News Updates November 07 & 08, 2022

1. Bitcoin Suddenly Plunges Below $20,000. Here’s Why? The price of Bitcoin suddenly has once again plunged below the psychologically important $20,000 level.  The world’s largest cryptocurrency reached an intraday low of $19,559 at 4:20 UTC on the Bitstamp exchange.
According to cryptocurrency data platform Coinglass, $112.83 million worth of crypto has been liquidated over the past hour alone. Long positions account for a whopping 94.94% of the wiped-out positions.  The recent drop is likely the result of cryptocurrency contagion triggered by the uncertainty of crypto giant FTX in light of its recent spat with Binance. 
The FTT suddenly plunged 14% in a single hour. The exchange token is now down a staggering 25.64% over the past day. According to blockchain analytics platform PeckShield, $284 million worth of crypto has been withdrawn from the FTX exchange

2. FTX Limiting Withdrawals to $1,000, Users Report Technical Issues.

The battle of Binance against FTX that turned into a massive red flag for the cryptocurrency market continues. A large number of reports on various social media channels suggest that the popular cryptocurrency exchange is facing technical issues with covering a huge wave of withdrawals. Is FTX solvent? The main reason behind the huge wave of withdrawals is concerns of investors regarding the ability of the exchange to cover the existing withdrawal demand, which technically makes it insolvent. FTX is currently limiting users' withdrawals in every legal or technical way possible, stating that a certain network is congested, or limiting withdrawals on Ethereum and other assets.
According to the FTX management, including SBF himself, the exchange remains solvent, and the company is able to cover the existing volume of funds on the trading platform. However, the wave of outflows does not seem to be stopping, and Alameda has no other choice but to bail out the exchange with its own funds. Panic or reasonable concern? The potential insolvency of an exchange can become a catastrophe for both investors and the market in general. The massive outflow of funds from exchanges that both retail and institutional investors use will cause a bloodbath on the market, as most investors would prefer completely exiting the industry. However, even a temporary inability on the part of FTX to cover the demands of its investors will cause an immediate reaction by said investors and aggravate the existing situation.

3. Brazilian Tax Authority RFB Registers New Record of Almost 1.5 Million Brazilians Investing in Crypto in September.

The Brazilian Tax Authority RFB registered a new record in the number of Brazilians that invested in crypto, in the month of September. The institution informed through its monthly reports that almost 1.5 million people had purchased crypto during Sept. The number of crypto investors in Brazil increased since August when a little more than 1.3 million people declared holding crypto.

Brazilian Tax Authority Registers Almost 1.5 Million Crypto Investors in September
Cryptocurrency is gaining popularity as an investment choice for portfolios in Latam. The Brazilian Tax Authority RFB presented the numbers corresponding to the cryptocurrency investments declared by taxpayers in the country on Nov. 4, registering a new record in investors putting their funds in crypto.

According to the statements of independent holders and of local exchanges received by the institution, almost 1.5 million citizens invested in crypto during September. These 1,490,618 citizens represent an increase of more than 10% compared to the number of taxpayers that declared holding crypto in August.

But the growth is even more impressive if compared to the numbers corresponding to September 2021, when only 424,524 cryptocurrency statements were received by the institution. this means that the number of cryptocurrency investors has more than tripled in one year, a sign of the popularity that crypto has achieved in the country.

4.   Countries ignoring crypto AML rules risk placement on FATF’s ‘grey list:’ Report
Reports suggest the Financial Action Task Force will conduct annual checks to ensure countries are enforcing Anti-Money Laundering rules for crypto providers.

Countries failing to adhere to Anti-Money Laundering (AML) guidelines for cryptocurrencies could find themselves added to the Financial Action Task Force’s (FATF) “grey list.”

According to a Nov. 7 report from Al Jazeera, sources say the global financial watchdog is planning to conduct annual checks to ensure countries are enforcing AML and Counter-Terrorist Financing (CTF) rules on crypto providers.

The grey list refers to the list of countries the FATF deems as “Jurisdictions under Increased Monitoring.”

