Update on FATF standards for virtual assets and service providers.

A new FATF report on virtual assets finds only 29 out of 98 jurisdictions have passed the FATF ‘travel rule’ to ensure crypto firms verify who their customers are. FATF members should lead by example & introduce relevant legislation ASAP.

See the report➡️https://t.co/PWbaOMtNfJ pic.twitter.com/hHpALXiIJv

— FATF (@FATFNews) June 30, 2022

A recent analysis by the Financial Action Task Force (FATF) on virtual assets reveals that only 29 of 98 countries have met the requirements of the FATF’s “travel rule” to guarantee that cryptocurrency businesses verify the identities of their consumers. Authorities need to move more quickly to verify the identities of crypto users. 

FATF’s anti-money laundering and counter-terrorism financing (AML/CFT) Standards have been extended to financial activities involving virtual assets and virtual asset service providers for the past three years in order to respond to the threat of criminal and terrorist misuse of these virtual assets. To enable countries and virtual asset providers properly execute the FATF Standards on virtual assets, FATF has released two worldwide evaluations of their implementation since then.

The study presents a third focused analysis of implementation, with a particular emphasis on the FATF’s Travel Rule. This rule mandates that the private sector gather and transmit recipient and originator information in conjunction with virtual asset transactions.

In addition to this, it offers a concise update on the general implementation of FATF’s Recommendation 15 and its Interpretative Note (R.15/INR.15), as well as newly emerging risks and market developments that FATF continues to monitor. According to the report, some examples of these include decentralized finance (DeFi), non-fungible tokens (NFTs), and unhosted wallets.

In related news, the Financial Action Task Force (FATF) said in its plans for 2018 that crypto service providers are required to verify the identities of their consumers. These suggestions were updated in 2019. 

However, many people in the sector have protested that it breaches privacy and is poorly intended for payments that are taking place on a public blockchain. The identification checks are expected to enable authorities to follow criminal transactions, just as they do in the traditional banking system.

Recent cryptocurrency thefts in the amount of one hundred million dollars may have been the work of North Korea.

Three digital investigative agencies came to the conclusion that North Korean hackers were most likely behind an assault that took place last week and stole as much as $100 million worth of cryptocurrency from a corporation in the United States. The story was published by Reuters.

On June 23, crypto assets were taken from Horizon Bridge, a service run by the Harmony blockchain that enables assets to be moved to other blockchains.

Since then, action by the hackers implies they may have links to North Korea, which experts believe is among the most frequent cyber attackers. According to the people who monitor sanctions for the United Nations, Pyongyang is said to use the stolen monies to boost its nuclear and missile programs.

Chainalysis, a blockchain company that is working with Harmony to investigate the attack, said on Tuesday that the method of attack and the high velocity of structured payments to a mixer, which is used to obscure the origin of funds, are similar to previous attacks that were attributed to actors with ties to North Korea. Chainalysis made its statement on Twitter.

According to a study published on Thursday by a different company, Elliptic, there are strong indicators that North Korea’s Lazarus Group may be involved in this heist. These suspicions are based on the nature of the attack as well as the subsequent laundering of the assets that were taken.

Located on the pattern of the transactions, Nick Carlsen, a former FBI analyst who now studies North Korea’s cryptocurrency thefts for TRM Labs, a company based in the United States, claimed that preliminary evidence suggests that this may have been a hack perpetrated by North Korea.

According to the report, the thief is trying to sabotage the chain of events leading back to the initial theft. Cashing out the money at an exchange is made easy by this method.

This would be the seventh incident this year – totaling $1 billion in stolen assets – that can be confidently ascribed to North Korea, or 60% of the total monies taken in 2022, according to Chainalysis.

Experts and South Korean officials told Reuters that the recent decline in bitcoin prices may have hampered North Korea’s ability to cash in on its stolen riches, potentially endangering a major source of money for the sanctions-strapped government.

Crypto Bear Market May Not Take Long.

