Crypto
Revealed: Cryptocurrency firm in UK transfers $4.2m to Russian arms dealer’s wallet
The transactions involving Copper Technologies raise concerns about whether UK crypto laws have kept pace with the rapidly evolving sector, which has faced growing scrutiny for its potential to provide anonymity
Recent findings reveal that a cryptocurrency company transferred over $4.2 million in digital assets to a crypto wallet linked to a member of an alleged Russian arms-dealing network, who later faced US sanctions.
According to a report, the transactions involving Copper Technologies raise concerns about whether UK crypto laws have kept pace with the rapidly evolving sector, which has faced growing scrutiny for its potential to provide anonymity.
Analysis of crypto records by the Guardian and the International Consortium of Investigative Journalists (ICIJ) reveals a connection between Copper Technologies and Jonatan Zimenkov, an Israeli-born Russian national.
Zimenkov, 29, faced US sanctions in February 2023 for allegedly aiding the Russian military in the invasion of Ukraine as part of the “Zimenkov network,” led by his father, Igor Zimenkov.
Copper transferred millions of dollars worth of digital currency in May 2021 to a wallet belonging to Jonatan Zimenkov, who was later sanctioned. Although Copper was based in London at the time of the transfer, it has since relocated to Switzerland.
While Zimenkov wasn’t under sanctions when the transaction occurred, the US Treasury Department stated that the network had been active for several years before imposing restrictions on individuals and entities involved.
Copper stated that it takes compliance seriously and acted within all regulatory standards at the time of the transaction.
The revelation highlights the opaque nature of cryptocurrency and raises questions about regulating digital assets within the financial system.
Zimenkov wasn’t a Copper client, relieving the company of regulatory obligations to verify his identity.
Financial firms can file suspicious activity reports for transactions raising concerns, even if rules aren’t violated. It’s unclear if Copper filed such a report.
The UK adopted a travel rule in late 2023, requiring crypto firms to conduct checks on funds transferred to external parties.
Blockchain logs show that Copper transferred over 1,700 units of ethereum to Jonatan Zimenkov in May 2021. The purpose and original source of the assets remain unclear.
The owner of the receiving wallet is not named in blockchain records, which only display a digital currency address.
The same address was included in a US Treasury announcement in February 2023, detailing sanctions against the Zimenkov network.
The alleged sanctions evasion network’s details revealed by the US underscore the importance of verifying the identities of individuals involved in asset transfers.
Jonatan Zimenkov, who held Russian, Israeli, and Italian citizenship, was identified as part of the network involved in projects connected to Russian defense capabilities.
The US Treasury stated that Igor Zimenkov, Jonatan’s father, worked closely with his son and others to facilitate Russian defense sales to third-country governments.
Both men are accused of corresponding with sanctioned Russian defense firms and participating in deals for Russian cybersecurity and helicopter sales abroad.
Sanctions apply to several companies involved in the arms trade, including GBD Limited, described as a “Zimenkov network company” attempting to supply weapons systems to an African government.
Russian public records show Jonatan Zimenkov registered as an “individual entrepreneur” in 2019, engaging in wholesale trade of ships, aircraft, and vehicles.
Last year, Copper Technologies was implicated in a share sale benefiting a Russian banker facing US sanctions, as reported by the Guardian.
Crypto
Cryptocurrency Price on May 7: Bitcoin falls below $63,700; Shiba Inu, Dogecoin tank 5%
As of 12:14 p.m., Bitcoin was trading 1% lower at $63,649, while Ethereum experienced a 3.5% drop to $3,068. Additionally, altcoins like BNB (-1.1%), Dogecoin (-4.9%), Toncoin (2.6%), Cardano (3.3%), Avalanche (-3.1%), and Shiba Inu (-5.2%) followed suit in the downward trend.
The crypto market sentiment was further impacted by news of significant transfers from FTX-associated addresses and a Wells Notice issued to Robinhood by the SEC, alleging unauthorized digital asset trading categorized as securities.
