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The European Parliament approved the world’s first legislation aimed at regulating artificial intelligence (AI). Bitcoin Fog founder Roman Sterlingov was convicted of money laundering, and major financial institutions completed a pilot test on the Canton Network blockchain.
European Parliament passes landmark AI Act
The European Parliament granted final approval to the European Union’s AI law — the EU AI Act — on March 14, which marks one of the world’s first set of comprehensive AI regulations.
The EU AI Act will govern the bloc of 27 member states to ensure that “AI is trustworthy, safe and respects EU fundamental rights while supporting innovation,” according to the EU Parliament’s website.
It places machine learning models into four categories based on the risk they pose to society, with high-risk models subject to the most restrictive rules.
According to the European Commission’s website, “unacceptable risk” is the top category that bans “all AI systems considered a clear threat to the safety, livelihoods and rights of people will be banned, from social scoring by governments to toys using voice assistance that encourages dangerous behavior.”
Bitcoin Fog founder convicted of money laundering
Roman Sterlingov, founder of the crypto mixing service Bitcoin Fog, was found guilty in the United States of money laundering, money laundering conspiracy, operating an unlicensed money-transmitting business and violations of the D.C. Money Transmitters Act.
The charges total to a maximum prison sentence of 50 years, and sentencing is set for July 15. Sterlingov’s attorney, Tok Ekeland, said in a March 12 X post that his team would appeal.
According to evidence in the trail, Sterlingov operated Bitcoin Fog from October 2011 to April 2021, which was a money laundering service for “criminals seeking to hide their illicit proceeds from law enforcement,” according to the U.S. Department of Justice (DOJ).
The service moved over 1.2 million Bitcoin
BTC $72,995 over that time — worth $400 million at the time of the transactions. The DOJ said the bulk of cryptocurrency came from darknet marketplaces tied to narcotics, computer fraud abuse and identity theft.
Sterlingov had argued he was a user of the service, not its operator. The DOJ said the “vast majority” of crypto deposited to his crypto exchange accounts came from “Bitcoin clusters” associated with Bitcoin Fog.
The jury granted asset forfeiture for seized Bitcoin Fog funds, including 1,354 BTC held in a Bitcoin Fog wallet and nearly $350,000 in various cryptocurrencies held in a seized Kraken account.
Banking participants join blockchain pilot
Traditional finance’s embrace of blockchain technology appears to be warming, as 155 participants from 45 major organizations participated in a pilot program on the Canton Network. Some of the participants included Cboe Global Markets, Goldman Sachs and BNY Mellon.
As Bloomberg reported, institutional investors participated in more than 350 simulated transactions on the Canton blockchain in areas such as tokenized assets, fund registry, digital cash, securities lending and margin management. Canton is an interoperable blockchain launched by Digital Asset Holdings in May 2023.
“Over a four-day period, participants were invited to try 22 dApps comprising five fund registries, five cash registries, three bond registries, three trading, four margin, and two financing apps, to exchange tokenized securities, money market funds, and deposits across applications,” Canton Network said.
The news comes as more financial institutions dip their toes into blockchain and crypto technology. In February, the Hong Kong subsidiary of Swiss bank UBS tokenized an options call warrant of Chinese smartphone company Xiaomi’s stock on Ethereum.