Financial strategists from the investment banking company JPMorgan Chase & Co are confident that the ongoing bear market has reached an advanced stage and it will soon come to an end.

Bloomberg cited a note written by JPMorgan strategists, including Nikolaos Panigirtzoglou, stating that the downturn of the cryptocurrency market in the past months is a manifestation of a deleveraging process. 

JPMorgan: Crypto Bailouts to Rescue the Situation

The good news is that JPMorgan strategists predict that the ongoing crypto deleveraging cycle may not last long following the growing amount of bailout funds given to companies largely affected by the market dip. 

“The current deleveraging cycle may not be very protracted since crypto entities with stronger balance sheets are currently stepping in to help contain the contagion,” the strategist said. 

According to JPMorgan strategists, venture-capital funding, which is an important source of capital for the crypto industry, has also continued at a healthy pace between May and June. 

For instance, FTX has been given credit to cryptocurrency companies and the exchange is also making moves to acquire some firms that are largely affected by the ongoing market crisis. 

Crypto Market Woes

It is no longer news that cryptocurrency-related businesses have been largely affected by a series of events, forcing some companies to take very stringent actions such as staff layoffs and also liquidation. 

The crypto market was dealt a heavy blow in February and March following an invasion carried out by Russian forces against Ukraine and the Federal Reserve’s move to curtail rising inflation by increasing interest rates. 

While crypto companies tried to stay afloat amid these unfortunate events, Terra ecosystem tokens LUNA and UST crashed tremendously, an incident that rocked the entire crypto market. 

Terra’s collapse in May resulted in the failure of Three Arrow Capital (3AC), which had a significant investment in Terra and is now being faced with liquidation. 

Popular crypto lending platform Celsius Network was forced to halt users’ assets’ withdrawals, swaps, and transfers following the crypto market collapse. 

Furthermore, crypto companies like Coinbase, Crypto.com, and Gemini were forced to slash their number of employees to cope with the downturn in the market. 

JPMorgan strategists are of the opinion that the cryptocurrency market has gone beyond a good portion of the current bear market troubles, adding that it is only a matter of time before crypto prices will rally again. 

South Korean Police Recover Bodies Of Missing Family As Findings Indicate Possibility Of A Suicide With Links To Terra Collapse.

A report by Korea JoongAng Daily on Wednesday reveals that the police have recovered the bodies of a missing family and have reason to believe the family may have committed suicide with possible links to the Terra (LUNA) collapse.

A car identified as belonging to the family of missing school girl Cho Yoo-na was found by South Korean law enforcement underwater close to the Songgok Harbor of the Island of Wando. In the vehicle, the police discovered the bodies of Cho Yoo-na and two adults suspected to be Cho’s parents.

While the circumstances that led to the family’s demise remain unclear, preliminary evidence from the police report suggests a possibility of suicide resulting from financial strains brought on by the Terra ecosystem collapse in May.

Investigators searched the parents’ online activity, revealing that their frequent searches included “Luna Coin,” “sleeping pills,” and ways to commit suicide. CCTV footage last saw the family around their rental house on May 30. 

10-year-old Cho was reported missing by her school after she didn’t return to school on June 22 as promised by her parents, who had said they were going on a trip for a month. The police report that the family appeared to be in significant financial constraint before their disappearance as stacks of unpaid bills could be found at their home.

The Terra ecosystem collapse in May shook the crypto community significantly and threatened to bring down the entire crypto market. Consequently, about $40 billion of investors’ funds were wiped out. It is worth noting that the police are yet to confirm if Cho’s parents invested in the cryptocurrency.

Notably, there have been several unconfirmed cases of suicide by people who bet all on the asset. However, since the Terra collapse, Terraform Labs’ founder, Do Kwon, has launched a new blockchain, claiming the project failed with no foul play on his part. 

Kwon and his team remain under investigation in Singapore and the US, facing multiple lawsuits for their actions leading up to the catastrophic event. As reported by The Crypto Basic on Monday, hacktivist group Anonymous is convinced that Kwon scammed investors and is actively investigating the matter.