US House Committee to Probe Crypto Crimes in November Hearing

The Financial Services Committee (FSC) of the United States House of Representatives is gearing up for a critical hearing on November 15, 2023, diving deep into the shadowy corners of cryptocurrency. Entitled “Crypto Crime in Context: Breaking Down the Illicit Activity in Digital Assets,” this session aims to unravel the complexity of illegal activities within the digital asset ecosystem.

At the forefront are notable witnesses including Mr. Bill Hughes from ConsenSys, Ms. Jane Khodarkovsky from Arktouros, and Mr. Jonathan Levin from Chainalysis, each bringing a unique perspective from their extensive experience in both the crypto industry and legal enforcement.

The hearing’s central theme emerges from the FSC’s intent: comprehending the extent of illicit activities in digital assets to effectively counteract them. Discussions will revolve around identifying gaps in the current system and exploring tools to prevent and detect criminal activities.

Highlighting the gravity of the situation, the FSC will delve into the concerning trends of money laundering and the funding of terrorist organizations through cryptocurrencies. The hearing will utilize data from Chainalysis, which indicates a surge in illegal crypto transactions despite increased sanctions and hacking attempts.

A significant part of the discussion will be dedicated to assessing the anti-money laundering and counter-terrorist financing measures employed by crypto exchanges and decentralized finance providers. Moreover, the roles of the Financial Crimes Enforcement Network, the Office of Foreign Assets Control, and the Department of Justice (DOJ) will be under scrutiny.

In parallel, the hearing will also touch upon legislative efforts, notably the markup of legislation for stablecoin regulation. Simultaneously, the DOJ is intensifying its focus on crypto-related crimes, merging two of its teams to form a specialized unit targeting ransomware offences.

This hearing marks a pivotal moment for the crypto industry, as it faces stringent scrutiny from lawmakers and regulators. The outcome could significantly influence the future regulatory landscape for digital assets.

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ConsenSys and Animoca Brands Investor C Capital Reaches New Heights with $250 Million Fund III

C Capital has successfully closed its Private Equity Fund III, accumulating over US$250 million in investments from both its main fund and associated co-investment ventures. This marks the firm’s most substantial private equity fund ever raised.

Driven by strong demand from both existing and new investors, the fund has exceeded its initial target. The newly launched Fund III boasts partnerships with more than 20 esteemed investors. These participants span various sectors and regions, encompassing funds of funds, established financial institutions, and prominent family offices from Asia Pacific, Middle East, Europe, and beyond.

Ben Cheng, C Capital’s CEO and president, highlighted the significance of this diverse group of investors, stating, “The broad consortium of investors we have attracted for this latest fund not only provides a boon in terms of capital injection but also stands as an endorsement of C Capital’s track record and forward-thinking investment paradigms.”

The firm plans to maintain its seasoned investment approach with Fund III, focusing on global growth-stage entities within the consumer and tech sectors. As of 31 August 2023, nearly 35% of C Capital’s portfolio companies achieved unicorn status, based on their latest financing round valuations. Notable names in this category include Casetify, Xiao Peng, NIO, Sensetime, Shein, Agile Robots, and Lalamove, among others.

Here’s a closer look at some of the prominent names within its diversified portfolio:

Shein: A leading international online fashion retailer known for its trendy, affordable apparel and accessories.

Animoca Brands: At the forefront of blockchain and gaming, Animoca Brands is recognized for its role in introducing non-fungible tokens (NFTs) to mainstream gaming and creating play-to-earn paradigms.

ConsenSys: A key player in Ethereum blockchain solutions, ConsenSys focuses on Ethereum software development and developer tools, having a vital role in the Ethereum ecosystem’s growth.

Sensetime: A globally recognized AI company, Sensetime specializes in computer vision and deep learning technologies and has applications across various industries, from finance to healthcare.

Threads: Renowned in the luxury fashion space, Threads has innovated shopping experiences through its unique tech-forward approach, blending luxury with the digital age.

Finery: In the tech-fashion crossover, Finery stands out with its wardrobe operating system, helping users organize and optimize their clothing collections.

