BRUSSELS — Global finance regulators’ failure to impose sufficient rules on cryptocurrency could threaten the world’s financial stability, global risk body the Financial Stability Board has warned. Reviewing the rollout of a global framework for crypto rules, the FSB said there are “significant gaps and inconsistencies” in implementing the rules, which could “pose risks to financial stability and to the development of a resilient digital asset ecosystem.” On the regulation of stablecoins, which are virtual currencies pegged to real-world assets, the FSB said regulation is “lagging.” Because of the international, decentralized nature of financial technologies like crypto, having gaps in global rules is an issue as providers can go wherever the rules are the most lax, which “complicates oversight,” the review said. It added that global cooperation on regulating the currencies is “fragmented, inconsistent, and insufficient” to address their global nature. The FSB also flagged gaps in oversight of crypto service providers, saying supervision of “potentially higher risk activities, such as borrowing, lending, and margin trading, is often lacking” and enforcement can “lag behind regulatory development.” The review recommended that governments implement the global crypto framework fully. It also said they should “conduct an assessment of the scale and nature of cross-border crypto-asset activities into and out of their jurisdictions” at the “appropriate time.” Earlier this week, FSB chair Andrew Bailey warned G20 finance ministers and central bank governors that stablecoins are a potential area of vulnerability for the financial system.

The Czech government on Wednesday survived a no-confidence vote triggered by a bitcoin scandal involving a drug dealer that has thrown the country’s politics into turmoil. Some 98 out of 192 MPs present voted against an opposition motion to topple Prime Minister Petr Fiala’s government — which could have triggered a snap ballot just four months before the country is scheduled to vote in regular elections. By contrast, 94 MPs voted to bring down the government. The no-confidence motion followed a scandal that saw Czech Justice Minister Pavel Blažek from Fiala’s conservative Civic Democratic Party (ODS) resign last month after accepting a €40 million bitcoin donation to the ministry from a convicted drug dealer. The cryptocurrency was provided by Tomáš Jiřikovský, who according to the courts ran an illegal darknet market that had drugs for sale, and who had served time in prison for embezzlement, drug trafficking and illegal possession of weapons. Czech newspaper Deník N broke the news last week that police are investigating the donation. Blažek, whose embroilment in multiple scandals from pressuring judges to meeting a pro-Russian lobbyist earned him the moniker Don Pablo — a play on deceased Colombian drugs baron Pablo Escobar — claims everything he did was “ultra-legal” and that Jiřikovský had donated money as “a form of penance.” The bitcoin affair is likely to further boost the election prospects of the current populist frontrunner Andrej Babiš, leader of the opposition ANO party, who previously governed Czechia from 2017 to 2021. Recent polling shows ANO leading with 31.2 percent support while the governing Spolu (Together) coalition — of which ODS is a part — trails with 21.6 percent. Babiš has called the ODS “a criminal organization” and termed Fiala “the head of the mafia.” Eva Decroix, who has taken over as the new Czech justice minister, said her task will be to restore public trust in the ministry and to ensure the bitcoin scandal is thoroughly investigated. For the government to be overthrown, at least 101 MPs in the 200-seat lower house of parliament would be required to support the motion. The government has a fragile majority of 104 MPs. Fiala’s government has survived four votes of no confidence since it took power in 2021.

