DoJ charges pair over China-linked attempt to build semi-autonomous crypto haven on nuked Pacific atoll
- Reference: 1662615011
- News link: https://www.theregister.co.uk/2022/09/08/doj_rongelap_atoll_crypto_charges/
- Source link:
The atoll’s thousand-strong populace was not told of the high-yield thermonuclear tests code-named Castle Bravo nor warned when radiation reached their home. Many fell sick before the US evacuated residents to a nearby atoll. Residents were allowed to return a few years later when they experienced high rates of radiation-related illnesses.
Rongelap is now part of the Republic of the Marshall Islands which has fought for compensation and justice for the atoll’s residents. That struggle is just about the only reason anyone outside the Marshall Islands pays attention to Rongelap.
[1]
But last week the US Department of Justice (DoJ) [2]unsealed an indictment that alleges the atoll has been of interest for odd reasons: a China-linked scheme to create a semi-autonomous region that would be a haven for digital dealings.
[3]
[4]
The [5]indictment alleges that Marshall Islands passport holders, Cary Yan and Gina Zhou, proposed that Rongelap be established as a “digital special economic zone” that would attract foreign business by “lowering or eliminating taxation and relaxing immigration regulations.”
It's said that the pair promoted the idea at a conference in 2018 and a few news outlets picked up on that plan and suggested Rongelap could become “the new Hong Kong.”
[6]
(For those who don't know, the US and the Marshall Islands have [7]deep ties for historical reasons, hence the Feds' involvement here.)
The International Monetary Fund (IMF) noticed the alleged plan and disapproved of it. In a May 2021 [8]publication [PDF] the IMF noted the proposal to create a digital economic zone on Rongelap and characterized it as “envisioned to focus on virtual means of exchange, including virtual assets.”
The IMF did not like the idea at all, suggesting economic benefits would accrue mostly to offshore entities and “generate a host of new risks.
[9]
“The planned combination of a tax-exempt zone targeting primarily (if not exclusively) non-resident entities with no physical presence in the jurisdiction, could prove highly susceptible to illicit financial flows and activity, while the proposed legislation – as currently stands – describes no mitigating solutions, such as preventive measures and meaningful oversight mechanisms.”
The IMF also opined that the Marshall Islands lacked the laws, institutions, and personnel to effectively oversee the digital economic zone.
[10]Huawei dangles developer incentives to sell Harmony OS around the world
[11]Tonga's submarine cable reconnects to the world
[12]US Air Force announces plan to assassinate molluscs with hypersonic missile
Which may be why, according to the DoJ, Yan and Zhou allegedly bribed government officials and legislators to advance their scheme to create a digital economic zone.
The DoJ alleges the pair sourced the funds for illegal payments to legislators and officials “from China and elsewhere”.
And the payments are alleged to have worked as in 2020 the Marshall Islands government passed a bill to allow the establishment of the Rongelap Atoll Special Administrative Region. Nothing seems to have come of the plan since, meaning the world has been spared an unusually radioactive tax-free crypto haven.
Yan and Zhou have been charged with conspiring to, and breaching, the USA’s Foreign Corrupt Practices Act. The pair also face charges of actual and planned money laundering.
News of the claims comes as China increasingly pushes into the Pacific with offers to [13]connect and secure small island nations. Western nations have tried to combat such offers with pledges of extensive assistance. Australia even [14]helped a local telco to buy the region’s biggest mobile carrier to ensure it did not fall into Chinese hands. ®
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[1] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/cybercrime&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Yxm9PBDWbHgW5Czd9wA07QAAABg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[2] https://www.justice.gov/usao-sdny/pr/us-attorney-announces-extradition-two-defendants-charged-bribing-high-level-officials
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/cybercrime&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Yxm9PBDWbHgW5Czd9wA07QAAABg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/cybercrime&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Yxm9PBDWbHgW5Czd9wA07QAAABg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.justice.gov/usao-sdny/press-release/file/1532731/download
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/cybercrime&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Yxm9PBDWbHgW5Czd9wA07QAAABg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://www.state.gov/u-s-relations-with-marshall-islands/
[8] https://www.imf.org/en/Publications/CR/Issues/2021/05/26/Republic-of-the-Marshall-Islands-2021-Article-IV-Consultation-Press-Release-Staff-Report-and-50177
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/cybercrime&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Yxm9PBDWbHgW5Czd9wA07QAAABg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[10] https://www.theregister.com/2022/08/22/huawei_aims_harmony_os_at/
[11] https://www.theregister.com/2022/02/22/tonga_cable_reconnected/
[12] https://www.theregister.com/2021/06/22/usaf_snail_clam_missile_plan/
[13] https://www.theregister.com/2022/05/27/china_south_pacific_tech_assistance/
[14] https://www.theregister.com/2021/10/27/china_telecom_booted_out_of/
[15] https://whitepapers.theregister.com/
Re: "offers to connect and secure small island nations"
I imagine the security offered is much like the security the US would offer such places - the threat that a warship will come if there's trouble not one permanently stationed there.
Aside from havng NUKED THE Island, Murica owns everything right... except radiation?
IS this any different from the way lobbyists operate?
"Which may be why, according to the DoJ, Yan and Zhou allegedly bribed government officials and legislators to advance their scheme to create a digital economic zone.
The DoJ alleges the pair sourced the funds for illegal payments to legislators and officials “from China and elsewhere”.
And the payments are alleged to have worked as in 2020 the Marshall Islands government passed a bill to allow the establishment of the Rongelap Atoll Special Administrative Region, although nothing seems to have come of the plan since.
Yan and Zhou have been charged with conspiring to, and breaching, the USA’s Foreign Corrupt Practices Act. The pair also face charges of actual and planned money laundering."
This is ludicrous that the US claims to step in with their own laws to correct the Marshal Island legislators. Then establishes some crazy PRE-CRIME theory when "nothing seems to have come from the plan since" approval.
Let's talk about the "SPECIAL RELATIONSHIP" the US has with the Marshal Islands. It is very special indeed...
Runit Dome holds more than 3.1 million cubic feet of U.S.-produced radioactive soil and debris, including lethal amounts of plutonium. Nowhere else has the United States saddled another country with so much of its nuclear waste, a product of its Cold War atomic testing program.
Between 1946 and 1958, the United States detonated 67 nuclear bombs on, in and above the Marshall Islands — vaporizing whole islands, carving craters into its shallow lagoons and exiling hundreds of people from their homes.
U.S. authorities later cleaned up contaminated soil on Enewetak Atoll, where the United States not only detonated the bulk of its weapons tests but, as The Times has learned, also conducted a dozen biological weapons tests and dumped 130 tons of soil from an irradiated Nevada testing site. It then deposited the atoll’s most lethal debris and soil into the dome.
I don't want to hear the US virtue signalling over the Marshall Islands that they effectively turned into a Nuclear Dump site.
Re: Aside from havng NUKED THE Island, Murica owns everything right... except radiation?
Every post, caps lock on; MURICA RANT RANT MURICA RANT MURICA RANT RANT RANT
Yawn.
I am all for encouraging (or forcing) billionaires onto a radioactive tax haven, where they can crypto the (brief) rest of their lives away.
Headline
Best for a some time. In the best El Reg tradition.
"offers to connect and secure small island nations"
Secure ? With the Chinese Navy ?
It will be quite expensive to have a warship stationed next to every tiny piece of rock in the Pacific.