Armarium: Catering to the luxury fashion sector, Armarium provides high-end fashion rentals, offering consumers access to the latest couture without the commitment of purchase.

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MetaMask Developer ConsenSys Responds to European Banking Authority’s Consultation on Anti-Money Laundering Measures

The European Banking Authority (EBA) closed its public consultation on revising guidelines for money laundering and terrorist financing (ML/TF) risk factors on August 31, 2023. The amendments aim to extend the scope to include crypto-asset service providers (CASPs). The EBA proposes common regulatory expectations for CASPs to identify and mitigate ML/TF risks, offering sector-specific guidance. The guidelines also advise CASPs on adjusting their customer due diligence based on these risks. The consultation is part of the EBA’s ongoing efforts to strengthen the EU’s anti-money laundering and counter-financing of terrorism (AML/CFT) defenses.

ConsenSys, the development lead for the widely-used MetaMask crypto wallet and a significant force in the blockchain sector, has formally responded to the European Banking Authority’s (EBA) recent consultation on anti-money laundering and terrorist financing guidelines. The company’s stance was publicized by Bill Hughes, a ConsenSys attorney, in a tweet dated August 31, 2023. Known on social media as @BillHughesDC, Hughes has a multifaceted background that includes roles at the Department of Justice (DOJ), the White House (WH), and law firm Sullivan & Cromwell LLP (S&C). He holds degrees from the University of Virginia School of Law (UVA Law) and Vanderbilt University (Vandy).

Self-Hosted Wallets Not a Risk Indicator

ConsenSys emphasized that the use of a self-hosted wallet should not be considered a risk factor requiring enhanced due diligence by banks. “We agree that a customer’s use of a self-hosted wallet was not, on its own, indicia of risk that necessitates enhanced due diligence of that customer by a bank,” Hughes stated. ConsenSys urged the EBA to explicitly include this point in its guidance.

Multiple Wallets Not Necessarily Suspicious

The company also contested the notion that the use of multiple self-hosted wallets or numerous public addresses should be treated as a red flag for money laundering. “Use of many wallets and addresses is entirely commonplace, and to some extent is precisely how the system is designed to work,” said Hughes. Treating such behavior as suspicious, ConsenSys argues, would invert normal anti-money laundering (AML) due diligence processes.

Transaction Limits and Risk Mitigation

ConsenSys further commented on the issue of transaction limits, stating that while services that do not limit the value or volume of transactions may pose a greater risk, banks should not be encouraged to set extraordinarily low limits to avoid enhanced due diligence scrutiny.

Embracing Technology for Compliance

Lastly, the company applauded the EBA for recognizing the role of new technologies like blockchain analytics in risk mitigation. “We would further encourage the EBA and other supervisors to be open to allowing technology, as it develops, to not just supplement standard due diligence mechanisms but replace them,” Hughes added.

Implications for the Industry

The response from ConsenSys comes at a time when regulatory scrutiny around cryptocurrency and blockchain technology is intensifying globally. The EBA’s guidelines are expected to have a broad impact on how financial institutions interact with blockchain technologies and cryptocurrencies.

ConsenSys’ commentary is particularly noteworthy given its role in the blockchain ecosystem. The company is known for its development of MetaMask, a popular Ethereum-based wallet.


ConsenSys’ response to the EBA’s consultation reflects broader industry concerns about the potential for overregulation to stifle innovation and impose undue burdens on users. It also highlights the evolving role of technology in compliance and risk mitigation, suggesting a future where traditional and blockchain-based financial systems can coexist more harmoniously.

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MetaMask Developer ConsenSys Challenges SEC’s Proposed ‘Exchange’ Definition, Citing Blockchain Misunderstandings

Blockchain tech company ConsenSys, represented by lawyer Bill Hughes, has formally objected to the Securities and Exchange Commission’s (SEC) Notice of Proposed Rulemaking (NPRM) concerning the redefinition of a securities “exchange”. Hughes voiced these objections in a series of tweets today.