A Czech government scandal involving a drug-dealing dark web entrepreneur and millions of euros in bitcoin threatens to help populist opposition leader Andrej Babiš’s prospects in this fall’s parliamentary elections. Czech Justice Minister Pavel Blažek from Prime Minister Petr Fiala’s conservative Civic Democratic Party (ODS) resigned Friday in a scandal involving a €40 million bitcoin donation to the ministry — auctioned off by the institution in exchange for cash in a public auction — gifted by a convicted drug dealer. The cryptocurrency came from Tomáš Jiřikovský, who formerly ran an illegal darknet market that had drugs for sale, and served time in prison for embezzlement, drug trafficking and illegal possession of weapons. Czech newspaper Deník N broke the news last week that police are investigating the donation. Blažek, who is also known as Don Pablo in Czech political circles due to his previous scandals that included attending the party of a pro-Russian lobbyist or alleged corruption related to municipal apartments, said he acted legally, but quit because he didn’t want the current coalition to suffer. “It was so ultra-legal that it couldn’t be more legal,” said Blažek, adding that Jiřikovský might have donated bitcoin to the ministry as a “form of penance.” But the scandal is a boon for opposition election front-runner Babiš, the leader of the right-wing populist ANO party who previously governed Czechia between 2017 and 2021 — and it arrives at a critical moment. Though it is still leading, ANO has been slowly declining in polls over the last few weeks, while the Together (SPOLU) coalition has been rising. Political analyst Ladislav Mrklas from CEVRO Institute in Prague, said the opposition will try to use the scandal for political gain for weeks. “The whole affair broke out at a very inopportune time, just when it seemed that the government parties were finally gaining some ground and their support was starting to rise from the bottom,” he said, adding that it is a “major inconvenience” for the government. Petr Kaniok, from the international relations department of Masaryk University in Brno, said that the coalition managed to dampen the impact of the scandal by having the minister resign. “To put it bluntly: no body, no crime. If Blažek is no longer in government, the opposition will struggle to attack it,” said Kaniok, adding that he does not expect the case to have a major effect — also because Blažek has long been a polarizing figure. Babiš was quick to accuse Blažek and ODS of money laundering and called for the government to resign. “Are you taking people for a joke, Mr. Prime Minister? You were literally laundering drug money! … This is grounds for the whole government to fall! … You’re the most corrupt government this country has ever had,” Babiš wrote in a post on X. The police and the National Headquarters for Combating Organized Crime are now investigating whether the donation came from laundered money.

LONDON — A new HBO documentary identifies Canadian developer Peter Todd as Satoshi Nakamoto, the pseudonymous founder of cryptocurrency bitcoin. Cullen Hoback, the award-winning filmmaker behind the documentary, comes to the conclusion by stitching together old clues and new ones, and then confronting both Todd and Blockstream founder Adam Back, another key Satoshi suspect, with the evidence. “It seems like you had these deep insights into bitcoin at the time?” Hoback puts to Todd in the film’s finale. “Well, yeah, I’m Satoshi Nakamoto,” Todd replies. The admission, however, is not necessarily a smoking gun. Todd, who is a vocal backer of Ukraine and Israel on his X feed, is known to invoke the claim “I am Satoshi” as an expression of solidarity with the creator’s bid for privacy. In an email to CoinDesk prior to the documentary’s release, Todd reportedly denied he was the bitcoin creator: “Of course I’m not Satoshi,” he said. If Todd is widely accepted as bitcoin’s creator, the revelation would end more than a decade of speculation over the identity of a person whose work spawned a global, multibillion-dollar craze for digital currencies: a mania that has pushed back the frontiers of finance but also enabled widespread fraud and other illicit activities. Todd is not unknown to enthusiasts of the stateless money system. As a longstanding bitcoin core developer known for communicating publicly with “Satoshi” before his disappearance from crypto forums in 2010, his name has always carried weight in the community. But he was rarely considered a prime suspect. A 39-year-old graduate of Ontario College of Art and Design in Toronto, Todd would have been 23 when the famous bitcoin white paper that first laid out the vision for the decentralized money system was being completed. Todd previously told a podcast he was about 15 years old when he first started communicating with key crypto influencers, known as the cypherpunks. “In investigations like these, digital forensics can only take you so far; they’re like a compass,” Hoback told POLITICO before the documentary aired. “Real answers can only be found offline.” “Todd’s game theory is next level,” Hoback said. “Just consider, in the run-up to release: he’s in the trailer, there’s a multi-million dollar betting pool, hundreds of thousands of tweets about the film and I didn’t see anyone suggest this possibility. He’s a fucking genius.” The naming of Todd will be a blow to crypto-based prediction markets, which had until Monday identified the late Len Sassaman, an American information privacy advocate, as the favorite.