Backpack crypto wallet secures VASP license for crypto exchange in Dubai

Report Cites Escalating Crypto Use by Pro-ISIS GroupsA recently published report suggests that pro-ISIS terrorist groups in central and southeast Asia and the Middle East are increasing their use of cryptocurrency.According to the report which was published on Friday by blockchain analytics firm TRM Labs, cryptocurrency has become a favored tool for terrorist organizations, with ISIS affiliates showing an increasing preference for the Tron network’s USDT stablecoin. The report highlights that terrorist groups worldwide, including those linked to ISIS, are actively utilizing cryptocurrencies for fundraising purposes, allowing them to attract supporters and bolster their operations.Photo by David McBee on PexelsOn-chain evidenceTRM Labs has been closely monitoring these activities over the past year and has uncovered a growing amount of on-chain evidence. Pro-ISIS networks in countries such as Tajikistan, Indonesia, Pakistan, and Afghanistan have been observed using crypto assets to facilitate their illicit activities, with Tether (USDT) stablecoin on the Tron network (TRX) being their preferred choice for transactions.The disturbing revelations show how recruited fighters were enticed to join ISIS’ Afghanistan affiliate (ISKP) through the use of cryptocurrency fundraising campaigns. One such campaign operated for over a year and managed an address that received approximately $2 million in USDT on Tron in 2022. TRM Labs played a role in getting the operation dismantled, leading to the arrest of Shamil Hukumatov, a senior ISIS fundraiser allegedly responsible for the scheme.Indonesia & PakistanIn Indonesia, individuals used a crypto platform to transfer over $517,000 in 2022 to addresses linked to pro-ISIS fundraising campaigns in Syria, all using USDT on Tron. This connection demonstrates the global reach and sophistication of the terrorist groups’ crypto operations.Additionally, a media unit associated with ISPP, the Pakistan affiliate of ISIS, ramped up its fundraising efforts in the latter half of 2022. The entity sought to capitalize on natural disasters, such as earthquakes in Turkey and Syria, to raise funds by publicizing various cryptocurrency addresses flagged by TRM Labs as associated with the terrorist organization.SyriaTRM Labs’ investigation ultimately points to pro-ISIS fundraising campaigns in Syria as a central hub for cryptocurrency usage by the terrorist group and its supporters. A significant portion of the donations ends up supporting ISIS families in camps like al-Hol and Roj, as well as funding local cryptocurrency exchanges that facilitate the group’s activities.For TRM Labs, the identification and tracking of these campaigns and their donors are crucial steps in mapping out and potentially disrupting pro-ISIS networks worldwide. Their efforts aim to mitigate the risks posed by the misuse of cryptocurrencies in financing terrorism and illegal activities.The rising adoption of cryptocurrencies by terrorist organizations poses significant challenges to law enforcement agencies and regulatory authorities worldwide. It’s a worrying development for legitimate users of digital assets as it may result in far more heavy-handed regulation as a direct consequence.Under these circumstances, it is crucial for the crypto community, governments, and regulatory bodies to collaborate in implementing effective safeguards against the abuse of digital currencies for nefarious purposes. Only through collective action can this threat be neutralized.