ConsenSys contends that the amendments proposed by the SEC would be unlawful if finalized in their current form, as they are intended to apply to blockchain protocols. They allege that the reopening release fails to rectify key legal deficiencies in the proposed amendments, misinterprets the term “exchange” as per the ’34 Act, and inappropriately aims to redefine exchanges in order to strengthen the registration of broker-dealers.

Furthermore, Hughes stressed that the proposal contains major misconceptions about blockchain technology and the dynamics of the broader ecosystem. Given these substantial shortcomings, ConsenSys has urged the SEC to withdraw the proposed amendments in their entirety.

Citing their prior 2022 comment, ConsenSys asserts that the Commission cannot lawfully enact the amendments as they currently stand. They argue that any further SEC action should exclude blockchain-based systems from the rule.

According to Hughes, these systems don’t align with a proper understanding of “exchange” under the ’34 Act, and thus cannot be regulated under it. Moreover, they state that SEC regulation in the broader blockchain context is inappropriate due to unresolved questions about the extent of the SEC’s jurisdiction over blockchain-based systems, and the Commission’s limited understanding of blockchain technology and ecosystem dynamics.

The lawyer also drew attention to Congress’s ongoing efforts to establish a comprehensive regulatory framework in this area. This framework, he said, will include specific provisions pertaining to the proper role of securities laws and the SEC. He therefore cautioned against the Commission’s potential to disrupt this large and growing economic sector with hastily and poorly thought-out regulations based on an unproven assertion of jurisdiction.


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ConsenSys Acquires Hal to Improve Alerts

ConsenSys, a company that provides services related to blockchain technology, has just completed the purchase of Hal, a platform for no-code blockchain development tools, with the purpose of causing a disruption in Web3’s alerts and notifications at the protocol level.

ConsenSys’ Web3 API provider Infura will be able to include Hal’s configurable webhooks or notification service into its developer stack as a direct consequence of the acquisition. As a direct result of this modification, it will be much simpler for developers to generate warnings and notifications at the protocol level for a wide range of signals.

According to ConsenSys, Infura offers a collection of tools to link apps, which the developer community may use to connect applications to the Ethereum network and other decentralized platforms. These tools were developed by Infura. The collection of these tools is sometimes referred to as a suite.

According to Eleazar Galano, one of the co-founders of Infura, the company wants to fix inadequacies in the present approach of creating apps for the bitcoin ecosystem. This information was provided by Galano. In relation to the acquisition of Hal by ConsenSys, Galano made the following statement: “Enabling developers to have a seamless end-to-end experience is a critical objective, and one of the most important trends is the use of little code / no code solutions.”

In February of 2022, ConsenSys successfully finalized the purchase of Ethereum wallet interface provider MyCrypto with the purpose of improving both the security of MetaMask and the level of the user experience it provides.

ConsenSys purchased Hal in order to expand upon this endeavor, which has been ongoing for an entire year, and to make it possible for MetaMask to provide a dynamic and tailored notification system. Additionally, the acquisition of Hal was made in order to make it possible for ConsenSys to expand upon this endeavor.


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MetaMask will capture IPs

A updated privacy policy agreement was issued by ConsenSys on November 23. The agreement states that beginning on that date, MetaMask would begin collecting the Ethereum wallet addresses and IP addresses of its customers whenever on-chain transactions take place.

However, ConsenSys, the company that developed the wallet, clarifies that the gathering of users’ data will only take place if the users utilize the Infura Remote Procedure Call (RPC) program that is included with MetaMask by default.

People that run their own Ethereum node or use a third-party RPC provider in conjunction with MetaMask are exempt from the recently revised ConsenSys privacy policy since they do not use the service.

Instead, you are subject to the conditions of the other RPC provider.

According to ConsenSys, the information that is gathered in this manner may be disclosed to affiliates, while conducting business deals, or in order to comply with requirements dictating Know Your Customer and Anti-Money Laundering by law enforcement. These requirements may be imposed by law enforcement.

With more than 21 million users actively using the platform on a monthly basis, MetaMask is presently one of the most popular self-custody wallets available on the market.

While this was going on, Hayden Adams, the man who invented the Uniswap protocol, was responding to questions by explaining that the decentralized exchange does not monitor IPs and does not let third-party tools on the platform to do so either.

