Creeping Crypto: Regulators Adapt to What People Have Been Doing
November 28, 2024
This write up is the work of a humanoid who admits he is a dinobaby; that is, deadwood too old to employ. By the way, the “dinobaby” lingo allegedly emerged from IBM during its housecleaning event years ago. The art, however, is from MidJourney and definitely AI fakery.
I don’t want to make a big deal of the “real” news in “Apple Pay, Cash App, and Other Digital Wallets Will Be Regulated More Like Banks Now.” The write up reports:
Major digital payment providers will soon be subject to bank-like supervision from the US Consumer Financial Protection Bureau (CFPB). On Thursday, the CFPB issued a final rule that will regulate digital payment apps that process over 50 million transactions each year, covering services like Apple Pay, Google Wallet, PayPal, Cash App, and others. The new rule is meant to ensure digital payment providers adhere to the same laws as credit unions and large banks. It will give the CFPB the authority to oversee their compliance with federal laws surrounding privacy, fraud, and other rules through “proactive examinations.”
Some governments move slowly and others not at all. This “adjustment” reminds me that the world of digital payments, particularly the use of crypto currency, is moving a bit faster than the regulators mentioned in the Verge’s story. (Wow, that log strikes me as weird.)
I want to point out that in the last few days, Telegram turned on its Messenger app’s linkage to the CryptoCasino operation. Here’s a snapshot of what Telegram is engineering. (I drafted the following text for a couple of the law enforcement professionals who pay some attention to my research team’s work related to Telegram, the The Open Network Foundation, and TON Social. (If there are goods in the following summary, let me know. I feel like the Lone Ranger when I try to figure out what the Russia-flavored online messaging outfit is up to.)
Here’s the snapshot I provided as background information:
CryptoCasino.com went live earlier this week. Telegram provides access to the service owned by Armchair Online BV is an experienced online gaming firm based in Willemstad, Curaçao, Netherlands Antilles. Information about the “organization” is sparse.
A Telegram user can access more than 5,000 games via the Telegram Messenger application. No additional registration is required. Plus Telegram’s platform provides the integration of the multiple steps required to engage in online gambling. This service illustrates the “new” Telegram which shifts from messaging functionality to programmatic services running on the distributed Telegram platform.
The gambling games range from poker to crypto horse racing. Live dealer sessions are available to VIP members who pay for additional privileges. The system uses a new $CASINO coin. This coin is available at a low rate and includes the same “bet on this coin’s value” functions as other Telegram “click to earn” games.
Why would Telegram offer a comprehensive online gambling services? The answer is, in the opinion of the Arnold research group is, “Revenue.” Telegram had previously agreed to team up with Ku Group, an organization indicted in the US for money laundering.Organizations identified by Telegram as being involved in this new initiative are:
- Altcoin Edge
- AvatarUX
- Betby
- Coinbase
- Covey
- Decubate
- Evolution Gaming
- Fast Track
- Fireblocks
- Hacksaw
- MetaMask
- MyAffiliates
- Oddin.ggg
- Pragmatic Play
- Push Gaming
- Spribe
- Trust Wallet
- Wallet Connect
- Zealy
Users the Telegram or CryptoCasino.com Web site are blocked from accessing the site from the US for most users. The work around is to use a VPN (virtual private network) which provides service from Malta, Spain, or a similar nation state. Telegram continues with its effort to engage in high-profit activities and building out the Telegram platform as an application programming interface for an unregulated financial system. Telegram is, intentionally or unintentionally, furthering the effort to reduce or shift global financial markets from the US dollar to crypto currency.
The reason I mention this Telegram development is three fold:
First, it illustrates what I call the “high frequency” deals Telegram is doing even though its founder is in France under the supervision of French authorities. Services which could facilitate money laundering are examples of a CEO with a healthy sense of disdain for laws designed to regulate mere mortals. (Telegram’s founder has allegedly sired more than 100 children. He is offering free in vitro fertilization for those qualified to extend his genetic superbness.)
Second, the purpose of the CryptoCasino in Telegram is to make it really easy for about one billion people to engage in activities which are at present somewhat challenging for investigators to track in real time. Telegram games like the more than 5,000 in the CryptoCasino deal include VIP (very important person) memberships, speculative bets on $Casino coins, and options for moving crypto through multiple wallets. Tracking transactions in one wallet can be done. But multiple wallets activated in short time cycles can make the time and resources budget dwindle quickly.
Third, regulators are likely to struggle to develop rules, regulations, and guidelines able to deal with the array of crypto-ized traditional financial services Telegram explained at its November 2024 Gateway Conference. Other than Group I-B what security centric firm attended the event in Dubai?
So, the Verge’s article provides some information about regulatory velocity. Now the more significant and difficult regulatory work has to be accelerated. In a race between the tortoise and the hare? If you want to bet on the winner, head to the Telegram CryptoCasino service, become a VIP, and interact with one of the 24×7 customer support staff. It is probable that the tortoise and the hare bet can be accommodated.
Stephen E Arnold, November 28, 2024
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