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The Morning Risk Report: U.S. Sanctions Crypto Platform Tornado Cash, Says It Laundered Billions
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Good morning. The U.S. Treasury Department imposed sanctions on a major cryptocurrency platform, accusing it of laundering billions of dollars in virtual currency, including $455 million allegedly stolen by North Korean hackers.
Monday’s action against Tornado Cash, a so-called mixer platform that enables users to exchange cryptocurrencies with relative anonymity, is another salvo by the Biden administration against the burgeoning blockchain financial markets. Regulators, lawmakers and law-enforcement officials say that some cryptocurrency platforms afford users anonymity that enables them to launder criminal proceeds, finance terrorism, or engage in public corruption.
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The Treasury Department said Tornado Cash had failed to impose effective controls to stop its users from laundering funds for malicious cyber actors. The Treasury Department said the platform laundered more than $7 billion in cryptocurrency since 2019, but private sector analysts said that figure conflated illicit funds and legitimate transactions. The sanctions block all property held by the exchange under U.S. jurisdiction and bar U.S. companies and individuals from transacting business with it.
“This action will send a really critical message to the private sector about the risks associated with mixers,” a senior administration official told reporters Monday. “It will not be our last.” [Read more]
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WSJ Risk & Compliance Forum
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Sign up for the next WSJ Risk & Compliance Forum on Nov. 16 for discussions on the critical issues facing corporate risk & compliance professionals, including keeping up with sanctions, screening for forced labor, and proposed U.S. rules on climate change and cybersecurity. Register here for a discounted ticket.
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An Airbus A319-100 that the U.S. says was owned and controlled by sanctioned Russian oligarch Andrei Skoch. U.S. prosecutors issued a warrant to seize the aircraft. PHOTO: U.S. DEPARTMENT OF JUSTICE
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U.S. issues warrant to seize sanctioned Russian oligarch’s jet. U.S. federal prosecutors said they have obtained a warrant to seize a private airplane worth more than $90 million that is allegedly owned by blacklisted Russian oligarch Andrei Skoch, in the administration’s latest effort to scrutinize the assets of rich and powerful Russians following the Kremlin’s invasion of Ukraine earlier this year.
The plane, an Airbus A319-100, has been in Kazakhstan since March, based on a warrant from the U.S. District Court for the Southern District of New York in Manhattan .[Read more]
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Boston Scientific investigates whistleblower claims. Medical-device maker Boston Scientific Corp. is investigating allegations that it violated U.S. antibribery laws at its operations in Vietnam.
In a quarterly report published last week, the company said it had received a whistleblower letter in March claiming violations of the Foreign Corrupt Practices Act, a law that prohibits companies from paying bribes to foreign officials to gain a business advantage.
Boston Scientific said in the report that it was cooperating with government agencies, but provided few details on the nature of its investigation. [Read more]
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Top BitMEX employee pleads guilty. A top employee at BitMEX has pleaded guilty in New York to failing to put in place an anti-money-laundering program at the cryptocurrency derivatives exchange, joining three co-founders who previously admitted to violations of U.S. law, Risk & Compliance Journal's Richard Vanderford reports.
Gregory Dwyer entered a guilty plea Monday in New York federal court, admitting to one count of violating the Bank Secrecy Act. Prosecutors said Mr. Dwyer, one of the first employees of BitMEX and its onetime head of business development, was involved in BitMEX’s flouting of U.S. anti-money-laundering rules. [Read more]
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The raid was made public in a statement released by Mr. Trump, in which he said FBI agents were at his home.
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Iran's chief negotiator in the nuclear talks, Ali Bagheri-Kani, in Vienna. PHOTO: LISA LEUTNER/REUTERS
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EU presents "final text" to Iran for reviving nuclear deal. U.S. and European officials announced Monday that a text for restoring the 2015 nuclear accord had been completed and that negotiations were finished, saying Iran must now decide whether to take or leave the deal. A senior European Union official said the bloc’s foreign policy chief Josep Borrell will now write to the U.S., Iran and the other negotiating parties, setting out next steps for approving a deal.