ConsenSys has joined the ranks of other big Web 3 firms like Coinbase that have implemented IP collecting in part owing to the increasingly rigorous laws in the industry.


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Goldman Sachs Joins Investors to Fund CertiK as it Tops $2B Valuation

New York-based blockchain security startup CertiK has finally confirmed to raise $88 million from investors, led by Tiger Global, Advent International, with participation from Goldman Sachs and existing investors such as Sequoia and Lightspeed Venture Partners.


Dubbed its Series B3 round, the company said the funding was oversubscribed and it comes off as its fourth financing round to date bringing the total capital raised to $230 million. Following the latest raise, the startup’s valuation has now topped $2 billion.

Considering the security demands in the digital currency ecosystem, as many as 3,200 blockchains and enterprise clients utilize CertiK’s solutions to safeguard their platform. Thus far, the company has helped these clients secure as much as $300 billion, a role that investors have acknowledged over and again.

“CertiK is a mission-critical blockchain cybersecurity platform in a massive market and has already become a clear leader in the industry with a high-quality product that provides all-round security for blockchain, smart contracts, and Web3,” said Steve Ward, Managing Director at Insight Partners. “We look forward to partnering with CertiK’s best in class founding team, complete with a team of leading crypto security thought leaders as they continue to grow and Scale-Up.”

Despite the latest economic downturn experienced in the digital currency ecosystem, CertiK has continued to grow its revenue which surged 12x in 2021, and profits growing more than 3000x. As detailed by the firm, it will continue to develop all of its security solutions, including Skynet, LeaderBoard, and Know-Your-Customer (KYC)- a mandatory process of identifying and verifying the client’s identity when opening an account and periodically over time, in a bid to meet the expectations of its broad-based clients.

“Given increasing trends in rug-pulls, we now see KYC playing an important role in Web3 security,” said CertiK Founder and CEO, Ronghui Gu. “KYC, together with Smart contract auditing and 24/7 monitoring of threats, will further strengthen our offer around end-to-end Web3 security services.”

Other security outfits like ConsenSys have also pulled funds from investors in recent times, the latest of which is $450 million raised by the firm to push its valuation to $7 billion.

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MetaMask Adds Apple Pay Integration, Expands Options for Buying Cryptos

ConsenSys-owned crypto wallet MetaMask announced Tuesday the addition of Apple Pay integration, increasing options for buying cryptocurrencies. - 2022-03-30T124642.813.jpg

MetaMask is a crypto wallet & gateway to blockchain apps. It is also a tool for interacting with decentralized applications (DAPP).

The app supports Firefox, Google Chrome, and Chromium-based browsers.

The company said it now supports iPhone or Apple Pay users to buy cryptocurrencies with debit or credit cards through the mobile app without transferring cryptocurrencies from cryptocurrency exchanges.

MetaMask uses two payment gateways, Wyre and Transak, to support transactions. Users can now buy ETH with credit cards (Visa and Mastercard) stored in Apple Pay and deposit up to $400 in their wallets through the Wyre API.

“We wanted to expand how users can convert crypto within the app itself and not have to leave it,” James Beck, Director of Communications and Content at ConsenSys, said.

The Ethereum software company ConsenSys has acquired the Ethereum interface MyCrypto last month, aiming to integrate MyCrypto with the MetaMask wallet owned by ConsenSys and improve the security of all products.

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ConsenSys Hits $7 Billion Valuation in New Funding Round

ConsenSys, an Ethereum application and infrastructure builder based in New York, announced on Tuesday that it raised $450 million in its Series D funding round. The financing seed gives the blockchain company a valuation of $7 billion. - 2022-03-16T173830.432.jpg

ConsenSys plans to use the latest funding to expand its business by increasing its headcount from 700 to over 1,000 employees by the end of 2022. The leading blockchain firm also said that it intends to use the fresh funds raised to support the expansion of its MetaMask and its flagship products.

