Users of the Coinbase crypto-exchange are closing their accounts in connection with the recent acquisition of the startup platform Neutrino, whose employees are found to be former members of the Hacking Team, which has previously sold software to monitor citizens and organizations.
Seeking to justify the acquisition of Neutrino, Cristina Sandler, head of sales for Coinbase, in an interview with the portal Cheddar, confirmed that the previous service provider was selling user data:
"It was important for us to get away from our current suppliers. They sold customer data to external sources and we needed to get control of this and use proprietary technology that we could use to secure data and protect our customers," she said.
Although this explanation may serve as an additional argument in favor of buying Neutrino, the leakage of users' personal data causes even more negative feedback from the community.
What exactly was sold by the previous provider has yet to be determined, but given that all clients of the exchange must follow detailed KYC identification procedures, such events can have dangerous consequences for users.
Cionbase technology provider —KYT (Know Your Transaction) and analytics firm Elliptic, which monitors blockchain transactions and track suspected illicit activities, which could be defined as money laundering or terrorist financing, rushed to deny allegations for user’s data collection and its selling to third parties for financial gain. Such deed also another Coinbase supplier, Chainalysis in an official statement, published in their blog post on March 5.
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4YFN (4 Years From Now) is the innovation platform of MWC (Mobile World Congress), the world’s largest exhibition for the mobile industry, bringing together the latest startups, innovations, investors, corporations and public institutions to discover, create, to connect and launch new business ventures together was held hole last week in Barcelona.
The theme of the congress was "Intelligent Connectivity", which was chosen to mark the future of the technology industry, defined by highly contextualized and personalized experiences through combination of 5G networks, the Internet of Things (IoT), artificial intelligence (AI) and big data, offered at any time and in any place.
The mission of the event was to organize a high-quality conference program and unite experts at one time and in one place to widely familiarize the public with solutions that will lead to an inevitable change in the technology innovations. KYCBench and congress participants had a unique ability to learn valuable information about the technology, understand the importance of the moment in time, and begin to perform the right actions to achieve success. MWC Barcelona enabled extensive learning opportunities with expanding the dialogues between governments, international corporations, innovative companies, investors and breakthrough startups, as highly potential fintech market does not tolerate amateurs, superficial and incompetent specialists.
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The Plenum of the Russian Supreme Court introduced the concept of cryptocurrency in the decision on money laundering cases. "On judicial practice in cases of money laundering," a clause appeared on "cash converted from virtual assets."
The subject of crimes under Articles 174 and 174.1 of the Criminal Code, including monetary assets converted from virtual assets (cryptocurrency), acquired as a result of the commission of a crime. By itself, cashing cryptocurrency will not be regarded as a crime, the court will check specific cases for violations.
The status of cryptocurrency in Russia is not defined and in recent years in Russia, cryptocurrencies have become more often used to market drugs and launder criminal proceeds. In practice changes are possible in the medium term. Digital money is more likely to be used for the unauthorized transfer of funds abroad and by those who are leading a shadow or penumbral business. For these people, in the short term, there are opportunities for cash conversion of cryptocurrency or the use of international exchanges and the shadow Internet for this, and in this regard, it is unlikely that something will change.
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Revolut CFO Peter O’Higgins resigned from his position last week and since he stated that resignation reason is rapid grow of the company, which brings it to the global scale and therefore requests “someone who has global retail banking experience at this level”, raised lots of questions as this occurred exactly following a crushing report from the Daily Telegraph.
As each company aims to grow, for any banking or financial institution receiving of proper licensing is a huge milestone, which opens lots of doors for the business. Revolut announced receiving of European banking license in December 2018, which since than brings its customers under the European Deposit Insurance Scheme (EDIS) and gives them access to overdraft facilities, personal loans and many other services, offered by traditional banks. Undergoing such serious licensing procedure means strict compliance with legal and regulatory requirements, therefore accusations in inactivity of the anti-money laundering (AML) system, reported by Daily Telegraph, should have a very serious base.
The report says that accordingly to the documentation seen, the company turned off its AML system, for some time from July to September 2018, due to its tendency for false positives. Nik Storonsky, the Revolut CEO, replied that the company was moving from temporary to “a more advanced sanctions screening system” with no failure to regulatory compliance and confirmed that there were no AML breaches. For this dilemma to be resolved, we can only wait for the reaction form the side of Authorities, which will bring even more attention to Revolut.
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Every week brings exciting news to KYCBench!
Last weekend the Blockchain Society together with Telekom Innovation Laboratories (T- Labs) & T-Systems Spain held a 32-hour Mobility & Blockchain Hackathon and Learnathon to learn and develop blockchain solutions.
This was the third T-Labs Hack Session, with the first one taking place in Seattle, the second one in Berlin, and this one happened in Barcelona, Spain!
We are extremely happy to announce that the 1st wining place in Hackathon for the personal data security and storage on blockchain for privacy protection was awarded to IT developers team, supervised by Emilio Gracia, KYCBench Operations Director!
