Bitcoin Forum

http://fortune.com/2019/04/15/binance-regualtion/

Compliance focused strategy seems to be leading the way with Binance's recent partnership announcement with cyber security and blockchain forensics firm CipherTrace. Fraud and money laundering are real and if we can somehow avoid it at all costs that seems fair to me, what are your thoughts?

Crypto is supposed to be private and unregulated, it seems like it would only slow things down for everyone while the launderers would find another way...

The elephant in the room is whether they can maintain their current KYC process. They seem to be trying to do so by ramping up their blockchain analysis and selective KYC. I'm curious to see how much more common account freezes and forced KYC become for unverified users.


I have a feeling he's right.

In a sense, what binance is aiming is to avoid or at least lessen the possibility money laundering or fraud that might occuring by using crypto exchange platform. Maybe they wanted to set a good standard as a top-one trusted platform by making sure to follow law in every jurisdiction.

No one wants to have a site used to money laundering because we all know that illegal. But at the same time the users should have the right to be anonymous, this is the main issue with cryptos because as The New Yorker said in 1993.
 

Ohh... I see that is why almost all ICO project out there is now asking for KYC verification because of the binance news.

I don't think it will be good for crypto but I believe for some user they are waiting for this for their own protection.

For me, I don't like to verify my name when exchanging something like an altcoin they will ask where did I get it or source of income just to monitor all our earnings and funds which is no more privacy if we tell.

Honestly, investors are not a problem the only problem in crypto is these ICO projects almost all ICO projects are scam. They should ask KYC verification to the CEO or owner of the project to make sure that the owner of the project is real and other members who involved in the project.

I think we are still figuring it all out ultimately. Right now with the laws and the way things are panning out, it looks like KYC might be the best thing to handle all of the drama between ICOs. It would make the most sense to check the CEO though

it is mainly because they want an additional revenue since they can no longer raise the same ridiculously high amount of money from their useless tokens. now they ask for KYC so that they have something to sell on dark markets and make some profit. every ICO participant and bounty hunter's identity is already available in dakrnet for purchase!

The ultimate fate of ventures like this that started with a "anonymous" goal, will be that it will gain a lot of popularity and people will support these services, but once they grow large enough, regulators start to take notice of them and then the pressure to legitimize their business or close their doors, comes down on them.

They want to make money, so they bend over to the regulators demands and then anonymity is sacrificed and the users are thrown to the wolfs. <Examples : Circle / Localbitcoin etc.>

I agree. Already heard about this news through several threads in this forum recently, but it will get regulated sooner or later. I was honestly surprised to hear that LocalBitcoins needs to comply with the KYC requirements by Nov 2019 which seriously sucks.

Popularity is a double-edged sword indeed in this case.

Binance wants to play by the rules but only the rules it can play with. Why else would they move from jurisdiction to jurisdiction if it was not to enjoy the best tax rules? China move to Japan was understandable,,, they wanted to run a business and they could not from China. But Japan is totally crypto friendly and Bitcoin is a recognized tender there. Why else would they move to Malta?

If it is allowed to continue, many victims will even cause bankruptcy. In my opinion, the regulation is valid, provided that it maintains a decentralized blockchain system.
I am very supportive of the steps taken by the binance

I think that the intention of Binance to comply with regulations to prevent financial crimes is good. What might be problematic is that the AML policies are ineffective. They put a lot of pressure on users, whereas the biggest threat is clearly the exchange/company itself. We have seen it before with banks, the biggest money launderers. Intruding into the privacy of individual low-income users.

Here is what you have to do: open your crypto related business, do not legally register it because you are working with crypto and it supposed to be free, when an officer comes to you tell him the same, keep repeating the words about free crypto to your cellmate.

Even if you work with crypto you have to obey the laws of your country. Seems like Binance is developing their AML service to prevent different kinds of arrests and sanctions against them. That's a normal and logical thing.

