{"id":96240,"date":"2020-10-23T21:24:03","date_gmt":"2020-10-23T18:24:03","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/law-decoded-government-sandboxes-test-beds-and-crypto-compromises-oct-16-23\/"},"modified":"2020-10-23T21:24:03","modified_gmt":"2020-10-23T18:24:03","slug":"law-decoded-government-sandboxes-test-beds-and-crypto-compromises-oct-16-23","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/law-decoded-government-sandboxes-test-beds-and-crypto-compromises-oct-16-23\/","title":{"rendered":"# Law Decoded: Government sandboxes, test beds and crypto compromises, Oct. 16-23"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a315703a4a70\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a315703a4a70\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/law-decoded-government-sandboxes-test-beds-and-crypto-compromises-oct-16-23\/#PayPals_crypto_payments_test_out_New_Yorks_conditional_BitLicense_and_vice_versa\" >PayPal\u2019s crypto payments test out New York\u2019s conditional BitLicense and vice versa<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/law-decoded-government-sandboxes-test-beds-and-crypto-compromises-oct-16-23\/#Bahamas_Sand_Dollar_goes_live\" >Bahamas Sand Dollar goes live<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/law-decoded-government-sandboxes-test-beds-and-crypto-compromises-oct-16-23\/#Mixers_beware\" >Mixers beware<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/law-decoded-government-sandboxes-test-beds-and-crypto-compromises-oct-16-23\/#Further_reads\" >Further reads<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Law Decoded: Government sandboxes, test beds and crypto compromises, Oct. 16-23 <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5ldS1jZW50cmFsLTEuYW1hem9uYXdzLmNvbS9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjAtMTAvZWFkZDllNjItYzlkMS00YzczLTk0MzgtZDVhNmQ0NTU5Y2NjLmpwZw==.jpg\" \/><\/p>\n<div data-v-5a136f3a=\"\">A line from immortal comic s<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/trip-and-travel\/\" data-internallinksmanager029f6b8e52c=\"10\" title=\"Trip &amp; Travel\" target=\"_blank\" rel=\"noopener\">trip<\/a> Calvin &amp; Hobbes goes \u201ca good compromise leaves everybody mad.\u201d When it comes to laws governing crypto, authorities are usually asking for pretty major compromises because they are, at their very best-intentioned, trying to work things out. While it\u2019s a fast-developing area of law \u2014 honestly a treat to cover \u2014 that means it\u2019s fast-developing relative to law, not tech. <\/p>\n<p>There is an innate conservatism to anything having to do with how people handle their money. That extends to laws governing how money and investments function. Consequently, everything regulators touch in crypto develops slower than the industry would necessarily like. <\/p>\n<p>It is, however, not an unreasonable instinct that regulators are resolute in setting up controlled ecosystems and sandboxes for all developments before releasing them into the wild. But restricting crypto\u2019s technological capacities requires some compromises. The major <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> from this week has seen that dynamic play out worldwide, as everything because a test case.\u00a0<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"law_decoded\"\/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"PayPals_crypto_payments_test_out_New_Yorks_conditional_BitLicense_and_vice_versa\"><\/span>PayPal\u2019s crypto payments test out New York\u2019s conditional BitLicense and vice versa<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>After months of rumors, PayPal formally announced that the platform would be onboarding crypto payments. <\/p>\n<p>While Bitcoin\u2019s price leapt at the news, there is a catch. PayPal\u2019s crypto will be locked up on the platform. No tokens in or out, a veritable Alcatraz. PayPal, meanwhile, will be operating on a probationary basis. <\/p>\n<p>PayPal\u2019s crypto platform received the tentative green light from New York\u2019s Department of Financial Services, arguably the most important sub-national financial regulator in the world and the issuer of the famed BitLicense. But in this case that license is conditional. Just as PayPal is testing out crypto in an extremely limited capacity, the DFS is testing out its new format for testing out firms looking to obtain that coveted license. <\/p>\n<p>A fascinating byproduct of this new system is that it pairs firms looking to get into crypto in New York with existing BitLicensees \u2014 in PayPal\u2019s case, Paxos. That sets up a dynamic by which established crypto firms will play mentor to companies that may, like PayPal, be far bigger in every other part of their business. Which is cool for the industry, and sets up any existing BitLicensee in a highly advantageous position as more mainstream firms go the way of PayPal.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Bahamas_Sand_Dollar_goes_live\"><\/span>Bahamas Sand Dollar goes live<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In what has turned into a global race for a central bank digital currency (CBDC), the Bahamas seems to have won. The island nation\u2019s \u201cSand Dollar\u201d went live nationwide earlier this week. <\/p>\n<p>Pilot programs involving functional Sand Dollar wallets have been going on for months. But as with much involving the Bahamas\u2019 system, the central bank\u2019s announcement was quite opaque, consisting of just a two-sentence <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Facebook<\/a> post. Interesting is the seeming restriction to national usage. The country\u2019s limited financial reporting standards have made it a popular venue for shell companies and offshoring money. The limited scope is possibly an attempt not to contribute further to this reputation.