With local regulator the Securities and Futures Commission (SFC) having set out guidelines for crypto firms regarding the provision of crypto staking services, two prominent Hong Kong companies have moved forward with staking-related offerings. HashKey Capital, a crypto-focused institutional asset manager, and crypto trading platform OSL, have announced the addition of staking to an Ether exchange-traded fund (ETF) and in the case of OSL, a partnership with Kiln to offer ETH staking.Photo by Raymond Yeung on UnsplashFirst spot crypto ETF in APAC to support stakingIn a press release published on April 11, HashKey Capital outlined that its Bosera HashKey Ether ETF, which was jointly launched with Bosera Asset Management in April 2024, has received approval from the SFC to engage in Ethereum staking activity from April 25 onwards.  HashKey claimed that its ETH ETF product is the first spot crypto ETF within the Asia-Pacific (APAC) region to support staking. The company stated: “By enabling staking, the ETF aims to enhance potential returns for investors, creating a new avenue to participate in the Ethereum ecosystem through a regulated virtual asset investment vehicle.” The staking service will be extended to the ETF by another HashKey Group company, HashKey Cloud, a Web3 infrastructure provider. HashKey Capital and HashKey OTC Global CEO Deng Chao said that the institutional-grade staking infrastructure of HashKey Cloud was being leveraged in order to provide a secure, efficient and regulated vehicle to access staking rewards with ease to both professional and retail investors.  The ETF is listed on the Hong Kong Stock Exchange (HKEX). It tracks the price of Ether via the CME CF Ether-Dollar Reference Rate, a daily benchmark index price that aggregates Ether trade data from various sources. Competitive edgeBoth HashKey and the Hong Kong authorities have stolen a march on their international counterparts with the launch. In recent months, efforts have been building in the United States by spot ETH ETF providers to add a staking element to these offerings.Robert Mitchnick, head of digital assets at the world’s largest asset manager, BlackRock, told last month’s Digital Asset Summit in New York that the lack of availability of a staking yield as part of U.S. spot ETH ETFs is likely to be holding the development of the products back. He added:”A staking yield is a meaningful part of how you can generate investment return in this space, and all the [ether] ETFs at launch did not have staking.” HashKey and OSL were the first two entities to be issued trading licenses by the regulator in Hong Kong. OSL is also looking to take advantage of the new regulatory clarity related to crypto staking in Hong Kong. On April 10, it published a press release, outlining details of a partnership that it has formed with enterprise-grade staking infrastructure firm, Kiln. By integrating with Kiln’s API infrastructure, OSL is now enabled in offering clients of its custody platform access to staking services.Kiln co-founder and CEO Laszlo Szabo underscored the significance of regulatory approval of staking in Hong Kong, while stating:”With the future integration of staking, these products will offer investors both exposure to ETH price movements and rewards for securing the Ethereum network.”

XRP, the native asset of the XRP Ledger (XRPL), a blockchain network developed by Ripple Labs, is destined for further institutional adoption in Asia due to the launch of the region’s first XRP tracker fund. Crypto-focused institutional asset manager HashKey Capital recently announced the launch of its HashKey XRP Tracker Fund, which has been devised to track the performance of what is the world’s fourth-largest crypto asset by market cap, after Bitcoin (BTC), Ether (ETH) and U.S. dollar stablecoin Tether (USDT).Photo by Kanchanara on UnsplashEnabling institutional accessThe fund enables investors to gain exposure to XRP without having to take direct ownership and custody of the digital asset. Bitcoin and Ethereum exchange-traded funds (ETFs) have become popular in a number of markets, including the United States, as they allow institutional investors to gain exposure to these digital assets where they may have been uncomfortable with direct ownership due to concerns around custody and counterparty risk or regulatory concerns. According to HashKey’s press release, investors can buy into the fund through cash or in-kind subscription and subscribe or redeem shares monthly. The fund will be measured and compared against a benchmark index provided by CF Benchmarks, a provider of crypto-related indices. HashKey Partner Vivien Wong acknowledged the potential that XRP has in the market, stating:“XRP stands out as one of the most innovative cryptocurrencies in today’s market, attracting global enterprises who use it to transact, tokenize, and store value.”She added that the new fund simplifies access to XRP within the region, while catering to a growing demand for investment opportunities related to digital assets.Potential ETF fund conversionThis marks HashKey’s third product that tracks digital asset pricing, with the company having launched both Bitcoin and Ethereum exchange-traded funds (ETFs) previously. On X, HashKey Capital outlined that the XRP Tracker Fund could potentially evolve into a fully fledged ETF, subject to regulatory approval, within the next 1-2 years. The new fund, which was launched on April 18, also incorporates a strategic partnership with XRP developer Ripple Labs. In what is understood to be the first of a number of collaborations, Ripple will fulfill the role of being the fund’s anchor investor. Ripple’s Managing Director for the Asia-Pacific (APAC) region, Fiona Murray, cited the development as proof that institutional adoption of digital assets continues to go from strength to strength.  Ripple CEO Brad Garlinghouse stated last month that he expects a number of spot XRP ETFs to be approved in the United States later this year. Earlier in March, analysts at American investment bank JPMorgan had estimated that spot XRP ETF approval in the U.S. could result in net inflows of $8 billion into such products.At the time of writing, XRP was trading at $2.09. The asset has increased in price by 300% over the course of the past 12 months, largely due to a changing regulatory environment in the United States and optimism that a settlement can be reached to end its multi-year legal battle with the Securities and Exchange Commission (SEC).