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BitGo, a leading digital asset custodian, says it will seek over $100 million in termination fee damages from Mike Novogratz and Galaxy Digital Holdings Ltd. A press release BitGo published on Monday noted that the crypto custodian viewed Galaxy’s earlier announcement that it had terminated their previously agreed acquisition deal as “improper.” Are you looking […]
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The U.S. Treasury has settled with BitGo over charges that it facilitated users in sanctioned areas to transact using its crypto wallet services between 2015 and 2019.
BitGo, an institutional crypto custodian service and wallet operator, did not do due diligence in blocking wallet users based in Crimea, Cuba, Iran, Sudan and Syria, said the Treasury’s Office of Foreign Asset Controls in a Dec. 30 announcement. OFAC said of BitGo:
“BitGo failed to exercise due caution or care for its sanctions compliance obligations when it failed to prevent persons apparently located in sanctioned jurisdictions to open accounts and send digital currencies via its platform as a result of a failure to implement appropriate, risk-based sanctions compliance controls.”
The Treasury wrote that there were 183 “apparent violations” of its various sanctions programs, adding up to just over $9,000 in transactions. They retain the status of “apparent” as the accusations are based on the IP addresses from which users accessed BitGo hot wallets. In mitigating factors, the Treasury said that: “BitGo screens all accounts, including “hot wallet” accounts, against OFAC’s Specially Designated Nationals and Blocked Persons List, including blocked cryptocurrency wallet addresses identified by OFAC.”
The settlement will cost BitGo $98,830. Given the hawkishness of OFAC’s programs, the settlement is relatively lenient, even though the actual value transacted was less than 10% of the fine. The civil penalty, had the case gone to court, would have been between $183,000 and $53 million.
But today’s action is certainly significant for other crypto companies. The announcement makes clear that OFAC will be looking more closely at crypto servicers:
“This action highlights that companies involved in providing digital currency services — like all financial service providers — should understand the sanctions risks associated with providing digital currency services and should take steps necessary to mitigate those risks.”
BitGo had not responded to Cointelegraph’s request for comment as of publication time.
U.S. regulators are upping their expectations for companies handling virtual currencies to know the customers on the other end. Just before Christmas, the U.S. Treasury proposed rules requiring registered financial institutions to know the identity of users of self-hosted wallets with which they are transacting.
A number of countries under U.S. sanctions have shown interest in using crypto to circumvent them. Venezuela’s Maduro regime is famously interested in Bitcoin, though its own Petro token has failed to catch on. Iran has similarly been a target for OFAC’s crypto sanctions.
Image Credit: Refer to Source
Author: Refer to Source Cointelegraph By Kollen Post
According to “Fortune” reports, multiple sources confirmed that the payment giant PayPal encryption company’s negotiations have broken down.
According to the report, the CEO of BitGo did not confirm the news in an interview, but he said that BitGo has been “negotiating with everyone” for many years and the company will not be “sold at a low price.”
According to a Bloomberg report in October this year, PayPal was exploring the possibility of acquiring cryptocurrency companies including BitGo. However, people familiar with the matter told Fortune that the relevant negotiations have ended and “PayPal is exploring other potential acquisitions.”
BitGo is the first crypto company in the United States to obtain brokerage approval, transfer agent registration and trust company approval, and it can provide custody services. The company was founded in 2013 and is currently not profitable. Belshe said it is in a “growth mode” and has a “very healthy balance sheet” and the company has no plans to raise more funds in the near future. According to Crunchbase data, BitGo has raised a total of $69.5 million in external funds so far.
Belshe also said that the company currently holds more than $16 billion worth of crypto assets for customers and is adding new customers every week.
According to an earlier report by “Betwee”, PayPal announced on October 21 that it would launch encrypted transactions and encrypted merchant payments, which caused a shock in the entire encryption industry.
PayPal is currently working closely with encryption services company Paxos. Paxos’s brokerage service powers PayPal’s encrypted transaction capabilities. Users can purchase Bitcoin and other cryptocurrencies through the PayPal digital wallet supported by Paxos.
Image source: PayPal
Author Liang Che
Ever since PayPal decided to add support for cryptocurrencies, there have been plenty of rumors regarding what it might do next. One such rumor was that the online payments giant might partner up with BitGo. However, a recent Fortune article revealed that this is not going to happen, according to a number of anonymous sources.
PayPal is a massive company, truly deserving of the name “payments giant.” Its market cap is currently at $280 billion — more than a third of the entire crypto industry’s collective market cap. As such, it would be a desirable partner to any crypto company, and there were claims that it aims to acquire some of them. But, it does not seem like the firm will enter a deal with BitGo.
