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Cyber Threats Facing the Gaming Industry and How to Protect Yourself

Data Counsel

Improving Accessibility Through AI Program Accountability – the More You Know

James Sherer Comments on Regulation of Audio Recordings in Financial Services Industry

Bridget McCabe, Jaein Cho Publish Article on Cartwright Act in The Daily Journal

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<a href="#new">New Crypto Products Announced by Financial Services Firms, Exchanges, DEXs</a>

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<a href="#trump">Trump Announces Key Positions for Crypto in His Administration</a>

<a href="#wolfsberg">Wolfsberg Group Publishes FAQs on Defining Digital Assets</a>

<a href="#ofac">OFAC Adds Crypto Public Keys to SDN List for Use in Russian Sanctions Evasion</a>

<a href="#crypto">Crypto Hackers Continue Attacks on Exchanges and Code Libraries</a>

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New Crypto Products Announced by Financial Services Firms, Exchanges, DEXs

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

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A major U.S. cryptocurrency exchange recently announced that it has integrated a major mobile payments application into its Onramp tool to enable web applications to more easily process fiat-to-crypto conversions with “free USDC on and offramping, and access to the most popular payment methods.” The integration will enable applications using the Onramp tool to process “fiat-to-crypto purchases” from the 60+ million U.S. users of the major mobile payments app.

In another recent announcement, a major U.S. financial services company announced that its Multi-Token Network (MTN) “has connected to Kinexys Digital Payments as a payment settlement solution to enhance the availability of B2B cross-border payments to business applications on MTN.” According to a press release, “Kinexys Digital Payments is a next-generation payment rail powering real-time value transfer using commercial bank money” and offered through Kinexys, the blockchain unit of a major U.S. bank.

In a third recent press release, BitGo, a major U.S. cryptocurrency custody provider, “announced the official launch of its dedicated retail platform, providing retail customers access to BitGo’s comprehensive suite of regulated and secure digital asset trading, staking, wallets, and qualified custody services.” According to the press release, “Retail customers can now experience the same institutional-grade security, convenience, and versatility of BitGo’s broader offerings.”

A fourth press release announced that a major blockchain infrastructure provider has introduced new DeFi capabilities. According to the press release, the infrastructure provider’s upgraded DeFi suite “adds the necessary guard rails for customer teams to interact safely with leading decentralized finance applications.”

In a final notable item, according to recent reports, Osmosis, a decentralized exchange (DEX) for the Cosmos ecosystem of blockchain networks that use the Inter-Blockchain Communication (IBC) protocol, has integrated with Nomic, a decentralized custody engine for Bitcoin that “bridges” BTC for use on any IBC-compatible blockchain. The Nomic bridge reportedly enables users to deposit their BTC on the Bitcoin network in return for a token called alloyed BTC (allBTC) available on the Osmosis DEX.

For more information, please refer to the following links:

<a href="https://www.coinbase.com/blog/Fiat-to-crypto-in-seconds-with-Apple-Pay" target="_blank" rel="noreferrer noopener">Fiat-to-crypto in seconds with Apple Pay</a>

<a href="https://www.mastercard.com/news/press/2024/november/mastercard-s-mtn-connects-to-j-p-morgan-s-kinexys-digital-payments-for-settlement/" target="_blank" rel="noreferrer noopener">Mastercard’s MTN connects to J.P. Morgan’s Kinexys Digital Payments for settlement</a>

<a href="https://www.businesswire.com/news/home/20241201410604/en/BitGo-Launches-Comprehensive-Retail-Platform" target="_blank" rel="noreferrer noopener">BitGo Launches Comprehensive Retail Platform</a>

<a href="https://www.fireblocks.com/blog/fireblocks-defi-suite-institutional-digital-asset-security-2024/" target="_blank" rel="noreferrer noopener">Fireblocks Expands DeFi Suite As Institutional Adoption of Digital Assets Drives $60 Billion Transactions in 2024</a>

