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Lithuanian tax service’s first confiscated crypto sale nets $7.6M

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The Lithuanian government has reportedly sold a batch of cryptocurrency seized by local enforcement agencies.

The State Tax Inspectorate, or STI, the country’s tax authority, sold confiscated crypto assets worth 6.4 million euro ($7.6 million) and subsequently added the funds to the state budget.

According to an official announcement on Nov. 24, the seized crypto assets included major cryptocurrencies Bitcoin (BTC) and Ether (ETH) as well as privacy-focused altcoin Monero (XMR).

The STI said this is the first time that the agency has sold seized crypto for fiat. “The conversion of cryptocurrencies into euros took almost a day,” the authority noted.

Irina Gavrilova, the director of the STI’s tax arrears administration department, said, “The whole process was new for the tax administrator, from the takeover of the confiscated cryptocurrencies to their realization.” She said that it will be much easier for the agency to sell confiscated crypto assets in the future.

According to the announcement, the STI took over the confiscated funds in late February 2020. The authority did not specify how exactly the STI sold the seized assets but noted that the exchange process required the STI to create a crypto wallet in order to receive crypto from law enforcement agencies.



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Regulation

New York authorizes first Yen stablecoin operator in the US

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New York has given the first authorization to a stablecoin backed by the Japanese Yen to operate in the U.S.

Per a Dec. 29 announcement, the New York Department of Financial Services has granted Japanese firm GMO-Z.com a charter to handle U.S.D. and Yen-backed stablecoins in New York. 

Given New York’s status as a global center, the NYDFS is the most prominent state financial regulator in the U.S. It is also one of the most aggressive. A pass to operate in New York often opens up the rest of the country. 

GMO’s charter is as a limited liability trust company rather than a full bank, the principle difference being in authorization to handle deposits. While a stablecoin operator typically needs the ability to hold reserves of the pegged asset, GMO’s charter limits its rights to hold other kinds of deposits not central to its ability “to issue, administer, and redeem” its stablecoins. 

The right to issue such non-depository charters has been a bone of contention between state regulators like the NYDFS and national banking regulators in the U.S. 

GMO president and CEO Ken Nakamura said: “We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset.” 

The NYDFS recently made changes to its famous BitLicense, including a conditional format that buddies up newly licensed firms with existing licensees. The first conditional BitLicense went to PayPal, facilitating the launch of its new crypto services earlier this fall with the help of longstanding licensee Paxos.