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Original reports that emerged after PayPal announced that it is entering the crypto industry said that the firm might be interested in acquiring BitGo — a digital trust firm that has been in operation since 2013.
While the deal does seem to have been real — it was not finalized by the time that rumors started circulating the web. Since then, it appears that the negotiations have fallen apart, and that nothing will come out of it, after all.
So far, neither of the parties confirmed or denied pretty much anything. PayPal declined to comment on the matter entirely, while BitGo CEO, Mike Belshe, did not confirm that the acquisition was on the table, in the first place.
However, he did say that there were such conversations with many other companies, and that BitGo would not be pleased with a “small exit.”
At the moment, the firm is managing over $16 billion in crypto, and Belshe even said that BitGo benefited from the current Bitcoin rally. Despite this, it did not manage to turn a profit, as its focus lies with growth, instead of profitability.
Global payment company PayPal is planning to acquire a crypto asset custody company. On October 23, Bloomberg released a report saying that the company is currently negotiating with BitGo Inc.
An anonymous source mentioned in the report said that the two companies may reach an agreement within a few weeks. BitGo is a multi-signature escrow company founded in 2013. In 2018, the company raised $15 million in a financing round led by Goldman Sachs and Galaxy Digital.
However, it is believed that the transaction is far from finalized. According to reports, “the negotiation may still break down, and PayPal may choose another target for the acquisition.”
This rumor appeared after a statement from PayPal this week, which revealed that PayPal will launch an encrypted payment service next year. This is a catalyst for the rapid increase in the price of Bitcoin (BTC), which has risen by more than 10%.
Not everyone is happy with the possible acquisition of PayPal. The official account of Thorchain (RUNE) expressed concerns about the decentralization of Wrapped Bitcoin (WBTC) because most of the Bitcoin (BTC) locked in the agreement is stored in BitGo. .
Something is going to happen to wBTC.
Most of wBTC is hosted by BitGo.
PayPal did not bring benefits to this area.
— THORChain ⚡️(ᚱ) (@thorchain_org) October 22, 2020
Yesterday, Meltem Demirors, chief strategy officer of crypto asset management company CoinShares, predicted that payment company PayPal will seek to launch a stable currency after it withdraws from the governance association of the Libra project launched by Facebook.
Summary:
Chainlink announced today that Ben Chan, the former CTO of digital asset custody service provider BitGo, will serve as Vice President of Engineering at Chainlink Labs.
This appointment will help Chainlink build an expanded infrastructure for its decentralized oracle network, thereby reducing the gas cost of node operators and preparing for the growth of DeFi to new heights.
Chan will focus on building Chainlink’s two-layer extension solution, called threshold signature. The goal is to serve thousands of data customers across multiple blockchains.
Chan said to Decrypt: “I am very happy to be working on Chainlink and excited to help establish industry standards for decentralized oracles. Today, DeFi’s scalable, secure and reliable data infrastructure will become the release of smart contracts. The next fundamental building block of the future.”
Chainlink provides a decentralized network of data oracle nodes, which can send real data measurement results based on cryptocurrency prices or gas conditions to blockchain-based applications.
Automatic code blocks known as smart contracts (including code on Ethereum) use data to perform many activities that support the DeFi ecosystem, which is a set of “decentralized finance” protocols that provide financial services to crypto users. Chainlink provides data for many leading DeFi protocols, including derivatives platform Synthetix and stable currency Ampleforth.
“In my opinion, Chainlink is indeed going through an amazing stage,” Chan said in a recent Chainlink YouTube interview. “Seeing the huge growth in the provision of reference data infrastructure for DeFi, I think what’s better is that other industries and use cases have greater potential.”
As the former CTO of BitGo, Chan helped develop a multi-signature wallet solution that can now help the company facilitate more than 15% of Bitcoin transactions worldwide.
Threshold signatures are similar to the Optimistic Rollup being tested in other parts of the crypto world, and work by aggregating data provided by decentralized oracle providers. This reduces the number of transactions required to confirm that the data is accurate.
The threshold signature will aggregate the data from the nodes on the Chainlink network, and then send the verified data to the data user through a transaction, instead of multiple nodes sending data to the end customer separately. The result is that data providers have greatly reduced operating costs and have the ability to scale to accommodate thousands of new customers in many different blockchains.
The high cost of Ethereum has temporarily eased, but the next wave of Ethereum boom may push the current network to its limit. At that time, Chainlink’s data providers and customers may be happy to have in-house solutions to solve the data expansion problem of next-generation blockchain applications.
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