Two Bitcoin Addresses Named Enemies of the State — Good Regulatory Step for Crypto

  • Darryn Pollock
    ⭐ Features

    A move by the US Government to sanction two BTC addresses is an interesting, but positive, precedent for the regulation of crypto

Two Bitcoin Addresses Named Enemies of the State — Good Regulatory Step for Crypto
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While it may not sound like positive news, the fact that the U.S. Treasury's Office of Foreign Assets Control (OFAC) sanctioned two Bitcoin addresses is a positive step for the regulation of crypto, as it shows the governments believe they have the tools to handle this situation.

It is an unprecedented move for cryptocurrency addresses to be added to this sanction list, which at one stage also listed Osama Bin Laden, but even in the unprecedented move, there has been no new legislation needed to make this happen.

What this means is that the US government believes it has the tools at its disposal to enforce the law over dodgy Bitcoin addresses and that it is ready to put its foot down and bring under scrutiny problematic Bitcoin addresses, such as those that could be funding terrorism.

Stepping in, and stepping up

The sanctioning of the BTC addresses was a move against against two Iran-based individuals, Ali Khorashadizadeh and Mohammad Ghorbaniyan. These two individuals helped exchange Bitcoin ransom payments into Iranian rial on behalf of Iranian malicious cyber actors involved with the SamSam ransomware scheme, which damaged over 200 known victims.

“The Treasury is targeting digital currency exchangers who have enabled Iranian cyber actors to profit from extorting digital ransom payments from their victims. As Iran becomes increasingly isolated and desperate for access to U.S. dollars, it is vital that virtual currency exchanges, peer-to-peer exchangers, and other providers of digital currency services harden their networks against these illicit schemes,” said Treasury Under Secretary for Terrorism and Financial Intelligence, Sigal Mandelker.

Regulation ready to tackle anonymous and transparent addresses

Cryptocurrency lawyer Marco Santori explains in a Twitter thread why this move from OFAC is a positive one on behalf of regulators and law enforcers trying to get cryptocurrencies under control.

His summation is that the “OFAC believes, today, that it has the tools it needs to enforce the law. It didn't ask for more legislation, nor did it didn't propose new prohibitions. The Treasury is fighting crypto bad guys using the tools already at its disposal,” Santori explains.

This is clearly an important standpoint for this department of US legal enforcement. If it was that the OFAC had to enact new laws in order to combat these dodgy Bitcoin addresses, it would not only be a slow process, but potentially a less effective one.

By making this move, OFAC has essentially opened its legal interpretation to include these digital asset addresses, and they feel that they can handle controlling how they operate despite their quasi-anonymous nature.

What can actually be done?

What does need to be asked, though, is what can the OFAC actually do about these addresses? As it stands currently, they have simply publicised two addresses, and as Santori predicts, will probably see random, anonymous individuals sending BTC to them as a joke.

And, based on the anonymous nature of cryptocurrency sending, it is very possible that anyone sending BTC to these sanctioned addresses will remain hidden, and more so, the lack of centralised control means that the addresses can probably still withdraw the BTC and turn it into useful funding.

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Question of the Day: Can Stablecoins Accelerate Cryptocurrency Adoption?

  • Yuri Molchan
    ⭐ Features

    Stablecoins show hardly any volatility compared to Bitcoin and altcoins, many are hoping that they will be able to bridge new crypto economy and regular fiat money

Question of the Day: Can Stablecoins Accelerate Cryptocurrency Adoption?
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Bitcoin, the father cryptocurrency, emerged in hope that it will remove all intermediaries in electronic commerce that cut off their share of payments. BTC was perceived as a P2P way to replace fiat cash in an electronic format, which would enable one party to pay another without any financial institution or payment platform which would demand its share of a transaction as a reward for its services.

What is wrong with Bitcoin

For quite a while Bitcoin was performing the way the crypto community expected. But the situation changed later – BTC rate became weaker, thus bringing down its financial and economic reliability, when it gets to be used as a regular means of payment.

You cannot have a currency that would cost like a British castle today, a gram of gold – tomorrow and a pack of French fries the day after.

At that point practical fintech minds came up with an idea of creating something which would become a breakthrough in the universe of crypto – a so-called stablecoin.

Will stablecoins solve the volatility problem?

Technically, stablecoins are protected from the volatility roller-coaster that Bitcoin and other cryptos love to ride. They are programmed to keep their prices stable and investors now are largely attracted to this new type of digital assets.

Stablecoin does not show any volatility in its monetary value, since it has a fixed connection to an asset it is pegged to. The major goal of using stablecoins is taking the best from decentralized crypto coins and combining it with a constant value. Thanks to it, stablecoins can be used as a reliable means of trade.

Asset-pegged stablecoins

Asset-backed ones get their value from an asset as can be understood from the name. An asset provides the necessary value to a coin, as well as the necessary legitimacy.

A great example of an asset-pegged stablecoin is Tether (USDT). In spite of a series of scandals at the end of last year, it remains the most popular stablecoin in the crypto market.

Recently, it has partnered with the Tron Foundation to launch a Tron-based stablecoin.

Other examples are TrueUSD (TUSD), USD Coin (USDC), the Gemini Dollar (GUSD), and the Paxos Standard (PAX). They are all pegged to the USD.

Crypto-backed stablecoins

Some digital coins work in a similar way to fiat-backed ones, however, they are pegged to collateral crypto. That means that crypto assets that ensure the value of such stablecoins are stored in a wallet similar to escrow.

A good example of a crypto-pegged token is Maker, which is ranked 16 on CMC.

Algorithmic stablecoins

Even though, stablecoin can be interesting at first thought but the way they are built goes against the principle of decentralization that crypto coins have as a foundation. Thus, many crypto fans and evangelists are positive that stablecoins must be linked towards not a centralized asset but a computer algorithm which takes value from a balance between supply and demand.

Basis is now considered the most promising algorithmic stablecoin of all.

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Can stablecoin ensure smooth future for the crypto industry?

The primary goal of all crypto assets was and remains to come up with virtual asset that would be liquid enough and not vulnerable to market volatility. From this point of view, stablecoins are a dream of all crypto fans and evangelists of a decentralized economy.

Apart from the potential to conduct crypto transactions smoothly, experts believe it can bridge the two worlds – fiat and crypto, bringing them a mutually beneficial coexistence. However, that may take time.

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