Sam Bankman-Fried lawyers pitch for changes to judge’s jury instruction
The crypto industry has seen a significant shift toward regulatory compliance since its early days, according to James Smith, co-founder of Elliptic, a crypto compliance firm established in 2013.
“In the early days, only a few companies approached compliance in a serious way,” Smith told Cointelegraph at the Token2049 event. “Coinbase was our first customer — they knew from the start that they wanted to build their business that way. But for most others, it just wasn’t a major priority.”
That began to shift as regulators, including those in New York State, took a more active interest in the crypto industry. The involvement of traditional financial institutions like Fidelity and DBS Bank also contributed, as they entered the space with established compliance expectations from traditional finance services.
Fidelity, for instance, offered its first crypto service for customers in 2019, while the Asian giant DBS created a digital exchange for accredited and institutional investors in 2020.
“We’ve seen a big change in the last couple of years. Exchanges on the global map all care about compliance now, because they want to be part of a global ecosystem,” Smith said.
Related: DeFi security and compliance must be improved to attract institutions
Compliance questions after Bybit hack
Crypto exchanges and peer-to-peer protocols remain the industry’s key compliance targets. For authorities, these firms are seen as critical choke points where Anti-Money Laundering and broader financial surveillance controls take effect. At the same time, they’re frequent candidates for sophisticated hacks and laundering operations, as seen in the Lazarus Group’s tactics.
The latest example comes from the Bybit hack, where the Lazarus Group engaged in a sophisticated money laundering scheme to funnel funds. The hackers quickly swapped low-liquidity tokens for Ether (ETH), then swapped them for Bitcoin (BTC) using no-KYC (Know Your Customer) decentralized exchanges.
“They went through some no KYC exchanges, which probably shouldn’t exist, but also through a decentralized protocol where there was lots of liquidity provision that enabled them to get it into Bitcoin,” Smith said, adding that “we’re making it too easy for them as an industry.”
Smith also noted that even after firms flagged the funds as stolen, users continued to trade them through decentralized platforms. “Why was there so much liquidity available to help launder this money?” he said, arguing that those providing liquidity to such protocols should be subject to basic checks on the source and destination of funds. “Go and look at who’s making money. And that’s the first place to start putting some controls.”
Magazine: Lazarus Group’s favorite exploit revealed — Crypto hacks analysis
Politics
UK joins US in strike on Houthi target in Yemen for first time since Donald Trump re-elected
The UK has joined US forces in attacking a Houthi target in Yemen for the first time since Donald Trump was re-elected.
The Ministry of Defence (MoD) confirmed the strikes took place on Tuesday as part of the government’s response to Houthi attacks on international shipping in the Red Sea and Gulf of Aden.
The ministry said careful intelligence analysis identified a cluster of buildings used by the Houthis to manufacture the sort of drones used to attack ships, located 15 miles south of the capital Sanaa.
RAF Typhoon FGR4s conducted strikes on several buildings using Paveway IV precision-guided bombs.
The planes had air refuelling support from Voyager tankers.
The ministry said the strike was conducted after dark to reduce the likelihood of civilians being in the area.
All the aircraft returned safely.
John Healey. Pic: Reuters
Defence Secretary John Healey said: “This government will always act in the interests of our national and economic security.
“Royal Air Force Typhoons have successfully conducted strikes against a Houthi military target in Yemen and all UK aircraft and personnel have returned safely to base.
“We conducted these strikes, supported by the US, to degrade Houthi capabilities and prevent further attacks against UK and international shipping.”
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Houthis a ‘persistent threat’ to ‘freedom of navigation’
Mr Healey said Houthi activities in the Red Sea are a “persistent threat” to “freedom of navigation”.
“A 55% drop in shipping through the Red Sea has already cost billions, fuelling regional instability and risking economic security for families in the UK,” he said.
“The government is steadfast in our commitment to reinforcing global stability and protecting British working people. I am proud of the dedication and professionalism shown by the service men and women involved in this operation.”
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
US intensifies strikes on Houthis
It was the first time UK forces have struck a target in Yemen since May last year, the ministry confirmed.
The US has intensified its strikes on the Iran-backed Houthis under Mr Trump’s presidency, after his re-election in November 2024.
The group began launching attacks on shipping routes in November 2023 saying they were in solidarity with Palestinians over Israel’s war with Hamas in Gaza.
