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Biden Administration Sanctions Crypto Exchange Due to Alleged Ransomware Involvement

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United States regulators are sanctioning the cryptocurrency exchange Suex for its alleged involvement with ransomware actors.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) says the exchange, which is based in Russia and the Czech Republic, had a hand in facilitating financial transactions with proceeds stemming from at least eight ransomware variants.ADVERTISEMENT

According to the OFAC, analysis of known Suex transactions indicates that more than 40% of the exchange’s activity was associated with illicit actors.

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Reports first surfaced last week that the Biden administration intended to hit unnamed ransomware targets with sanctions.

And at a White House briefing earlier this month, Deputy National Security Advisor for Cyber and Emerging Technologies Anne Neuberger said that Americans and businesses must take active steps to prevent being victimized by ransomware attacks, even as the government rolls out regulations.

“We continue to see successful attacks occurring against vulnerabilities for which there are patches, so we want to use the opportunity of this pressroom and the attention that it gets to ask Americans, to ask organizations, to [take] the steps they need to… be safe online, even as the government focuses on its efforts.”

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The FBI reports there was a nearly 21% increase in reported ransomware cases and a 225% increase in associated losses from 2019 to last year, according to the OFAC.

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Crypto Exchange

Fidelity to Launch Spot Bitcoin ETF This Week

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Fidelity is aiming to launch its first spot Bitcoin ETF

Fidelity, an American multinational financial services corporation, is set to launch its first spot Bitcoin ETF in Canada this week, according to Bloomberg senior ETF analysts.

ETF launch

Fidelity is a multinational financial services corporation that was established in 1946, and it remains one of the largest asset management companies in the world with $4.9 trillion AUM with a total AVN of $8.3 trillion.

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According to Bloomberg analysts, the fund with FBTC CN is currently pending listing on the Canadian exchange and will be trading under the name Fidelity Advantage Bitcoin. Balchunas also notes that the new fund might possibly become the biggest asset management company that includes Bitcoin products.

Spot ETF as main advantage

While futures-backed Bitcoin ETFs are not something new for the market, the physically-backed exchange-traded fund would actually be a more convenient solution for Canadian investors who are willing to receive exposure to the cryptocurrency market and Bitcoin specifically.

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Compared to futures-backed funds, physical settlement Bitcoin products allow investors to receive direct exposure to the cryptocurrency market without facing high roll costs. Since Bitcoin-tracking funds utilize short-term one-month futures, they have to renew their contracts every month, which puts investors in an unfavorable position.

Due to funds operating with large volumes, the futures market faces significant buying power that puts futures contracts prices higher than the actual underlying asset. Such a market condition is called contango bleed when investors have to overpay for opening new positions on the market, which puts them at around a 20% annual loss.

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Former PayPal CEO’s Cryptocurrency Exchange Goes Live for Institutional Clients

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“Bullish” exchange backed by PayPal co-founder is set to launch for institutional investors.

The cryptocurrency exchange backed by Peter Thiel and Richard Li began operating for a batch of institutional investors on Tuesday. The start for institutional investors is only the first step before the full launch for private investors and traders.

The Bullish Exchange will offer Bitcoin, Ether and EOS tokens for trading against USD coins. With further development and expansion in the future, the exchange will broaden its digital assets offering for both institutional and retail investors.

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Exchange founders

Among the exchange’s first clients are firms like Virtu Financial (non-U.S. affiliate) and Hong Kong-based crypto finance firm Amber Group. The first company is an electronic market-making firm that is based in New York.

The new exchange, which is also backed by hedge fund managers Alan Howard and Louis Bacon, was established earlier in 2021. The exchange has numerous distinctive features that come from the world of decentralized finance, including automated market making, lending tools and portfolio management mechanisms that will help traders to properly handle their funds.

The chairman of Bullish exchange presented his product like a tool designed for investors who are looking for secure and efficient exposure to the digital assets market on a platform that will ensure funds safety from both the technical and legal sides.

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The exchange will initially use its own assets to add more liquidity to pools that would be used by automated lending and market-making mechanisms. The backend of Bullish exchange is powered by EOSIO—open-source blockchain software developed by Block.one.

Plans for the future

Bullish exchange is planning to further broaden its offering by going public on the New York Stock Exchange by merging with SPAC company Far Peak Acquisition Crop. The transaction between the two companies will set the exchange’s value at approximately $9 billion.

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‘New Blow’ as Large Crypto Exchanges Are Told to Pay British Tech Tax

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Crypto exchanges operating in the United Kingdom – including the likes of Coinbase â€“ will be forced to pay a recently created tech tax – with the British tax body, HM Revenue and Customs (HMRC), declaring that cryptoassets “are not financial instruments.”

The British Treasury last year announced the launch of a new 2% sales charge on online vendors, search engines and social media providers with global revenue of over USD 666.4m and domestic sales above the USD 33.3m mark.

Per the Telegraph, the tax office has informed crypto exchanges that they are subject to the levy, which was created in a bid to make sure the likes of Google and Amazon â€“ who have been criticized for finding tax workarounds in the UK – contribute more to the Treasury’s coffers.

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The same media outlet noted that although Coinbase’s UK operations had reported sales worth just under USD 24m, “the company recently reported that global revenues had quadrupled, meaning it is likely to pass the UK threshold in 2021.”

However, the tax may be short-lived, at least in its current form: earlier this year, the G20 agreed to create a streamlined tax essentially aimed at global tax giants. The measure will force some of the world’s biggest companies to cough up some USD 150bn in extra tax revenue each year.

Last month, the BBC reported that G20 chiefs had agreed to create a global minimum tax rate of 15% for large companies, and would enforce the measure starting in 2023.

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In the meantime, however, the British “tech tax” is still in place – and Coinbase is likely to have to pay it.

HMRC’s ruling that cryptoassets “are not financial instruments” is key. Financial providers are exempt from the tax, but the tax body’s insistence that tokens “do not qualify as commodities or money” means that crypto trading platforms cannot slip through the net.

The same media outlet quoted the crypto pressure group CryptoUK as claiming that it was “unfair” to classify crypto “differently to other financial assets” – particularly as the UK tax body’s American counterparts largely consider coins to be commodities.

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CryptoUK director Ian Taylor was quoted as calling the move “a new blow” to crypto exchanges, who were already reeling from “arduous” licensing measures announced by the regulatory Financial Conduct Authority â€“ ultimately leading to higher fees for exchange customers.

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