The week’s developments in the crypto currencies world including FATF to release new rules for global crypto sector

FATF to release new rules for global crypto sector

On June 21, the Financial Action Task Force (FATF) is expected to publish a note clarifying how G7 nations should exercise oversight for the digital assets sector. The new rules will apply to crypto exchanges, custodians and crypto hedge funds, among others. FATF is an intergovernmental organization to promote the implementation of legal, regulatory and operational measures to fight money laundering. Bloomberg reports that the FATF rules are expected to require firms ranging from major spot exchanges to asset managers to gather data on all clients initiating transactions worth over $1,000 or 1,000 euros. They will also be asked to provide data on the recipients on the funds, and share that data with the recipient’s own service provider together with data on each transaction, Bloomberg claims.

Source: “FATF to Release New Rules for Global Crypto Sector, Impacting Exchanges, Funds, Custodians”, available at


CryptoCompare launches exchange benchmark

London-based crypto data provider CryptoCompare has launched an Exchange Benchmark product that ranks over 100 crypto spot exchanges worldwide. According to CryptoCompare, the new product has been launched in response to industry concern sparked by research indicating that a significant number of crypto exchanges globally have been using wash trading and other strategies (such as spoofing and incentivized trading schemes) to artificially inflate trade volumes. CryptoCompare has designed its Exchange Benchmark deploying both a qualitative (due diligence) and quantitative (“market quality based on order book and trade data”) approach, the press release notes. CryptoCompare recently revealed a partnership with Nasdaq to release a new cryptocurrency pricing product targeted at institutional investors, following the recent announcement of a joint venture with BitMEX to jointly build a real-time crypto futures dataset.

Source: “CryptoCompare Launches Exchange Benchmark in Response to Concerns Over False Volume Reporting”, available at

Blockchain for retail

Bitcoin is still very far away from being universally accepted by retailers, however, acceptance is growing. Recently, blockchain start-up Flexa announced that its app will permit users to pay for their purchases using cryptocurrencies at popular retailers such as Barnes & Noble, Office Depot and Whole Foods. In addition to payments, blockchain can be of use to the retail sector in other ways. One additional use is customer loyalty programs, which would benefit from blockchain’s ability to protect the value and personal data, thereby decreasing loyalty-fraud crime. Blockchain provides an efficient for supply chain tracking, which can be used to verify the authenticity and source of consumer goods and can also be used to track the origin and supply chain of food. Blockchain could also be utilised for customer data management, as retailers often record, store and utilize large amounts of customer data. Blockchain would improve security, give customers greater control over their data and could create new forms of marketing to retail customers.

Source: “Blockchain for Retail: Use Cases and Potential Applications”, available at

Australian government employee charged with mining cryptocurrency at work

A 33-year-old Australian government employee has been charged after he was caught mining cryptocurrency at work. the Australian Federal Police (AFP) alleged that the IT contractor from the Sydney suburb of Killara had modified government computer systems to mine cryptocurrency worth over AU$9,000 for his own gain. The charges carry a maximum penalty of 10 years imprisonment and two years imprisonment, respectively. Others have also been charged with similar crimes. In 2017, a former employee of the Federal Reserve Board of Directors was fined $5,000 and put on probation after being caught mining bitcoins on a server owned by the U.S. central bank. Nuclear scientists at a Russian weapons research facility were charged for the same crime last February. And, last November, two school principals in China were caught stealing power from their institution to mine the cryptocurrency ether.

Source: “Australian government employee charged with mining cryptocurrency at work” available at

22-year-old gets 2 years in jail and must forfeit $823,357 for illegally selling hundreds of thousands in Bitcoin

A 22-year-old man in the US has been sentenced to two years in prison and must forfeit $823,357 in illicit profits for selling hundreds of thousands of dollars in Bitcoin BTC through an unlicensed money transmitting business. He plead guilty, admitting he had operated a Bitcoin exchange without previously registering the business with the Financial Crimes Enforcement Network (FinCen) of the US Department of Treasury. He also admitted he had not implemented the necessary anti-money laundering procedures (AML).

Source: “22-year-old gets 2 years in jail for illegally selling hundreds of thousands in Bitcoin” available at

Facebook to consider offering employee salary paid in cryptocurrency

Facebook could announce its new digital currency called GlobalCoin this month and may allow its employees to take their salary in the form of this new currency. Many reports have speculated on the possible plans that Facebook currently has regarding blockchain technology and digital assets such as use in different applications including Facebook, Messenger, WhatsApp and Instagram. The aim of this digital currency is to help users pay for things and send and receive money across borders, something that has usually been difficult and expensive to do with traditional fiat currencies. Critics have cited concerns with privacy, especially in light of the privacy problems that Facebook has faced in recent years.

Source: “Facebook Could Announce Its Cryptocurrency This Month For Employees To Take It As Salary”, available at

Claire Cummings

Claire practises financial services law with a focus on regulatory issues, cryptocurrencies and tokens, trading and brokerage documentation and advising both existing and start-up funds and fund managers.

If you would like to discuss any of the points we raise, please contact me or one of our other lawyers.

Phone: 0207 585 1406