Daily Digest - 29 March 2023

Headlines

▌UK encryption promotion bill is expected to be introduced by the end of 2023

The British Ministry of Finance said in a tweet on Tuesday that the cryptocurrency promotion legislation is expected to come into effect later this year. The draft Financial Services and Markets Act was published on Monday. It will enable the Financial Conduct Authority (FCA) to regulate crypto firms under existing extension laws set out in the Financial Services and Markets Act (FSMA).

The Treasury said in a tweet that the rules were designed to allow the U.K. government to try and protect consumers from “misleading crypto asset promotions.” The legislation also includes a time-limited exemption for cryptocurrency firms, which will allow those registered with the FCA the opportunity to approve and advertise themselves. Some companies are authorized companies under the FSMA and therefore can approve their own advertisements.

Documents accompanying the measure estimated that if ads were approved by a third party, it would cost companies £5,000 to £15,000 ($6,168 to $18,504) to get endorsed, depending on the "complexity of the material". Parliament will soon discuss amendments to the Financial Services and Markets Act.

▌Court documents: The United States announced 13 new indictments against FTX founder SBF

Court documents showed that the United States has 13 new indictments against the founder of the FTX cryptocurrency exchange, Sam Bankman-Fried. The US has accused Bankman-Fried of directing the transfer of at least $40 million in cryptocurrency to bribe Chinese government officials in new bribery conspiracy charges.

Policies

▌Belarus Cryptocurrency Tax Incentive Period Extended to January 1, 2025

Belarusian President Alexander Lukashenko signed Decree No. 80 on personal tax issues, extending the period of tax incentives related to cryptocurrencies to January 1, 2025. Decree No. 80 also stipulates that by July 1, 2024, a concept for the further development of the field of digital tokens in Belarus will be formulated.

▌FDIC requires Signature Bank crypto customers to withdraw money by next week

The US Federal Deposit Insurance Corporation (FDIC) has asked Signature Bank’s cryptocurrency customers to withdraw funds by next week.

The FDIC had previously sold Signature's remaining assets to New York Community Bank, but the deal did not include about $4 billion in cryptocurrency-related deposits or Signature's digital payments platform, Signet. An FDIC spokesperson said it is still trying to sell Signet and plans to liquidate crypto deposits by April 5.

It is reported that the FDIC has been contacting cryptocurrency depositors and encouraging them to find another bank that accepts these deposits. If those customers are unable to find a new bank, they will receive a check, the spokesman said.

The government bailout for Signature savers, which includes crypto customers’ uninsured deposits, is expected to cost the FDIC insurance fund $2.5 billion. According to previous news, the former management of Signature is under investigation because its actions may have caused the bank to fail.

Cryptocurrency

▌Canada requires pension funds to disclose encryption risks

The Canadian government stated that as Ottawa strengthens its supervision of volatile industries, the country’s federally regulated pension funds will need to disclose their exposure to encrypted assets to the Office of the Superintendent of Financial Institutions (OSFI).

“To help protect Canadians in retirement, Budget 2023 announces that the government will require federally regulated pension funds to disclose their exposure to cryptoassets to OSFI,” the government said in its new 2023 budget plan.

The budget plan adds that the federal government will also work with the provinces and territories to discuss the disclosure of crypto assets or related activities by the country’s largest pension plan, which will ensure Canadians understand their pension plans may be exposed to crypto assets.

The move follows several high-profile bankruptcies such as FTX exchange and the recent collapse of crypto-friendly US banks Silvergate Bank and Signature Bank, exposing the extreme volatility investors face in the industry.

▌Report: North Korean hacker group APT43 uses encryption services to launder money

According to a new report from the intelligence firm Mandiant, the North Korean hacker group APT43 uses encryption services such as computing power leasing and cloud mining to launder money. According to the report, the United States and South Korea are the two main targets of the group.

Unlike other North Korean groups such as APT38, APT43's main mission is not to raise funds for the government, but is likely to maintain its own operations. Mandiant said APT43 likely used the stolen bitcoins to pay for computing power leases and cloud mining services, and to produce “clean bitcoins.” Cloud mining services provide anyone with the opportunity to remotely mine bitcoins for a fee without having to install and run a mining machine directly.