<a href="https://www.coindesk.com/tech/2024/12/02/bitcoin-gets-a-decentralized-exchange-as-cosmos-native-osmosis-activates-bridge" target="_blank" rel="noreferrer noopener">Bitcoin Gets a Decentralized Exchange as Cosmos Native Osmosis Activates Bridge</a>

Trump Announces Key Positions for Crypto in His Administration

By <a href="https://www.bakerlaw.com/professionals/isabelle-corbett-sterling/">Isabelle Corbett Sterling</a><a href="https://www.bakerlaw.com/VeronicaReynolds"></a>

President-elect Trump recently announced that he will nominate Paul Atkins to lead the U.S. Securities and Exchange Commission (SEC). Atkins was an SEC commissioner from 2002 to 2008 and is currently the CEO and founder of a consulting firm. He serves on the board of a crypto trade association, which Trump highlighted in his announcement of Atkins as the future chair. According to reports, the crypto community supports Trump’s choice.

Trump also announced David Sacks as White House AI &amp; crypto czar, which is a new position designed to position the U.S. as the leader in both areas. Sacks is a co-founder and partner in a venture capital firm and former executive at a large payments company. According to reports, Trump said Sacks will “work on a legal framework so the Crypto industry has the clarity it has been asking for, and can thrive in the US.” Sacks will also lead the Presidential Council of Advisors for Science and Technology.

In related news, the SEC announced new co-leads of its Crypto Assets and Cyber Unit. The leads are being promoted from assistant director of the SEC’s crypto and enforcement unit and counsel to an outgoing Democratic SEC commissioner. The former head of the Crypto Assets and Cyber Unit was recently promoted to chief litigation counsel at the SEC.

<a href="https://www.law360.com/fintech/articles/2269374?nl_pk=443df714-8612-4cc7-92bb-12102189ef09&amp;utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=fintech&amp;utm_content=2024-12-05&amp;read_main=1&amp;nlsidx=0&amp;nlaidx=0" target="_blank" rel="noreferrer noopener">Crypto Groups Hail Trump’s SEC Pick Paul Atkins</a>

<a href="https://www.law360.com/fintech/articles/2269188?nl_pk=443df714-8612-4cc7-92bb-12102189ef09&amp;utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=fintech&amp;utm_content=2024-12-05&amp;read_main=1&amp;nlsidx=0&amp;nlaidx=2" target="_blank" rel="noreferrer noopener">SEC Taps New Co-Leaders For Crypto Enforcement Unit</a>

<a href="https://www.law360.com/fintech/articles/2270227?nl_pk=443df714-8612-4cc7-92bb-12102189ef09&amp;utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=fintech&amp;utm_content=2024-12-06&amp;read_main=1&amp;nlsidx=0&amp;nlaidx=0" target="_blank" rel="noreferrer noopener">Trump Taps Musk Ally David Sacks As ‘AI &amp; Crypto Czar’</a>

Wolfsberg Group Publishes FAQs on Defining Digital Assets

The Wolfsberg Group, an association of 12 global banks that aims to develop frameworks and guidance for the management of financial crime risks, recently published a report, The Wolfsberg Group Frequently Asked Questions (FAQs) on Defining Digital Assets. The report proposes definitions that “can be used by [financial institutions], policymakers, supervisors and regulators to understand the characteristics of the assets, the [money laundering]/[terrorist financing] and operational risks that they generate, including the impact on the financial system; serve as an input to [financial institutions] developing policies and appropriate controls; [and] act as a resource for supervisors and regulators.” According to the report, the Wolfsberg Group intends to supplement the report in the future with guidance on the risks and associated controls for digital assets in line with the concepts developed in the report. The report addresses definitions across six broad categories: (1) Digital Assets; (2) Stablecoins and Tokenized Deposits; (3) Anonymity-Enhanced Cryptocurrency; (4) Digital Asset Industry Stakeholders; (5) Digital Assets as a Product or Service; and (6) Architecture of Digital Assets.

