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Australia’s police joins global campaign to disrupt crypto scams

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The Australian Federal Police has teamed up with Chainalysis to identify over 2,000 compromised crypto wallets belonging to Australians.

Australia‘s national policing agency, the Australian Federal Police, has partnered with blockchain forensic firm Chainalysis to combat crypto scammers as the number of identified compromised crypto wallets belonging to Australians surpassed 2,000.

In an Aug. 5 press release, the AFP said it had joined the so-called “Operation Spincaster,” the initiative targeted criminals employing a tactic known as “approval phishing,” a method of fraud that has enriched threat actors by stealing crypto from non-custodial wallets.

While it’s unclear whether the AFP succeeded in recovering some of the stolen assets, it said that BTC Markets, Binance, Crypto.com, Ebonex, Independent Reserve, OKX, SwyftX, and Wayex collaborated in identifying and supporting Australian victims, thereby preventing further monetary loss. The AFP urged Australians to remain vigilant against approval phishing and to exercise caution when dealing with crypto transactions.

Approval phishing attacks continue to rise

Approval phishing is a particularly sneaky form of crypto theft. Scammers trick victims into authorizing transactions that give them control over the victims’ wallets.

The AFP says this tactic is prevalent in both investment and romance scams, where victims are lured with promises of high returns or manipulated through the pretense of a romantic relationship.

According to the police, bad actors gained more than $4 billion in crypto since May 2021 by utilizing the approval phishing attack only. As crypto.news reported earlier, the crypto sector suffered a series of devastating attacks in July, culminating in losses amounting to approximately $266 million, a 51% increase compared to the $176 million reported in June.



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Australia fines Kraken’s operator $5m for unlawful credit facility

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Kraken’s Australian entity, Bit Trade, is facing a multi-million fine for failing to comply with rules requiring a target market determination for its margin extension product.

The Australian operator of the Kraken crypto exchange, Bit Trade, has been fined AUD 8 million (around $5.2 million) for unlawfully issuing a credit facility to more than 1,100 customers, the Australian Securities and Investments Commission said in a Thursday press release, Dec. 12.

The Federal Court ruled that the company failed to follow Australian laws requiring financial products to have a target market determination to ensure they are sold to the right customers.

From October 2021, Bit Trade offered a margin extension product that “provided for margin extensions to be made and repaid in either digital assets like Bitcoin (BTC) or national currencies such as U.S. dollars,” the regulator says. However, the product was marketed without a required target market determination, a key regulatory document meant to ensure financial products are offered only to suitable customers.

The court found Bit Trade’s product breached design and distribution obligations requirements every time it was issued without a target market determination. Customers were charged fees and interest exceeding $7 million, with trading losses surpassing $5 million, the regulator claims.

One investor reportedly lost nearly $4 million using the margin extension product. Justice Nicholas, in his ruling, described Bit Trade’s actions as “serious and motivated by a desire to maximize revenue,” adding that the company failed to address compliance requirements until flagged by ASIC.

Commenting on the ruling, ASIC Chair Joe Longo called it a “significant outcome,” adding that “it is ASIC’s first penalty against an entity for failing to have a TMD and a reminder for digital assets firms to consider their regulatory compliance obligations.” In addition to the fine, Bit Trade was ordered to cover ASIC’s legal costs.



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Australia seeking advice on crypto taxation to OECD

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Australia, with the world’s most significant number of crypto ATMs, seeks advice from an international organization on implementing crypto taxation.

The Organization of Economic Cooperations and Development (OECD), which has invented taxation on digital assets framework, was asked by the Department of Treasury to share input by next January.

The input of the consultations has focused on comparing two options of crypto taxation: implementing the OECD’s Crypto Asset Reporting Framework (CARF) into their law or customizing the policy approach.

CARF is a taxation transparency framework for the international authorities to collect tax-related information from the providers, including crypto-asset purchases and specific consumer data for $50k above transactions. Tax authorities could also share the information with other authorities to gain related information.

“The CARF improves visibility of income from crypto assets. This helps increase compliance with local tax laws and deter tax evasion,” the government on report.

The consultations seek advice on whether the government should follow the same rules as the OECD or implement its own to target specific data needed. If the Australian government implements its own, it could add or remove particular information fields based on the tax authority.

CARF would apply the Reporting Crypto Asset Providers to several crypto companies, including crypto exchanges, wallet providers, brokers, dealers, and ATM providers.

Australia’s growing crypto industry

The Australian government is aware that the crypto industry is growing. This is reflected in the relatively high crypto adoption among their people, with one-fifth of their population identified as crypto holders.

Australian crypto holders last year also gained a profit of up to $9,627 on average, or an increase of 17% from 2022 profit, according to a Swyftx report. The number of people going to invest in crypto in the next year is projected to boost to more than 2 million people.

According to CoinATMRadar, the crypto automatic teller machines (ATM) in Australia also share a big amount, estimated at around 3,3% of the market share in the world. The ATM has spread into Australia’s top cities, including Sydney (441), Melbourne (311), Brisbane (201), and Perth (140).

The government has recently sought advice regarding the central bank digital currency or digital dollar.



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Crypto hedge fund managers JellyC and Trovio merge to attract pension fund investment

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Australian crypto hedge fund manager JellyC has merged with Singaporean Trovio Asset Management in an effort to attract bigger allocations from investors, such as pension fund investment.

According to a Bloomberg report on Oct. 23, Australian hedge fund manager JellyC will hold the majority of shares as it merges operations with Trovio Asset Management, said company executives.

CEO of Trovio, Jon Deane said Trovio plans to eventually dispose of shareholding in the merged business, but he did not specify when it is scheduled to occur.

JellyC’s Co-Founder Michael Prendiville said that the merger aims to grow the combined assets from both hedge fund managers up to 150% from current assets to $250 million AUD or equal to $166.5 million USD.

He stated that JellyC and Trovio have set their sights on big investors in the Asia Pacific region, especially Australian pension funds.

“If we’re not at capacity, we won’t get the allocation,” said Prendiville.

So far, Australia has yet to inject its pension funds into digital assets. Though, Prendiville believes this condition will change overtime, as Australia gears up to place crypto regulations.

In May 2024, Coinbase announced that it is working on a new service that would offer crypto investment products for portfolios that make up about a quarter of Australia‘s $2.5 trillion pension system.

Meanwhile other countries like Japan and South Korea have allocated pension funds into crypto-related entities. South Korea’s National Pension Service, which holds nearly $800 billion in assets under management, acquired 24,500 MicroStrategy shares for $33.75 million.

MicroStrategy is currently the largest corporate holder of Bitcoin, owning over 252,000 BTC in their reserves.

Japan’s Government Pension Investment Fund, the largest pension fund in Japan and globally, revealed in a press release that it is considering the possibility of accommodating Bitcoin and other commodities, including farmlands, forests and gold.

In July 2024, the State of Michigan Retirement System invested around $6.6 million in ARK 21Shares’ ARKB spot Bitcoin exchange-traded fund.



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