Bitcoin Regulations News

Gov’t Seeks to Tax Crypto Transactions as Capital Gains

The South Korean government plans to tax capital gains on cryptocurrency transactions. A Dec. 9 report from The Korea Times reveals that a revised bill to introduce the measure will be drawn up by the country’s Ministry of Economy and Finance by the first half of 2020.

In parallel, the Korean National Assembly is in the process of advancing a related bill aimed at increasing transparency in cryptocurrency trading. If passed, the new regulations would come into effect one year after the Assembly’s plenary session.

While the government’s capital gains bill will reportedly go ahead regardless of related legislation, The Korea Times notes that a more adequate definition of cryptocurrencies and digital assets will be required to provide clarity for the government’s interventions. 

Among the matters to be clarified is the question of whether crypto-related gains are to be deemed similar to gains in stock trading or real estate transactions.

To implement its taxation plans, the government could therefore need to obtain access to trading records on cryptocurrency exchanges — a practice already underway in countries such as the United States.

Anti-Money Laundering measures

As Cointelegraph reported, South Korea’s proposed Act on Reporting and Use of Certain Financial Transaction Information will, if passed, stipulate that banks must issue real-name accounts to crypto exchanges. This would ensure that crypto exchanges adhere to the same Know Your Customer and Anti-Money Laundering standards as traditional financial institutions. 

This move to bring cryptocurrency exchanges under the direct regulation of the country’s watchdog, the Financial Services Commission, will also include introducing a crypto exchange licensing system, as recommended by the Financial Action Task Force (FATF).

Major South Korean exchange Upbit, which is run by a subsidiary of Korean tech giant Kakao, revealed last month that 342,000 Ether (ETH) had been stolen from its hot wallets. 

The thefts happened when the exchange was allegedly moving assets between its hot and cold storage facilities, sparking some speculation that the incident may have been an inside job, rather than an external breach. Upbit has pledged to reimburse those affected from its corporate funds. 

Transfers of the ill-gotten assets have since been detected on the Ethereum blockchain.

Source Cointelegraph

Steven Mnuchin Does Not Expect US to Issue Digital Dollar in Next 5 Years

United States Secretary of the Treasury Steven Mnuchin said that he and Federal Reserve Chairman Jerome Powell do not anticipate the development of a national digital currency in the country.

Mnuchin delivered his comments during a House Financial Services Committee hearing in Washington, Bloomberg reported on Dec. 5. “Chair Powell and I have discussed this — we both agree that in the near future, in the next five years, we see no need for the Fed to issue a digital currency,” Mnuchin said.

The Treasury secretary’s statement came in response to a question about Facebook’s yet-to-be-released Libra stablecoin. Mnuchin further said that he has no objection to Libra, as long as it is fully compliant with bank secrecy and Anti-Money Laundering regulations, so that “In no way can this be used for terrorist financing.” 

Regulators’ critical stance towards crypto

The Federal Reserve sent a letter to U.S. Representatives French Hill and Bill Fosters in mid-November, in which the agency revealed that it is not currently developing a central bank digital currency (CBDC), but it has assessed and continues to evaluate the costs and benefits of such an initiative.

Powell said in the letter that, prior to issuing a CBDC, the Federal Reserve has to address a number of legal questions, including monetary and payments policies, financial stability, supervision and operational issues, and their vulnerability to cyber-attacks.

On Dec. 4, a panel of senior financial regulators in the United States headed by Mnuchin warned the public about the purported risks of stablecoins and cryptocurrencies. The regulators stated:

“If a stablecoin became widely adopted as a means of payment or store of value, disruptions to the stablecoin system could affect the wider economy. Financial regulators should review existing and planned digital asset arrangements and their risks, as appropriate.”

Source Cointelegraph

EU Won’t Let Stablecoins Enter Market Until Risks Are Addressed

No global stablecoin project will begin operation in the European Union (EU) until the associated risks to monetary sovereignty are addressed, according to EU authorities.

In a joint statement adopted by the Council of the European Union and the European Commission (EC), the Council and the Commission admitted that stablecoins may be effective at providing cheap and fast payments, but they have far more risks and challenges.

The statement was approved by the Economic and Financial Affairs Council (ECOFIN), one of the oldest configurations of the Council, on Dec. 5, based on the data in an official document released in late November.

