🇬🇧🕵️♀️January Crypto Intelligence News
January 31, Economic Intelligence Analysis about CryptoCrime, Libra, CBDC e Telegram
Crypto Crime and Bandits
The Chainalysis 2019 report on crypto-crime analysis has been released. At the macro level, it stands out, that illicit activities have more than doubled compared to the previous two years, reaching a level of 1.1% of total cryptocurrency trade, with an equivalent figure of 11.5 USD billion. The growth in the percentage is worrying, minus the size of the figure, which remains a laughable niche compared to the estimated illicit activities in fiat currency.
The main component is fraud, implemented mainly through Ponzi schemes and ICOs. This demonstrates both the ignorance of the market, which still characterizes those who approach it, attracted by easy gains, and the scarce training work carried out by the media, despite the very articulated coverage present with constancy also in generalist newspapers with wide circulation. Relative growth for transactions on the darknet, theft, ransomware and terrorism.
As always Chainalysis does not mention the sources of the analysis so it is difficult to understand the reliability of what it says. If for some cases (scams, darknet marketplace, and a little bit for thefts) it is intuitable the methodology of analysis, which derives from the cross between internal data and public statistics, for others (terrorism, child pornography market) the extrapolation of the conclusive data is, in the absence of a description of the process, of arbitrary origin.
On the micro level, instead, two interesting factors are highlighted. The first is the activity, improperly defined OTC in the absence of better (there is no canonical difference ‘In/Over The Counter’ in the cryptomarkets), by operators with broker functions who mediate on their own between single bid/ask and, subsequently, turn to the exchangers for the exchanges deriving from the conclusion of the agreement. Chainalysis based on the fact that most of the illicit transactions, from two analyzed exchangers, originated by OTC, highlights the potential dangerousness of the brokers in terms of tracking.
The second factor, the proliferation of decentralized exchagers, such as Bisq, where no-rule is the rule and therefore the potential dangerousness is also highlighted. The comment is the same as before: if the highlighting is a positive factor of the analysis, there is no evidence in the reliability of danger conclusions but only suppositions. So it is necessary to take the deductions of Chainalysis always with the benefit of the doubt, also because cryptocurrency remain, if properly used, an excellent non traceable recycling vehicle of which Chainalysis certainly does not have full quantitative awareness, basing its analysis only on data derived from its own activity.
For the intelligence activities connected to the crypto world of Iran, China and terrorism, excellent analysis on Forbes.
Libra and Facebook
For Libra, the double-track already highlighted continues. The singular scenario is that, on the one hand, the initiative continues to lose pieces (of the calibre this time of Vodafone) while, on the other hand, it continues to progress in its internal organization with the initialization of a high standing technical committee driving technological development. In the middle, Australia expressed its willingness to study new regulatory methods given the evolution of fintech, including Libra. The analysis follows the last month one: the project will come to life in terms but how it will develop is still a mystery.
Libra had the great merit (with China) to rock the boat regarding the institutional about the need to drive the crypto-digitalization of fiat currencies (Central Bank Digital Currency). At the present time the most interesting theme of economic intelligence with regard to the cryptoeconomy is the debate, very rich in documents and opinions at different levels, regarding the prospects of what should be faced, in the medium term, with issues of state or supra-national stablecoins.
The focus is on operational tests, such as SandDollar of the Central Bank of The Bahamas, the increasingly accurate definition lines of the Chinese cryptoYuan project, the analysis of the influence of stablecoins and hypothetical CBDCs on current systems, the thinking of opinion leaders and the preparation of several central institutions (and their joint study groups) on how to address and be actors of change. Also interesting are the opinions of US Dollar stakeholders, such as IMF, whose value is that CBDCs never see the light.
What to emerge is a new chapter in the ‘ monetary’ economic warfare that has seen the US against everyone for years. The CBDCs and private stablecoins are another serious threat to the more than secular monetary hegemony of USD. In the meantime Telegram with Gram pays the bill for that. The story is symbolic because Telegram is not a central bank nor a big-one but, however, the issuance of a cryptocurrency of its own can be an annoying precedent given the number of accounts of the messaging app. On the other hand, Pavel Durov has made some fundamental strategic mistakes, first of all the choice of the ICO’s issuing jurisdiction.
The US is therefore caging Telegram, by SEC, in a lawsuit concerning the commodity nature of the ICO token, so on compliance with the rules of knowledge of the data and accounts of buyers (direct and indirect) of the 1.7 USD billion tokens (sold in the US and considered by the SEC as financial instruments and not commodities) and on the respect of privacy regulations towards the buyers (in all countries where the tokens have been sold). It is clear the aim is the Telegram’s exhausted, being the company unable to provide the requested data.
A first result was that on January 6 Telegram backtracked, in order to October 2019 when the Gram operation was detailed, stating that Gram’s wallets will not be incorporated into the text app but managed by a third-part application. The scenario for Telegram appears uncertain compared to the road-map announced in October.
Since January 10 5AMLD, an update of the European Anti-Money Laundering Directive which includes exchangers and wallet managers, came into force. On 2 January, the Italian CONSOB published its views on crypto assets.
This is an English adaptation of a neuronal Italian/English AI translation by DeepL