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Ronald Baumgarten Appears on IDFA Podcast “The Dairy Download”

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Employment Law Spotlight

Update: Los Angeles City Council Moves to Amend Minimum Wage for Hotel and Airport Workers with Carve Outs and Add-Ons

Bulls, Bears, and Blockchain™ – December 19, 2024

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<a href="#Japanese">Japanese Crypto Exchange Goes Public in U.S., Stablecoin Initiatives Announced</a>

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<a href="#Multiple">Multiple Digital Asset Initiatives Announced in Foreign Markets</a>

<a href="#Advocacy">Blockchain Advocacy Organization Publishes Global Standards Mapping Report</a>

<a href="#Enforcement">Crypto Enforcement Actions Continue Across U.S. and Foreign Jurisdictions</a>

<a href="#Hacks">Cryptocurrency Hacks Continue Through Various Attack Vectors</a>

<a href="#Adoption">Crypto Adoption and Illicit Exposure Report Published</a>

Client Alert: <a href="https://www.bakerlaw.com/insights/victory-for-tornado-cash-as-court-rules-sanctions-were-unlawful/" target="_blank" rel="noreferrer noopener">Victory for Tornado Cash as Court Rules Sanctions Were Unlawful</a>

Client Alert: <a href="https://www.bakerlaw.com/insights/potential-risks-to-financial-stability-the-financial-stability-oversight-councils-2024-annual-report/" target="_blank" rel="noreferrer noopener">Potential Risks to Financial Stability: The Financial Stability Oversight Council’s 2024 Annual Report</a>

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Japanese Crypto Exchange Goes Public in U.S., Stablecoin Initiatives Announced

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By <a href="https://www.bakerlaw.com/professionals/john-e-robertson/">John Robertson</a>

According to recent reports, the parent company of Coincheck, one of Japan’s largest cryptocurrency exchanges, has gone public on a major U.S. stock exchange. The reports indicate that the company, which is said to serve over 2 million users in Japan, will be traded under the ticker symbol CNCK.

In other news, USDC stablecoin issuer Circle recently announced a new partnership with one of the world’s largest cryptocurrency exchanges. The press release states the exchange will make USDC more available on their products and services while also adopting USDC as a “vital dollar stablecoin” for its own corporate treasury. The release indicates Circle will provide the crypto exchange with “technology, liquidity and other tools” for its users to “benefit from the trust and innovation that Circle has built for USDC.” Circle will also work with the exchange to build “key relationships across the global finance and commerce landscape.”

In a separate press release, Circle announced it has become the first stablecoin issuer to commit to comply with the Ontario Securities Commission (OSC) and Canadian Securities Administrators’ (CSA) Value-Referenced Crypto Asset requirements. The press release states that this commitment will allow crypto trading platforms to continue offering USDC after CSA’s December 31 cutoff for delisting noncompliant stablecoins. The press release notes meeting these requirements furthers Circle’s commitments to transparency and regulatory compliance.

Finally, a press release from the Core Foundation announced Core’s integration with BitGo, a major U.S. digital asset custody provider. The release indicates the integration will allow BitGo’s clients to access Core’s dual staking offering while retaining full custody of their assets to avoid counterparty risk.

For more information, please refer to the following links:

<a href="https://www.blockhead.co/2024/12/12/japan-exchange-coincheck-lists-on-nasdaq-paving-the-way-for-global-expansion/" target="_blank" rel="noreferrer noopener">Japan Exchange Coincheck Lists on Nasdaq, Paving the Way for Global Expansion</a>

<a href="https://www.circle.com/pressroom/circle-and-binance-enter-into-a-strategic-partnership-that-will-accelerate-global-usdc-and-crypto-adoption" target="_blank" rel="noreferrer noopener">Circle and [ ] Enter into a Strategic Partnership that will Accelerate Global USDC and Crypto Adoption</a>

<a href="https://www.circle.com/pressroom/circle-is-the-first-stablecoin-issuer-to-meet-new-canadian-listing-rules" target="_blank" rel="noreferrer noopener">Circle is the First Stablecoin Issuer to Meet New Canadian Listing Rules</a>

<a href="https://coredao.org/explore/blog/bitgo-to-offer-secure-institutional-yield-for-bitcoin-liquidity-via-core" target="_blank" rel="noreferrer noopener">BitGo Becomes the First US Qualified Custodian to Offer Secure Institutional Yield for $2T of Untapped Bitcoin Liquidity via Core</a>

Multiple Digital Asset Initiatives Announced in Foreign Markets

By <a href="https://www.bakerlaw.com/RobertAMusiala">Robert A. Musiala Jr.</a>

A recent press release announced that Project Diamond, a smart contract-powered platform for institutions to create, buy and sell digitally native assets, “is adopting the Chainlink standard as infrastructure for powering the full lifecycle management of tokenized assets.” According to the press release, “[b]y natively integrating the Chainlink standard … [the] Project Diamond platform can now offer data and cross-chain connectivity in a secure way that helps meet the compliance needs of institutional adopters.” The press release notes that Abu Dhabi Global Market “will be the flagship user” of the newly upgraded platform.

