WazirX Faces $230 Million Security Breach Amid Regulatory Challenges
- On 17 July 2024, WazirX experienced a major security breach resulting in the theft of over $230 million from a multisignatory wallet. This breach involved Liminal’s digital asset custody services.
- WazirX described the breach as a “force majeure event beyond our control,” while assuring users that efforts are being made to recover the stolen funds. The exchange also disclosed that crypto withdrawals had already been halted prior to the incident.
- In response to the breach, WazirX suspended all Indian rupee withdrawals as the company investigates the breach. The breach has been linked to the North Korean Lazarus hacking group, known for similar exploits.
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SEC Awards Over $37 Million to Whistleblower, Bolstering Regulatory Compliance
- On 17 July 2024, the SEC awarded over $37 million to a whistleblower whose information led to a successful enforcement action exemplifying the importance of the SEC’s whistleblower program to enhance regulatory compliance in helping return millions to harmed investors.
- Payments to whistleblowers are made from an investor protection fund, established by Congress and financed entirely through monetary sanctions paid to the SEC by securities law violators. Whistleblowers are eligible for awards when they voluntarily provide original, timely, and credible information that leads to successful enforcement actions.
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IRS Enhances Identity Authentication Process for FATCA Registration
- On 17 July 2024, the IRS announced enhancements to the identity authentication process for FATCA registration. Taxpayers must now use Login.gov or ID.me to access the FATCA Registration System, ensuring greater security and compliance.
- This initiative safeguards against private cryptocurrency transactions that may otherwise evade regulatory scrutiny. As cryptocurrencies become more prevalent, the IRS’s authentication measures help ensure that crypto assets held in foreign accounts are reported accurately.
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MAS Commits Up to S$100 Million to Boost Quantum and AI Capabilities in Financial Sector
- On 18 July 2024, the Monetary Authority of Singapore committed up to S$100 million to enhance quantum and AI capabilities within the financial sector.
- Following the National Quantum Strategy announced by Deputy Prime Minister Heng Swee Keat in May 2024, MAS will establish a dedicated Quantum track under FSTI 3.0. to offer various grants to support financial institutions in developing quantum and AI capabilities in Singapore
- This investment scheme supports financial institutions to accelerate technological advancements within Singapore’s financial sector, fostering innovation and improving operational efficiencies.
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MAS Addresses Global IT Outage, Ensures Smooth Financial Operations
- On 19 July 2024, MAS effectively managed a global IT outage affecting various organizations. Singapore’s financial markets operated normally during the disruption, and MAS extended the operating hours of its real-time gross settlement system to ensure stability and smooth financial operations.
- MAS requested major financial institutions to report any impact while the institutions reported minimal or no impact on their customers and key operations. But some experienced disruptions to internal systems used by staff, all critical systems remained unaffected.
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SEC Launches Interagency Securities Council to Bolster Enforcement Coordination Across Federal, State, and Local Agencies
- On 19 July 2024, the SEC launched the Interagency Securities Council to enhance collaboration and enforcement efforts among federal, state, and local agencies. This council aims to improve regulatory cohesion and protect investors from emerging scams and frauds.
- In the context of several high-profile cryptocurrency-related financial frauds, such as the collapses of exchanges and fraudulent initial coin offerings (ICOs), the establishment of the ISC will ensure that fraud is tackled from the grassroots level up to major industry players.
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Japanese Crypto Industry Urges Government for Immediate Tax Reforms
- On 19 July 2024, the Japan Blockchain Association petitioned the government for significant tax reforms, arguing that high tax rates on crypto profits are stifling investment. The association seeks to align crypto tax rates with those of conventional financial assets to enhance Japan’s competitiveness in the global web3 sector.
- Under existing Japanese law, traders must declare token-derived profits as “other income” on their tax returns, subjecting high earners to a maximum tax rate of 55%, making Japan less attractive for crypto investors.
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Ethereum Exchange-Traded Funds Set to Launch Amid Market Optimism and Speculation
- On 22 July 2024, the SEC approved the launch of multiple Ethereum ETFs, set to begin trading on major stock exchanges to provide regulated exposure to Ethereum for traditional investors and enhancing market stability.
