Noncustodial cryptocurrency exchange ShapeShift announced today the integration of nearly a dozen decentralized exchange, or DEX, protocols — a move designed to relieve both the company as well as users of Know Your Customer burdens while simultaneously offering traders superior liquidity, pricing, asset availability and security. Prior to the integrations, ShapeShift required users to undergo a KYC process in order for the company to remain legally compliant, as the exchange served as a counterparty to user trades. In an interview with Cointelegraph, ShapeShift CEO Erik Voorhees said that regulated services will continue operating on assets that are not currently available …

The U.S. Securities and Exchange Commission has not been kind to crypto in the past year. In March 2020, in the SEC v. Telegram case, the Commission won a worldwide injunction against the proposed issuance of Grams by Telegram, undoing years of innovative work even in the absence of any allegations of fraud. Then, on the last day of September 2020, Judge Alvin K. Hellerstein dashed the hopes of Kik Interactive by ruling in favor of the SEC’s motion for summary judgment in SEC v. Kik Interactive, finding that Kik had sold securities when it issued its Kin crypto tokens. …

Hacked cryptocurrency exchange Exmo is not able to recover a large amount of stolen funds as hackers withdrew millions of dollars in crypto through the Poloniex crypto exchange. On Dec. 21, Exmo announced a major hack causing the platform to freeze all withdrawals from the exchange. The United Kingdom-based company now estimates total losses to stand at more than $10.5 million in various digital assets like Bitcoin (BTC), Ether (ETH), Tether (USDT), XRP, Bitcoin Cash (BCH), and Zcash (ZEC). Exmo executives allege that as much as $4 million of totally stolen assets cannot be recovered due criminals withdrawing the funds …

The unique power of blockchain and cryptocurrency can also be considered their weakness. Crypto users gain unparalleled privacy for financial transactions through a decentralized transactional system. Governments, however, demand transparency in financial transactions for legal concerns. This creates a paradox. People are less inclined to use financial instruments if, in doing so, they expose their money to the world. Conversely, there are a number of regulations requiring financial institutions to counteract terrorism and money laundering — serious concerns for many governments. The crux of the issue is that most public blockchains require a consensus of all participants to validate transactions. …

Every Friday, Law Decoded delivers analysis on the week’s critical stories in the realms of policy, regulation and law. Editor’s note Last week’s Law Decoded sounded the alarm on threats to self-custodial wallets in the U.S. in particular. While such concerns have continued to take shape, nothing concrete has emerged from the U.S. Treasury, which was at the heart of last week’s conversation. Though I don’t like to recycle themes, it seems a reasonable time to ask the question: What is a crypto wallet as far as a regulator is concerned? While many people access their crypto through custodial solutions …

French financial authorities are strengthening the country’s cryptocurrency regulations in a move to prevent illicit activities like money laundering and terrorism financing. On Dec. 9, several ministries in France jointly introduced an order aiming to prevent anonymous digital asset transactions by banning anonymous crypto accounts. The new regulatory effort is backed by French finance minister Bruno Le Maire, overseas minister Sébastien Lecornu and junior economy minister Olivier Dussopt. The order is pursuant to Article 203 of France’s PACTE law, which stands for the Action Plan for Business Growth and Transformation. In the document, the ministries have admitted that digital assets …

Elliptic, a leading firm in blockchain analytics, has found major shifts in recent trends in illicit crypto use. Per the firm's study released Wednesday, the proportion of Bitcoin (BTC) transactions that the firm has linked to criminal activity is way down, certainly relative to its 2012 peak: Tom Robinson, Elliptic's chief scientist, explained to Cointelegraph that this is the result of many trends in crypto. These included heightened exchange compliance and law enforcement activity, as well as the growing force of analytics firms like Elliptic itself. Interestingly, Robinson also said general use has simply exploded: "Other crypto use-cases have exploded …

The crypto space is an incredible, albeit risky, learning environment. Its volatility serves as a dire warning to those who like to test how deep the pool is by jumping in headfirst. Old guards constantly warn newcomers: “Take it slow, learn the basics and stack sats.” Wealth, in this space, can appear and disappear in an instant. In 2018, many newcomers got their first taste of what a crypto winter feels like. This wasn’t the first time Bitcoin (BTC) crashed, and it won’t be the last. Despite being around for more than 10 years, the crypto space is still in …

A decentralized anonymous margin trading exchange says it doesn’t require Know Your Customer checks — meaning users can begin trading as soon as they’ve generated a wallet. DMEX says it is able to operate without KYC because of how it runs on a smart contract, and positions itself as a compelling alternative to BitMEX. Most decentralized exchanges use synchronous trade executions, meaning that users have to wait for their last trade to be registered on the blockchain before they can perform a new one. DMEX addresses this by using a state-of-the-art matching engine that monitors account balances while the confirmation …

Crypto exchange and debit card provider Crypto.com has completed the acquisition of an Australian financial services company in order to secure an Australian Financial Service License, or ASFL. The acquired firm, named The Card Group Pty Ltd, has been described as specializing in "prepaid card, mobile, and wearable solutions" for enhancing cardholders' engagement. Crucially, the firm was already approved by Australia’s Foreign Investment Review Board, paving the way for Crypto.com's ASFL. With an ASFL under its belt, Crypto.com will be licensed to legally issue its proprietary card in Australia and to establish direct relationships with domestic consumers along with actors …

Major players in U.S. crypto lobbying are coming out in defense of noncustodial wallets. On Tuesday, the Blockchain Association released a new report presenting policy options for self-hosted wallets to regulators. On Wednesday, Coin Center published an expert view by Jai Ramaswamy, also defending such wallets. The Blockchain Association is a trade organization for the crypto industry, while Coin Center is a nonprofit focused on defending decentralization before policymakers. Both are based in Washington, D.C. Ramaswamy currently works on compliance for Celo's parent company, C Labs, and was formerly the head of the Department of Justice’s Anti-Money Laundering division. His …

BitMEX, one of the world’s biggest Bitcoin (BTC) trading platforms, continues to strengthen its Anti-Money Laundering measures in the aftermath of its criminal charges in the United States. According to a Nov. 12 blog post, BitMEX has partnered with software and compliance firm Eventus Systems to improve its trade surveillance and AML transaction capabilities. Per the announcement, Eventus Validus‘ technology will be integrated into BitMEX’s existing trade surveillance and AML processes in order to provide a “safe and secure trading environment” for its users. “We will be able to more efficiently screen out bad actors and increase proactive monitoring for …