Crypto.com gets EU nod on MiCA license  

US federal prosecutors have rebutted claims they suppressed evidence in their case against the co-founders of the crypto mixing service Samourai Wallet, arguing their disclosure of a conversation with Treasury Department staff was made within the required timeframes. In a May 9 letter to a Manhattan federal court, prosecutors opposed a request for a hearing, claiming they handed over “all known substantive communications” between them and the Treasury’s Financial Crimes Enforcement Network (FinCEN) regarding Samourai “months in advance of pretrial motions and trial.”“The defendants will have seven months to make use of the information before trial,” they wrote. “Nothing more is warranted.”On May 5, Samourai co-founders Keonne Rodriguez and William Hill asked the court for a hearing, claiming that prosecutors were late to disclose that FinCEN representatives told them six months before they charged the pair that under the agency’s guidance, the service “would not qualify as a ‘Money Services Business’ requiring a FinCEN license.”However, prosecutors still charged the pair in February 2024 with conspiracy to operate an unlicensed money transmitting business and money laundering conspiracy, unsealing the charges and arresting the pair in April that year. They have both pleaded not guilty.In their letter, prosecutors argued they “acted in good faith” in disclosing the “contents of this informal conversation” between them and Kevin O’Connor, the chief of FinCEN’s Virtual Assets and Emerging Technology Section in the Enforcement and Compliance Division, and Policy Division staffer Lorena Valente.A highlighted excerpt of the prosecutors’ letter arguing that they disclosed a discussion with FinCEN on time and the discussion was an “informal conversation.” Source: PACERThey claimed O’Connor and Valente’s comments were “their individual, informal, and caveated opinion” on whether Samourai would need to register as a money transmitter under FinCEN regulations.FinCEN “did not have a sense” of broaching SamouraiThe prosecutor’s letter noted that an email from one of the prosecutors summarizing the August 2023 call with FinCEN said that because Samourai doesn’t take custody of the crypto, it “would strongly suggest that Samourai is NOT acting as an MSB [money services business].”However, it noted FinCEN staff “did not have a sense of what FinCEN would decide if this question were presented to their FinCEN policy committee.”An excerpt of an email from prosecutor Andrew Chan said FinCEN “did not have a sense” of what it would decide on Samourai. Source: CourtListenerSamourai’s lawyers had claimed that the call showed Rodriguez and Hill “were not money transmitters under FinCEN’s guidance” and that they “could not possibly be prosecuted for not having a license.”The Samourai co-founders had bid to dismiss the case in April, pointing to Deputy Attorney General Todd Blanche’s memo released that month saying the Justice Department wouldn’t prosecute crypto mixers for “unwitting violations of regulations.” In their letter, prosecutors addressed the memo, arguing the court “should not consider” it, as the memo states it “may not be relied upon to create any right or benefit” against the US or its departments.Legal Panel: XRP win leaves Ripple a ‘bad actor’ with no crypto legal precedent set 

Censorship-resistant “dark stablecoins” could come in increasing demand as governments tighten their oversight of the industry. Stablecoins have been used for various groups to store assets due to a lack of government interference; however, with regulations pending, that could soon change, Ki Young Ju, CEO of crypto analytics firm CryptoQuant, said in a May 11 X post.“Soon, any stablecoin issued by a country could face strict govt regulation, similar to traditional banks. Transfers might automatically trigger tax collection through smart contracts, and wallets could be frozen or require paperwork based on government rules,” he said.“People who used stablecoins for big international transfers might start looking for censorship-resistant dark stablecoins instead.”On the heels of US President Donald Trump’s crypto-friendly administration assuming power earlier this year, lawmakers are weighing stablecoin legislation, which seeks to regulate US stablecoins, ensuring their legal use for payments. The European Union has already brought in its Markets in Crypto-Assets (MiCA) regulation, which, among other measures, mandates that stablecoins be regulated and transparent.Source: Ki Young JuJu speculates that a dark or private stablecoin could be created as an algorithmic stablecoin, with the value maintained through algorithmic mechanisms rather than being pegged to an external asset like gold, which makes it susceptible to interference from authorities. “One possible example could be a decentralized stablecoin that follows the price of regulated coins like USDC using data oracles like Chainlink,” he said.Another way would be stablecoins issued by countries that don’t censor financial transactions, or, for example, if Tether chooses not to comply with US government regulations in the future.“USDT itself used to be considered a censorship-resistant stablecoin. If Tether chooses not to comply with US government regulations under a future Trump administration, it could become a dark stablecoin in an increasingly censored internet economy,” Ju said.Privacy technology in crypto is already being usedZcash (ZEC) and Monero (XMR) — while they aren’t stablecoins —already shield transactions and allow users to send and receive funds without revealing their transaction data on the blockchain.Related: Russia finance ministry official floats country making own stablecoins: ReportSeveral projects are also working on using similar technology for stablecoins, such as Zephyr Protocol, a Monero fork that hides transactions from being revealed on the blockchain. PARScoin also hides user identities, transaction values, and links to past transactions.The market cap of US dollar-denominated stablecoins has continued to grow, crossing $230 billion in April, a report from investment banking giant Citigroup found. That’s an increase of 54% since last year, with Tether (USDT) and USDC (USDC) dominating 90% of the market.Meanwhile, total stablecoin volumes hit $27.6 trillion in 2024, surpassing the combined volumes of Visa and Mastercard by 7.7%. Magazine: Ridiculous ‘Chinese Mint’ crypto scam, Japan dives into stablecoins: Asia Express