It’s not clear whether the new statement will somehow affect any further course of action or would become the basis for anything legally binding. Cointelegraph contacted the Council’s press officer for comment but the representatives available were evasive.

Stablecoins’ potential to facilitate cross-border payments vs associated risks

In their statement, the EU authorities have outlined multiple risks and issues associated with adoption of stablecoins — digital currencies pegged to another asset to prevent volatility usually seen in cryptocurrencies. If adopted on a global scale, stablecoins pose a threat to monetary sovereignty, the Council and the Commission argued.

The statement reads:

“These arrangements pose multifaceted challenges and risks related for example to consumer protection, privacy, taxation, cyber security and operational resilience, money laundering, terrorism financing, market integrity, governance and legal certainty. [..] These concerns are likely to be amplified and new potential risks to monetary sovereignty, monetary policy, the safety and efficiency of payment systems, financial stability, and fair competition can arise.”

Challenges raised by global stablecoins require a coordinated global response

As such, solving the challenges raised by global stablecoins requires coordinated efforts from global jurisdictions, the authorities noted. Moreover, entities that plan to issue stablecoins in the EU should provide “full and adequate information urgently to allow for a proper assessment against the applicable existing rules,” the statement notes.

The Council and the Commission concluded:

“No global ‘stablecoin’ arrangement should begin operation in the European Union until the legal, regulatory and oversight challenges and risks have been adequately identified and addressed.”

While pointing out a number of risks associated with stablecoins, the EU authorities noted that they welcome central banks working to assess the costs and benefits of central bank digital currencies (CBDCs) and working on providing fast and inexpensive cross-border payments.

Yesterday, the governor of the central bank of France announced the bank’s plans to pilot a CBDC financial institutions in 2020. The official stated that the bank will start testing the digital euro project by the end of the first quarter 2020.

Source Cointelegraph

Bakkt CEO Kelly Loeffler Appointed to US Senate Seat

Georgia Governor Brian Kemp has appointed Kelly Loeffler, CEO of institutional Bitcoin (BTC) futures platform Bakkt, to a United States Senate seat.

With the appointment, Loeffler will replace Sen. Johnny Isakson (R-GA), who plans to retire at the end of the year, the Washington Post reported on Dec. 4. A person familiar with the matter, shared Loeffler’s remarks with the publication, in which she ostensibly said:

“I haven’t spent my life trying to get to Washington. But here’s what folks are gonna find out about me: I’m a lifelong conservative. Pro-Second Amendment. Pro-military. Pro-wall. And pro-Trump. I make no apologies for my conservative values, and will proudly support President Trump’s conservative judges.”

As previously reported by Cointelegraph, various party leaders, including President Donald Trump, reportedly pressed Kemp to choose U.S. representative Doug Collins instead, purportedly given his strong support for Trump, gun rights and anti-abortion efforts.

The President and many among his followers are not sold on Loeffler, viewing her as too moderate. Previously, Kemp reportedly met with the President and Loeffler in a bid to obtain Trump’s approval of his pick for the Senate seat but to no avail.

Bakkt’s recent developments

In the meantime, Bitcoin futures open interest on the Bakkt platform hit a new all-time high of $6.5 million on Dec. 3. The reported open interest was a 42% increase from the previous day, which had been an all-time high as well.

Also, Bakkt is planning to launch the first regulated options contract for Bitcoin futures on Dec. 9. The new options product is based on customer feedback, explained Loeffler, and is designed to hedge or gain bitcoin exposure. Bakkt added:

“ICE Futures U.S. has self-certified the contract with the CFTC and we’re excited to leverage the benchmark futures prices and institutional-grade custody to meet the needs for a regulated options contract.”

Source Cointelegraph

China’s Great Firewall Blocks Popular ETH Block Browser Etherscan

China’s Great Firewall, a tool used to ban Chinese citizens from using sites like Google and Facebook, has listed a major explorer for Ethereum’s (ETH) blockchain.

According to data from non-profit monitoring organization GreatFire, China allegedly blocked one of the most popular ETH block browsers, Etherscan, in October 2019. As of Dec. 3, Etherscan’s domain remained inaccessible from IP addresses inside mainland China, as reported by crypto publication Coindesk on Dec. 3.

