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The Morning Risk Report: U.S. Treasury Issues $60 Million Penalty Against Operator of Bitcoin ‘Mixers’
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The headquarters of the U.S. Treasury Department's Financial Crimes Enforcement Network in Vienna, Va. PHOTO: EPA/SHUTTERSTOCK
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A bureau of the U.S. Treasury Department Monday imposed a $60 million penalty on Larry Dean Harmon, operator of the bitcoin “mixers” Helix and Coin Ninja, for allegedly violating anti-money-laundering laws, the agency said.
The civil penalty against Mr. Harmon, who already faces charges from the U.S. Justice Department, is the first of its kind imposed by the Treasury’s Financial Crimes Enforcement Network against a virtual currency “mixer” or “tumbler”—businesses that charge customers a fee to send virtual currencies to a designated address in a manner designed to conceal the source or owner of the currency, according to the agency.
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The enforcement action comes seven years after FinCEN first issued guidance requiring exchangers and administrators of convertible virtual currency to register as money-services businesses and to adopt anti-money-laundering compliance programs. The agency clarified in 2019 that financial institutions that are mixers and tumblers of convertible virtual currency must also comply with these requirements.
Charles Flood, a lawyer at Flood & Flood representing Mr. Harmon in the DOJ case, said Mr. Harmon wasn’t represented by counsel in the FinCEN matter. He said, however, that the FinCEN action was similar to a portion of the DOJ criminal case, in that it “rests on an incorrect determination that a bitcoin tumbler was a ‘money transmitter’ pursuant to Federal law during the time period underlying the indictment.”
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From Risk & Compliance Journal
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Former Iranian CEO Sentenced for Sanctions Violations
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An Iranian businessman was sentenced to 23 months in prison for his role operating a company that prosecutors said helped Iranians circumvent U.S. sanctions.
Seyed Sajjad Shahidian, founder and former chief executive of Iranian online financial services company Payment24, pleaded guilty in June to conspiring to defraud the U.S.
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FBI agents searched for evidence after the 1998 bombing of the U.S. Embassy in Kenya. Sudan had previously agreed to pay compensation to victims of the attack.
PHOTO: JUDA NGWENYA/REUTERS
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President Trump said on Monday that he would remove Sudan from a list of countries that sponsor terrorism once it completes payment of a settlement to victims of terrorist attacks.
The move, which Mr. Trump announced on Twitter, would end more than 25 years of U.S. efforts to isolate Sudan and came as a possible precursor to the normalization of relations between the African nation and Israel, a move sought by the White House.
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Federal prosecutors unsealed charges against six Russian intelligence officers accused of engaging in some of the most destructive cyberattacks of recent years, including operations that knocked out Ukraine’s energy grid, exposed emails from the French president’s party and damaged global systems in the costly 2017 NotPetya attack.
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HBO Max is attracting more viewers, but is up against big tech companies with outsize market power, the chief of the streaming video service’s parent said Monday. AT&T Chief Executive John Stankey said tech giants like Amazon.com and Apple should be scrutinized for their power to restrict the kinds of apps and services allowed on their platforms.
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Fed Chairman Jerome Powell last month. He says the potential benefits of a digital currency would include less costly international transactions.
PHOTO: DREW ANGERER/PRESS POOL
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The Federal Reserve is in no hurry to issue a digital currency, Chairman Jerome Powell said Monday, citing unresolved concerns including the potential for theft and fraud.
Central banks around the world are stepping up research on the costs and benefits of central-bank digital currencies, which could supplement existing national currencies. China is ahead of other nations, after rolling out a homegrown digital currency in April across four cities in a pilot program.
Potential benefits include faster and less costly international transactions, Mr. Powell said. But the Fed must also consider the risk of cyberattacks, counterfeiting and fraud, as well as the impact on monetary policy and financial stability.
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A technical problem halted trading on exchanges owned by Euronext, hitting activity at one of the busiest times of the year for European stock markets. Monday’s glitch stopped trading in stocks, bonds, commodities and derivatives on exchanges in Paris, Amsterdam, Lisbon and elsewhere.
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China’s accelerating expansion is raising hopes that the world’s second-largest economy can pull the globe out of its coronavirus-induced funk. But some economists warn that expecting China to continue spending, producing and exporting at current levels is wishful thinking.
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House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin edged closer to a sweeping coronavirus relief package, her spokesman said Monday. The Dow Jones Industrial Average fell more than 410 points Monday amid uncertainty that a package can be worked out by Election Day.
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During the pandemic, Zoom use grew to more than 300 million daily meeting participants from 10 million late last year.
PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGE
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Zoom Video Communications plans to capitalize more broadly on its massive surge in popularity but is still assessing how best to target smaller consumers, Chief Operating Officer Aparna Bawa said Monday.
Before the pandemic, Zoom was largely focused on servicing large enterprise customers. Almost overnight, the app became a daily tool for individuals and businesses of all sizes to make it through the pandemic.
The increased popular attention also highlighted shortcomings. Zoom, early in the pandemic, struggled to deal with the explosion of “Zoombombing”—where people gain unauthorized access to a meeting and share hate-speech or pornographic images.
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Goolsby Elementary School second-grader Ella Dweck (left) is tutored by College of Southern Nevada student Jordyn Leal as she takes an online class during the first week of distance learning for the Clark County School District in August. The district was recently the target of hackers.
PHOTO: ETHAN MILLER/GETTY IMAGES
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An increase in data breaches, ransomware and phishing attacks is disrupting classes from New York to California for as long as a week at a time as schools’ overburdened tech staffs, many without dedicated cyber experts, try to keep up.
At least 289 districts across the U.S. have suffered cyber incidents such as hacks this year, according to Doug Levin, who runs Arlington, Va.-based consulting firm EdTech Strategies LLC.
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As part of Adam Neumann’s exit package from WeWork, SoftBank agreed to pay him $185 million to consult. PHOTO: NOAM GALAI/GETTY IMAGES
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A $185 million consulting deal that SoftBank Group signed with WeWork co-founder Adam Neumann upon his departure last year is no longer in place, a WeWork executive chairman said.
“I don’t think that consulting agreement is still in force,” Executive Chairman Marcelo Claure said of the agreement, speaking at The Wall Street Journal’s Tech Live conference, held remotely on Monday. “I think Adam may have violated some of the parts of the consulting agreement, so that’s no longer in effect.”
Mr. Neumann was “incredibly helpful at the beginning” in assisting SoftBank to understand WeWork, he said. Mr. Claure, who is also a top executive at SoftBank, declined to elaborate on how Mr. Neumann might have violated the agreement, saying it was part of continuing litigation.
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Carrier Global Corp. on Monday named a new finance chief months after its debut as a public company during the coronavirus pandemic. The Palm Beach Gardens, Fla.-based company said Patrick Goris will become its chief financial officer, effective Nov. 16. Mr. Goris was most recently CFO at Rockwell Automation Inc., an industrial technology company in Milwaukee.
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