Russian government authorities have revealed that the federation owns more than 16.5 trillion rubles, or US$214 billion worth of cryptocurrencies – controlling roughly 12 percent of the crypto market.
Russians Own More Crypto Than Expected
According to sources within the Kremlin, the report was an estimate calculated by analysing IP addresses of some of the biggest crypto exchanges in the country. Russian authorities are using this estimate to form a better overview of the industry and implement proper regulations.
It’s unclear if this estimate is lower than the actual number of crypto users in the Russian federation, since a lot of them use anonymous tools to transact cryptocurrencies:
Government ain't stupid, most of them if not all hold crypto.
It is, however, a huge leap from December 2021 when it was reported that Russians held only 5 trillion rubles in crypto, or US$67 billion at that time.
Russia Finally Comes Out in Favour of Proper Crypto Regulation
The regulatory weather in Russia has been a quite confusing environment for crypto users. Two weeks ago, the Russian central bank attempted to ban crypto, only to be countered by the finance ministry with a crypto regulatory framework:
Russian banks wants to Ban crypto 2 weeks ago and now owns 12% of all crypto 🤥
But after a bunch of back and forths between authorities, it seems Russia is finally preparing the roadmap for establishing proper crypto regulation, starting first drafts this month. Dmitry Chernyshenko, deputy chairman of the Russian Federation, last week signed a crypto regulation roadmap valid until the end of the year, as per a report from RBC.
Additionally, finance minister Anton Siluanov suggested that banks and other licensed financial entities should be allowed to provide crypto services, reiterating the ministry’s stance on regulating crypto rather than banning it.
New research by blockchain data firm Chainalysis shows there has been an estimated US$33 billion laundered through crypto in the past five years, mainly through centralised exchanges, but as of 2021 there has been a major increase in money laundered through DeFi.
Chainalysis has released a preview of its 2022 Crypto Crime Report detailing how illicit funds have been moved over the blockchain and its various services. The total value of cryptocurrencies laundered by services in 2021 was estimated at US$8.6 billion.
Total crypto laundered. Source: Chainalysis
That figure was up 30 percent on the previous year, which was expected, given the boom in both legal and illegal activities in the crypto space. However, the figure is down 23 percent from 2019, which was the most significant year for laundered crypto.
These numbers only account for funds obtained from “cryptocurrency-native” crime, meaning activities such as darknet market or ransomware attacks in which profits are virtually always denominated in cryptocurrency. In spite of the billions of laundered dollars, money laundering accounted for only 0.05 percent of all cryptocurrency transaction volume in 2021.
Destination of funds leaving illicit addresses by crime type. Source: Chainalysis
One thing that stands out is the difference in laundering strategies between the two highest-grossing forms of cryptocurrency-based crime in 2021: theft and scamming. Researchers think this might be because more cryptocurrency was stolen from DeFi protocols than any other type of platform last year, as well as the technical skills required to launder money. For example, a DeFi hacker would have better technical skills and use different means to launder money than a scammer using a centralised exchange.
Easier to Track Laundering on the Blockchain
It’s considerably more difficult to track illicit funds when they are first converted to crypto from fiat. But due to the inherent transparency of blockchains, analysts can more easily trace how criminals move cryptocurrency between wallets and services in their efforts to convert funds into cash.
Destination of funds leaving illicit addresses between 2016 – 2021. Source: Chainalysis
Since 2018, centralised exchanges have been the main conduit for money laundering, with 58 percent of laundered crypto funnelled into just five trading platforms.
Increase in Laundering Through DeFi
Last year, for the first time since 2018, centralised exchanges did not receive the majority of funds sent by illicit addresses. Instead, DeFi protocols are making up much of the difference. The report states that DeFi protocols received 17 percent of all funds sent from illicit wallets in 2021, up from 2 percent the previous year.
YoY % growth in value by category. Source: Chainalysis
This phenomenon translates to a 1,964 percent year-on-year increase in total value received by DeFi protocols from illicit addresses, reaching a total of US$900 million in 2021.
North Korea at the Forefront of Money Laundering
Kim Grauer, Chainalysis’ director of research, says that “there are certain types of criminals in particular that lean into technological advancements more quickly”, adding that “North Korea is always the first to use a new kind of tech solution for laundering money. We follow them each year, and this year they’ve used a lot of mixers. Last year, they were using DeFi.”
This year “is already off to a big start for NFT crime”, Grauer says, pointing to the rise in wash trading on NFT platforms. “This is definitely going to continue.”
