Top

Chinese Nationals Detained in Crypto Mining Clampdown in Libya

Policy & Regulation·June 24, 2023, 12:11 AM

Authorities in Libya have detained 50 Chinese nationals suspected of involvement in an illicit crypto mining operation in Zliten, a city located 160 kilometers east of the Libyan capital of Tripoli.

The attorney general’s office in Libya made the announcement on Friday, revealing that the individuals were caught operating a cryptocurrency mining farm within an abandoned iron factory.

Photo by Dmitry Demidko on Unsplash

 

Mining operation dismantled

Photos and videos released by the office of Attorney General Siddiq Al-Sour showcased the dismantling process of the extensive mining systems discovered in Zliten.

This is not the first instance of Chinese miners being detained for crypto mining activities in the North African country. The development follows the recent arrest of ten other Chinese nationals in the city of Misrata on the Mediterranean coast, as well as at two sites within the capital, Tripoli. The individuals were apprehended on Wednesday while being caught “red-handed” with numerous powerful equipment used for intricate proof of work (PoW) mining calculations. The mining rigs were subsequently confiscated by the attorney general’s office.

 

Mining ban

Despite the official ban on cryptocurrency mining in the country, Libya has witnessed a high prevalence of such activities, with the nation recording the highest percentage of cryptocurrency mining across the African continent in 2021. It is estimated that Libya accounted for approximately 0.6 percent of global Bitcoin production during that year.

Libya’s appeal as a destination for cryptocurrency mining stems from its low electricity costs, which stand at a remarkably low rate of $0.004 per kilowatt hour. This cost is approximately 40 times cheaper than in the United States, making Libya an attractive location for miners.

While energy may be cheap, the increased demand for electricity that crypto mining brings puts a strain on what was an already vulnerable power grid in the country. That has resulted in frequent and lengthy power blackouts, particularly during the summer months.

A lack of oversight has also encouraged an influx of Chinese miners, albeit with these recent arrests, it appears that the Libyan authorities are stepping up the level of oversight and enforcement. The vast majority of Bitcoin miners were based in China up until a mining ban was enforced in 2021.

 

Global issue

That event led to an exodus of miners internationally. Some established themselves legally in the United States and elsewhere. The first casualty of illegal mining was Kazakhstan. The sudden arrival of miners led to its power grid coming under pressure. As a consequence, the Central Asian country clamped down on the activity, and later regulated it.

In response to these illegal activities, Libyan authorities have intensified their efforts to combat cryptocurrency mining operations. They are conducting investigations into alleged mining sites in Tripoli and Misrata, aiming to curtail these activities and mitigate the strain on the country’s electricity infrastructure.

The recent arrests highlight the ongoing challenges associated with illegal mining activities in jurisdictions globally where cheap energy can be exploited, giving rise to the need for enhanced regulatory measures to address these issues.

More to Read
View All
Web3 & Enterprise·

Nov 17, 2023

Elliptic and CODE join forces to propel crypto compliance in Korea

Elliptic and CODE join forces to propel crypto compliance in KoreaElliptic, a global blockchain analytics and crypto compliance solutions provider, has partnered with CODE, a Seoul-based Travel Rule solution provider, as part of efforts to expand its operations into the Korean market. Under this agreement, the two companies aim to actively support virtual asset service providers (VASPs) in South Korea in their attempts to adapt to the evolving international regulatory landscape for anti-money laundering (AML) and the crypto Travel Rule.Photo by NordWood Themes on UnsplashCrypto Travel RuleThe Travel Rule refers to the Financial Action Task Force’s (FATF) Recommendation #16, which outlines that VASPs must share certain personal information about customers — including names and account numbers — when facilitating crypto transactions that exceed a certain amount.Empowering VASPs through risk mitigationElliptic and CODE will work together on comprehensive regulatory technology-based (RegTech) solutions to enable VASPs to identify AML and Counter Financing of Terrorism (CFT) risks among virtual asset transactions, ultimately leading the sustainable growth of the crypto asset industry. In particular, CODE will be able to leverage Elliptic’s services to ensure compliance with Travel Rule regulations. Elliptic offers solutions like wallet screening, transaction monitoring, crypto investigations and VASP screening for big names like Coinbase, Binance and BitGo, as well as law enforcement agencies.“This partnership with Elliptic allows us to expand our compliance services beyond Travel Rule-related solutions for VASPs. Elliptic’s advanced technology and expertise will help our corporate members achieve regulatory compliance more efficiently, contributing greatly to enhancing transparency and security throughout the larger virtual asset industry,” said CODE CEO Lee Sung-mi.

