News Updates August 24, 2022

1. Law Society of England and Wales Tells Members to Be Wary of Bitcoin Use in Transactions

This is a cash transaction so there is a high risk of money laundering," the professional body told its members.

The Law Society of England and Wales said members should treat bitcoin (BTC) as cash and be aware of potential money laundering issues when clients choose to use the cryptocurrency for transactions.

Responding to a question seeking advice on the purchase of a property with the proceeds of bitcoin investment, the professional association for lawyers said while there is no specific guidance, members need to establish the source of funds used to buy the bitcoin.

This is a cash transaction, so there is a high risk of money laundering," it said in a post on its website. There is a "significant risk" in this transaction that the bitcoin "may be derived from criminal activity."

Under regulation 33 of the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, you must apply enhanced due diligence (EDD) measures dictated by the level of risk and obligations on source of wealth and source of funds

Membership of the society is included in the cost of a practicing certificate for solicitors in England and Wales. Its judgement on bitcoin therefore is likely to have far-reaching implications for how bitcoin is treated.

2. Bitcoin bulls may win big as two key moving averages prepare to cross

History repeating itself would be good news for those looking to enjoy further BTC price upside.

Bitcoin (BTC) lost a key bear market trendline last week as it shed almost 12%, but other chart data offers a silver lining for bulls.

As noted by popular Twitter user Dave the wave on Aug. 24, long-term moving averages (MAs) are about to repeat classic bullish behavior.

 *Analyst: Bulls could be about to “do well”*

BTC/USD disappointed over the weekend as it put in lows not seen since the end of July. Since then, $21,000 has offered only weak support, and fears abound that new lows are coming.

One of the casualties of the downturn was the 200-week moving average (MA), data from Cointelegraph Markets Pro and TradingView shows, a level which had flipped from resistance to support the month prior.

Now back overhead and unchallenged by rebounds this week, the 200-week MA offers a verdict on the current lack of strength in Bitcoin.

The amount of FOMO we saw on CT in the past 2 weeks during the $25k rally is unprecedented. This bulltrap almost has to play out,” analyst Venturefounder summarized after the 200-week MA failed as support.

Observing the behavior of the 50-week and 100-week MAs, however, suggests that all might not be lost.

In his Twitter thread, Dave the wave showed that the former is about to cross over the latter — and in the past, this has been followed by sustained price growth.

Bitcoin 1 year moving average now crossing the 2 year moving average as per the corrective phase after a speculative run-up,” he wrote in accompanying comments:

He added that five months prior, the same pair of MAs had correctly assessed the incoming market downtrend which saw BTC/USD hit a macro bottom of $17,600 in June.

 *Here’s why holding $20.8K will be critical in this week’s $1B Bitcoin options expiry*

The classic Pi Cycle Top indicator, which has caught macro bottoms throughout Bitcoin’s history, was already turning green in July, lending weight to the idea that June’s $17,600 really was a multi-year floor.

In an update on Pi this week, however, commentator Miles Johal acknowledged that bulls needed to clear higher levels to keep the status quo favorable.

3. Bitcoin Dominance Rate (BTCD) Approaches End of Bullish Pattern

The Bitcoin Dominance Rate (BTCD) is expected to break out from a bullish pattern. However, the long-term trend remains bearish.

BTCD has been falling since reaching a high of 48.45% on June 11. The downward movement has so far led to a low of 40.60% in Aug 14. 

Over the past month, the decrease has been contained inside a descending wedge, which is considered a bullish pattern. Furthermore, the daily RSI is extremely bullish. It has: 

* Broken out from a descending resistance line

* Moved outside its oversold territory

* Generated bullish divergence

If a breakout transpires, the 0.382 Fib retracement resistance level at 43.60% would be the first resistance area.

Cryptocurrency trader @eliz883 tweeted a chart of BTCD, showing that it is following a descending support line.

Due to the bullish RSI readings and creation of the aforementioned wedge, a breakout from this pattern would be the most likely scenario.

 *Long-term movement*

Despite the bullish daily readings, the weekly chart suggests that the long-term trend is still bearish. The main reason for this is the weekly RSI breakdown (green line) and decrease below 50. Both of these signs are associated with bearish trends. 

Currently, BTCD is trading just above the 40.50% horizontal support area, which has been in place since May 2021.

If a breakdown occurs, the first target would be at 34.13%, created by the 1.61 external Fib retracement of the most recent upward movement. This would take BTCD to a new all-time low.

So, the weekly and daily time frame readings are not in alignment in each other. Combining these two time frames, the most likely scenario would suggest an initial breakout, that takes BTCD towards at least 43.60%. Afterward, a fall towards new all-time lows would be expected.

4. Australia’s markets regulator to prioritize shielding citizens from crypto harm

Part of its actions will include raising public awareness about the risks inherent in crypto-assets and decentralized finance.

