Crypto regulation in the world: weekly digest #20

FTX update

Sam Bankman-Fried’s FTX exchange filed for Chapter 11 bankruptcy, putting an end to one of the most wealthiest crypto services in a world. As Bloomberg noticed though Chapter 11 lets companies continue operating while they work out a plan to repay creditors, FTX’s filing on Friday morning -- a 23-page form checking boxes -- offered no hint of reorganization plans.

The FTX’s CEO Bankman-Fried resigned as part of the filing, and John J. Ray III was appointed to replace him, according to a Twitter statement. The initial filings offered no explanation for the firm’s downfall.

Meanwhile the Bahamas regulator froze assets of FTX Digital Markets and related parties, suspended its registration in the country and appointed a provisional liquidator for the unit.

The US Department of Justice and the SEC also launched their investigations into Bankman-Fried’s business to determine whether any criminal activity or securities offences have been committed.

Per leaked reports, FTX’s downfall stemmed from Bankman-Fried’s efforts to save other crypto firms, which ultimately left his trading unit in financial hole of up to $8 billion as customers rush for the exit. This week FTX faced a huge amount of withdrawals due to these events.

At the same time the US Commodity Futures Trading Commission (CFTC) Commissioner Christine Johnson emphasized the need for a regulatory framework that would provide better visibility into the cryptocurrency markets and cover all issues related to FTX and Alameda crisis.

The US Senators Cynthia Lummis and Kirsten Gallibrand – authors of the Responsible Financial Innovation Act (RFIA) also stated that there is a need for clearer rules and regulations for the circulation of crypto assets in response to FTX's troubles. In their opinion, the stability of the digital currency market and the safety of investors can only be ensured through strict regulation of the industry.


The Financial Action Task Force, the world’s AML/CFT watchdog has reported that countries that do not comply with the recommendations on combating money laundering using cryptocurrencies will be put on the organzation’s «grey list». FATF strengthens control over money laundering with the use of cryptocurrencies. According to an Al Jazeera report, the global financial institution plans to conduct annual audits to ensure countries are enforcing AML and anti-terrorist financing regulations using cryptocurrencies.

The gray list includes countries that the FATF considers "jurisdictions under enhanced control." According to the FATF, the states on this list have committed themselves to addressing strategic weaknesses in the fight against money laundering within an agreed time frame and are thus subject to enhanced monitoring.


New information was added on the OFAC’s SDN list concerning the Tornado Cash mixer that came under US restrictions in August this year. The US Treasury accused Tornado Cash of helping hackers launder tokens stolen from users, and in particular because of the activities of the North Korean Lazarus Group.

A well-known group of North Korean hackers is working in the interests of the DPRK, not only stealing secrets and disrupting the critical infrastructure of "enemies of the state", but also stealing digital currency.

The funds received are used to finance the development of the military industry. The new formula of accusations directly links the work of Tornado Cash with the support of the North Korean state. The move is intended to complicate lawsuits from pressure groups that criticize the US Treasury for attacking technology.

We continue to highlight the news of the world of crypto regulation worldwide. Stay tuned for the latest news!

The TokenScope Team
#TokenScope #FTX #Alameda #FTT #TornadoCash #FATF
More about TokenScope cryptocurrency risk assessment & investigation platform at: