TRM Labs

🎧 Learn about the Internal Revenue Service (IRS) and U.S. Department of the Treasury’s current approach to #crypto in our latest #TRMTalks! Sulolit "Raj" Mukherjee J.D. (Executive Director for the Office of Digital Assets Initiative at the IRS) joins Ari Redbord to discuss recent “broker regulations,” the role of tax authorities in shaping crypto policy, and the importance of public-private partnerships. Listen to the full episode now ➡️ https://lnkd.in/e2iF-fa3

📚 New from TRM Academy: An enhanced clustering and change analysis module in the TRM Academy Certified Investigator (TRM-CI) course and certification. In this updated module (available starting today!), you’ll learn how to cluster UTXO addresses using various heuristics such as co-spend, nominal spend, multi-signature analysis, and more—essential for presenting cryptocurrency evidence in court. With this refreshed module, you’ll learn how to: ✅ Confidently trace UTXO chains like Bitcoin ✅ Accurately select change addresses ✅ Verify ownership of additional addresses with a high degree of confidence This is just one of many updates we’re making to the TRM-CI certification—essential for anyone conducting on-chain investigations across blockchains. Learn more about the course ➡️ https://hubs.la/Q02Hvzzn0 or speak with your TRM rep today to get signed up for the certification.

This summer, we’ve seen a spate of #ransomware attacks on a diverse set of businesses around the world, from telecom to automotive. Our latest blog dives into the details of these recent ransomware attacks, examines how ransom payments are traced, and explains how international law enforcement and regulators are attempting to fight back against cybercriminals. Read the post here ➡️ https://hubs.la/Q02Hq_140

Over the last several years, most of the focus on digital assets regulation has been in the centralized space—think exchanges, custodians, and brokers. But the promise of the technology is decentralization; yet only a few regulators address the opportunities and risks in DeFi. While we’ve seen a report from the U.S. Commodity Futures Trading Commission Technology Advisory Committee, a risk assessment from the U.S. Department of the Treasury, a paper from Abu Dhabi Global Market, and proposed standards from IOSCO (the global securities standards setter), most global policy makers have focused on the centralized ecosystem. One exception is France. Last week, the Autorité des marchés financiers (AMF) – France, part of the Banque de France, published a summary response to its 2023 discussion paper on DeFi. The AMF followed a paper from the Danish Financial Supervisory Authority titled, “Principles for the Assessment of Decentralisation in the Markets for Crypto-assets,” released at the end of June. Both papers dive into the importance of actual decentralization when it comes to regulation. And both acknowledge that the level of centralization impacts whether or not a project falls within the regulatory perimeter. For example, if a DeFi project’s infrastructure layer is truly decentralized, then regulation may not be necessary or appropriate. Additionally, both papers acknowledge that decentralization exists on a sliding scale and evolves over time. However, they diverge on the need to certify smart contracts, a primary position of the AMF. 🧐 What’s next? Both papers will contribute to the broader EU discussion on how MiCA impacts the DeFi space, with a report from the European Commission expected by the end of the year. 📷: Gilles Rolle / REA

We are hiring! Join our mission and build a safer financial system at TRM!

We are hiring! Join our mission and build a safer financial system at TRM!

Want to find out what it takes to build a best-in-class sanctions program to help your #crypto business stay ahead of evolving circumvention techniques and regulatory expectations? This webinar is for you. Join Crystal Noe (Head of Global Sanctions Compliance) from Kraken, Sophie Bowler (Chief Compliance Officer) from Zodia Custody, and Isabella Chase (Senior Policy Advisor) and Thomas A. (Compliance Advisor) from TRM Labs on July 30 or 31 for an in-depth discussion on all things sanctions and crypto compliance. They’ll be covering: ▪️ Recent changes in sanctions policy impacting crypto businesses ▪️ The challenges of operationalizing an effective sanctions program ▪️ How to handle indirect risk exposure ▪️ Strategies to upskill your sanctions team Note: We’re offering this session on two days, in two different time zones. Select the one that works best for you! Save your spot now ➡️ https://hubs.la/Q02FDYT50

Last week, Artur Schaback, the co-founder and former chief technology officer of Paxful pleaded guilty today to conspiracy to fail to maintain an effective anti-money laundering (AML) program. Paxful is a peer-to-peer (P2P) cryptocurrency marketplace that allows users to buy and sell cryptocurrencies directly with each other for a variety of other items, including fiat currency, prepaid cards, and gift cards. This case was investigated by Homeland Security Investigations (HSI) and IRS Criminal Investigation. TRM Labs is proud to have supported law enforcement in this investigation. According to court documents, from July 2015 to June 2019, Schaback allowed customers to open accounts and trade on Paxful without gathering sufficient know-your-customer (KYC) information; marketed Paxful as a platform that did not require KYC; presented fake AML policies to third parties that he knew were not, in fact, implemented or enforced at Paxful; and failed to file a single suspicious activity report, despite knowing that Paxful users were perpetrating suspicious and criminal activity. Cryptocurrency exchanges and other businesses are considered Money Services Businesses (MSBs) for purposes of the Bank Secrecy Act (BSA) - the US anti-money laundering regime. Under the BSA, the Financial Crimes Enforcement Network (FinCEN) classifies entities that deal in the exchange, transfer, or storage of virtual currencies as MSBs, specifically as "money transmitters." This classification imposes regulatory obligations on these businesses including registration, maintaining AML programs, recordkeeping, and reporting requirements. TRM works with crypto businesses – from large exchanges to DeFi protocols – to ensure compliance with the BSA and other AML regimes. As a result of his failure to implement AML and KYC programs, Schaback made Paxful available as a vehicle for money laundering, sanctions violations, and other criminal activity, including fraud, romance scams, extortion schemes, and prostitution. Paxful, as shown in TRM’s graph visualizer below transacted with darknet markets, mixers, terrorist financiers, and non-compliant exchanges such as Russian-based Garantex. This case is the product of an investigation by HSI and IRS-CI. U.S. Department of Justice Bank Integrity Unit Deputy Chief and National Cryptocurrency Enforcement Team Deputy Director Kevin Mosley and Trial Attorneys Emily Cohen, Victor R. Salgado, and Caylee Campbell of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), and Assistant U.S. Attorney Matthew Thuesen for the Eastern District of California are prosecuting the case. This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation.

In this week’s edition of The Weekly Roundup, Ari Redbord, Isabella Chase, and Angela Ang give us the rundown on this week’s decentralization, stablecoin, ransomware, and regulatory happenings around the world. Check out the headlines, and click in for the details ⬇️ - France and Denmark publish papers on decentralization - Hong Kong finalizes stablecoin regulations - Korea’s Virtual Asset User Protection Act goes live - Atlantic Council updates Cryptocurrency Regulation Tracker for 60 countries - Ransomware attacks are heating up this summer—but so has the global response - US Treasury Secretary is “very attentive to use of cryptocurrencies” by Russia

After scammers used sophisticated phishing techniques to steal #crypto assets from a victim’s MetaMask wallet, Taiwan-based exchange XREX Inc. stepped up to help. They used TRM’s #blockchainintelligence to analyze the flow of funds, corroborate the victim’s ownership of the stolen assets, and collaborate with law enforcement on the investigation—ultimately leading to the seizure and return of almost all of the victim’s stolen crypto. Read the full story for all the details ➡️ https://hubs.la/Q02H4R0m0