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energy consumption comes from the way the Particularly when you look at the recent
blockchain works, known as the consensus collapse of FTX…
protocol, which keeps the blockchain up-to- The failure of FT , and before that, of the Celsius
date and validates new operations. The Bitcoin platform, is a classic! It should be remembered
protocol is based on Proof of Work (PoW). This that these are people domiciled in tax havens
is materialised by the work of thousands of such as the Bahamas and the Seychelles, who
computers. In a system working with a PoW have committed fraud and used client funds for
protocol, miners have to solve a complex speculative and personal purposes - it’s a Madoff
equation, which requires a lot of computing case in crypto version, with the deployment of
power. Recently, Ethereum changed its protocol the same motives and strategies! At the head
to Proof of Stake, allowing it to consume 99% of FT , was Sam Bankman-Fried, aged 30, who
less energy! This method has the advantage of had a philanthropic fa ade: he was the second-
not requiring the power of computers to operate largest donor to the American Democratic Party.
and secure the blockchain. FT was very close to US regulators, such as
the Securities and Exchange Commission. With
Cryptocurrencies are also criticised for the clearer regulations, we will not be completely
lack of regulation. Will the Markets in Crypto- protected from fraud but it will create a greater
Assets (MiCA) regulation be a game-changer? ecosystem of trust and clean up the market with © Depositphotos/Wirestock
Currently in Europe, apart from the Virtual more reliable players.
Assets Service Providers (VASP) in France and
Monaco, there is little regulation. This is normal How do you see it evolving?
as cryptos are a young asset class and regulation At the peak of the market, cryptos were worth 3 too high, we are required to make a suspicious
takes time to be put in place. Europe will draw trillion in valuation. Today we are at around 800 transaction report to TRACFI in France or to C
inspiration from French regulations, which are billion. There is a concentration of operators. SICCFI in Monaco. M
deploying VASP registration and approval, with Binance held around 50% to 60% of market
requirements for the expertise of managers share before the fall of FT and will likely grow Are criminals in the habit of using crypto- Y
just as for management companies - and to close to 70%. FT was the second-largest currencies such as Bitcoin or Ethereum? CM
procedures for combating money laundering and platform in 2021, with a 700 billion yearly This is the common preconception. According MY

the financing of terrorism, which are equivalent volume after Binance ( 2.5 trillion). to Chainalysis, of the volume of crypto CY
to the banking system. With MiCA, which aims transactions in 2021, the proportion linked
to harmonise, on a European level, the regulation How do you control the origin of funds? to fraudulent activity is 0.15%! For money CMY
of players offering services on crypto assets (by There are three levels of C ( now our laundering, nothing beats the dollar, which K
2024 at the latest), we should move towards Customer). We first check the identity of is used in the majority of cases, but that’s no
an approval procedure which will impose new the person to see whether they are under reason to abolish it!
constraints, such as a higher capital amount for international sanction; then, depending on
companies and a higher professional indemnity the amount deposited, we ask for additional Virtual currencies are said to be the ideal tool
insurance. Once MiCA is in place, European information such as proof of residence for transactions on the dark web, particularly
players will have 18 months to comply. This (amounts above €5,000) and the source of in the context of drug trafficking?

is positive for both investors and customers. the funds (above €50,000). It is very easy to Tornado crypto mixer protocol has been used
trace the origin of funds on a to anonymise transactions and cover tracks.
blockchain, by tracing the origin For the American authorities, all operations
of the Bitcoin or crypto received. that have passed through this protocol
Take the example of someone are blacklisted and may be subject to
with a fortune in crypto: it is easy sanctions by the US Treasury Department’s
for us to understand the source Office of Foreign Assets Control (OFAC).
of funds, thanks to additional As a reminder, OFAC’s purpose is to apply
questions and the analysis of economic and trade sanctions based on
the on-chain transactions of the foreign policy and national security
the blockchain address of the objectives of the United States against
client’s wallet. The blockchain targeted foreign countries and regimes,
is a public ledger, so all you terrorists, traffickers of international

have to do is apply a filter and narcotics, persons engaged in activities
scan the address from which related to the proliferation of weapons
the funds come. There are lists of mass destruction and other threats to
of blacklisted addresses linked the national security, foreign policy and
to criminal activity. If the risk is economy of the United States.

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