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Cryptocurrency This Week: Crypto Crime Hit Record High In 2018, Iran Reverses Bitcoin Ban

Cryptocurrency This Week: Crypto Crime Hit Record High In 2018, Iran Reverses Bitcoin Ban

The Subhash Chandra Garg interdisciplinary committee is in the final stages of the draft crypto/virtual assets regulation

The Central Bank of Iran releases a draft on crypto regulations, reversing a previous ban

The Securities Commission Malaysia announces plans to regulate cryptocurrencies and ICOs

The interim Budget came and went, bringing no tidings at all for cryptocurrency in India, to the disappointment of the crypto community. Interim finance minister Piyush Goyal, while presenting the Interim Budget 2019, didn’t address the issues relating to cryptocurrency in India.

However, the interdisciplinary committee led by the department of economic affairs secretary Subhash Chandra Garg is in the final stages of the draft crypto/virtual assets regulation, according to a submission earlier filed by the Indian government.

Many lawyers dealing with cryptocurrencies or crypto assets recently also met the committee and filed their submissions.

Mumbai-based Nisith Desai Associates, in an independent submission made to the Garg committee, has batted for crypto-asset regulations.

Favouring regulation — not prohibition — the firm has, in public interest, also proposed a framework around crypto regulations, stating that it will be a win-win situation for both consumers and businesses and is also practically implementable by the government.

Meanwhile, the Central Bank of Iran has released an early draft of its regulations on cryptocurrencies, reversing a previous ban. On a similar note, the Securities Commission of Malaysia (SC) has announced plans to regulate ICOs and trading of cryptocurrencies.

Let’s take a look at last week’s crypto and ICO-related developments:

Crypto Crime Hit Record High In 2018

Regardless of Bitcoin’s performance in 2018, crypto crime hit a record high, according to CipherTrace’s new Cryptocurrency Anti-Money Laundering Report.

The report said that $1.7 Bn in cryptocurrency was stolen and scammed in 2018 — a dramatic rise in criminal activity despite a slump in the market.

Theft from cryptocurrency exchanges accounted for the majority of the criminal activity: more than $950 Mn was stolen by hackers in 2018 — 3.6 times more than in 2017.

On top of these thefts, the research also showed that investors and exchange users lost at least $725 Mn in cryptocurrency in 2018 to exit scams such as fraudulent ICOs, phoney exchange hacks, and Ponzi schemes.

The top 10 trending crypto threats, providing actionable threat intelligence for anyone dealing with cryptocurrency are:

  1. SIM swapping: An identity theft technique that takes over a victim’s mobile device to steal credentials and break into wallets or exchange accounts to steal cryptocurrency.
  2. Crypto dusting: A new form of blockchain spam that erodes the recipient’s reputation by sending cryptocurrency from known money mixers.
  3. Sanction evasion: Nation states that use cryptocurrencies to circumvent sanctions and that has been promoted by the Iranian and Venezuelan governments.
  4. Next-generation crypto mixers: Money laundering services that promise to exchange tainted tokens for freshly mined crypto, but, in reality, cleanse cryptocurrency through exchanges.
  5. Shadow money service businesses (MSBs): Unlicensed MSBs that bank cryptocurrency without the knowledge of host financial institutions, thus exposing banks to unknown risk.
  6. Datacenter-scale crypto-jacking: Takeover attacks that mine for cryptocurrency at a massive scale and that have been discovered in data centres, including AWS.
  7. Lightning Network transactions: Enabling anonymous bitcoin transactions by going “off-chain” and now scaling to $2,150,000.
  8. Decentralised stable coins: Stabilised tokens that can be designed for use as hard-to-trace private coins.
  9. Email extortion and bomb threats: Mass-customized phishing email campaigns by cyber-extortionists using old passwords and spouse names and that demand bitcoin. Bomb threat extortion scams spiked in December.
  10. Crypto robbing ransomware: New malware distributed by cyber-extortionists that empties cryptocurrency wallets and steals private keys while holding user data hostage.

Iran’s Central Bank Issues Draft Crypto Rules, Reverses Ban

As speculated since last year, the Central Bank of Iran has released an early draft of its regulations on cryptocurrencies, reversing a previous ban, but still imposing restrictions on the use of the digital currency inside the Islamic Republic, reported Aljazeera.

In an announcement made during an annual two-day Banking and Payments conference, the Central Bank of the Islamic Republic of Iran also announced the suspension of the existing ban on cryptocurrencies with limited restrictions. For instance,  cryptocurrencies such as Bitcoin can be used only for international payments and not inside the country.

Iran is also in a process of developing its own cryptocurrency and currently sees it as the best fit route to avoid US sanctions.

Meanwhile, according to The New York Times, the United States Treasury has imposed sanctions and issued warnings to digital marketplaces that buy and sell Bitcoin and to companies that sell computers used to process Bitcoin transactions. The US Treasury has directed that they should not provide services to Iranians.

Crypto wallets and exchanges are now blocking buy-and-sell features for IPs belonging to Iran.

Malaysia To Regulate Crypto and ICOs

After getting a nod from Malaysian finance minister YB Tuan Lim Guan Eng, the Securities Commission Malaysia has announced plans to regulate the offering and trading of digital assets such as cryptocurrencies and ICOs.

The Commission has said that it will soon release guidelines that will establish the criteria for determining fit and properness of issuers and exchange operators, disclosure standards and best practices in price discovery, trading rules and client asset protection.

Those dealing in cryptocurrencies will be required to put in place anti-money laundering and counter-terrorism financing (AML/CFT) rules, cybersecurity, and business continuity measures.

The relevant regulatory framework is expected to be launched by end-Q1 2019.

Meanwhile, in other news, the world’s leading stock exchange, Nasdaq, New York, is sharing its proprietary surveillance technology with seven cryptocurrency exchanges, including Gemini and SBI Virtual Currency.

However, according to Nasdaq officials, the vetting process is not easy and includes business model, KYC/AML, and exchange governance and controls.

Author

Suprita Anupam

Inc42 Staff

An Electronics Engineer turned Business Journalist | Blogger | Avid Reader. Previously associated with Network18, Clean India Journal and Mudra Communications, he has been writing on a variety of issues that include cryptocurrency, policy-related matters, blockchain, investments-destination, technology and other startup-related matters.

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