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The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury has sanctioned a crypto operator allegedly connected to the terrorist group Hamas.

In an Oct. 18 notice, OFAC announced sanctions for Hamas operatives and financial facilitators following the organization’s attack on Israel. The entities added to OFAC’s list of specially designated nationals included a “Gaza-based virtual currency exchange and its operator” with a Bitcoin (BTC) wallet address.

According to the Treasury Department, the sanctions were aimed at “root[ing] out Hamas’s sources of revenue” following an Oct. 7 attack which resulted in the deaths of many Israelis. The exchange using digital currency, named Buy Cash Money and Money Transfer Company, is operated by Gaza resident Khan Yunis — Treasury alleged both the firm and Yunis were “linked to Hamas”. Ahmed M.M. Alaqad, the owner of the business, was also named in the sanctions.

“We will continue to take all steps necessary to deny Hamas terrorists the ability to raise and use funds to carry out atrocities and terrorize the people of Israel,” said Treasury Secretary Janet Yelln. “That includes by imposing sanctions and coordinating with allies and partners to track, freeze, and seize any Hamas-related assets in their jurisdictions.”

Today, Treasury imposed sanctions on ten key Hamas terrorist group members, operatives, and financial facilitators in Gaza and elsewhere as part of a continuous effort by the U.S. to root out Hamas’s sources of revenue. https://t.co/KZtF6K60id

— Treasury Department (@USTreasury) October 18, 2023

Blockchain analytics firm Elliptic reported on Oct. 18 that other terrorist groups had used the money transfer company, with more than $25 million in BTC and Tether (USDT) moving through the firm since 2015. In addition to Hamas, the entities allegedly connected to the firm included an al-Qaeda affiliate and ISIS (Islamic State of Iraq and Syria).

Israel formally declared war against Hamas following the terrorist attack, leading to bombardments over Gaza and creating a crisis as most residents were unable to escape. At the time of publication, U.S President Joe Biden was in Israel meeting with officials, who reportedly agreed to allow humanitarian assistance into Gaza from Egypt.

The U.S. Treasury has often used sanctions as a tool to weaken financial support for entities alleged to have been involved in terrorism or other illicit activities. On Oct. 3, Treasury announced sanctions against crypto wallets tied to China-based chemical manufacturers in parallel with an indictment from the Justice Department over the production of the drug fentanyl.

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Michelle Yeoh has stiff competition for her deserved Oscar as the multiverse-hopping Evelyn in one of last year’s hottest movies. Web3 firms are also creating an “everything bagel multiverse,” attempting to be all things to all people, all the time. But, the reality is that we humans have simpler tastes. 

Humans have developed the intelligence to hold onto many facts at the same time, even when some of those facts can appear to conflict with one another. However, as much as we love to consider ourselves rational, fact-based creatures, we tend to respond more to our own base needs than cold, hard facts. Gallup research shows that up to 70% of variance in consumer engagement is driven by emotional rather than rational factors. 

However, our emotional psychology also works differently than when processing facts. Humans are far more effective in handling our sentiments when we experience them in a way that’s comprehensible and digestible. If we describe something as an “emotional rollercoaster,” it’s because it’s a short-lived exception to our relatively stable norms. 

Companies that excel at branding understand this need for consistency and stability and know how to leverage it for maximum effect. Even the greenest startup founders know that most well-used branding practices are rooted in the principles of psychology.

Yet, even the most experienced companies in the Web3 space still frequently fail to leverage the real value of this knowledge. There’s a difference between understanding how to use branding and marketing messages to invoke a particular response and doing it in a way that’s coherent and consistent enough to leave a lasting impact. 

Why consistency matters

Consistency is key to branding. Or more specifically, a lack of consistency is what kills a brand. Household-name brands gain recognition through endless, timeless repetition. Although the style, tone or delivery of the story may change over time, we see the same underlying messages with the same promise delivered consistently — every single time. In this way, the brand becomes recognizable and memorable. 

Eventually, the brand stands apart from the competition in people’s minds. Rather than a cola-flavored beverage, you automatically ask for a Coke. Rather than searching online, you Google. When you see an unrealistic image, you’ll wonder if it was Photoshopped. 

Not a product, a brand. Not even a noun or name — instead, a verb. 

At this point, the relationship is one of unrivaled trust and credibility. The mind doesn’t hesitate — the brand is the product. It’s the go-to choice in any scenario because it’s known, trusted and valued for its ability to deliver. 

Consistency isn’t just about logos, colors and the right words. It’s about invoking the same emotional response every time. In creating that response, the brand isn’t necessarily looking for a sale or even generating a lead. It’s about leaving an indelible impression on the brain. It’s a brand in its more literal meaning — a mark.

Think of Volvo and its unwavering messages of safety and security. Those messages aren’t pitched to little kids who dream of becoming F1 drivers. They aren’t pitched to newbie drivers trying to find the biggest engine on the tiniest budget. But when those drivers finally need the safest vehicle on the road to transport their own precious cargo, Volvo is a go-to brand. It was alwaysthere. 

The brand became synonymous with safety, and that’s the goal. 

