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Winklevoss Twins' Gemini and Archax Exchange Now Licensed by UK Financial Conduct Authority

The Financial Conduct Authority, the United Kingdom’s financial watchdog has granted licenses to two exchanges in the UK—Archax digital security exchange, as well as the Winklevoss twins’ Gemini exchange.

The UK’s Financial Conduct Authority (FCA) has granted two licenses according to their official website, one for Gemini and the other for Archax, which reportedly makes Archax the first regulated digital security exchange custodian and in the United Kingdom.

According to the FCA website, Archax and Gemini Europe Services were registered by the financial regulator on Aug. 18 and Aug. 19 respectively, after meeting the compliance standards of the authority.

The FCA implemented mandatory risk assessments for exchanges in January, to assess their compliance with Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) regulations.

Despite Kraken claiming to be the first licensed crypto exchange in the United Kingdom on July 6, their subsidiary Crypto Facilities has was only granted a Multilateral Trading Facility (MTF) license from the United Kingdom’s Financial Conduct Authority (FCA). Meaning that the UK Financial Conduct Authority’s decision has, in fact, made Archax the first regulated exchange and custodian in the UK, beating Gemini to the punch by a single day.

UK FCA Oversight on Crypto Advertising

As reported by Blockchain.News on July 21, the UK Treasury believes the lack of regulation around cryptocurrency and their associated financial products often leaves investors in the space without the same protections that are granted to retail investors, such as authoritative recourse and compensation.

The UK Government has proposed that crypto-asset promotions should fall under the scope of the Financial Conduct Authority’s existing oversight and does not require a whole new framework just for digital assets.

Economic Secretary to the Treasury & City Minister, John Glen said, “If adverts by unauthorized firms are misleading, or don’t fully outline the risks, then people can end up losing money. That’s why we want to put more protections in place around such financial promotions, including the promotion of crypto-assets while continuing to ensure people have access to a wide range of products on the market.”

The fastest solution being proposed is to immediately empower the FCA to begin regulating the promotion of digital asset and crypto investment products, as a way to combat misleading advertising.

UK FCA Regulator Proposes Mandatory AML Data Reports from Cryptocurrency Firms

The United Kingdom’s Financial Conduct Authority (FCA) has proposed an obligatory requirement for crypto exchanges in the UK to produce a report on anti-money laundering measures and data.

The UK’s Financial Conduct Authority (FCA) now wants crypto exchanges and crypto wallet custodians operating in the UK to provide more detailed information regarding money laundering risks.

The UK FCA regulator has put forward the proposal which is open to comment until November 23, 2020 and plans to publish a policy statement by the first quarter of 2021.

The FCA policy proposal published on Aug 25, is a plan by the UK financial regulator to impose obligatory AML reporting on digital asset firms and cryptocurrency wallet providers—a blanket-wide obligation for crypto exchanges large and small and “irrespective of their total annual revenue.”

FATF Recommends Extending AML Obligations to Crypto

In July 2016, the FCA introduced an annual financial crime reporting obligation for financial institutions on a range of indicators that reflect the potential money laundering risks of the firm services. The obligation to provide this financial crime information falls under the FCA’s Annual Financial Crime Report (REP-CRIM).

Based on the recommendations of the Financial Action Task Force (FATF)—an international body that sets global standards on combating money laundering and terrorist financing—the FCA now wants to extend the “the application of REP-CRIM to all firms we supervise.”

According to the proposal:

“We (FCA) consider that this approach will result in improving firms’ money laundering systems and controls, reduce actual risks of money laundering, and help improve the overall integrity of the UK financial system. It is also in line and builds on our data strategy, announced earlier this year, to use data and data analytics to transform the way we regulate and reduce the burden on firms.”

Under the new proposed rules, should they come into effect, crypto firms and cryptocurrency wallet custodians must provide information the FCA with information like the number of customers they serve in jurisdictions considered high risk and customers who refuse to comply and exit the services for suspicious reasons. This kind of AML information will be required by the FCA from crypto companies from their next “accounting reference date” after 10 January 2022.

The FCA also defined the term operates as “where the firm carries on its business or has a physical presence” as many cryptocurrency firms and custodians choose to register their business in tax haven territories such as the Cayman Islands.

UK FCA Grants First Crypto Licenses

As reported by Blockchain.News on August 21, the UK’s Financial Conduct Authority (FCA) has granted its first operating licenses for two crypto exchanges—one for Gemini and the other for Archax, officially making Archax the first regulated digital security exchange custodian and in the United Kingdom.

The FCA implemented mandatory risk assessments for exchanges in January, to assess their compliance with Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) regulations.

Google Sues Unknown Entities for Malware Scheme Disguised as AI Chatbot Bard

Google LLC has initiated legal proceedings against three anonymous individuals, accusing them of orchestrating a sophisticated malware distribution scheme under the guise of offering upgrades to Google’s AI chatbot, Bard. The lawsuit, filed on November 13, 2023, in the Northern District of California, San Jose Division, identifies the defendants as “Does 1-3,” reflecting Google’s current lack of specific identification.

Google alleges that the perpetrators have been exploiting the company’s trademarks, particularly those related to its AI products like “Google, Google AI, and Bard.” By creating misleading social media profiles and pages that mimic Google’s branding, these individuals have reportedly been luring victims into downloading malware. The fraud involves invitations to download free copies of Bard and other AI tools, purportedly from Google.

One striking example provided by Google includes a screenshot of a bogus “Google AI” social media profile used by the con artists. These profiles and pages are designed to deceive users into believing they are interacting with legitimate Google products.

Upon following the provided links, users unwittingly download malware, which is particularly engineered to hijack social media login credentials. This scheme is said to target businesses and advertisers primarily, exploiting their reliance on social media for marketing and communications.

In response to these fraudulent activities, Google has requested the court to grant a comprehensive restraining order and award damages, including attorneys’ costs. The tech giant is also seeking permanent injunctive relief for the harms caused by the defendants, any profits gained from the fraud, and other equitable relief deemed appropriate by the court.

This lawsuit emerges at a time when AI services, especially chatbot services, are experiencing a significant increase in global users. Recent data reveals Google’s Bard bot attracting 49.7 million individual visits each month, while OpenAI’s ChatGPT records over 100 million monthly logins and approximately 1.5 billion unique website visits.

Over the past year, major tech companies like Google, OpenAI, and Meta have been embroiled in various legal disputes. In July, Google faced a class-action lawsuit, underscoring the legal complexities in the rapidly evolving AI and digital services sector.

This case underscores the critical need for heightened digital security measures as AI technology becomes more integrated into everyday digital interactions. Google’s lawsuit not only seeks to safeguard its own intellectual property but also aims to protect unsuspecting users from malicious cyber activities disguised as legitimate AI offerings.