 *Australia’s financial regulator, Australia's*

Securities and Investments Commission (ASIC) has pledged to put crypto assets and decentralized finance (DeFi) firmly in its sights over the next four years. 

According to ASIC’s newly released “Corporate Plan” released on Tuesday, the financial regulator said it will be focusing on “digitally enabled misconducts” as “emerging technologies and products change our financial ecosystem” as part of its four-year strategic plan that stretches to 2026. 

Joe Longo, chair of ASIC said the regulator would be focusing in particular on scams and crypto-assets.

Our regulatory environment is changing and evolving — climate risk, our aging population, emerging data and digital technologies, and significant volatility in the crypto-assets market are all having a transformational impact.”

He noted that Scamwatch, a website that provides information to consumers and businesses about recognizing, avoiding, and reporting scams, received 4,783 reports of crypto investment scams and $99 million in reported losses in 2021.

ASIC said the actions will “protect investors from harms posed by crypto-assets” and include supporting the development of an effective regulatory framework, implementing and monitoring the regulatory model for exchange-related products, and raising public awareness of the risks inherent in crypto-assets and DeFi, among other actions.

In a Wednesday Sydney Morning Herald report, Longo again warned against investing in crypto, describing it as “a highly risky and highly volatile activity,” and consumers “should be really careful before you do it.”

“ASIC is not against innovation, and will do whatever it can to look for lawful ways of using the underlying technology, the distributed ledger, and blockchain technology, but that’s not to be conflated or confused with investing, inverted commas, in crypto assets.”

 *Australia’s new government finally signals its crypto regulation stance*

The industry has been calling for government legislation to reduce the risk for investors and transform cryptocurrencies into an established and safer asset class.

However, there are thousands of crypto assets or currencies and Longo admits “regulation is coming” but “we will have to design a framework that suits us, that works within our existing legal and regulatory arrangements.”

5. Singapore High Court Recognizes Three Arrows Capital Liquidation Order: Report

The decision will provide Three Arrow's liquidator, Teneo, the ability to probe assets held in Singapore.

The liquidators of Three Arrows Capital secured a crucial court decision in Singapore, which will give them the ability to probe the local assets of the defunct crypto hedge fund, Bloomberg reported, citing people familiar with the matter.

The Singapore High Court granted the request of Three Arrows Capital's appointed liquidator, Teneo, on Monday. This means that the court now legally recognizes the liquidation order originally filed in the British Virgin Islands.

Recognition in Singapore gives Teneo the freedom to request all financial records held locally, this includes bank accounts, cryptocurrencies, stakes in companies and properties, the report said. In July, Three Arrows co-founder Su Zhu was reportedly looking to sell one of his homes in Singapore worth $35 million.

The fall of the hedge fund was part of a wider crypto contagion that swept across the entire industry. In May, algorithmic stablecoin terraUSD (UST) collapsed alongside the LUNA ecosystem, Three Arrows had exposure to the ecosystem and Su Zhu described the episode as "humbling".

After Terra's collapse, crypto lenders like Celsius Network and Voyager Digital filed for bankruptcy while several firms were forced to halt withdrawals as the liquidity crunch gripped the crypto markets.
Teneo has gained control of at least $40 million of Three Arrow Capital's assets so far, this represents a small fraction of creditor claims, which are estimated to be at least $2.8 billion, according to a 1,157-page court filing published in July.

The founders of Three Arrows Capital broke their silence shortly after the court filing was released, with Su Zhu and Kyle Davies describing the collapse as /"regrettable."

6. Philippines central bank approves two more digital banks

A total of six digital banks are now allowed to operate in the Philippines after the Bangko Sentral ng Pilipinas (BSP) issued Certificates of Authority to UnionDigital Bank, Inc. (UDB) and GoTyme Bank Corporation (GTYME).

* BSP earlier authorized four digital banks namely Tonik Digital Bank, Inc. (TONDB), Maya Bank, Inc. (MAYA), Overseas Filipino Bank, Inc. (OFBDB), and UNObank, Inc. (UBI).

* Of the six digital banks in the Philippines, only the Overseas Filipino Bank, Tonik, and Maya are fully operational, while UNObank, UnionDigital Bank, and GoTyme have commenced limited operations targeting select customers. The three are expected to publicly launch within the second half of this year.

* According to the BSP, from January to June 2022, the volume of electronic payments and financial services processed through digital banks reached 1.4 million transactions valued at 8.45 billion Philippine pesos (US$150 million).

* BSP Governor Felipie Medalla earlier told Forkast the reason for being selective in awarding licenses to digital banks was because of the market’s nascent potential as well as its ability to regulate the sector.

• Digital banks “support” the BSP’s aim to digitize half of the total volume of retail payments in the country, and onboard at least 70% of adults in the country into the formal financial system by 2023, a spokesperson told Forkast.