Crypto Tracker
CoinDCX Research Team noted, “In the short term, both BTC and ETH show bearish price action, though the higher time frame remains bullish. BTC needs to reclaim the $67,000 level, while ETH must surpass $3,250 to regain momentum.”Also Read: Grayscale Bitcoin Trust’s shares jump after first inflow since JanuaryStablecoins accounted for $69.86 billion in volume, representing 91.12% of the total crypto market’s 24-hour volume, according to CoinMarketCap.Within the same timeframe, Bitcoin’s market cap rose to $1.253 trillion, with BTC volume surging by 67.8% to $30.57 billion.Vikram Subburaj, CEO of Giottus, analyzed Bitcoin’s technicals, stating, “Bitcoin, after breaching $65,000 briefly, is consolidating above $63,500 today. The asset has found strong support at the 0.5 fib extension ($60,700), aligned with its 100-day MA at $60,850. Its RSI levels continue to improve towards a neutral territory. Bitcoin can consolidate at these levels for a few more days before it holds $65,000 and turns bullish.”
Regarding Cardano, Rajagopal Menon, Vice President at WazirX, remarked, “Cardano is looking at an accumulation phase which means the network could see more buying activity in the coming days, creating a potential for a price surge. Its technical indicators are favourable and all signs point to a buying activity for investors in the coming days.”
In Tuesday’s trade, Cardano saw a 3.3% decline to $0.4476. Over the past month, the crypto token dropped by 24%, yet it rallied by 17% over the last year.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Crypto
Kenya Appoints Marathon Digital as Consultant for Cryptocurrency Regime and Mining Energy Needs
Kenyan President William Ruto announced a major policy shift in the country’s approach to cryptocurrency on May 3, revealing that his government has appointed U.S.-based Bitcoin mining company Marathon Digital as its consultant.
The move signals a departure from the Central Bank of Kenya (CBK) and other government entities’ previously defiant stance on cryptocurrencies.
Marathon Digital to Collaborate with the Kenyan Government
The announcement was made during the AMCHAM Business Summit, where notable figures such as U.S. Secretary of Commerce Gina Raimondo and Kenya Investment and Trade Cabinet Secretary Rebecca Miano were present.
President Ruto explained that Marathon Digital will partner with the National Treasury and the Energy Ministry to address the energy requirements associated with cryptocurrency mining.
“Marathon Digital has been ushered to consult with the Treasury on the cryptocurrency regime and ministry of energy to discuss the energy needs in connection with the cryptocurrency mining,” stated President Ruto during the meeting with American investors.
Ruto’s decision departs from the previous cautious stance on crypto taken by institutions like the CBK under former governor Patrick Njoroge. Njoroge had strongly warned against crypto involvement, suggesting that considering Bitcoin as a reserve asset would be absurd. He even stated that he should be imprisoned if such a proposal were entertained.
Following Njoroge’s tenure, Kenyan authorities have shown a willingness to explore regulation of cryptocurrencies rather than outright prohibition. Collaborative efforts with organizations like the Kenyan Blockchain Association have been initiated to draft regulatory frameworks. The current government has also appointed a working group to develop a comprehensive regulatory and monitoring framework for virtual asset service providers.
Kenya Takes Strides Towards Cryptocurrency Regulation
Kenya is initiating efforts toward crypto regulation, with the government forming a multi-agency team that includes the central bank.#crypto #cryptoregulationhttps://t.co/RneVliYODw
— Cryptonews.com (@cryptonews) April 23, 2024
Kenya’s crypto adoption momentum culminated in December 2023 when the Kenyan National Assembly’s committee approved the Capital Markets Bill. If passed into law, this bill would introduce taxation on cryptocurrency exchanges and wallets, mirroring the taxation framework applied to traditional banking transactions.
On April 23, NTV Kenya reported establishing a multi-agency working group tasked with developing rules and oversight for crypto, also known as virtual assets, and the entities dealing with them, such as Virtual Asset Service Providers.
Kenyan National Treasury Cabinet Secretary Prof. Njuguna Ndung’u disclosed the formation of this group to the National Assembly. He cited concerns raised by regulators regarding unlicensed virtual asset products and the findings of a Central Bank risk assessment. This assessment highlighted the risks of money laundering and terrorist financing associated with virtual assets.
Kenya’s 2022 anti-money laundering report further highlighted the need for regulatory measures, identifying virtual assets and virtual asset service providers as areas requiring attention. Additionally, Kenyan authorities uncovered suspicious M-Pesa withdrawals totaling at least $20 million in 2023, linked to the now-suspended iris-scanning project Worldcoin.
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