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CipherTrace gives officials tips on how to uncover criminals’ crypto caches

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Blockchain forensics firm CipherTrace has published comprehensive guidance to assist law enforcement officials in identifying signs of cryptocurrency use when carrying out criminal investigations.

The report notes that the U.S. Department of Treasury has identified a “consistent decrease in reported bulk cash seizures by agencies throughout the United States” since 2013, suggesting the trend may indicate increased cryptocurrency adoption among criminals.

“The signs of cryptocurrency usage, however, can easily be overlooked by investigators unfamiliar with what to look for.” 

The report encourages law enforcement to scour confiscated phones and computers for cryptocurrency-related applications, bookmarks and authenticator apps, supplying a list of popular cryptocurrency exchanges, wallet providers and crypto ATM maps.

“Old, disconnected, and seemingly non-functioning computers could hold the private keys to cryptocurrency wallets,” CipherTrace emphasized.

Investigating officers are also encouraged to examine so-called “pocket litter” and “other random papers” for Bitcoin ATM receipts and wallet recovery seed-phrases, providing examples of how recovery seeds are typically stored on paper.

Example of wallet recovery phrase: CipherTrace

The post adds that “recovery seeds can also be hidden within books, planners, and unrelated notes, or in plain sight as clear lists or metal backups.”

The report also provides an extensive list of hardware wallet manufacturers and models, and examples of what the most popular devices look like.

“The signs of cryptocurrency use can be easily overlooked by investigators; hardware wallets can look like inconspicuous USB sticks and recovery seeds are just random words on a page.”

CipherTrace urges law enforcement to be especially vigilant in searching for evidence of crypto caches “when there is a lack of cash seizure for known cash intensive activities.”



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London Stock Exchange-listed firm inks FCA’s approval for crypto services

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Mode Global Holdings, a London Stock Exchange-listed fintech group, has secured major regulatory approvals for cryptocurrency and fintech operations in the United Kingdom.

The company announced Thursday that Mode has secured its Electronic Money Institution license and AMLD5 registration from the U.K. Financial Conduct Authority.

The AMLD5 registration has been granted to Mode’s crypto arm Fibermode Limited, establishing it as an official crypto asset firm in the United Kingdom, pursuant to the amended regulations on money laundering, terrorist financing and transfer of funds.

The AMLD5 registration is a requirement for crypto-related businesses in the country that fall within the scope of money laundering regulations. According to the announcement, Mode is the fifth company to have received this registration to date since the FCA became the official AML supervisor of the crypto industry in the U.K. in January 2020.

Alongside the AMLD5, Mode’s subsidiary Greyfoxx Limited also acquired the EMI license, which enables Mode to offer a “range of innovative financial services” to both businesses and consumers in the United Kingdom, the announcement notes.

Following the acquisition of new regulatory approvals, Mode is planning to further expand its crypto services, including decommissioning its investment product known as the “Bitcoin Jar.” The product aims to allow Mode customers to use Bitcoin (BTC) to generate BTC interest rather than simply holding it in a wallet or on an exchange.

Mode CEO Ryan Moore noted that the new regulatory developments provide a major step in Mode’s mission to deliver a trusted and regulated environment. “It means we now have the ability to scale our operations and continue delivering innovative payments products for our customers under our own EMI licence. Both the EMI licence and the AMLD5 registration ensure business transparency, strong oversight and give our customers confidence in our offering,” he said.

Related: UK regulator warns against 111 unregistered crypto companies… and FOMO

The latest news comes shortly after a member of the British Parliament pointed out major difficulties in the process of registering crypto firms under the FCA’s AML regulations in late May. Economic secretary John Glen elaborated that FCA was not able to process and register all applications by its previous deadline due to a significant number of firms failing to adopt robust AML control frameworks as well as employ proper staff.