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Houthi rebels allege US airstrike hit prison
The strike came after a Houthi-controlled TV channel claimed a US strike killed 68 people at a detention centre for African migrants in Yemen on Monday.
Will MPs get a vote on a trade deal with Donald Trump?
It used to be Labour policy, though Sir Keir Starmer didn’t sound keen on the idea at Prime Minister’s Questions.
The PM was challenged, first by Lib Dem MP Clive Jones, who wants a guarantee that parliament has the final say on any trade deal, including one with the US.
“This idea is not new,” said Clive, who used to be a director of various toy companies, and was president, chairman and director of the British Toy and Hobby Association, no less.
“It’s exactly what Labour promised to do in an official policy paper put forward in 2021, so I am asking this government to keep their promise,” he continued.
And, toying with the PM, he complained: “Currently, members of parliament have no vote or voice on trade deals.”
In reply, Sir Keir gave one of those non-answers we’re becoming used to at PMQs, saying rather tetchily: “As he knows, parliament has a well-established role in scrutinising and ratifying trade deals.”
Later, Sir Ed Davey had a go. “Will the government give MPs a vote on the floor of the House on any deal he agrees with President Trump? Yes or no?” he asked.
He fared no better. Sir Keir said again: “If it is secured, it will go through the known procedures for this House.”
Read more on the trade deal:
US ‘positive’ on talks
Deal ‘possible’ but not ‘certain’
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Chancellor’s trade deal red lines explained
So what are parliament’s “well-established role” and “the known procedures”? And what exactly did Labour promise in opposition back in 2021?
The 2021 promise was, in fact, one of those worthy pledges parties make in opposition and then either conveniently forget about or water down when they’re in government. U-turn if you want to.
The policy paper referred to by Mr Jones was: “Labour’s trade policy: putting workers first” – published in September 2021 by Emily Thornberry when she was shadow international trade secretary.
The secretary of state at the time was none other than Liz Truss. Whatever happened to her? Come to think of it, whatever happened to Emily Thornberry?
Back then idealistic Emily declared in her policy paper: “We will reform the parliamentary scrutiny of trade agreements…
“So that MPs have a guaranteed right to debate the proposed negotiating objectives for future trade deals, and a guaranteed vote on the resulting agreements…”
A guaranteed vote. Couldn’t be clearer. And there was more from Emily.
“…with sufficient time set aside for detailed scrutiny both of the draft treaty texts and of accompanying expert analysis on the full range of implications, including for workers’ rights.”
Sufficient time for detailed scrutiny. Again, couldn’t be clearer.
Starmer was pushed on the deal at PMQs. Pic: PA
Then came a section headed: Parliamentary Scrutiny of Trade Deals.
“The Constitutional Reform and Governance Act 2010 (CRAG) dictates that international treaties (including trade agreements) must be laid before parliament for a period of 21 sitting days before they can become law,” we were told back then.
“At present, a treaty can only be challenged and (temporarily) rejected by means of an opposition day debate, if one is granted by the government within that time.
“The CRAG legislation was agreed by parliament before Brexit was on the horizon. Its procedures for the ratification of trade treaties, which were then negotiated and agreed at EU level, were given no consideration during the passage of the Act, and no one envisaged that they would become the mechanism for parliamentary scrutiny of the government’s post-Brexit trade deals…
“Despite the flagrant evidence of the inadequacy of the CRAG Act to allow proper oversight of trade deals, the government repeatedly blocked numerous cross-party proposals to improve the processes for parliamentary scrutiny and approval during passage of the 2021 Trade Act.
“A future Labour government will return to those proposals, and learn from best practice in other legislatures, to ensure that elected MPs have all the time, information and opportunity they need to debate and vote on the UK’s trade deals, both before negotiations begin and after they conclude.”
So what’s changed from the heady days of Liz Truss as trade secretary and Labour’s bold pledges in opposition? Labour’s in government now, that’s what. Hence the U-turn, it seems.
Parliament’s role may be, as Sir Keir told MPs, “well-established”. But that, according to opponents, is the problem. It’s contrary to what Labour promised in opposition.
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Sir Ed hit back at the PM: “I’m very disappointed in that reply. There was no ‘yes’ or ‘no’ response. We do want a vote, and we will keep pressing him and his government on that.”
And true to their word, Mr Jones and another Lib Dem MP, Richard Foord, have already tabled private member’s bills demanding a final say on any trade deal with President Trump.
Watch this space. And also watch out for Labour MPs also backing demands for a Commons vote on a Trump trade deal before long.
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