7. Crypto Prices Are Fanned by Flawed Economics and Conspiracy Theories; CBDCs Are Immune: Bank of Finland Governor

While making a case for digital euro, Bank of Finland governor Olli Rehn said that central bank digital currencies won't be subject to price volatility of private cryptos.

The volatile prices of private cryptocurrencies are "fanned by popular misunderstanding of monetary economics and even conspiracy theories," while central bank money in digital form can be trusted implicitly, the governor of Finland's central bank says.

Some have joked that a central bank digital currency (CBDC) is 'a solution looking for a problem.' While I may not be an outright fan of CBDCs, I think the detractors unfairly downplay the potential merits," Olli Rehn, governor of the Bank of Finland said during a panel at the University of California, Berkeley on Tuesday.

Central banks around the world are exploring the benefits of CBDCs, and some like China and Nigeria have succeeded in launching one. The European Central Bank (ECB), the apex bank of the European Union (EU), is still in the middle of an experiment into a digital euro, set to wrap up in October 2023. The bank's public communication on a digital euro so far has involved lambasting crypto over perceived dangers and risks while praising the merits of a digital euro issued by the ECB.

8. Crypto licensing roundup: Learn about the most recent approvals in the industry

Here's where cryptocurrency firms have received the most regulatory approvals and licenses over the past few weeks.

 *Cryptocurrency companies have been*

moving to improve compliance worldwide amid the bear market of 2022, with many platforms increasingly securing licenses and approvals. 

As one may find it difficult to track all global regulatory milestones in crypto, Cointelegraph has picked up some of the latest compliance developments over the past couple of weeks.

Global crypto firms have recently been active in growing presence and compliance in North America, with exchanges like China-founded Huobi Tech entering Canada.

Huobi Technology Holdings announced on Tuesday that its subsidiary Hbit Technologies has successfully obtained a Money Services Business (MSB) license from the Financial Transactions and Reports Analysis Centre of Canada.

cuWith the new license, Huobi Tech is officially authorized to engage in regulated activities for foreign exchange, money transferring and virtual currencies dealing in Canada. The new compliance milestone came shortly after Hbit received the MSB license in the United States in July.

Binance.US, the American partner of Binance, another crypto exchange founded in China, has also been actively improving regulatory efforts in North America recently. On Thursday, the exchange received a Money Transmitter License from the Nevada Department of Business and Industry, Financial Institutions Division.

Nevada became the seventh jurisdiction where Binance.US secured the license in 2022, following West Virginia, Connecticut, Wyoming, Rhode Island, Idaho and Puerto Rico. Binance.US said it operates in 46 states and Puerto Rico, offering investment and trading for more than 120 cryptocurrencies.

Clear Markets, a crypto derivatives platform tied to the Japanese financial giant SBI, has secured major approval in the United State as well. Backed by SBI, Clear Markets received approval from the Commodity Futures Trading Commission in mid-August for over-the-counter crypto derivatives trading for its U.S. subsidiary Clear Markets North America.

Among other compliance developments in North America, major crypto exchange Crypto.com completed the Service Organization Control (SOC) 2 Type II Compliance audit on Tuesday. Developed by the American Institute of CPAs, the SOC 2 is an auditing procedure aiming to ensure the secure management of data and confidentiality. Previously, Crypto.com became one of 37 crypto exchanges to register with the United Kingdom's Financial Conduct Authority.

Elsewhere in the world, Singapore-based crypto exchange Bhex.sg received the Standard Payment Institution license from the Monetary Authority of Singapore (MAS) on Friday. The MAS approval requires licensees to meet a high standard of compliance to protect consumers, enabling the exchange to offer digital payment token services in Singapore.

 *European Central Bank addresses guidance on licensing of digital assets*

Other recent compliance developments also include Socios, a major fan token platform working in conjunction with the fan token cryptocurrency Chiliz. On Thursda, Socios secured regulatory approval as a service provider of virtual currencies and digital wallets for its fan engagement and rewards platform in Italy.

The recent compliance developments in the crypto industry mark yet another milestone in the global crypto regulatory landscape but international regulators are yet to come up with clear rules for crypto companies. Earlier this week, economists from the International Monetary Fund highlighted the need to establish clear guidelines on regulated financial institutions in Asia. Some experts believe that certain regulatory clarity could be detrimental to crypto though.

9. Miami Crew Faces 30 Years in Prison for Running a Fraudulent Crypto Scheme.

Da Corte, Gonzalez, and Meza gathered over $4 million by purchasing crypto with stolen identification and later asking banks for a refund.
The US Department of Justice (DOJ) charged three residents of Miami – Esteban Cabrera Da Corte, Luis Hernandez Gonzalez, and Asdrubal Ramirez Meza – with defrauding banks and a cryptocurrency platform for over $4 million.

The men used fake identification to buy digital assets, while later, they lied to financial institutions that the transactions were not authorized so they could net more money. For their crime, the trio faces up to 30 years in Federal prison.