Tokenised real estate is now a reality thanks to NFTs. The global real estate store Propy offers a faster, simpler and more secure process for buying and selling property through smart contracts.
On January 14, Coinbase announced it would list Propy (PRO) on its website’s blog. Coinbase is the largest cryptocurrency exchange in the US and the second-largest cryptocurrency exchange by volume globally.
Propy is a project focused on expanding the functionality of NFTs beyond the digital art world. The Ethereum-based protocol integrates blockchain technology with the real estate sector and offers an automated closing process for international real estate transactions.
The PRO token is used to pay for platform fees to process tasks such as modifying and creating title and deed contracts. Read the whitepaper here.
First Real Estate NFT in the US
Along with the recent Coinbase listing, Propy has an upcoming sale in Tampa, Florida, which will be the first real estate NFT sale in the US. These two factors appear to have boosted the price of the PRO token:
PRO was worth US$1.12 on January 12 before news of the Coinbase listing. The price moved 227 percent to hit a daily high at US$3.67 on January 14 and has since continued to climb beyond US$4.00. The token has ballooned by an impressive 5192.6 percent in just one year and is still climbing the ranks, currently sitting at #257.
Not wanting to miss out on the multi-trillion-dollar metaverse market, US-based retail giant Walmart is pressing on with its plans to make and sell virtual goods.
The world’s second-largest retailer (recently outranked by Amazon) is planning to launch a collection of non-fungible tokens (NFTs) and create its own cryptocurrency.
New Trademark Applications Show Metaverse Intent
On December 30, Walmart filed several new trademarks that indicate its intent to build a virtual Walmart store within the metaverse and allow users to shop for electronics, home decorations, personal care items, toys, sporting goods, and a range of other products available in Walmart stores, offering its own virtual currency as a means of payment.
Walmart trademark application.
Walmart even has plans to offer a crypto wallet, described in its trademark application as: “Downloadable software for use in managing portfolios of digital currency, virtual currency, cryptocurrency, digital and blockchain assets, digitised assets, digital tokens, crypto tokens, and utility tokens; downloadable software for electronic wallet services; downloadable e-wallets.”
Source: Gerben Intellectual Property
Shopping in Walmart in the Metaverse
Watch the video below to get a glimpse of what shopping in Walmart in the Metaverse might look like:
The buzz around the metaverse went ballistic after Facebook announced it was changing its company name to Meta last October. Since then, big businesses across different sectors have been amping up their own efforts for how they can adapt to exist in a virtual 3D world.
Nike entered the Metaverse after acquiring the virtual sneaker company RTFKT (pronounced “artifact”) and teaming up with Roblox to create an online world called Nikeland, following other big sports footwear names such as Adidas and Asics who had already launched their own NFT collections last year.
Many other big brands are also racing to stake their claim in the metaverse. Last week, Crypto News Australia reported that Samsung will open a virtual store hosted in Decentraland. The metaverse is becoming the future frontier for retailers and promises a whole new world of financial opportunities.
According to a survey conducted by Visa, almost a quarter of small businesses across nine countries around the world plan to accept cryptocurrencies as a form of payment in 2022, as crypto holders increasingly want to use their assets to shop.
One in Four SMBs Plans to Accept Crypto as Payment
Almost one in four small and mid-size businesses (SMBs) that participated in the sixth edition of Visa’s global Back to Business study indicated its intention to accept payments in cryptocurrencies such as Bitcoin. The survey consisted of 2,250 small businesses owners in countries including the United Arab Emirates, Hong Kong, Canada, Brazil, Singapore and the US.
In the same survey, 73 percent of respondents indicated that accepting new forms of digital payment options will be a key factor affecting business growth in 2022. Of all respondents in the study, 82 percent said they planned to implement a form of digital payment option this year.
Visa found that more than 30 percent of SMBs in the UAE, Hong Kong, Singapore and Brazil planned to offer cryptos as a payment option in the coming months. By contrast, 19 percent of SMBs in the US and a mere eight percent in Canada expected to do so.
The survey also included a consumer section where 1,500 adults across nine markets participated. More than half of respondents in this section expected to go completely cashless within the next 10 years, while 41 percent indicated that customers had abandoned a physical purchase where digital payment options were not available.
Last week, Mozilla Foundation, the non-profit organisation behind open-source web browser Firefox, announced it would be accepting crypto donations to “keep the Web open and free”. Only days later the foundation reversed its decision, citing concerns regarding “cryptocurrency’s environmental impact”.
Liechtenstein-based crypto exchange LCX has had one of its hot wallets compromised, the hacker getting away with almost US$8 million in various cryptocurrencies.