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The official said Iran would have “very, very few weeks” to decide whether to revive the deal. Iranian officials pushed back immediately saying they had already conveyed an initial response to the draft and would come back with additional views at a later point. [Read more]
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Federal Trade Commission member Noah Phillips plans to resign by this fall, creating a vacancy for a Republican on the five-member panel.
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Congress is set to depart for its August recess soon without acting on a bipartisan antitrust bill targeting the largest U.S. technology companies.
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A live-fire exercise by the Chinese People's Liberation Army last week.
PHOTO: LAI QIAOQUAN/ASSOCIATED PRESS
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Risk insurers shy away from Taiwan amid tension with Beijing. Tensions around Taiwan, which have ramped up since the recent visit of U.S. House of Representatives Speaker Nancy Pelosi, have made it nearly impossible in recent days for businesses to obtain insurance to cover the possibility of losses arising from conflict there, experts say.
Insurers are shying away from writing new policies to cover Taiwan-related political risk on the self-ruled island, Risk & Compliance Journal's Richard Vanderford reports. Taiwan was encircled by Chinese forces last week in a live-fire military exercise. [Read more]
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Isabella DiGiamberdini works at the Bird-in-Hand Family Inn in Pennsylvania, where staffing remains below pre-Covid levels. HANNAH BEIER FOR THE WALL STREET JOURNAL
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Businesses hire workers as recession risks mount. Businesses across the U.S. have seen demand for goods and services cool as inflation has risen and the Federal Reserve has increased interest rates. Yet the labor market has continued to grow at a brisk pace, standing out as a source of strength for the overall economy.
The disconnect between the growing job market and otherwise faltering economy boils down to one key point: Despite slowing consumer demand, the supply of workers to make goods and provide services has been considerably below companies’ needs. [Read more]
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YouTube still operates in Russia, possibly because the Kremlin views it as too big to block. THE WALL STREET JOURNAL
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How YouTube keeps broadcasting inside Russia’s digital iron curtain. Months into its war against Ukraine, Moscow continues to let its own citizens access YouTube, leaving a conspicuous hole in its effort to control what Russians see and hear about the conflict.
The video-streaming service, owned by Alphabet Inc.’s Google, is one of the few places where Russians can view and discuss images of the war from independent outlets. Russia has restricted domestic access to many other big platforms—including news sites and Facebook—since the conflict began.
YouTube’s availability in Russia has continued for longer than some Google executives themselves initially expected, according to people familiar with the matter, especially given that the Silicon Valley giant has irked Moscow during the war. [Read more]
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Buying cyber insurance gets trickier. For many businesses, obtaining or renewing cyber insurance has become expensive and arduous.
The price of cyber insurance has soared in the past year amid a rise in ransomware hacks and other cyberattacks. Given these realities, insurers are taking a harder line before renewing or granting new or additional coverage. They are asking for more in-depth information about companies’ cyber policies and procedures, and businesses that can’t satisfy this greater level of scrutiny could face higher premiums, be offered limited coverage or be refused coverage altogether, industry professionals said. [Read more]
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Different job tracks explain why some male graduates of the University of Michigan Law School earned more than their female counterparts three years out.
PHOTO: ERIN KIRKLAND FOR THE WALL STREET JOURNAL
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Gender pay gap opens early, data shows. Broad new data on wages earned by college graduates who received federal student aid showed a pay gap emerging between men and women soon after they joined the workforce, even among those receiving the same degree from the same school.
The data, which cover about 1.7 million graduates, showed that median pay for men exceeded that for women three years after graduation in nearly 75% of roughly 11,300 undergraduate and graduate degree programs at some 2,000 universities. In almost half of the programs, male graduates’ median earnings topped women’s by 10% or more, a Wall Street Journal analysis of data from 2015 and 2016 graduates showed.
At Georgetown University, men who received undergraduate accounting degrees earned a median $155,000 three years after graduation, a 55% premium over their female classmates, the analysis showed. [Read more]
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