USA

Bakkt Warehouse Launches Deposits and Withdrawals as Planned: Bakkt Warehouse, a qualified custodian of crypto trading platform Bakkt, is now accepting customer Bitcoin (BTC) deposits and withdrawals.

U.S. Government agencies paid nearly $10M for blockchain analysis; led by IRS, FBI and ICE: The total amount raised by blockchain analysis companies to date is $107 million. Blockchain analysis is utilized by virtually all compliant businesses that deal with cryptocurrencies but is also utilized by government agencies. U.S. Government agencies have entered purchase orders and contracts with blockchain analysis companies worth nearly $10 million to date The IRS, ICE, and FBI made up nearly 85% of that total.

US SEC Reaches $10 Million Settlement With Digital Assets Issuers: The United States Securities and Exchange Commission (SEC), a primary governmental regulator, has settled charges with digital assets company Bitqyck Inc. and its founders. The SEC announced the development in a press release on Aug. 29. According to the announcement, Bruce Bise and Sam Mendez­ are the founders of Bitqyck — a company that provided security offerings for digital assets Bitqy and BitqyM in Dallas, Texas. The company claimed that Bitqy tokens gave investors fractional shares of company stock via a smart contract. Additionally, Bitqyck said that BitqyM tokens would give holders interest in a cryptocurrency mining facility running on sub-market-rate electricity, per the press release. The SEC alleged in its complaint that both of these claims were false. The SEC alleged that the founders fraudulently misrepresented a platform called QyckDeals, which was a deals platform for Bitqy tokens. Lastly, the SEC charged the company with illegally operating an unregistered, national security exchange for Bitqy entitled TradeBQ.

US Congress Urged to Regulate Crypto Sector Under Bank Secrecy Act: The Financial Integrity Network (FIN) — a Washington D.C.-based advisory firm — has urged the United States Congress to regulate firms in the cryptocurrency sector under the Bank Secrecy Act (BSA). In a copy of FIN testimony published ahead of a hearing on Sept. 3, FIN recommended that virtual asset service providers (VASPs) should be regulated based on the particular service or services that they provide with emphasis on promoting system-wide governance. FIN’s vice president for product development and services, David Murray, noted that some VASPs are currently regulated as money transmitters under the BSA, while others are not regulated at all. Murray continued by saying:

“Even for those VASPs currently regulated as money transmitters, the regulations are insufficient to protect virtual assets from exploitation.”

Nevada Regulators Say Bitcoin ATMs Will Need License to Operate: Bitcoin and cryptocurrency ATMs need a licensing scheme, authorities in the state of Nevada have officially announced. In a statement first reported on by local news media outlet Nevada Current on Aug. 28, the state’s finance regulator, the Financial Institutions Division of the Department of Business and Industry (NFID), said ATM operators must conform to existing rules:

“Any entity that facilitates the transmission of or holds fiat or digital currency by way of brick-and-mortar, kiosk, mobile, internet or any other means, should contact the NFID to request a licensure determination”

VanEck, SolidX to Offer Limited Bitcoin ETF for Institutions Via Exemption: Following another delay on Bitcoin exchange-traded funds (ETFs), asset managers VanEck and SolidX plan to offer a limited version of their Bitcoin ETF to institutional investors. VanEck Securities and SolidX Management want to start selling shares in a limited version of a Bitcoin ETF, using a rule that exempts the shares from securities registration, under which shares can be sold only to certain institutional investors, The Wall Street Journal reported on Sept. 3.

Political Group Launches ‘ICO’ to Support US House Candidate: A political action committee (PAC) wants to conduct an initial coin offering to support candidates for public office. “BitPAC has its own funds but we’re also doing an initial coin offering,” said Dan Backer, the group’s founder. “Anyone who donates to [the PAC] as of [Friday] can get one politicoin.” There’s no value associated with BitPAC’s politicoin, Backer explained, but the goal is to ultimately grant some sort of voting right to token holders.

NSA Working to Develop Quantum-Resistant Cryptography: The United States’ National Security Agency (NSA) is allegedly working to develop quantum-resistant cryptography. The claim was made in a tweet by Bloomberg Technology reporter William Turton on Sept. 4, who was in attendance at the Billington CyberSecurity 10th annual summit in Washington D.C. Turton’s tweet gives only a hint at the agency’s apparent plans, with reference to the quantum-resistant cryptography project confined to an aside. He wrote:

Judge Rules Against Craig Wright, Criticizes Credibility in Court Decision: Notorious Bitcoin SV enthusiast Craig Wright has reportedly lost his legal battle against Ira Kleiman, the brother of Wright’s deceased business partner David Kleiman. As part of the reported ruling, Wright has been ordered to pay David Kleiman’s estate 50 percent of the bitcoin that he says he mined with Kleiman prior to the start of 2014. Wright has never provided any proof that he owns these coins, however, bringing into doubt whether Ira Kleiman will receive the settlement at all.

Ripple Hires Congressional Assistant as Government Relations Manager: On Sept. 3, Ron Hammond took to Twitter to announce that as of today, he is the new manager of government relations for Ripple. Hammond was reportedly part of the team that crafted the Token Taxonomy Act, a bill that would exclude cryptocurrencies from classification as securities, as well as provide the introduction of regulatory certainty for businesses and regulators in the U.S. blockchain industry.

Gemini Adds Former Morgan Stanley Executive as Chief Compliance Officer: Cryptocurrency exchange and custodian Gemini has announced that Noah Perlman, former global head of financial crimes and chairman of the political action committee at Morgan Stanley, will be its new chief compliance officer. Tyler Winklevoss, one of Gemini’s founders, announced this development on September 4, 2019. The announcement states that Perlman’s appointment goes hand-in-hand with Gemini’s policy to “ask permission, not forgiveness.”

Unlicensed Exchange Conviction Leads to Seizure of 54 BTC: Kunal Kalra, a resident of Los Angeles, California, has pleaded guilty to running an unlicensed cryptocurrency exchange operation which catered to drug traffickers. An announcement published by the U.S. Department of Justice indicated that Kalra, who went by the pseudonyms “Kumar” and “Coinman,” has plead guilty to four charges, including operating an unlicensed money transmitting business, failure to maintain an anti-money laundering (AML) program, laundering of monetary instruments and distribution of methamphetamine.