Tinian, a small island in the US territory of the Northern Mariana Islands, could get a second chance at launching a stablecoin after the territory’s Senate voted to override the governor’s earlier veto of its stablecoin bill.On May 9, the Northern Mariana Islands Senate voted 7-1 to override Governor Arnold Palacios’ April 11 veto of the bill, which would allow the Tinian local government to issue licenses to internet casinos and includes a provision for the Tinian treasurer to issue, manage and redeem a “Tinian Stable Token.” The bill will now head to the 20-member Northern Mariana Islands House, which will need a two-thirds majority vote to override the veto and pass the bill into law.If the House is quick to pass the bill, the Tinian government could be in the lead for the first US public entity to issue a stablecoin. It’s in a race against the state of Wyoming, which is aiming to issue a stablecoin by July.Tinian is governed by the local government, the Municipality of Tinian and Aguiguan, and is one of four municipalities in the Commonwealth of the Northern Mariana Islands, a small US territory in the Pacific north of Guam. Tinian has just over 2,000 residents, and its economy heavily relies on tourism.Senators push “much-needed” bill despite “deep concerns” Governor Palacios said in his letter last month that he vetoed the bill as it “presents several legal issues and may be unconstitutional” and would regulate an activity that could not “be clearly restricted” to Tinian.Democrat Senator Celina Babauta, the only one to vote against overriding the veto, said before the vote that she had “deep concerns with respect to the lack of resources, the lack of manpower” to enforce the gambling law and police use of the stablecoin.“We are restricted by federal statutes and must comply with that,” she added.Senator Celina Babauta (right) delivers remarks at a Senate hearing alongside Senator Karl King-Nabors (middle). Source: YouTube“We struggle with trying to find creative and innovative ways to diversify our economy and our industries,” Babauta said. “I don’t believe that gambling is the only thing that we can be looking forward to every single time there’s an investor that comes in.”However, Republican Senator Karl King-Nabors, who represents Tinian and co-authored the bill, said it was “a far more stringent and efficient way to oversee the online gaming aspect.”“This stablecoin is tracked through software, and if anything, it allows for more transparency when it comes to the Tinian Casino Gaming Control Commission,” he added.King-Nabors said the bill aligned with “much-needed” economic diversification measures, as the local economy was yet to bounce back from a COVID-19 pandemic-induced slump.“This legislation stands at a time where we’re going through so much economic hardships,” King-Nabors added. “I find it difficult that we’re constantly having to step over obstacles when we’re trying to incentivize and look for ways to bring in revenue that don’t affect our environment, that don’t require a brick and mortar, that don’t impact our land.”Tinian bids for fully-backed stablecoinRepublican Senator for Tinian, Jude Hofschneider, led the introduction of the bill in February, which aims to amend a local Tinian law to allow internet-only casino licenses, along with allowing the island to launch a fully backed US dollar-pegged stablecoin.A four-member Tinian delegation to the Marianas legislature, which includes Hofschneider and King-Nabors, had passed the bill to Governor Palacios in a unanimous vote on March 12.Statements shared with Cointelegraph in March said the stablecoin is called the Marianas US Dollar (MUSD) and will be backed by cash and US Treasury bills held in reserve by the Tinian Municipal Treasury.The Tinian government chose tech services firm Marianas Rai Corporation, based in the Northern Mariana Islands’ capital of Saipan, as the exclusive infrastructure provider to issue and redeem MUSD.MUSD is built on the eCash blockchain, a network that rebranded from Bitcoin Cash ABC in 2021 and is a fork of Bitcoin Cash, a blockchain that split off from Bitcoin in 2017.Related: Senator Tim Scott slams partisan politics for failed stablecoin bill Marianas Rai Corp. co-founder and technology chief Vin Armani told Cointelegraph in April that it was “in active discussions with potential partners” about launching the token after Governor Palacios’ veto and was “poised to act quickly” as US Congress is looking to pass stablecoin laws.In the US, one stablecoin bill, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, has since stalled in Congress after Senate Democrats pulled support for the bill due to concerns about President Donald Trump’s sprawling crypto ventures.Another stablecoin-regulating bill in the House, the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act, has also lost Democrat support due to Trump’s crypto tie-ups.Legal Panel: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight