to all of these high profile individuals sort of to try to make the presumably these are people trolling to try to make the point of how is this going to be judged and characterized? There's so much messiness and complexity here. That you're right, surely surely they could kind of see and predict there was going to be some fallout. And I think part of what you're getting at and part of my understanding from speaking to folks who spend a lot more time in Washington than I do is that this seems to be somewhat politically motivated. I think that that's part of the subtext of what we're saying, that this is not only a shot across the bow towards the
CoinDesk Podcast Network
"ofac" Discussed on CoinDesk Podcast Network
"The industry as a whole the most by surprise here is the way that this enforcement is being carried out. Yeah, so let's talk about that a little bit because I agree. I think that the U.S. government had not been unclear about its feelings on mixers, right? And this particular type of technology, maybe let's frame it as a counterfactual. If you were to have guessed or be forced to guess kind of before this week, what type of action, how would you have seen that feeling expressed? Did you anticipate that the U.S. would do some sort of regulatory just banning of that type of technology or versus the sort of sanctions approach? What wouldn't have surprised you, I guess, is maybe a better way to put it. Yeah, and to be honest, I hadn't thought about it deeply, actually. I had thought about it to the extent to which I could kind of believe in foresee that something was going to happen at some point to discourage the continued building and development of tornado cash to discourage U.S. persons from engaging with the tool and the technology, but I hadn't and I'm not a lawyer, right? So I hadn't gotten into the weeds and how that might play out. If you had told me, if you'd come back from a week in the future and told me that something was going to happen here with ofac and sanctions, I would have guessed based on my knowledge and understanding and somewhat experience having to comply with these things that it would have been people associated with tornado cash. So the lead developers on it, the founder of the project, et cetera, who are maybe being sanctioned. I would have guessed that certain addresses that were interacting with tornado cash might be sanctioned. There was a history of sanctioning Bitcoin addresses, other cryptocurrency addresses. And so that wouldn't have surprised me. But both of those things are very, very different from actually putting a smart contract address on the sanctions list, right? Where the smart contract itself is an open-source bit of software and code that is arguably independent and neutral tool. This is what many people are arguing right now, of course. And that's a very different perhaps even unprecedented thing for ofac to do. Versus again in sanctioning
Corruption Crime & Compliance
"ofac" Discussed on Corruption Crime & Compliance
"Thanks again for listening to corruption. Crime and compliance. Please subscribe to the podcast series. The volkhov law group believes that every company should have a robust ethics and compliance program experience in research show that ethical companies are better performers in the global marketplace. You can learn more about the legal and compliance services. We offer at our website. Www dot volkov law dot com. You can also follow our award winning blog. Corruption crime and compliance and our podcast series. You can contact michael volkov..
Corruption Crime & Compliance
"ofac" Discussed on Corruption Crime & Compliance
"Fire to these changes she.
Corruption Crime & Compliance
"ofac" Discussed on Corruption Crime & Compliance
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Corruption Crime & Compliance
"ofac" Discussed on Corruption Crime & Compliance
"I know again. It's got confused nozzle. I never been have stand breaking etiquettes. A big red nose.