The FATF says countries on this list have committed to resolving “strategic deficiencies” within agreed timeframes and are thus subject to increased monitoring.

It differs from the FATF “blacklist,” which refers to countries with “significant strategic deficiencies in relation to money laundering,” a list that includes Iran and North Korea. 

At the moment, there are 23 countries on the grey list, including Syria, South Sudan, Haiti and Uganda.

Crypto hotspots like the United Arab Emirates (UAE) and the Philippines are on the grey list as well, but according to FATF, both countries have made a “high-level political commitment” to work with the global financial watchdog to strengthen their AML and CFT regime.

Pakistan was previously also on the list, but after taking 34 actions to solve FATF’s concerns, they are no longer subject to increased monitoring.

One of the anonymous sources cited by Al Jazeera noted that while failure to comply with crypto AML guidelines won’t automatically put a country on the FATF’s grey list, it could affect its overall rating, tipping some to fall into increased monitoring. 

Cointelegraph has reached out to the Financial Action Task Force for comment but has not received a response at the time of publication. 

In April 2022, the AML watchdog reported that many countries, including those with virtual asset service providers (VASPs), are not in compliance with its standards on Combating the Financing of Terrorism (CFT) and AML.

Under FATF guidelines, VASPs operating within certain jurisdictions need to be licensed or registered.

In March, it found that several countries had “strategic deficiencies” in regard to AML and CTF, including the United Arab Emirates, Malta, the Cayman Islands and the Philippines.

5. G20 Summit to Focus on Global Crypto Framework and Penalize Countries That Don’t Comply.

The upcoming G20 summits are expected to focus on crypto regulation. This is due to money laundering and terrorist funding with cryptocurrencies.

The last G20 summit under the presidency of Indonesia will take place on Nov. 15. Later, India will take up the presidency of the future G20 summits for one year from Dec 2022.


Ahead of the G20 summit, the finance minister of India, Nirmala Sitharaman, has shared her thoughts on regulating crypto. Last Tuesday, while addressing the Indian Council for Research on International Economic Relations (ICRIER), she quoted that:


 "We have not come out with any plan to regulate digital assets. The agenda of cryptocurrency regulation will be brought in G20 Meeting."

Nirmala Sitharaman

Illicit activities funded by cryptocurrency.
Svetlana Martynova, a senior official at the UN, believes that the prevalence of crypto-funding of terrorist activities may have increased by four times in recent years. She estimates that 20% of the terrorist attacks have been crypto-financed. 

Additionally, according to a Chainalysis report, illicit entities received nearly $10 Billion this year. While in 2021, it was a record high, with illicit entities receiving more than $15 Billion.

6. US Seizes 50K Bitcoins Related to Silk Road Marketplace

The bitcoin, which was obtained in 2012 and which was valued at $3.36 billion when it was discovered in November, is now worth $1.04 billion.

Damian Williams, the U.S. Attorney for the Southern District of New York, said Monday that authorities seized 50,676 bitcoins related to the darknet marketplace Silk Road in November.
The bitcoin was valued at $3.36 billion at the time it was discovered. Now it is worth $1.04 billion. In November, it was the largest cryptocurrency seizure to date, but has since been surpassed by the 70,000 bitcoins seized in February in relation to a hack of the Bitfinex crypto exchange.
 

In the Silk Road case, the coins were found at an address in Georgia connected with James Zhong. The feds also found $661,900 in cash as well as various precious metals. Zhong pleaded guilty to committing wire fraud in 2012, according to a statement from the Justice Department on Monday.
"This case shows that we won’t stop following the money, no matter how expertly hidden, even to a circuit board in the bottom of a popcorn tin,” Williams said in the statement.
The Silk Road was an illegal marketplace on the darknet that operated between 2011 and 2013 and that primarily used bitcoin as a method of payment. The site collapsed following the arrest of its operator, Ross Ulbricht, who is serving a double life sentence and 40 years in prison, without the possibility of parole.