According to another recent press release, “B2C2, a global leader in institutional liquidity for digital assets, and PV01, the on-chain debt capital markets house, announced the breakthrough issuance of B2C2’s first on-chain corporate bond.” The press release states that the bond is represented by a transferable token on the Ethereum blockchain, is denominated in the USDC stablecoin, and “its entire lifecycle takes place on-chain: issuance, secondary transfers and trades and redemption.”

A third press release by stablecoin issuer Tether “announced the acceptance of USD₮ by the Financial Services Regulatory Authority (FSRA) as an Accepted Virtual Asset (AVA) in the Abu Dhabi Global Market (ADGM).” According to the press release, the approval “enables Authorised Persons operating and licensed by the FSRA to offer pre-approved services related to USD₮.”

In a final recent release, “Yellow Card, Africa’s largest fiat-to-crypto on and off-ramp … announced a new partnership with Lightspark.” The new partnership will reportedly allow users of the Universal Money Address network “to send and receive cross-border payments to 20 African countries through an integration with Yellow Card’s Payments API – powered by Lightspark Extend.”

<a href="https://www.prnewswire.com/news-releases/coinbases-project-diamond-strategically-integrates-the-chainlink-standard-to-scale-institutional-adoption-of-digital-assets-302327790.html" target="_blank" rel="noreferrer noopener">Coinbase's Project Diamond Strategically Integrates the Chainlink Standard To Scale Institutional Adoption of Digital Assets</a>

<a href="https://www.b2c2.com/newspost/b2c2-and-pv01-pioneer-corporate-bond-on-blockchain?mc_cid=bf9f21198c&amp;mc_eid=4e910b8d89" target="_blank" rel="noreferrer noopener">B2C2 and PV01 Pioneer Corporate Bond on Blockchain</a>

<a href="https://tether.io/news/tethers-usdt-recognized-as-accepted-virtual-asset-in-adgm/" target="_blank" rel="noreferrer noopener">Tether’s USD₮ Recognized as Accepted Virtual Asset in ADGM</a>

<a href="https://www.lightspark.com/news/yellow-card-announcement" target="_blank" rel="noreferrer noopener">Yellow Card and Lightspark partner to bring Universal Money Address (UMA) to African businesses and consumers</a>

Blockchain Advocacy Organization Publishes Global Standards Mapping Report

By <a href="https://www.bakerlaw.com/RobertAMusiala">Robert A. Musiala Jr.</a><a href="https://www.bakerlaw.com/VeronicaReynolds"></a>

The Global Blockchain Business Counsel recently published its Global Standards Mapping Initiative 5.0 report. The 185-page report is a “comprehensive industry-focused effort to map and analyze the blockchain and digital assets community across six key areas: (1) Legislation &amp; Regulatory Developments; (2) Taxonomy; (3) Technical Standards; (4) Blockchain &amp; Digital Assets Landscape; (5) Courses from Accredited Educational Institutions; and (6) In-Depth Reports &amp; Visuals on Key Themes.” According to the report, its content was generated by “110+ entities spanning government, corporates, startups, nonprofits, and academia,” through participation in seven working groups in the areas of blockchain and AI convergence, decentralized finance (DeFi), digital identity, supply chain, sustainability, taxonomy, and technical standards.

<a href="https://www.gbbc.io/uploads/gsmi50.pdf?mc_cid=bf9f21198c&amp;mc_eid=4e910b8d89" target="_blank" rel="noreferrer noopener">GBBC: GLOBAL STANDARDS MAPPING INITIATIVE 5.0</a>

Crypto Enforcement Actions Continue Across U.S. and Foreign Jurisdictions

The U.S. Department of Justice (DOJ) recently announced that a defendant has pleaded guilty to wire fraud “for operating a large-scale illegal ‘cryptojacking’ operation.” According to a DOJ press release, the defendant “defrauded two well-known providers of cloud computing services out of more than $3.5 million worth of computing resources in order to mine cryptocurrency worth nearly $1 million.”

In another enforcement action, the U.S. Commodity Futures Trading Commission (CFTC) announced charges against an individual and companies he controlled “for engaging in a fraudulent digital assets multilevel marketing scheme worth at least $5.9 million.” According to a CFTC press release, the defendant abused his position of trust as a church pastor to solicit investments in the fraud.

A third enforcement action by the Brooklyn district attorney reportedly shut down 40 Internet domains associated with a non-fungible token (NFT) scam targeting artists. According to a press release, in one instance the fraudsters contacted an artist using an account on a popular social media platform, claiming to be a dealer for a company whose website closely resembles that of a legitimate NFT marketplace.

In the United Kingdom, according to recent reports, the Solana network memecoin site, pump.fun, has shut off access to U.K. users following publication of a notice by the U.K.’s Financial Conduct Authority (FCA) stating pump.fun may be providing or promoting financial services or products without FCA permission. And in Australia, the Australian Securities and Investments Commission (ASIC) recently announced that the foreign affiliate of a major U.S.-based cryptocurrency exchange has been “ordered to pay $8 million for unlawfully issuing a credit facility to more than 1,100 Australian customers.”

