British police seized a $22.25 million financial fraud project. Will the crypto market be hit hard?

Author: Goro Mori

Although the significant positive news from Germany has stimulated the European market, there is still a dark cloud in the Americas.

Yesterday (August 16), British police announced the arrest of two suspects suspected of operating a cryptocurrency fraud project and confiscated crypto assets worth approximately US$22.25 million, including a USB flash drive containing Ethereum (ETH) worth US$9.5 million and a digital wallet containing approximately US$12.7 million worth of crypto assets.

According to the official announcement of the police, the two suspects are a 23-year-old man and a 25-year-old woman. The two suspects set up a trading website and illegally obtained crypto assets from investors in the United Kingdom, the United States, Europe, China, Australia and other places. After accumulating a certain amount of money, the two closed the website.

The police said that the amount confiscated this time was only 90% of the amount suffered, and is currently being gradually returned to the victims.

In order to prevent online fraud cases, Manchester police are also increasing the budget of the economic and cyber crime department. It is reported that more than 1.5 million pounds has been invested in tracking stolen money.

Although the amount involved in this case is not large compared to the hundreds of millions of dollars involved in the cryptocurrency field, ChainDD believes that the impact of this case will be more far-reaching than the "600 million US dollars blunder" of Poly Network last week.

The latest "Cryptocurrency Awareness Survey" report released by the UK financial regulator FCA shows that awareness and popularity are increasing in surveys on consumer preferences for cryptocurrencies.

The FCA estimates that there are currently about 2.3 million people in the UK holding cryptocurrencies, and there are also many holding cryptocurrencies such as Bitcoin and Ethereum, and more than 27% of people use cryptocurrencies for payments.

Therefore, since last year, the British government has been strengthening its supervision of the crypto asset trading sector. Reuters also reported at the beginning of the year that 90% of financial institutions do not recommend crypto asset investments to users.

The unfavorable wind direction also forced British giants to start taking action. On June 7, The Times reported that Ruffer, a large British asset management company, sold its cryptocurrency asset Bitcoin (BTC) and made a profit of more than US$1.1 billion.

According to Ruffer's investment managers, the firm invested $600 million in Bitcoin as part of its portfolio in November 2020.

On June 26, the FCA issued an announcement reminding the public that Binance is an unregulated exchange in the UK.

The crackdown on cryptocurrency trading platforms has also been going on on a large scale since the beginning of the year.

In the Asian market, the Japanese government has also begun to accelerate the registration system in the country since June, and has approved the legal status of more than 30 exchanges. However, the scope and content of transactions are still subject to restrictions. Overall, the market has not expanded, but the number of people sharing the cake has increased.

Externally, the Japanese Financial Services Agency has adopted a consistent strategy of internal protection and external prohibition. On May 28, the Japanese Financial Services Agency issued a warning to Bybit Fintech Limited, which is based in Singapore, and on June 25, the Japanese Financial Services Agency also issued a second warning to Binance.

In Europe, aside from the bad news from the UK, Germany is opening its doors to cryptocurrencies.

On July 1, Germany passed a law allowing institutional investors to invest up to 20% of their portfolios in cryptocurrencies through “special funds” (Spezialfonds). The law came into effect last week.

Industry insiders say this could attract nearly $4 trillion in crypto assets. Spezialfonds are funds for German institutional investors.

There are currently more than 3,000 special funds managed in Germany, which are based on insurance companies and pension funds. With this regulatory change, cryptocurrencies may be incorporated into the traditional financial system.

In the Americas, as the CBDC turmoil continues, government agencies have never relaxed their supervision of cryptocurrencies.

Since the beginning of the year, the Canadian government has been cracking down on this issue.

On March 29, the Canadian Securities Administrators and the self-regulatory organization IIROC reached an agreement on compliance requirements for cryptocurrency exchanges and announced the details.

The Ontario Securities and Exchange Commission stated, "We need to consult with the Securities and Exchange Commissions of relevant states before April 19," and asked digital currency exchanges, including world-class large exchanges, to respond.

The reason is that although the contract transactions such as virtual currency derivatives currently provided by major exchanges are legally considered securities, many exchanges have not yet completed the necessary registration procedures with the authorities. IIROC stated that legal sanctions will be imposed on exchanges that fail to contact the authorities within the prescribed time limit.

Poloniex Exchange was announced on May 25, Kucoin Exchange was announced on June 8, and Bybit Exchange was announced on June 21. All hearings are still ongoing.

At the same time, in June, the Canadian province of Ontario also banned Binance from providing services in the field.

Poloniex is also facing a $10 million fine from the U.S. SEC for not being registered.

On August 10, the U.S. Securities and Exchange Commission (SEC) fined the crypto asset (virtual currency) exchange Poloniex $10 million for operating an "unregistered online digital asset exchange" in violation of the Securities Exchange Act.