I think fraud and money laundering will still exist with or without cryptocurrency. As long as people can find a way how to do fraudulent and money laundering, they can easily do that thing again and again without anyone can stop. I think that will be good for binance because they can try to reduce the fraud and money laundering level from their members so they can make sure that their site is "clean."

O yeah, the company that fled Japan during the night denying that they can't respect financial regulation there and fled to the last off-shore in EU is thinking about playing by the rules..
Playing what, roller coaster tycoon or zootycoon?

All those news lately about Binance wanting regulation, welcoming regulations making me think down there they are in some really deep trouble and when this will burst people will start seeing mtgox as a happy chapter compared to this one.


LB is dead for me
Many of the users I've dealt with during the years have gone silent, the new ones offer prices with quite a heavy % on bitstamp, less and less banks for national transfers...Really not attractive anymore.



 

your opinion is very reasonable, but not all ICOs are like that, there are still a lot of ico that are real by doing KYC because a regulation is one of the requirements to open ico sales

Binance is just another exchange like bittrex, they are based in Hong Kong so trying to look more appealing to customers with these regulations, thats it.

the days of centralized exchanges are numbered in my opinion and the more they push for more restrictive rules that are bad for the whole community the faster they go in direction of becoming obsolete.
the decentralization of exchanges and most other services (such as market places) have begun.


but "customers" look for security and assurance that they are not going to get hacked or scam them.
regulations and KYC are not guaranteeing that. in fact Bittrex scammed people right after they implemented KYC.

Where anonymity is involved, money launderers get a bright opportunity to play around with money in that area. The only way to stop it is to alter the framework which in this case can be called as regulaiton.
Hence the anonymity concept is disrupted. I would say that binance is doing it's best thinking of the possible problems it could face in future and making itself ready for upcoming problems.
It's at least thinking of tackling such problems while it's competitors are doing nothing.

I expect DEX and marketplace without KYC to be banned at some point or another if they ever get too successful (it's not because it's decentralized you can't make it a pain in the ass to access).
The serious DEX we are currently seeing coming close to release are mostly about being non-custodial, not so much about being anonymous.

regulations and limits on verification can be significantly tightened, because the war against money laundering will be topical for the Binance administration. Meanwhile, we have practical freedom of action and wide-ranging trade opportunities.

i am not sure what "non-custodial" exchanges exactly mean but if it is about you being in control of your funds not the exchange then it makes sense for them to gain traction since anonymity was never as important as having control and having some privacy.

my question then becomes should we just disregard all of the scams and large amount of funds that are being funneled and stolen from innocent people? I just find companies like ciphertrace giving more people hope and confidence that they're funds are safe. if we want more people to use crypto they need to feel safe.

Long tail.

The market will be bigger and bigger, that's what we have to bet on. And if the market is really big, we'll have options for everyone. Probably exchange deregulated, do not ask for KYC or even completely decentralized will exist.

But Binance wants to attract more and more institutional investors. And for that it has to conform to some regulations.

That might work fine for cryptocurrencies and tokens, but what about fiat? Fiat exchanges are the most bogged down by concerns about AML/KYC, licensing and regulations. We can tokenize fiat to work with a DEX, but how do we get that fiat money into people's bank accounts?

ICOs are not regulated, this whole market is not regulated, there is no law enforcing them to comply by KYC rules but 90% of them add that. then we have some that are forced by the platforms such as Binance to do that which again is not by any "law" or "regulations".
not to mention that i wouldn't call any ICO "real" as long as all they do is raise funds and then go away!

The SEC chairman has said virtually all ICOs he has seen fall under existing securities laws. He also said (https://www.sec.gov/news/public-statement/statement-clayton-2017-12-11) that under existing law, securities transactions paid in cryptocurrency entail the same AML/KYC requirements as cash payments:


So, if an ICO is making its offering available to US residents, they are definitely regulated by the SEC and other US agencies. Even if they prohibit US residents, other countries (or blocs like the EU) have AML/KYC regulations too.

I think the "wild west" days where everyone thought no laws applied to cryptocurrency are pretty much over.