Etherscan is aware of the block, firm’s CEO says

While the Etherscan’s blockage was largely unnoticed, the firm’s CEO Matthew Tan reportedly said that Etherscan noticed the action “within the last 3 months,” Coindesk reports. Cointelegraph contacted Etherscan’s team to confirm the information but the firm hadn’t responded as of publication.

The block’s timeline

According to GreatFire, which collects a database of websites blocked by the Great Firewall, Etherscan was purportedly still intact with “no censorship detected” as of Aug. 17, 2019.

The Ethereum block browser was fully blocked by Oct. 29, 2019, while the exact time of the block is not reported by GreatFire.

Other ETH blockchain explorers still accessible in China

Meanwhile, other Ethereum block explorers are still intact in China. As reported by Coindesk, a localized version of the browser,, is accessible to Chinese users as of press time.

A block explorer is a website or a tool that allows users to track blocks, wallet addresses, network hashrate, transaction data and other key data on a certain blockchain, like the Bitcoin (BTC) blockchain, the Litecoin (LTC) blockchain, or the Ethereum blockchain. For Bitcoin, there are a number of block explorers, including,, or

Meanwhile, Etherscan is just one of a number of block explorers such as and In March 2019, major Ethereum wallet supplier MyEtherWallet announced the launch of the alpha version of its new open-source Ethereum blockchain explorer, EthVM.

Source Cointelegraph

CryptoBridge Decentralized Exchange Shuts Down Citing Regulations, Markets

The decentralized cryptocurrency exchange (DEX) CryptoBridge announced that it is closing down in a message on its website.

In the announcement, the exchange warns users that all of the firm’s services and servers will terminate after Dec. 15. Users will be able to withdraw funds from the exchange until the last day of operation, but deposits will be closed after Dec. 3. The announcement reads:

“Please note that user verification is required by EU law for all withdrawals. We highly recommend that you start the process as early as possible as verification can take a few days.”

Scammers are impersonating CryptoBridge

The company cites market conditions, increasingly strict regulation and lack of funds as reasons for its decision to close and not pursue further development. 

Users visiting the official Twitter profile of the exchange are met with a “that page doesn’t exist” warning. However, a new CryptoBridgeEU account became active earlier today and spreads messages in conflict with the announcement appearing on the official platform’s website. The account in question claims that the shutdown of the platform is only temporary, stating:

“I’m proud to announce CryptoBridge’s termination is not the end! We will be moving our headquarters to Denmark! We will have a new site up and running so stay tuned!”

An update to the official website confirms that the profile is fake:

“Our social media channels are closed, all accounts on Twitter that are pretending to be representing CryptoBridge are fake. We are not planning a comeback at the moment.”

Fierce competition in the DEX space

The competition in the DEX space is becoming increasingly fierce. Major crypto exchange Binance launched one in April while its competitor Poloniex acquired a Tron-based DEX at the end of November. 

On Nov. 27, decentralized liquidity network Bancor announced a 60,000-token airdrop in an attempt to expand its liquidity pool. Low liquidity is a major issue facing decentralized exchanges and hindering their ability to compete with centralized exchanges.

Source Cointelegraph

South African Central Bank to Reportedly Introduce New Crypto Regulations

The South African Reserve Bank (SARB) — the country’s central bank — is purportedly going to impose new regulations for the use of digital currencies in a bid to deter users from evading currency controls.

As local business-focused publication Business Report reported on Dec. 2, SARB’s deputy governor, Kuben Naidoo, said that the new rules will be implemented in the first quarter of 2020, following a five-year-long series of consultations on the matter.

Naidoo’s statements followed a decision of FirstRand Bank — one of the largest financial institutions in South Africa — to discontinue providing banking services to digital currency exchanges in late November. FNB reportedly blamed regulatory uncertainty for the move.

The blockchain and crypto communities have already responded to the idea of further controls on cryptocurrency. South African blockchain development community SA Crypto told Business Report:

“The implications of the Sarb clamping down on cryptocurrency use for the purpose of stricter capital controls are far-reaching and alarming.”

Crypto popularity in South Africa

Cryptocurrencies have proved to be popular in South Africa, with 10.7% of the country’s residents owning crypto, which is the highest of any country surveyed. The South African rand’s volatility, which is one of the world’s most volatile currencies, prompted consumers to seek protection for their money. 

Cross-border payments are a contributing factor of crypto popularity in the country, especially given how remittances are often sent from countries like South Africa to 15 other countries on the continent in what is known as the Southern African Development Community.

In August, major South African crypto exchange Luno saw an average daily trading volume exceeding 80 million South African rand ($5.4 million). Luno saw a significant surge of new customers, reaching a milestone of three million wallets across 40 countries on its platform.

Marius Reitz, general manager for Africa at Luno, said that this indicated increasing global adoption and reinforces the company’s purpose of “reimagining a financial system where money is cheaper, faster and safer with open and equal access for everyone.”

BRICS’s crypto for united payment system

In the meantime, members of BRICS — including South Africa — discussed the creation of a new cryptocurrency at a recent summit in mid-November. The director-general of the Russian Direct Investment Fund Kirill Dmitriev said at the time:

“An efficiently operating BRICS payment system is capable of stimulating settlements in national currencies and ensuring the stability of settlements and investments between our countries, which form more than 20% of the global influx of foreign direct investment.”

Source Cointelegraph

Trump Isn’t Sold on Bakkt CEO Kelly Loeffler Becoming US Senator

Georgia Governor Brian Kemp is expected to appoint Kelly Loeffler, CEO of institutional Bitcoin (BTC) futures platform Bakkt, for a United States Senate seat next week.

Atlanta’s local news outlet AJC reported on Nov. 29 that Kemp plans to choose Loeffler in a bid to expand the appeal of the Republican party to women. If nominated, Bakkt’s CEO will become just the second woman to serve in the United States Senate from Georgia.

Furthermore, Loeffler could also finance GOP activities with her personal fortune, which the outlet suggests could break fundraising records. 

Bakkt CEO backs Trump

In an apparent effort to try to obtain Republican approval, Loeffler said that she wants to strengthen the border, shut down drug and human trafficking, lower healthcare costs and protect the national interests of the U.S. She added:

“If chosen, I will stand with President Trump, Senator David Perdue, and you to Keep America Great.”

The seat is currently occupied by Johnny Isakson, who will leave the Senate at year’s end because of health problems. Unspecified Republican Party officials allegedly told the outlet that Kemp is expected to publicly announce Loeffler’s appointment at a press conference next week.

But President not a fan of Loeffler

Various party leaders, including President Donald Trump, reportedly pressed to choose U.S. representative Doug Collins instead. Republican leaders have pushed for the appointment of Collins given his strong support for Trump, gun rights and anti-abortion efforts. 

The President and many among his followers are not sold on Loeffler viewing her as too moderate. The outlet also reported that Kemp met with the President and Loeffler last week to try to obtain Trump’s approval of his pick for the Senate seat but to no avail.

Meanwhile, institutional interest in Bitcoin is seemingly increasing with Bakkt having set another new daily volume record trading $42.5M in Bitcoin futures contracts on Nov. 28.

Source Cointelegraph

European AML Regulations Follow the US Path With a Six-Years’ Delay

In January 2020, the regulatory landscape for crypto businesses will completely change in the European Union in comparison with the last decade — and these changes will touch all those who store clients’ crypto funds or provide fiat-to-crypto exchange services, at minimum.

Not long ago, the Anti-Money Laundering regulations were extended to cover cryptocurrency custodian wallet service providers and crypto-to-fiat exchanges in the EU. The legislation known as the EU Fifth Anti-Money Laundering Directive entered into force on July 9, 2018, and shall be transposed into the national legislation of each EU member state by Jan. 10, 2020. Before that, cryptocurrencies, in most cases, fell outside of the EU regulatory regime. 

Related: Do Lawmakers Use AML as an Excuse to Centralize Crypto and Blockchain?

Much like the EU, the United States was also compelled to act on this emerging asset class when, in 2013, the Financial Crimes Enforcement Network, or FinCEN, for the first time introduced an interpretive guidance for cryptocurrency industry participants, mainly exchangers and administrators. Exchangers are persons or entities who engage as a business in the exchange of digital currency for real currency, whereas administrators are persons or entities that engage as a business in issuing or redeeming a digital currency.

As the EU member states transpose the new directive into their national legislation, it will already be over half a decade since cryptocurrency regulation came into force in the U.S. What should we learn from this long-standing experience? And what should we expect from the regulation of the EU market as compared to the U.S.?

On the same page

Studying both the EU and the U.S. cases, we can note the explicit resemblance of regulatory approaches. Both jurisdictions stress the significance of cryptocurrency regulation to combat money laundering and counter the financing of terrorism. Back in June, the G-20 held a meeting in Japan and underlined some concerns about crypto assets, stating:

“While crypto-assets do not pose a threat to global financial stability at this point, we remain vigilant to risks, including those related to consumer and investor protection, anti-money laundering (AML) and countering the financing of terrorism (CFT).”

As such, specific crypto service providers face the same requirements as traditional financial institutions in terms of authorization from a financial regulator, customer identification (KYC), ongoing account monitoring, recordkeeping and suspicious activity reporting.

Notably, EU member states are free to impose stricter anti-money laundering measures in their national legislation much like the U.S., where states are permitted to impose more stringent regulations as long as they do not conflict with U.S. federal law.

In this way, competent authorities in the EU and the U.S. can more closely monitor the use of cryptocurrency. It allows for the prevention of placing illicit money into the financial system and excludes concealing transfers with unlawful purposes because of the certain degree of anonymity associated with cryptocurrency. 

Nevertheless, both jurisdictions aim to make such monitoring balanced and proportional to safeguard the technical advances of fintech.

Some of the key differences

Definitions — Despite the EU and the U.S. following the same approach to regulating crypto, there are some differences, and they start from the definition. Crypto service providers obtain the status of “obliged entities” under the Fifth Anti-Money Laundering Directive, or 5AMLD, in the EU, which is equal to “covered financial institutions” in the U.S. — both definitions have the same purpose, which is to make crypto service providers comply with the established banking rules in each regulatory jurisdiction.

Focus of regulation — 5AMLD covers custodian wallet service providers and crypto-to-fiat exchanges, while the U.S. federal regulatory regime applies to providers exchanging or transmitting crypto regardless of fiat currency involvement. 

Legislative compliance — The U.S. has two levels of regulation: federal and state. Therefore, crypto service providers must ensure two levels of compliance. Interestingly, a crypto service provider may be exempt by local laws in some U.S. states. Comparably, this is not possible in the EU, where the legislation in each member state must be equal or stricter to 5AMLD provisions.

Data protection — The final distinction is the attitude toward data protection. In the EU, the General Data Protection Regulation applies to the processing of personal data collected for the purposes of AML/CFT under 5AMLD, which means that crypto exchanges and wallet providers are obliged to ensure appropriate measures to protect the information they collect on their customers. To date, no federal privacy or data collection regulation has been enacted in the U.S., although privacy laws have started to appear in some U.S. states.

Related: GDPR and Blockchain: Is the New EU Data Protection Regulation a Threat or an Incentive?

Beneficial ownership vs. customer due-diligence

Another important thing is the introduction of the beneficial ownership rule. In the EU, it requires obliged entities to collect information about the identity of the beneficial owners of its customers. 

Analogous to this, we have the Customer Due Diligence rule in the U.S., which requires financial institutions to collect the beneficial owner information on all legal entity customers. In fact, in the U.S., this rule does not cover crypto service providers directly. Nevertheless, crypto businesses usually consider the CDD rule as a part of their risk-based approach. This also helps to meet the expectations of financial partners.

Besides this, 5AMLD obliges EU member states to make information on beneficial owners available on state public registers, which should be interconnected on the EU level to facilitate cross-border cooperation and access to information by regulators and financial intelligence units. 

To the contrary, many in the U.S. have speculated that states will soon follow suit and create a national database that tracks the beneficial ownership of entities. Currently, there is only the optional FinCEN program under the USA PATRIOT Act’s Section 314(b), allowing financial institutions to share beneficial ownership information on customer entities among the interested parties, including other financial institutions and law enforcement, but exclusively for the purpose of money laundering and terrorism financing prevention. 

What can we learn from the U.S. experience?

Cryptocurrency has been regulated in the U.S. under existing money transmitter laws for six years now. Apart from FinCEN, other U.S. regulators like the Securities and Exchange Commission and the Commodities Futures Trading Commission have sought to bring crypto partially under their jurisdictions. 

