Crypto Confab Weekly: Crypto’s Role in the Opioid Crisis, Not All is Well at Facebook, and more…

Two of our reviewed token sales have important dates this week:

MindSync AI: MindSync AI is an AI platform for developers, customers and experts. MindSync’s IEO ends on September 1. Read more

Ahrvo DEEX: Ahrvo DEEX is a blockchain-based brokerage exchange. Ahrvo’s ICO begins on September 1.  Read more…

First Crypto Exchange IPO

In their rush to reinvent modern finance, the crypto community has come up with a smorgasbord of fancy acronyms: ICOs, IECs, DeFi etc., some of which even they are clueless about. Now, crypto exchange INX is borrowing a page from traditional centralized companies, by planning an IPO.

The exchange hopes to raise $135 million from the public markets. Seventy five percent of the proceeds raised from the offering will be placed in a fund to be used as insurance against hacks and breaches. The exchange also plans to offer utility tokens to investors interested in transacting on it. The INX token will be used to pay fees and will also reward holders with a share of profits. But, it will not grant ownership rights to token-holders; those rights are only available to investors. In the event of a liquidation of the exchange, however, token holders will take precedence over investors and will be compensated first.      

INX Exchange is a subsidiary of Gibraltar-based INX Limited, owned by Alan Silbert, brother to Barry Silbert, the owner of Digital Currency Group. (DCG has a crypto media company, an index fund and more among its holdings).

Cryptocurrency and the Opioid Crisis in America

It may seem odd to link crypto to the opioid crisis in America, but both are now tangled up in a common web of intricacies around how to legislate criminal activity that spans multiple borders.

Based on statements released by the White House and the Treasury Department, cryptocurrency is actually said to have played a prominent role in fomenting the opioid crisis within the United States.

The White House issued advisories to financial institutions and online payment firms last week, educating them about the role of crypto in enabling purchases of illegal drugs over the internet. The advisory listed four cryptocurrencies – Bitcoin, Bitcoin Cash, Ether and Monero – that are being used to purchase illegal drugs. It also outlined the process involved in purchasing drugs and information required by the agencies to identify such transactions.   

In coordination with the White House, the Treasury Department’s Office of Foreign Asset Control (OFAC) sanctioned the blockchain addresses of three Chinese drug kingpins, alleging they broke drug-smuggling and money-laundering laws. The drug lords have an international drug trafficking operation that “shipped hundreds of packages of opioids” to U.S. customers, according to the report.

Crypto Crime Back in the Spotlight

A United States District Court in Southern California charged 25-year-old Los Angeles resident Kunal Kalra with operating an unlicensed money transmitter business last week. According to a release issued by the Department of Justice, Kalra exchanged $25 million in cash and virtual currency for individuals, including Darknet drug dealers and other criminals. Kalra pled guilty to the charges.

The SEC also fined for engaging in fraudulent activity. claims to post impartial reviews of offerings, but the SEC found that the site earned $100,572 in fees from various ICO issuers between December 2017 and July 2018. The federal agency claims that these offerings’ reviews were, in fact, paid advertisements that had not been disclosed. 

The New York Times also reported last week on the various ways in which terrorist groups, including Hamas, are using Bitcoin to fund their operations.

If you’re worried that crypto crime will ultimately dwarf legitimate uses of digital currencies, a June study by research firm Chainalysis might offer some comfort: It found that only 2% of all transactions on Bitcoin’s blockchain are illicit.

Some Mull Jumping Ship on Facebook’s Libra Project 

Tensions around Facebook’s Libra project may be coming to a head.

According to an FT report released last week, two members of the Libra Association are considering jumping ship, while a third is allegedly apprehensive about the attention that their involvement in the project might generate. The Libra Association currently has 28 members, and Facebook has said it intends to increase that number to 100 by 2020, when the project is due to launch. The association boasts a diverse array of big names from different fields, including payment processors Mastercard and Visa, and ride-sharing giants Lyft and Uber. 

The exits of three members from the association could complicate Facebook’s plans. Facebook is allegedly tired of sticking its neck out, and being met with only criticism, according to the report. Members of the U.S. Senate and Congress were unsparing in their criticism of the project in July, and international regulators have not been much kinder to the social media behemoth. 

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