The False Narrative of Bitcoin’s Role In Illicit Activity
New U.S. Secretary of the Treasury Janet Yellen has said that crypto-assets are “a particular concern” when it comes to criminal activity and terrorist financing, going on to say that they “are used, at least in a transaction sense, mainly for illicit financing.” In fact, identified cases of laundering through crypto-assets are tiny compared to the volumes of cash laundered through traditional methods. According to the United Nations, the estimated amount of money laundered globally in one year is $800 billion – $2 trillion, whereas, according to Chainalysis, in 2019, criminal activity represented only 2.1% of all crypto-asset transaction volume (about $21.4 billion).
The European Commission and the European Central Bank cooperating on a digital euro
The European Commission and the European Central Bank (ECB) are jointly reviewing at the technical level a broad range of policy, legal and technical questions emerging from a possible introduction of a digital euro. Following the conclusion of the public consultation on January 12, 2021 and a period of preparatory work, the ECB will consider whether to start a digital euro project towards mid-2021. Such a project would answer key design and technical questions and provide the ECB with the necessary tools to stand ready to issue a digital euro if such a decision is taken.
Tether and Bitfinex seek further 30 days to produce critical trial documents
iFinex Inc, the parent company of Bitfinex and Tether, has asked the New York Supreme Court to push back its trial date again, and another 30 days to produce the documents demanded by the Office of the Attorney General (NYAG). The document production process was originally supposed to be completed by December 16, 2020, which was subsequently extended to January 15. The new request noted that a “substantial volume” of material had already been handed over to the OAG, but that there remained “supplemental agreed-upon items” that still had to be sourced. The legal battle extends back to April 2019, when the NYAG alleged that Bitfinex had attempted to cover up the loss of $850 million of customers’ funds by taking illegal loans from Tether.
On January 10, Bitfinex and Tether CTO Paolo Ardoino said that the two companies have so far “produced more than 2.5m million documentation pages in response to requests from NYAG.”
Coinbase Acquires Blockchain Infrastructure Firm Bison Trails
Coinbase has bought blockchain infrastructure startup, Bison Trails, which provides an easy-to-use platform to launch and run nodes on any blockchain network. Bison Trails will serve as a foundational element within Coinbase’s ecosystem suite of products, while continuing to operate as a standalone product and provide its “infrastructure as a service” to its current customers. It enables holders of digital tokens to run their own validators or simply custody their holdings offline and delegate the stake to another company’s validator.
* The views expressed herein are those of the author and should not be attributed to the International Monetary Fund, its Executive Board or its management.
