Latest in Legislation 05

Celsius is called to push for Chapter 11, while two people attempt to steal millions in Bitcoin.
  • Two people are charged with intent to steal millions of dollars in Bitcoin
  • Bybit arrives at settlement agreement with Ontario Securities Commission
  • Coinbase announces new KYC rules for users in the Netherlands
  • Iran's clampdown on crypto miners extended until the end of summer
  • Celsius urged to push for Chapter 11 bankruptcy by lawyers

The Scoop:

Celsius Network has hired advisors to prepare for a high chance of bankruptcy. The UK-based crypto lending company froze transfers and withdrawals at the start of the month due to extreme market conditions, claiming a "HODL mode" was in place to protect the users' funds. During the fallout, Celsius engaged Citigroup for advice on financial options, and are currently working with lawyers from Akin Gump Strauss Hauer & Feld. Despite the ban on withdrawals, Celsius is still receiving new deposits and CEL token has climbed upward in the past two weeks.

Bybit recently arrived at an agreement with the Ontario Securities Commission (OSC) after the OSC disclosed a "Statement of Allegations" against the crypto asset trading platform. The agreement was spurred on by financial penalties imposed against Bybit and KuCoin previously for violating security laws. Bybit added that they won't be accepting new accounts from Ontario residents, or carry out any marketing efforts aimed at its residents. This decision was concluded by regulators that previously issued warnings and took legal action against crypto exchanges that provided services to Ontario residents. Ontario currently has eight registered crypto trading platforms including Bitbuy, Digital Assets, Bitvo, and Fidelity.

Two people were accused of a conspiracy to launder cryptocurrency that was stolen during the 2016 hack of Bitfinex. Presently, law enforcement has seized $3.6b billion out of the $4.5 billion that was stolen. Ilya Lichtenstein and his wife Heather Morgan, from New York - are set to appear in federal court in Manhattan this week. Registration discussions with the provincial regulator are currently being reviewed, and if the process fails - Bitfinex operations will halt completely.  

“Today, federal law enforcement demonstrates once again that we can follow money through the blockchain, and that we will not allow cryptocurrency to be a safe haven for money laundering or a zone of lawlessness within our financial system.”

General Kenneth A. Polite Jr., Assistant Attorney of the Justice Department’s Criminal Division

The court documents concluded that Morgan and Lichenstein had planned to launder 119,754 Bitcoin that was stolen from the platform. The theft began when a hacker broke into Bitfinex's systems, and initiated more than 2,000 unauthorized transactions into Lichenstein's wallet. These transactions were further distributed into different financial accounts to launder the money, between Lichenstein and his wife. The two are sentenced to 20 years in prison, with the final decision to be carried out by the federal district court judge.

The government of Iran has repeatedly shared its disagreements on crypto mining. Due to the negative impacts of mining operations on the nation's power supply - crypto is viewed as a hindrance to the economy. 118 approved mining firms in Iran have zero access to electricity, states a report. The Iran power generation, transmission, and distribution company Tavanir requested cryptocurrency miners to pause operations until the last day of summer. Electricity complaints will soon be increasing due to the rise of AC consumption around the country. The sustained use of electricity both for mining and regular activities caused power shortages and frequent blackouts. This halt in mining operations make up a minor portion of the network's workload, but a significant portion nonetheless.

Starting on June 27th, Coinbase is requesting users in the Netherlands to comply with KYC (Know Your Customer) rules for transactions to wallets outside of Coinbase. This rule is mandatory and aligned with local regulations. Netherland's 1977 Sanctions act demands financial service providers to verify identities before approval. Following the new change, users who will transfer to wallets off Coinbase must provide details about the transaction, the recipient's full name, address, and purpose of transfer. Coinbase's new announcement for Dutch users demonstrates their proactive approach to the travel rule compliance and new foreign regulations.

The Netherlands cryptocurrency crypto Coinbase
Coinbase users will face added KYC rules for off-wallet transactions.

New crypto adoption:

Decrypting Legalese:

"Chapter 11" is named after U.S. bankruptcy code 11, and is one of the most complicated forms of bankruptcy proceedings. It's a type of bankruptcy that involves reorganization of a debtor’s business affairs, debts, and assets - and for that reason is known as "reorganization" bankruptcy.


This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. Charts, graphs and references to any digital assets are for informational and illustrative purposes only.

Finblox Blog is associated with Finblox - a reliable cryptocurrency earnings platform where you can buy and earn passive income on your digital assets.

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