ProBit Bits — ProBit Global’s Weekly Blockchain Bits Vol. 57

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 Japan to Enforce New AML Measures

It came to light last week that Japan is seeking to strengthen crypto-related money laundering measures as of June 1. According to local reports, Japan's cabinet has approved stricter anti-money laundering (AML) procedures which include tracing crypto asset transactions, in an effort to align the country’s legal framework with global standards.

Reports state that the changes were made in response to the Financial Action Task Force's assessment that Japan's previous AML efforts needed to be revised. The new framework puts the enforcement of the "travel rule" as a priority and requires financial institutions involved in processing crypto asset transfers to share customer information—including sender and recipient names and addresses—with the next institution.

 US IRS Dispatches Overseas Agents in Fight Against Cybercrime

The Internal Revenue Service Criminal Investigation (IRS-CI), the investigative arm of the IRS focusing on financial crime, last week launched a pilot program to combat crypto-related cybercrime. It entails sending four special agents to serve as cyber attachés in Sydney, Bogota, Frankfurt, and Singapore, and collaborating with law enforcement partners in the different continents. They will work for 120 days from June to September 2023 to provide expertise and tools to fight cybercrime globally, a move which IRS-CI Chief, Jim Lee, highlights as a way to ensure that their foreign counterparts have “access to the same tools and expertise” as the US regarding fighting cybercrime.

 Crypto Community Marks 13th Bitcoin Pizza Day

Last week was the 13th anniversary of Bitcoin Pizza Day. Since May 22, 2010, when a Florida man named Laszlo Hanyecz made a historic purchase of two pizzas for 10,000 BTC, the day has been given special attention, particularly considering the unrealized value of the sold assets in current market rates. Apart from May 22nd being a date to commemorate the first documented real-world transaction involving Bitcoin, it also marks the beginning of Bitcoin’s use as a medium of exchange, as well as the top cryptocurrency’s adoption drive. Hanyecz is also credited for introducing the first program to mine Bitcoin using a computer’s graphics card (GPU).

 Hong Kong Set to Open For Trading as Regulator Eases Requirements

Hong Kong’s Securities and Futures Commission (SFC) last week released its consultation conclusions on the proposed regulations for virtual asset platform operators. In a move set to position Hong Kong as a digital-assets hub, the proposal will allow licensed operators to serve retail investors, while the SFC will implement measures such as suitability checks, enhanced due diligence, admission criteria, and disclosures to protect the investors.

With the guidelines coming into effect on June 1, 2023, operators willing to comply with the SFC's standards are expected to apply for a license while those who do not intend to comply will have to close their operations in Hong Kong. This news has divided the crypto community at large, with many welcoming the region’s delayed embrace of crypto, while some suggesting that it might not signal the start of a bull market as initially hoped.

Elliptic Hints on Chinese Businesses Using Crypto in Illicit Fentanyl Supply Chain

According to recent findings by the Elliptic research team, Bitcoin is the preferred cryptocurrency among China-based chemical manufacturers, who supply the precursor for fentanyl, a potent opioid. Tether, the US dollar stablecoin, follows as the second most popular payment option. Approximately 90% of these manufacturers utilize cryptocurrency wallets for transactions. The study, which is set to release soon, revealed that over $27 million has been exchanged through thousands of crypto payments, representing a significant 450% increase in transactions compared to the previous year.

It is worth noting that China used to be the primary source of illicit fentanyl until 2019 when the Chinese government implemented an export ban. Subsequently, Mexican drug cartels took over fentanyl production, manufacturing their own supply using precursors imported from China.

 Indonesia Aims to Double Down on Bitcoin Adoption

Governor Ridwan Kamil of the Indonesian Province of West Java, last week expressed his strong belief in the widespread adoption of Bitcoin in Indonesia as he highlighted the country's ongoing efforts to embrace the top cryptocurrency.

It has been reported that approximately 70% of the country's 12 million crypto investors have chosen Bitcoin as their preferred digital asset. With a vision to establish Indonesia as a prominent "Bitcoin heaven," Kamil aims for them to surpass other nations in adopting this transformative technology, as he emphasized that the first nation to extensively adopt Bitcoin will gain a considerable advantage. The 51-year-old politician recognizes the potential of Bitcoin to empower the unbanked population in Indonesia, which he says currently accounts for 40% of their society, by offering them access to financial technology.

 Crypto Assets Gaining Ground in US Marital Law Practice

A CNBC report last week sought to draw attention to the growing significance of crypto asset and blockchain forensics in family and marital law practice in the US.

The report highlights a specific case involving a man who was allegedly caught concealing $500,000 worth of Bitcoin during a divorce proceeding. A divorce attorney further emphasizes that crypto forensics is currently the fastest-growing aspect of their practice, with explicit requests for crypto-related information arising in 40% to 50% of cases during the discovery phase.

The report comes at a time when crypto continues to attract interest from politicians and lawmakers alike, with Florida Governor Ron DeSantis promising in a Twitter Spaces event with Elon Musk that he would protect Bitcoin if elected as U.S. president next year.

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