<a href="https://db.wolfsberg-group.org/assets/344e51dd-243c-4fe8-adfa-0e1d6567c4ed/Digital%20Assets%20FAQs%20-%20For%20publication.pdf" target="_blank" rel="noreferrer noopener">The Wolfsberg Group Frequently Asked Questions (FAQs) on Defining Digital Assets</a>

OFAC Adds Crypto Public Keys to SDN List for Use in Russian Sanctions Evasion

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

On December 4, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions against five individuals and five entities, adding the individuals and entities to OFAC’s Specially Designated Nationals (SDN) List. According to a press release, the sanctioned parties have facilitated the circumvention of significant sanctions on behalf of Russian elites. OFAC stated that the sanctioned parties “provid[ed] an unregistered service to exchange cash and cryptocurrency” and “sought to exploit digital assets — in particular U.S. dollar-backed stablecoins — to evade U.S. and international sanctions.” As part of the action, OFAC added two cryptocurrency addresses associated with the sanctioned individuals to the SDN list. The Treasury announcement noted that the actions continue the G7 commitment to hold parties accountable for evading or offsetting the impact of international sanctions.

<a href="https://home.treasury.gov/news/press-releases/jy2735" target="_blank" rel="noreferrer noopener">Treasury Exposes Money Laundering Network Using Digital Assets to Evade Sanctions</a>

<a href="https://ofac.treasury.gov/recent-actions/20241204" target="_blank" rel="noreferrer noopener">Specially Designated Nationals List Update</a>

Crypto Hackers Continue Attacks on Exchanges and Code Libraries

By <a href="https://www.bakerlaw.com/KeithRMurphy">Keith R. Murphy</a>

According to a recent report, Japanese cryptocurrency exchange DMM Bitcoin intends to shut down and transfer its assets and accounts to a different trading platform following a $305 million hack earlier this year. The company reportedly had been restricting withdrawals and the acceptance of funds following the hack, but determined that continuing that practice would impair its customers. As noted in the report, while it is not known who is behind the hack, there is a suggestion that the North Korean Lazarus Group may have been involved.

In related news, the XT.com cryptocurrency exchange recently suffered a hack worth $1.7 million. The stolen funds were converted to ether and put into a newly created Ethereum wallet, according to a recent report. As noted in the report, this follows recent hacks on exchanges including BingX and Indodex.

And finally, several recent reports announced that the Solana ecosystem was impacted by a supply-chain attack. The attack reportedly affected the npm JavaScript library, a tool used by developers to create decentralized applications on the Solana blockchain, and was likely enabled when the npm package maintainers were targeted through a spear-phishing attack. According to the reports, the hackers embedded malicious code in certain versions of the library, creating a backdoor that exfiltrated private keys and drained approximately $160,000 in funds.

<a href="https://www.coindesk.com/business/2024/12/02/japanese-crypto-exchange-dmm-bitcoin-to-shut-down-after-305-m-hack" target="_blank" rel="noreferrer noopener">Japanese Crypto Exchange DMM Bitcoin to Shut Down After $305M Hack</a>

<a href="https://www.coindesk.com/business/2024/11/28/crypto-exchange-xt-is-hacked-for-1-7-m" target="_blank" rel="noreferrer noopener">Crypto Exchange XT Is Hacked for $1.7M</a>

<a href="https://thehackernews.com/2024/12/researchers-uncover-backdoor-in-solanas.html" target="_blank" rel="noreferrer noopener">Researchers Uncover Backdoor in Solana’s Popular Web3.js npm Library</a>

<a href="https://decrypt.co/294742/solana-web3-js-library-compromised-in-targeted-supply-chain-attack" target="_blank" rel="noreferrer noopener">Solana Web3.js Library Compromised in Targeted Supply Chain Attack</a>

Weekly Blockchain Blog – December 9, 2024

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