The fundraising was led by ParaFi Capital, which also participated in the previous fundraising. Other Series C investors, including Third Point, True Capital Management, Marshall Wace, and UTA VC, United Talent Agency’s venture fund, also participated in the round. Serval new investors also joined this round of funding, including C Ventures, Sound Ventures, Anthos Capital, Microsoft, SoftBank Vision Fund 2, and Temasek.

ConsenSys mentioned that it would convert the raised funds into Ethereum (ETH) to build further its ‘ultrasound money’ position as a rebalance to its Ethereum to fiat ratio in line with its treasury strategy.

Joseph Lubin, the founder and CEO of ConsenSys, talked about the development and said: “I think of ConsenSys as a broad and deep capabilities machine for the decentralized protocols ecosystem, able to rapidly capitalize at scale on fundamental new constructs that emerge, such as developer tooling, wallets, security audits, DeFi, NFTs, Layer-2 scaling, DAOs, and more.”

Building Digital Infrastructure for Future Finance

In November last year, ConsenSys raised $200 million in a Series C financing round, bringing its valuation to $3.2 billion.

The firm works to fulfil its mission, which is to unlock the collective power of communities by making Web3 universally easy to access, use, and build on. Founded in 2014, the blockchain company has continued to develop tools and infrastructure being used by over 450,000 developers, including MetaMask and leading DeFi and NFT platforms.

Last month, ConsenSys acquired MyCrypto, an open-source platform that allows users to manage Ethereum (ETH) accounts securely and privately. ConsenSys integrated its Web3 wallet, MetaMask, with MyCrypto to improve security and standardize the user experience across desktop, extension, mobile, and browser wallets.

In January, ConsenSys partnered with Visa to help central bank digital currency (CBDC) networks bridge the gap with traditional financial institutions. The partnership is set to enable customers to use their CBDC-linked Visa card or digital wallet anywhere that Visa is accepted worldwide. Currently, ConsenSys’ Protocols group — developer of Hyperledger Besu and ConsenSys Quorum — is building CBDCs (Central Bank Digital Currencies) for six central banks.

In December last year, ConsenSys partnered with Mastercard to improve efficiency, scale, and speed up transactions using the Ethereum (ETH) blockchain while focusing on network integrity. ETH-based protocols are used in various industries such as decentralized finance, NFTs, Web 3.0, and metaverse platforms. Over 177 million Ethereum addresses need improved scalable applications and privacy settings on the Ethereum blockchain.

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ConsenSys acquires MyCrypto to ‘improve the security’ of its products

ConsenSys announced Tuesday that it had acquired MyCrypto, the Ethereum wallet interface provider, adding it to the software company’s product suite. Its intent is to merge MyCrypto with the ConsenSys-owned MetaMask wallet, to “improve the security of all the products and create a cohesive user experience across desktop, mobile, extension and browser wallets.”

MetaMask currently has 21 million monthly active users, according to its website, and is one of the fastest-growing non-custodial Ethereum wallets and browser extensions. MetaMask co-founder Dan Finlay said that he expects that the combination between MetaMask’s mobile apps and browser extensions and MyCrypto’s web product and desktop application will “connect people to the world of Web3 in even more ways.”

Related: MetaMask’s new inbuilt multichain institutional custody feature

Similarly, MyCrypto explained in a blog post how it will be working together with MetaMask “to lead the way to Web3” and that they have a shared goal to “build the perfect wallet.” The characteristics of an ideal wallet include becoming increasingly decentralized and trustless, prioritizing user security and safety and providing seamless access across various user accounts, protocols and networks.

MyCrypto clarified that the user experience will not be changing in the short term, apart from small updates like UX improvements, network handling, error messages and a dark mode. Neither is any action needed from MyCrypto or MetaMask users at this time. In the long-term, however, both wallets will reportedly “slowly” merge into a “comprehensive, Ethereum-first suite of open-source, non-custodial product offerings.

According to ConsenSys, MetaMask co-founders Dan Finlay and Aaron Davis, alongside MyCrypto founder Taylor Monahan, will lead the new desktop, mobile, extension and browser product team, while MyCrypto’s 12 employees will join ConsenSys.

ConsenSys reached a valuation of $3.2 billion after raising $200 million in November 2021.