Every time we noisily celebrate our industry achieving the next important milestone, there are, also, a growing number of nefarious actors, which, simultaneously, quadruple their efforts in order to maximize their own profits.
In abundance such actors were presented in the ‘Spring 2020 Cryptocurrency Crime and Anti-Money Laundering Report’ recently published by CipherTrace (CT) — one of the latest additions to an exponentially growing number of ‘blockchain intelligence’ companies.
[BTW: CipherTrace is headed by a chairman of the ‘Travel Rule Information Sharing Architecture’ (TRISA) working group, which was created in order to promote CT’s “enhanced validation certificates and the Certificate Authority (CA) Trust Model”.]
From this report we can see not only how insignificant is the real amount of ‘illicit transactions’ — $4.5 billion, or less that 0.5% of $1 trillion worth of crypto transactions in 2019 — but also that the pressure applied by enforcers on industry’s players has been notably intensifying the past 6 months.
Extract: “As of January 10, the EU’s 5th Anti-Money Laundering Directive, variously referred to as 5AMLD or AMLD 5, went into effect in a bid to make fiat-to-crypto transactions more transparent. … “
Extract: “ … the United Kingdom’s Financial Conduct Authority (FCA) became the anti-money laundering and counter terrorist financing (AML/CTF) supervisor for businesses carrying out cryptoasset activities under the amended Money Laundering, Terrorist Financing and Transfer of Funds Regulations.”
Extract: “On May 1, Japan’s newest crypto AML laws, amendments to the Payment Services Act (PSA) and the Financial Instruments and Exchange Act (FIEA), began their period of enforced compliance. “
Extract: “On March 23, the Board of the International Organization of Securities Commissions (IOSCO) published Global Stablecoin Initiatives — a report examining the possible implications of global stablecoin initiatives on securities markets regulators and how existing IOSCO Principles and Standards could apply.” (see my review of that report)
Extract: “On March 26, the Department of Justice indicted Venezuelan President Nicolás Maduro and 14 other officials for operating a narcotics ring involving drug runners, Colombian revolutionaries, and narco-terrorism. In a related press release, Homeland Security Investigations (HSI) alleged the conspirators used crypto to conceal their crimes.”
All of that has, already, crucially increased AML / KYC costs burden on fiat-to-crypto exchanges, which led to their massive exodus from G20 jurisdictions to off-shores like Panama.
However, that marks only the beginning of the world-wide crack-down on crypto. After June 16, 2020, when, an universal compliance with FATF’s ‘travel rule’ must be enforced in all members’ countries we can expect the growing number of centralized small and medium sized exchanges being targeted by authorities (specially p2p kinds).
That will accelerate the division of all cryptocurrencies transactions into two internal ‘classes’: approved-by-govs and all the rest, which can be traced back to ‘suspicious’ sources (including, of course, ‘mixers’, ‘tumblers’ etc.), as well as to all exchanges non-compliant with FATF’s constantly changing ‘rules’.
Moreover, we can expect govs reducing the number of exchanges to few ‘licensed’ ones, which will be not only fully compliant but also directly controlled and constantly monitored by, say, SEC.
Unless, of course, we add the 28 amendment to the Constitution, introducing “The Bill of Innovations”, which will protect our rights to improve our lives without being promptly regulated-out-of-existence by non-elected bureaucrats.
Link: https://ciphertrace.com/spring-2020-cryptocurrency-anti-money-laundering-report/
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