How Web3 is failing to deliver

With the benefit of 25 years of branding experience and a decade in blockchain, I’ve observed that most Web3 firms aren’t delivering on brand consistency. My firm recently published some proprietary research analyzing brand data from centralized crypto exchanges. 

Based on an analysis of the ten top-performing CEXs, we found that: 

The key messages across all crypto exchanges can be consolidated into nine core narratives.

Despite the relatively small number of narratives, all exchanges offer emotionally competing messages to customers. 

Exchanges with more content tended to have less overall brand consistency.

Missed opportunities

The impact of these conflicting messages on the lizard brain of the everyday user can’t be understated. If your business sells itself on being the most sophisticated exchange with the most features and boasts the simplest interface and user experience, then you’re damaging your chances of becoming known for either of those things. Neither stands out against the conflicting message of the other. Your potential user is already lost. 

“Simply and technically sophisticated” might sound like good jargon for a website or investor deck, but when you see it as a would-be user, your subconscious brain does a double-take and believes it to be nonsense. 

These conflicts also invoke mistrust. One example of this is when there are messages of security and compliance alongside talk of permissionless, open financial systems. The security and compliance messages play to a need for safety, but that clashes with the idea of permissionless, pseudonymous participation. Thus, those users who prioritize safety become alienated, and their trust in the security of the platform becomes eroded. 

Conversely, more libertarian-minded audience members seeking permissionless freedom will associate “compliance” with Big Brother-style surveillance. 

Ultimately, these conflicts compromise the ability to generate any substantial return on investment from marketing spend. Imagine if Volvo decided to add the concept of speed to its brand messaging, invoking the idea that its cars are designed for thrill-seekers. What would that do to the company’s reputation for safety and the value accumulated in that reputation?

Brands live and die by their ability to stay on-brand. It’s clear that the crypto exchange business has plenty of work ahead to establish sustainable brands that consistently deliver. Choosing a realistic, appealing brand promise to a specific audience can improve the ability to endure difficult markets and strengthen the chances of outlasting the competition.

German is co-founder and chief relevance officer of THE RELEVANCE HOUSE, a branding and marketing agency focused on blockchain and Web3.

This article was published through Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.

The Basel Committee on Banking Supervision of the Bank for International Settlements (BIS) released a consultation paper on Oct. 17, proposing to make it compulsory for banks to disclose their crypto exposure.

The Basel Committee comprises central banks and financial authorities from 28 jurisdictions and is a forum for regulatory cooperation on banking supervisory matters. The latest consultation paper is based on the disclosure guidelines in the final prudential standard on how banks should handle their exposure to crypto assets released in December 2022.

The consultation paper aims to set a standardized “disclosure table and set of templates for banks’ crypto-asset exposures,” with a proposed implementation date of Jan. 1, 2025. The Basel Committee has opened the proposal for public comment until Jan. 31, 2024, after which the results will be published on its website.

Under the new proposed regulations, banks would be required to provide quantitative data on exposures to crypto assets and the corresponding capital and liquidity requirements. The banks would also be required to offer qualitative data on their activities linked to cryptocurrencies.

Additionally, the banks will be required to offer information on the accounting classifications of the exposures that they have to crypto assets along with the liabilities. The committee in its proposal noted that using a uniform disclosure format will encourage the application of market discipline and lessen information asymmetry between banks and market participants.

The Basel committee also reviewed the topic of crypto assets and bank exposure in June earlier this year. At the time, the committee didn’t delve deeply into the topic, mentioning only that they were focusing on permissionless blockchains as well as the eligibility criteria for "Group 1" stablecoins.

The BIS has been actively involved with crypto consultations and looking at the regulatory aspect of the decentralized technology. Earlier, in the first week of October, the BIS and a handful of European central banks were working to develop a system to track international flows of cryptocurrencies.

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A United States judge has approved an order requiring Genesis Global entities to produce certain documents in accordance with a subpoena requested by Terraform Labs.

In an Oct. 13 filing in U.S. District Court the Southern District of New York, Judge Jed Rakoff said Genesis would have 5 days — likely until Oct. 18 — to produce documents following a subpoena from Terraform. According to the filing, Genesis failed to provide records by Oct. 9 as was required by an Sept. 12 subpoena, though the order was unclear as to what documents the crypto firm was seeking.

Oct. 13 order from Judge Jed Rakoff. Source: Courtlistener

The order was part of the U.S. Securities and Exchange Commission’s (SEC) civil case against Terraform and co-founder and CEO Do Kwon first filed in February. Kwon is currently serving a four-month prison sentence in Montenegro for using falsified travel documents while the lawsuit against Terra continues in the United States.

U.S. regulators have alleged Terra and Kwon “misled and deceived investors” with claims about its algorithmic stablecoin Terra USD (UST). The collapse of Terraform Labs was one of the precipitating events in the crypto market crash of 2022, prior to the bankruptcies of FTX, BlockFi, Celsius Network, Voyager Digital, and others.

Genesis filed for bankruptcy protection in January, estimating its liabilities to be roughly $1 billion with $10 billion in assets at the time. Both the firm and cryptocurrency exchange Gemini have been the targets of a civil suit filed by the U.S. Securities and Exchange Commission in January. The regulator alleged the companies offered unregistered securities through Gemini’s Earn program.

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