<\/p>\n<p>The announcement came at a time when government officials in the U.S. and Russia made statements denying the need to be first to release a CBDC. And, indeed, with all due fear of being a condescending American, responsibility for the Bahamian dollar is not the same as responsibility for the U.S. dollar. However, given its outsized role in international financing, the Bahamas faces many of the same concerns of larger economies working out their own CBDCs. Central bankers for such economies will certainly be monitoring the Sand Dollar closely.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Mixers_beware\"><\/span>Mixers beware<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>U.S. anti-money laundering watchdog FinCEN fined Larry Dean Harmon $60 million for operating mixing services Helix and Coin Ninja.<\/p>\n<p>This is the first time FinCEN has taken action against a mixer or tumbler, services that combine and disperse cryptocurrencies through extensive nexuses of wallets in order to enhance privacy by obscuring their transaction history. As you can imagine, this is often because the coins have been involved in illegal activity. <\/p>\n<p>While FinCEN has long maintained that crypto businesses need to keep the same sort of client records as banks, actually targeting a mixing operator ups the ante considerably. There\u2019s really no conceivable way for the business model of mixers to incorporate the kinds of AML information that FinCEN requires. Even if you don\u2019t assume that the coins involved have been caught up in some business that falls somewhere on the spectrum from shady to horrifying, a mixer\u2019s function is to strip coins of any features that can be tied to their owner.<\/p>\n<p>To be fair, Harmon is a remarkably easy target. A resident of Ohio, he\u2019s been facing criminal charges for his mixers since February. FinCEN consequently had access to reservoirs of information on Harmon\u2019s mixers that the Justice Department\u2019s investigation had already dug up. Not to mention that FinCEN obviously knew where to find him.<\/p>\n<p>Despite the convenience of the action, it\u2019s obviously jarring news, especially for anyone running a crypto service that enhances privacy, but more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>ly for anyone who thinks that maybe not every transaction should be packed with personal information. <\/p>\n<h3><span class=\"ez-toc-section\" id=\"Further_reads\"><\/span>Further reads<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Electronic Frontier Foundation <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.eff.org\/deeplinks\/2020\/10\/coinbases-transparency-report-welcome-first-step\">applauds Coinbase\u2019s new reporting<\/a> on its interactions with government and its compliance initiatives. <\/p>\n<p>Attorneys for Vinson &amp; Elkins <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.jdsupra.com\/legalnews\/cryptocurrency-101-doj-s-new-76385\/\">run down the DOJ\u2019s framework<\/a> for crypto enforcement released earlier this month. <\/p>\n<p>On her podcast Unchained, Laura Shin <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/unchainedpodcast.com\/how-this-doj-strike-force-hunts-down-cryptocurrency-criminals\/\">digs into the DOJ\u2019s<\/a> methods of tracking down crypto criminals.<\/p>\n<p>Government is frustrating because when it is working right nobody gets exactly what they want. Balancing priorities, managing risk, enhancing compliance \u2014 writing about the law entails wading through swamps of such noxious jargon in search of some grove of what people are actually saying. Which is typically compromise.\u00a0<\/p>\n<\/div>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener noreferrer\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/government-sandboxes-test-beds-and-crypto-compromises\" target=\"_blank\" rel=\"noopener noreferrer\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Law Decoded: Government sandboxes, test beds and crypto compromises, Oct. 16-23 &#8221; A line from immortal comic strip Calvin &amp; Hobbes goes \u201ca good compromise leaves everybody mad.\u201d When it comes to laws governing crypto, authorities are usually asking for pretty major compromises because they are, at their very best-intentioned, trying to work things&#8230;<\/p>\n","protected":false},"author":1,"featured_media":96241,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/s3.eu-central-1.amazonaws.com\/s3.cointelegraph.com\/uploads\/2020-10\/eadd9e62-c9d1-4c73-9438-d5a6d4559ccc.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[76356,76604,76605,76574,71391,71511,73157,70934],"class_list":["post-96240","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-fincen","tag-nydfs","tag-paxos","tag-paypal","tag-department-of-justice","tag-government","tag-investigation","tag-regulation"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/96240","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=96240"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/96240\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/96241"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=96240"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=96240"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=96240"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}