- The SEC approved the launch of spot Ethereum ETFs by major issuers, including BlackRock, Fidelity, 21Shares, Bitwise, Franklin Templeton, VanEck, and Invesco Galaxy. These ETFs will feature management fees ranging from 0.15% to 0.25%, providing retail investors access through brokerages like Robinhood and Fidelity.
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Marathon Digital Ordered to Pay $138 Million for Breach of Contract, Reflecting Challenges in Upholding Ethical Standards in Crypto Industry
- On 19 July 2024, Marathon Digital was ordered to pay $138 million for breaching a Non-Disclosure/Non-Circumvention Agreement with Michael Ho.
- The lawsuit, initiated by Ho, detailed how Marathon Digital had agreed to utilize his strategy for developing a large-scale Bitcoin mining facility in North America but failed to honor the compensation terms.
- The ruling highlights the critical role of judicial oversight in ensuring ethical enforcement of agreements within the crypto industry. By holding Marathon Digital accountable for breaching its contractual obligations, the judiciary reinforces the importance of upholding trust and integrity in business practices
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Keith E. Cassidy Named Interim Acting Director of SEC’s Division of Examinations
- On 22 July 2024, Keith E. Cassidy was appointed as interim Acting Director of the SEC’s Division of Examinations. Cassidy, with extensive experience in cybersecurity and regulatory affairs.
- In addition to serving as Deputy Director, Mr. Cassidy is the National Associate Director of the Division’s Technology Controls Program (TCP) with responsibility for technology-focused examinations and overseeing the SEC’s CyberWatch program and the Cybersecurity Program Office.
- SEC’s commitment to preparing itself with highly technologically proficient individuals to address and maintain the integrity and security of financial markets, particularly as they intersect with innovative technologies like blockchain and cryptocurrencies.
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Elon Musk Unveils World’s Most Powerful AI Training Cluster
- On 22 July 2024, Elon Musk’s xAI began training its large language model, Grok, on the Memphis Supercluster, claimed to be the world’s most powerful AI training cluster with 100,000 Nvidia H100 AI chips.
- Musk’s automotive company Tesla plans to deploy humanoid robots in its factories next year. These robots, named Optimus, are designed to perform tasks that are unsafe, monotonous, or repetitive for human workers.
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Hong Kong Launches Asia’s First Inverse Bitcoin ETF Amidst Volatile Market Conditions
- On 22 July 2024, CSOP Asset Management launched Asia’s first inverse Bitcoin ETF, allowing investors to profit from declines in Bitcoin’s value and to attract investors seeking to capitalize on Bitcoin’s downside movements.
- Ding Chen, CEO of CSOP Asset Management made a statement saying “The first futures-based inverse bitcoin product listed in Hong Kong creates opportunities for investors to gain from downside movements in bitcoin,”
- It provides a tool for risk-averse investors to hedge against potential downturns in Bitcoin’s value and it also contributes to market stability.
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Bank of Ghana and Monetary Authority of Singapore Successfully Demonstrate E-Cedi in Cross-Border Transactions
- On 24 July 2024, the Bank of Ghana and the Monetary Authority of Singapore completed a proof of concept (POC) for the e-cedi, demonstrating its viability for cross-border payments.
- This initiative has shown that many intermediaries and associated costs typically involved in international transactions can be eliminated.
- Giesecke+Devrient (G+D) are the technology partner for the Ghanaian central bank confirmed the effectiveness of utilizing digital credentials for international trade and cross-border payments.
- Earlier this year, in April, the Ghanaian and Singaporean central banks completed their first cross-border transaction using the e-cedi.
- The POC was a collaborative effort involving Fidelity Bank, a Ghanaian commercial bank, which provided banking and exchange services for the CBDC.
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Revolut Secures UK Banking License, Poised to Expand Services
- On 20 July 2023, Revolut received a preliminary banking license from the UK’s Prudential Regulation Authority, is a significant milestone for the fintech firm.
- The approval from the PRA comes with certain restrictions during a “mobilization” stage before Revolut can obtain a full banking license
- Revolut offering banking services alongside its crypto trading platform, it can provide a seamless experience for crypto enthusiasts, integrating traditional banking with digital asset management
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