news
Policy & Regulation·

Jul 26, 2023

Korea’s Intragovernment Group Launched to Thwart Crypto-Related Crimes

Korea’s Intragovernment Group Launched to Thwart Crypto-Related CrimesThe South Korean government has taken a significant step today in combating cryptocurrency crimes with the launch of a dedicated intragovernmental division. The newly established joint crypto-crime investigation division operates under the Seoul Southern District Prosecutors’ Office and comprises 30 skilled investigators from seven different government agencies.Photo by Daniel Bernard on UnsplashMulti-agency collaborationThese agencies are the Public Prosecutors’ Office, the Financial Supervisory Service (FSS), the Korea Financial Intelligence Unit (FIU) of the Financial Services Commission (FSC), the National Tax Service (NTS), the Korea Customs Service (KCS), Korea Deposit Insurance Corporation (KDIC), and Korea Exchange (KRX).The growth of the domestic crypto market in South Korea has been remarkable since the advent of cryptocurrency exchanges in 2014, attracting approximately 6.27 million individuals and reaching a valuation of 19 trillion KRW ($14.9 billion). Daily average trading volumes have surged to three trillion KRW, involving participants from various age groups, with individuals in their 30s and 40s constituting the largest share.Regulatory absenceHowever, the absence of adequate regulations has exposed customers to unfair practices in virtual asset trading. Although the recent passage of the Virtual Asset User Protection Bill at the National Assembly is encouraging, implementing comprehensive policies to safeguard crypto investors will take a significant amount of time.The risks associated with virtual asset investments are highlighted by the frequent delisting of cryptocurrencies from the nation’s top five exchanges. In the past two years, 1,053 cryptos have been delisted, and an additional 1,010 have been flagged as risky. The prevalence of unstable cryptocurrencies has resulted in high price volatility, incurring losses for investors. This volatile environment has also given rise to various crypto-related crimes, including unlawful listings, market manipulation, illegal foreign exchange trading, and pyramid schemes.Two teamsTo address these challenges, the joint crypto-crime investigation division is structured with two teams. The research and analysis team will study virtual asset issuers and distributors, identifying suspicious transactions. Virtual assets found to be fraudulent will be reported to the investigation team, which will then conduct thorough investigations and pursue legal action against problematic projects, while also recommending regulatory enhancements. Profits obtained through illegal means will be confiscated by the Seoul Southern District Prosecutors’ Office.The division’s main focus lies on virtual assets that have been rapidly delisted, those marked as risky, and those exhibiting significant price volatility. Committed to upholding fairness and transparency in the crypto industry, the joint crypto-crime investigation division will strive to protect market participants and make valuable contributions to the Korean economy.

news
Policy & Regulation·

Nov 15, 2023

Libeara gears up to offer tokenized Singapore dollar government bonds

Libeara gears up to offer tokenized Singapore dollar government bondsStandard Chartered’s fintech investment subsidiary SC Ventures has unveiled Libeara, a platform set to cause a stir with the introduction of the first-ever tokenized Singapore-dollar government bond fund.Once launched, the offering would provide for a significant departure from traditional bond funds, offering a sleek and digital twist to the stable investment option. There’s no fixed date for the product offering as yet, as it will need to be approved by the local regulator, the Monetary Authority of Singapore (MAS).Photo by Zhu Hongzhi on UnsplashGreater accessibility and liquidityLibeara’s emergence signifies yet another instance of the convergence of traditional financial instruments in combination with blockchain technology. Through the tokenization of government bonds, Libeara not only aligns with the evolving preferences of modern investors but also promises greater accessibility and liquidity in the bond market.Within Libeara’s distributed ledger-based innovation, each token mirrors a unit of the bond fund, embodying its value and ownership rights. This approach streamlines the investor experience, ensuring a seamless process from onboarding to subscription and redemption of tokenized units. Libeara’s model addresses historical inefficiencies, enhancing the efficiency, transparency and security of bond trading that has long been plagued by cumbersome processes and intermediaries.Aaron Gwak, Founder and CEO of Libeara, provided further details on the new startup’s market offering:“This will be the first time a Singapore-dollar government bond fund will be offered in token format. At Libeara, we care deeply about not only creating a token representing an asset but also about how close the token is to the actual asset. Ensuring that FundBridge’s investors can buy native tokens, where each token represents a unit of the fund, is central to the infrastructure of the tokenisation solution that we have created for FundBridge.”Catering to accredited investorsLibeara’s product proposition caters to accredited investors and is positioned as a collaborative effort with industry leaders. The new start-up is emerging in Singapore, wholly owned by SC Ventures while partnering with FundBridge Capital, both headquartered in the city-state.The firm has partnered with enterprise-grade platform Fireblocks for digital asset infrastructure. There’s further Singaporean involvement by way of partnerships with local entities such as digital assets services group Fazz and digital asset payments infrastructure firm StraitsX for crypto-to-fiat conversions. Chainalysis has been contracted for its on-chain AML capabilities, Hong Kong’s Chekk for KYC solutions and local firm Letsbloom for cloud deployments and compliance.Sue Lynn Lim, CEO and COO of FundBridge Capital, emphasized the transformative potential of the venture, stating:“By partnering with Libeara, we are ensuring that we can provide additional investment opportunities enabled by lower operating costs, higher transparency and higher operational efficiency.”The move not only involves creating a digital representation of an asset but reimagining the asset itself in a digital format for increased accessibility, ease of trade and potential profitability.

news
Loading