Cryptocurrency mixers may soon be classified as money-laundering hubs in the United States. Meanwhile, New York’s attorney general has filed a lawsuit against Gemini, Genesis, and DGC for allegedly defrauding investors through the Gemini Earn investment program, and Lightning Labs has released the mainnet alpha of Taproot Assets.
U.S. Treasury to designate crypto mixers as money-laundering services
The United States Treasury Department plans to expand its sanctions against so-called cryptocurrency mixers, according to an Oct. 19 report by The Wall Street Journal.
The Treasury seeks to include cryptocurrency mixers under the broad umbrella of money-laundering hubs. Deputy Treasury Secretary Wally Adeyemo said this would enable the government to combat the use of digital assets for illicit purposes, including cyber warfare and terrorism.
Crypto was back in regulators’ crosshairs this week after Senator Warren and more than 100 other lawmakers signed a letter urging the Biden administration to “swiftly and categorically act to meaningfully curtail illicit crypto activity.”
Earlier this week, the Treasury Departmnet also added a Gaza-based crypto operator to its list of Specialiy Designated Nationals.
New York Attorney General sues Gemini, Genesis, DGC for allegedly defrauding investors
New York’s attorney general has filed a lawsuit against cryptocurrency firms Gemini, Genesis and Digital Currency Group for allegedly defrauding investors through the Gemini Earn investment program.
An official statement from the office of attorney general Letitia James outlines the basis of the charges, claiming that the companies defrauded more than 23,000 investors, including 29,000 New York citizens of more than $1 billion.
An investigation carried out by James’ office claims that Gemini lied to investors about its Gemini Earn investment program which it ran in partnership with Genesis. It claims that while Gemini had assured investors that the program was a low-risk investment, investigations reveal that Genesis’ financials “were risky”:
“The lawsuit alleges that Gemini knew Genesis’ loans were undersecured and at one point highly concentrated with one entity, Sam Bankman-Fried’s Alameda, but did not reveal this information to investors.”
The lawsuit also charges Genesis as well as its former CEO Soichiro Moro, parent company DCG and its CEO Barry Silbert with defrauding investors by attempting to conceal more than $1.1 billion in losses.
The lawsuit looks to ban Gemini, Genesis and DCG from operating in the financial investment industry in New York as well as seeking restitution for investment and the return of “ill-gotten gains”.
Lightning Labs releases Taproot Assets, bringing stablecoins to Bitcoin
Bitcoin layer-2 infrastructure firm Lightning Labs has released the mainnet alpha of Taproot Assets, a protocol aimed at enabling stablecoins and real-world assets to be issued on the Bitcoin and Lightning Network.
The current version, Taproot Assets v0.3, will provide a “feature-complete developer experience” to issue, manage and explore stablecoins and other assets on the Bitcoin blockchain, according to Ryan Gentry, head of business development at Lightning Labs.
“With this release, developers can issue financial assets on-chain in a scalable manner,” Lightning Labs stated on Oct. 18 in a separate post. “Today marks a new era of multi-asset bitcoin.”
Gentry says the integration will extend Bitcoin’s network effects and move it one step closer toward “bitcoinizing the dollar.” He added:
“This is how we make bitcoin the global routing network for the internet of money. This is how we bitcoinize the dollar and the world’s financial assets.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
