Payment Expert’s Blockchain Bulletin analyses how the world of blockchain is constantly evolving and heavily impacting the payment industry, with cryptocurrencies, NFTs and the metaverse revolutionising the space.
This week, the crypto market has once again been rocked as the world’s largest exchange, Binance, forked out $4.3bn in settlement fees after its CEO, Changpeng ‘CZ’ Zhao, admitted he and the company violated various money laundering violations.
Binance future in question after Zhao steps down as CEO
The crypto world has been hit with another major scandal as this time, Binance has been found to have broken several money laundering and KYC measures which ultimately led to the exchange agreeing a $4.3bn settlement fee and to its CEO Changpeng Zhao stepping down from his position.
The US Department of Justice announced during a press conference this week that Binance ‘facilitated transactions between US users and users in sanctioned countries, knowing it would be in violation of US law’, but they did it anyway’.
The $4.3bn figure – which is a record for a crypto company settlement – will be credited to the DOJ and Commodity Futures Trading Commission who issued a lawsuit against Binance earlier this year, as well as the Securities and Exchange Commission in June.
Zhao, who resides in the United Arab Emirates but flew to Seattle to plead guilty to the charges against him, was ordered to pay $50m in settlements. His successor, Richard Teng, will take over the reins as CEO as Zhao has been instructed to stay away from Binance operations for the next three years.
SEC continues crypto crackdown suing Kraken
In other US regulatory news, the Securities and Exchange Commission (SEC) has filed a lawsuit against Kraken over its unregistered status as a crypto exchange in the US.
The allegations, which echo the SEC lawsuits against Binance and Coinbase this year, also revealed that the financial regulator believes Kraken has been ‘commingling’ investor and company funds.
Kraken defended itself from the allegations, reiterating the same frustrations many crypto companies share when it comes to the SEC’s stance on crypto in the US.
A crypto boom heading to Argentina under the new President?
The recent election of Javier Milei as Argentina’s new President has the crypto industry hinting at a possible growth in adoption in the country.
This is due to Milei being a vocal Bitcoin supporter and ardent advocate that the monetary control of cryptocurrencies should be directed to the private sector, going against the Argentine central bank, which could mean a possible end to any Central Bank Digital Currency (CBDC) plans the predecessor and bank may have had.
Milei is listed on the World Economic Forum, a body which has been vocal in its support for greater regulation of cryptocurrencies.
CDBCs privacy elements have “significant effects” on usage
As Central Bank Digital Currencies continue to gain prominence, fears are growing in parallel when it pertains to privacy and data governance of the digital currency.
The Bank of International Settlements surveyed over 3,500 participants recently and the overwhelming majority believes that tighter protections over the security of CBDCs will lead to more willingness for widespread adoption.
The BIS revealed: “The privacy-preserving variations of the CBDC design have significant effects on the willingness to use CBDC when respondents purchase privacy-sensitive products.”
Paysafe adopts Visa’s tokenisation technology
Payments platform Paysafe has extended its partnership with Visa by integrating its Network Tokens as an alternative to primary credit and debit card numbers.
The tokenisation method adds an additional layer of protection for cardholders without adding friction to the user journey, aiming to create a seamless payment experience with higher authorisation rates.
Germany opening up to crypto as Commerzbank gains licence
Commerzbank has become the first full-service German bank to receive a Crypto Custody License to develop its digital asset services.
The licence was granted in accordance with the German Banking Act (KWG). It will give Commerzbank the right to build up a portfolio of digital asset services, with a particular focus on crypto.