Law Enforcement Inquiries Sent to Kraken Nearly Tripled in 2018

Cryptocurrency exchange Kraken has received nearly three times more law enforcement inquiries in 2018 than in 2017, the exhange reported in a tweet Jan. 5.

According to data displayed in the weet, in 2018 the exchange received 475 law enforcement inquiries from global government agencies, while in 2017 there had been only 160. Still, 2017 numbers were already considerably higher than the previous year, when there were only 71 inquires.

Annual Law Enforcement Inquiries Received by Kraken – Source: Kraken tweet

The tweet further highlighted the prevalence of United States agencies among the inquiries, stating “you can see why many businesses choose to block US users.” The exchange reported that 315 of the 475 inquiries in 2018 came from U.S. government bodies.

Inquiries by Country of Inquiring Agency

Inquiries by Country of Inquiring Agency – Source: Kraken tweet

As Cointelegraph reported at the beginning of December, Florida-based United American Corp. (UnitedCorp) has purportedly filed a lawsuit against Bitmain, Bitcoin.com, Roger Ver, and Kraken.

The suit filed alleges that the defendants jointly used unfair methods and practices to manipulate the Bitcoin Cash (BCH) network for their benefit and detriment of UnitedCorp and other BCH stakeholders.

Also in December, Japanese police reported that there has been a significant uptick in reports from cryptocurrency exchanges about suspicious transactions. The increase reports occured after a bill came into force obliging the exchange to report such activity.

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Swiss Crypto Mining Firm Faces Enforcement Action for Potentially Unauthorized ICO

The Swiss Financial Market Supervisory Authority (FINMA) has launched enforcement proceedings against crypto mining firm Envion AG over its potentially unauthorized token sale, according to a FINMA press release today, July 26.

Swiss-based Envion AG is an off-grid mining company that claims to use decentralized, clean energy to power its mobile mining units, and completed its month-long Initial Coin Offering (ICO) for the EVN token in mid-January this year.

FINMA’s investigation into the case to date suggests that in the context of its ICO, Envion AG accepted approximately 100 million francs (around $100.01 million at the time) from over 30,000 investors in return for issuing EVN tokens “in a bond-like form.”

The regulator clarifies that the proceedings are focused on “possible breaches of banking law resulting from the potentially unauthorized acceptance of public deposits” during the token sale.

While FINMA declines to comment any further on the case until it concludes its proceedings, the Swiss context provides a robust and differentiated framework for ICOs, the most recent version of which was released by FINMA in mid-February of this year –– a month after the conclusion of Envion’s fundraising.

Earlier guidance for domestic ICOs had been published by the regulator in September 2017, which set the precedent that token sale conduct would be considered “case-by-case” –– but notably already indicated that an ICO “generally necessitates” a banking license for accepting public deposits.

Earlier this month, Switzerland was ranked second “most favorable” country worldwide for ICOs, with the U.S. sealing the top spot and Singapore third. The research was based on publicly available data for the number of ICO projects per country which made it onto the ‘Top 100 ICOs’ global list by funds raised.

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