<a href="https://www.justice.gov/usao-edny/pr/nebraska-man-pleads-guilty-multi-million-dollar-cryptojacking-case" target="_blank" rel="noreferrer noopener">Nebraska Man Pleads Guilty in Multi-Million Dollar “Cryptojacking” Case</a>

<a href="https://www.cftc.gov/PressRoom/PressReleases/9015-24" target="_blank" rel="noreferrer noopener">CFTC Charges Washington State Pastor with Fraud, Misappropriation in Multilevel Marketing Scheme Targeting Hispanic Americans</a>

<a href="http://brooklynda.org/2024/12/06/brooklyn-district-attorney-shuts-down-40-domains-associated-with-nft-crypto-scam-targeting-artists-after-brooklyn-painter-lost-over-135000/" target="_blank" rel="noreferrer noopener">Brooklyn District Attorney Shuts Down 40 Domains Associated With NFT Crypto Scam Targeting Artists, After Brooklyn Painter Lost Over $135,000</a>

<a href="https://www.coindesk.com/policy/2024/12/06/memecoin-factory-pump-fun-bans-u-k-crypto-traders" target="_blank" rel="noreferrer noopener">Memecoin Factory Pump.Fun Bans U.K. Crypto Traders</a>

<a href="https://asic.gov.au/about-asic/news-centre/find-a-media-release/2024-releases/24-274mr-kraken-crypto-exchange-operator-to-pay-8-million-following-asic-enforcement-action/" target="_blank" rel="noreferrer noopener">Kraken crypto exchange operator to pay $8 million following ASIC enforcement action</a>

Cryptocurrency Hacks Continue Through Various Attack Vectors

According to recent reports, DeFi protocol Radiant Capital has attributed a $50 million hack to a threat actor with ties to the Democratic People’s Republic of Korea (DPRK). Radiant Capital recently published certain details of its ongoing investigation of the hack. Among other things, the report notes that the attack began when a Radiant developer received on a messaging app a message from “what appeared to be a trusted former contractor” that “included a link to a zipped PDF regarding the contractor’s new alleged endeavor.” The zip file “ultimately delivered malware that facilitated the subsequent intrusion.”

In another recently reported incident, two versions of a popular Python AI library, Ultralytics YOLO11, were reported to be compromised to deliver cryptocurrency mining malware. The reports noted that the malware was detected based on feedback that installing the Ultralytics YOLO11 library was causing drastic spikes in CPU usage, which is a sign of cryptocurrency mining activity.

A third recently reported incident involved scammers that use fake verification bots on a popular messaging app to deliver malware used to steal cryptocurrencies from wallets hosted on the device used to access the messaging app. According to reports, the scammers used fake social media accounts that impersonate so-called crypto-influencers to make contact with victims.

<a href="https://www.coindesk.com/tech/2024/12/09/radiant-capital-says-north-korean-hackers-behind-50-million-attack-in-october" target="_blank" rel="noreferrer noopener">Radiant Capital Says North Korean Hackers Behind $50 Million Attack in October</a>

<a href="https://medium.com/@RadiantCapital/radiant-capital-incident-update-e56d8c23829e" target="_blank" rel="noreferrer noopener">Radiant Capital Incident Update</a>

<a href="https://thehackernews.com/2024/12/ultralytics-ai-library-compromised.html" target="_blank" rel="noreferrer noopener">Ultralytics AI Library Compromised: Cryptocurrency Miner Found in PyPI Versions</a>

<a href="https://www.techradar.com/pro/security/popular-python-ai-library-hacked-to-deliver-malware" target="_blank" rel="noreferrer noopener">Popular Python AI library hacked to deliver malware</a>

<a href="https://cointelegraph.com/news/telegram-verification-bots-carry-crypto-stealing-malware" target="_blank" rel="noreferrer noopener">Scammers are using Telegram verification bots to inject crypto-stealing malware</a>

Crypto Adoption and Illicit Exposure Report Published

Blockchain analytics company TRM Labs recently released its 2024 Crypto Adoption and Illicit Exposure Report. According to a press release, the report’s key findings include the following: (1) India, Indonesia, Nigeria, the United States and Vietnam led in crypto adoption in 2024; (2) Kenya saw the largest increase in crypto adoption, doubling its crypto transaction volume from 2023; (3) North Korea, Nigeria, Georgia, the Philippines and Russia are the top five countries with the highest percentage of illicit exposure for entities primarily located in their jurisdictions; and (4) in the top 10 countries for illicit exposure, incidents are largely driven by the exposure of their entities to sanctions or fraud and scams.

For more information, please refer to the following link:

<a href="https://www.trmlabs.com/post/2024-trends-crypto-adoption-and-illicit-activity-by-country" target="_blank" rel="noreferrer noopener">2024 Trends: Crypto Adoption and Illicit Activity by Country</a>

Weekly Blockchain Blog – December 16, 2024

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