Unfortunately, the government won't allow it.
We like to be not regulated but we don't have our own government, we are just using a tech which is decentralized but majority
of the people are still not accepting bitcoin and that requires our bitcoin to be converted into fiat, now the regulation will come in.

Binance is taking the right action in the right direction by way of minimizing the rate of money laundering through cryptocurrency which have raised lots of concerns to the entire cryptocurrency industry lately with government seeing cryptocurrency as just a tool for laundering of money and illegal use for founding terrorism. Some one need to put things right and binance have taken the first step.

I support for regulation from the other side that there should be clear rules of the game and a regulatory framework that protects investors or just people who own a cryptocurrency. For example, from the tyranny of crypto exchanges, from scam crypto exchanges or management fraud. Of course, anonymity is cool. But big money will never enter the market in which there are no clear and understandable rules of the game. Investors must be protected. And large investors are very worried about protecting their capital. Now there is no regulatory framework that would protect cryptocurrency investors. Therefore, I only support these initiatives.

For Binance to play by the rules will create more slow-work in the world of cryptocurrency. Although fighting money laundry is good for our economy but will defeat the purpose of cryptocurrency in my opinion. If these rules are not strict, then let it be as they intend, maybe those fraud and money laundry individuals will find another root.

honestly I think that more exchanges are going to move towards compliance. companies like CipherTrace aren't planning to look on each person's purchase but instead look for large amounts of money moving

Binance is increasingly becoming the Amazon of cryptocurrencies, so they are going to cover all of their bases to ensure they are compliant in combatting money laundering. More than likely their team of lawyers has urged them to be proactive in being financially compliant to prevent potential friction with various governments around the world.

I would like to know what everyone means by 'slow work' I dont think it will slow any of the processing but instead cut out the major players in money laundering. I doubt Ciphertrace plans to analyze every single purchase for people.. they're looking for suspicious activity overtime 

If those measurements are required to fight money laundering then why not accept it?
I also feel more safe (some how) if they want to play by the rules, as that means that it will be more stable for them to make their clients to withdraw their funds without any government issues.
As well for them, if they need these sort of "approvals and agreements" for them to keep running without legal issues then we should consider is ok to have them.

in the crypto world this can be good or bad, it will depend on the exchange or service that the person will be using. for example:

imagine if someday a shady exchange like yobit start asking your customers to make KYC, would you make KYC on yobit? I would not do. Why would not I do KYC on yobit? because I do not know who the yobit owner is, how am I going to hand over my documents to a stranger?

Why would you care about someone "laundering money". Their illegal activity shouldn't concern you unless you are some government worker or the police.
I really don't care if someone wants to move money around without telling their government spies about it. If your government bans bitcoin you could find yourself loundering money too.

The spelling of regulation was regualtion. I hope you fix this minimal error. To avoid these Fraudulent activities and to support the Anti Money Laundering we must regulate exchanges and especially bitcoin. It's a good move to regulate cryptocurrency. It makes it safer and not connected to some kind of bad activities.

I agree with you about regulation. There has to be some what of regulation to make governments to keep people, investors and governments safe.

I think that binance new partnership with compliance companies is a welcomed development, as it would build trust and confidence amongst investors in cryptosphere.
It will also go a long way in helping the government fight money laundering  crimes , and all such activities.

I agree on the partnership and how it will go a long way in helping governments. I think it will also help them open their minds to crypto in general

Actually it is a very good thing to help crimes that are detrimental to the state, like what you say that money laundering is very illegal so it is natural for binance administrations to issue rules and at the same time verify so that there is no loss behind the day. but clearly the freedom and ease that binance makes will not reduce.

I read in news that binance has left the use of ethereum blockchain, is it true?? they are preparing for their own very blockchain launch :i . BNC(binance coin) has reached 53 week high today going to 24 USD in market.

I think overtime people will be appreciative of these sorts of partnerships. Having some compliance help from companies like ciphertrace will allow people to continue using crypto without full regulation of the government