ℹ️ Incident Update: We are sorry to announce that one of our hot wallets had been compromised. We have taken security measures to protect other wallets and assets. 1/3
On January 9, the LCX team and crypto-security firm PeckShield detected a breach of one of the LCX hot wallets. On further inspection, it was established that the theft had taken place on January 8 between 11:23pm and 11:37pm CET.
According to the LCX update, the hacker got away with an estimated US$7.94 million in Ethereum (ETH), USDC, Sand Token (SAND), LCX Token (LCX), and various others. The exchange did, however, manage to freeze US$700,000 and commented that none of its users or other LCX wallets were impacted.
The assets were moved to the hacker’s ETH wallet address (0x165402279F2C081C54B00f0E08812F3fd4560A05), which has since been flagged. In the meantime, the platform has paused all deposits and withdrawals, and the incident has been reported to several Liechtenstein authorities. It hasn’t yet been revealed how the hacker got access to the hot wallet.
Last year was a rough one for the DeFi ecosystem, having sustained an estimated US$10.2 billion in losses from hacks, bugs, fraud, exploitations and other malevolent activities, according to a report by IMMUNEFI. This represented a 137 percent increase on the losses suffered in 2020.
Although 2021 was generally seen as a good year for the cryptocurrency industry in terms of market performance, the number of international jurisdictions banning crypto has more than doubled since 2018 with no sign of the trend easing in 2022.
According to an updated report by the American Library of Congress (LOC), nine countries have now applied an absolute ban on crypto and 42 an implicit ban. This is up from eight and 15, respectively, in 2018 when the report was first published.
Bans Have Two Shades of Meaning
In the context of the LOC report, an absolute ban means any “transactions with or holding cryptocurrency is a criminal act”, whereas an implicit ban prohibits cryptocurrency exchanges, banks and other financial institutions from “dealing in cryptocurrencies or offering services to individuals and/or businesses dealing in cryptocurrencies”.
The nine new jurisdictions with an absolute ban are Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia, Bangladesh and China. Other than the 51 jurisdictions with a crypto ban already in place, 103 have applied Anti-Money Laundering (AML) and combatting the funding of terrorism (CFT) laws, more than three times the 33 jurisdictions with such laws in place three years ago.
Current international legal status of cryptocurrencies. Source: LOC
Sweden, Estonia, Russia on the List; India Delays Execution
Estonia, Sweden’s EU neighbour across the Baltic Sea, is set to implement AML/CFT rules next month. As for Sweden itself, the Scandinavian nation’s Environmental Protection Agency called for a ban on proof-of-work (PoW) mining in November 2021 due to the power demands of keeping networks running.
The new rules are expected to change the definition of a virtual asset service provider and apply an implicit ban on decentralised finance (DeFi) and Bitcoin.
India’s government sent a shiver through the international crypto community when lawmakers there considered a total cryptocurrency ban last November. Although it did not eventuate, the Securities and Exchange Board of India – which oversees the regulation of local crypto exchanges – pushed to regulate cryptocurrencies as crypto assets. An outright ban, however, is still on the table.
Meural digital frames were originally designed for displaying private collections of one’s digital photos. Electronics manufacturer Netgear has now announced its plans to expand Meural Canvas capabilities to include the display of digital artworks (NFTs).
Netgear unveiled the new Meural NFT integration at the tech trade show CES 2022 in Las Vegas, US, and it is currently in beta. The new feature will allow users to connect their MetaMask wallets to the Meural device and access any NFTs they own, enabling digital art collectors to physically display NFTs in a framed “smart” canvas hanging on the wall.
Partnership with Async Art
The Meural online platform is a digital canvas marketplace to which members can subscribe and access thousands of images to display on their Meural digital frames. Joining forces with blockchain-based art platform Async Art, Meural owners will be now be able to showcase programmable NFT artworks. Async allows art enthusiasts to create, collect and trade programmable art. This technology is an extremely exciting innovation for artists and art collectors alike:
Async Art is a new art movement built on the blockchain. Create, collect, and trade programmable art: digital paintings split into ‘layers’, which you can use to affect the overall image. Art that can evolve over time, react to its owners, or follow a stock price is now all possible with programmable art.
Watch the video below explaining how Async Art works:
NFT art has grown into a US$11.7 billion industry over the past year. It’s no wonder that hardware companies such as Netgear are cashing in on the opportunity to provide new products to service this fast-growing market. Check out the Meural Canvas II in action in the video below. The frames are already available in stores, although the added NFTs function is not yet released.