As the market evolves, and as financial products built on top of this emerging asset class continue to innovate, the impetus to solve this regulatory overlap may become more pronounced. Regulation also gives a certain level of protection to customers, which extends trust to reliable service providers who seek to avail themselves of the regulated market.

We believe the regulation of crypto in the EU will lead to the same results of bringing greater adoption to the crypto market and facilitating the stability of the EU financial system. We also think that much like in U.S. states, we may see varying degrees of rigidity in regard to crypto service providers and the specifics of their regulation from one EU member state to another. 

The EU is catching up and becoming more harmonized, analogous to what happened after FinCEN provided initial guidance in the U.S. back in 2013, by broadening the definition of regulated institutions and bringing them under the umbrella of AML/CFT requirements. The main difference between the EU and the U.S. approaches lies in the scope of regulation. 5AMLD extends to custodian wallet service providers and crypto-to-fiat exchanges, while FinCEN covers crypto exchange and transmission activity regardless of fiat currency involvement. 

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Serhii Mokhniev is a Certified Anti-Money Laundering Specialist and regulatory-compliance expert specializing in cryptocurrency regulation and prevention of money laundering. He is currently a regulatory affairs counsel at CEX.IO

Source Cointelegraph

5 Crypto Exchanges Halt or Shut Services Amid Perceived Crackdown

At least five Chinese cryptocurrency exchanges have halted or chosen to terminate operations this month in response to a perceived redoubling of Beijing’s anti-crypto stance.

Exchange operator Bitsoda informed the public on Nov. 23 of its decision to terminate services; Akdex followed suit, announcing its decision to shut down on Nov. 24. 

Also on Nov. 24, Idax cited Chinese government policy as the basis for its decision to prevent domestic clients from using its service.

Likewise, with explicit reference to government policy, Btuex revealed on Nov. 25 that it would halt services immediately and reopen in the future for an overseas-only clientele. 

On Nov. 4, crypto exchange Biss had announced it was “actively cooperating” with investigations into its operations and planned to resume services as soon as possible. 

Since then, it has been reported that authorities had arrested 10 suspects connected with the exchange. While information surrounding the arrests remains piecemeal, reports claim that regulatory authorities found Biss’ services to be in violation of Chinese capital controls.

Blockchain, not Bitcoin

With exchanges and operators falling into line, Bloomberg has this week published a report claiming that these recent developments represent “the biggest cleanup of the sector” since Beijing’s historic rout in Sept. 2017.

Citing data from blockchain intelligence firm Chainalysis, Bloomberg’s report notes that 20 of the top 50 global crypto exchanges are based in the Asia-Pacific region, accounting for an estimated 40% of Bitcoin transactions in the first half of 2019. Within Asia-Pacific, Chainalysis’ data indicates that the lion’s share of exchanges are based in China.

Beijing’s reaffirmation of its hardline stance has been interpreted as a bid to prevent what it perceives to be the speculative excesses associated with crypto trading, which it purportedly fears could increase following a major public endorsement of blockchain by President Xi Jinping in October. State media has since cautioned the public to remain “rational.”

Clarity or clampdown?

Katie Talati, head of research at Los Angeles-based asset manager Arca, told reporters:

“It appears that, like everything else within their borders, China feels it needs to have tighter controls on the crypto market including exchanges, miners and asset issuers.”

Talati nonetheless argued that Beijing’s position is evolving in a similar direction to that of Japan, where “tight and clear regulations for crypto businesses” are being established.

Local traders appear nervous nonetheless: as Bloomberg notes, wallet app Imtoken reported a twofold increase in Tether (USDT) transactions among its 10 million users on Nov. 22, purportedly in response to fresh warnings from Chinese regulators. USDT is commonly used as a vehicle to move between digital and fiat currencies.

Binance’s official account on major Chinese microblogging website Weibo was suspended in mid-November, as well as that of the Tron Foundation —  the development organization behind the 11th biggest cryptocurrency Tron (TRX).

As Cointelegraph reported, crypto exchange IDAX has today suspended deposits and withdrawals generally after its CEO allegedly disappeared. 

In the wake of its announcement it would cease to serve Chinese users, the platform had earlier this week warned it was seeing a run on withdrawals. It has now further revealed that the whereabouts of IDAX Global CEO Lei Guorong are unknown and that it has — as a precautionary measure — locked-down its cold storage wallet to protect user funds.

Source Cointelegraph