Netgear Follows Samsung into the NFT Market
Netgear isn’t the only tech company with eyes on the NFT market. Samsung is also set to release smart TVs with NFT trading capabilities. These new digital display devices with blockchain interoperability will help drive the online digital art movement into the mainstream and real world.
There are already online NFT art galleries in cyberspace, and it won’t be long before real-world art galleries exhibiting NFT art in digital displays such as Meural Canvas become the new normal.
Swiss crypto tracking and tax assistance platform Accointing has released a new Trading Tax Optimiser (TTO) tool to help traders stay on top of the taxes they are liable pay for their trades.
For any sort of trader, it’s important to keep track of trades in order to file for taxes. Traders who don’t make proper preparation can be confronted by huge tax bills that can potentially eat away at profits. Accointing can assist users with organising and keeping track of their crypto data:
Some crypto traders don’t really pay attention to the potential tax consequences of their trades until it’s too late. It can easily be the case that if a trader had sold a different coin from a different wallet using the same strategy, they could have reduced their tax bill substantially.
To fill this gap, Accointing’s TTO tool can help determine tax consequences before making a trade to help reduce tax deductibles. Before a trade is made, users can take a look at their dashboard to see the tax implications of the particular coin they want to sell.
The difference in tax rates for selling the same coin held in different wallets can be significant. By displaying the tax implications of selling different coins in a portfolio and which coins attract the lowest taxes, users can manage their deductibles and potentially save thousands of dollars.
Getting Ready for Tax Time
According to Accointing’s business developer, in the US the highest marginal tax rate at the federal level is 37 per cent if you sell one coin, but selling the same coin from a different wallet for the same price can result in a tax rate as low as 15 per cent. The platform allows users to see these implications before making a trade, which could cost them more at tax time. Accointing also has a solution for Australian users to help them at tax time.
By planning ahead, the tool can show users how their tax situation will develop by tracking positions across all wallets. And since all the data is stored on the platform, when it comes around to tax filing time users can simply print their tax report.
In October last year, Melbourne’s RMIT University urged the Australian government to reform crypto capital gains tax. Here are some additional tax tips for Australian traders published by the Australian Tax Office (ATO).
In a blatant pitch for the tech-savvy youth vote, South Korea’s ruling Democratic Party (DPK) is to issue non-fungible tokens (NFTs) for electoral fundraising purposes in what it claims is a political world first.
Digital images of Lee Jae-myung, the ruling party’s presidential candidate, will be sent to supporters who donate money to his campaign from this month. The party says that these NFTs, which feature Lee’s photos and details of his policies, will serve as a kind of bond so holders can freely exchange the assets with others.
Digital Assets to be Taxed … But Not Just Yet
The party was quick to confirm that South Korea’s National Election Commission had quietly decreed last month that fundraising using NFTs does not violate the Political Funds Act or the Public Official Election Act. And while the South Korean Financial Services Commission said in November that NFTs would not be regulated, it has since backpedalled by announcing the digital assets would be taxed from January 2022.
But in a convenient loophole for candidate Lee and the DPK, the implementation of the new tax has been delayed a year because of flaws noted by party scrutinisers.
Lee Declares His Support For Gaming NFTs
As part of his efforts to win over Korean Millennials and Gen Zs, candidate Lee openly supports the gaming industry’s use of NFTs. In an interview last month with a gaming YouTuber, Lee said that Korea should lead the global trend of integrating games with virtual assets and NFTs. Failing to do so, he added, would be tantamount to isolationism.
As the young generation[s] are interested in emerging technologies, including virtual assets, NFTs and the metaverse, this type of fundraising could appeal to them. If we deny what actually exists, it will be similar to an isolationist foreign policy.
Lee Jae-myung, presidential candidate, Korean Democratic Party
Party officials claim that if Lee’s initiative is successful, he will become the world’s first politician to issue NFTs to help finance a presidential bid. The NFTs, representing political memorabilia, could also hold future value and serve as an investment for donors. Donated digital monies will be converted into Korean won through a crypto exchange and then deposited into the campaign’s account.
Trump, Snowden Challenge Korea’s ‘World First’
As for the DPK’s claim of a political world first, former US first lady Melania Trump may have beaten Korea to the punch with last month’s launch of her own NFT platform. Its first offering was a tokenised watercolour of husband (and former president) Donald Trump’s eyes.
But as long ago as April last year, whistleblower Edward Snowden sold an NFT to help raise funds for the Freedom of the Press Foundation. That would certainly fit the description of a political act.