Reputable judges, with broad experience in distributed ledger architecture, software development, innovations and telecommunications, gave the highest score in technical deployment, consumer centric, usefulness and innovation!
KYCBench is exceptionally proud and pleased to be part of this 32-hour energetic and tense competition, which gives us new, unique experience and knowledge! Congratulations guys!
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Every day is different in the crypto industry and reputation of a money laundering space due to the lack of regulation is about to change. Under more radical than 4th, new adopted 5th Money Laundering Directive, crypto-currencies, virtual currency platforms and wallet providers will have a legal definition and become regulated entities. Due diligence has come to stay and CFT/AML regulations will be applied same as for financial institutions.
KYCBench has identified 3 main trends, that will be in the forefront in 2019:
1. Enhanced Due Diligence as part of KYC;
Tokens are being now recognised as Securities, Utilities, or other financial instruments in various countries and ICO’s now checking for due diligence in order to stay compliant with legal and tax implications, assuring that mechanics of their token economy are within the legal frame of their geographical location. Proof of Funds and Proof of Wealth of company’s investors now becoming an ordinary part of Enhanced KYC process.
2. Ultimate Beneficial Owner Information;
New open source Beneficial Owner Registers are not available yet, but Crypto-related businesses are already started thinking about incorporation of the new Beneficial Ownership checks into compliance and client onboarding processes.
3. Investment in Automated AML & KYC
With regulations becoming tighter and more complex, the challenge for many companies is to join the complexity of KYC and AML compliance with a seamless client onboarding. Automation of AML and KYC brings companies clients experience to the next level and provide the ability to drive the growth and stay out of the competition.
KYCBench is looking into the bright future of the Crypto industry and brings to crypto reality experience and procedures of traditional financial institutions, offering full range of the Due Diligence and compliance for our customers, beside automated KYC verification.
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On 19th of February 2019, Cyprus Securities and Exchange Commission (“CySEC”) has issued a Consultation Paper proposing to bring activities of Virtual/Cryptocurrencies and Assets (Crypto Assets) under the wing of the provisions of the new adopted 5th AML Directive into national law, in order to control Money Laundering Risks:
“Since launching the CySEC Innovation Hub, CySEC has been contacted by entities engaging in crypto-asset activities; a number of which do not appear to fall within the existing regulatory framework. As a consequence, CySEC considers the transposition of the parts of the AMLD5 concerning crypto asset activities, into national law, as appropriate.
Taking into consideration the FATF recommendations, CySEC also advises on gold-plating AMLD5 in order to bring the following activities under the AML/CFT obligations (which are not included in AMLD5): exchange between crypto assets; transfer of virtual assets, and participation in and provision of financial services related to an issuer’s offer and/or sale of a crypto asset.
In CySEC’s view, such an extension … will address the AML risks emanating from crypto assets activities in a more comprehensive manner”.
Source: https://www.cysec.gov.cy/CMSPages/GetFile.aspx?guid=3f50dd6a-fba9-4a1a-b00c-ad49f215f468
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INZURA is the world's first insurance based crypto project where user can claim loss of cryptocurrency in the exchange. Inzura protects the crypto asset and brings trust in the crypto community that not even single user will face loss of crypto in this crypto space anymore. Over 100s of millions of dollar lost in exchange which cannot be retrieved. Many investors were severely burnt by these hacks and will not return to crypto market. Inzura solves this problem and attracts new investors to enter the market. Inzura is the world first token which serves as crypto insurance where you can claim the lost/hacked/scammed cryptocurrency.
Inzura and KYCBench are aiming to take the crypto space to next level the way people see cryptocurrency: Inzura will provide protection to your crypto asset by insuring it and KYCBench is securing the community from bad actors like never before.
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Saudi Arabia will release its own cryptocurrency for interbank transactions in 2019, together with the United Arab Emirates, said the Head of the Innovation Department of the Kingdom financial regulator Saudi Arabia Monetary Authority (SAMA), Mohsen Al Zahrani.
For the first time, Saudi Press Agency wrote about its own cryptocurrency, explaining that the cryptocurrency will be used as a mechanism for the implementation of interbank payments and will be available only to banking organizations. The Head of the United Arab Emirates Central Bank Mubarak Al Mansouri explained:
The digital currency will not replace physical cash,” commented on the matter Al-Mansouri, “it will be a new payment tool used by banks and not individuals.”
Al Mansouri also noted that the cryptocurrency is under development: its launch is planned as soon as Saudi Arabia will complete the necessary research, which is likely to be in the middle of 2019.
Recall that in August 2018, a special committee consisting of representatives of various ministries and the central bank of Saudi Arabia, said that trading in "unresolved" cryptocurrencies, such as Bitcoin, was illegal in the country.
In October, the Minister of Communications and Information Technology of the Kingdom of Abdullah Amer Al Swah announced his intention to use blockchain in trade operations with Russia and enter into a number of partnerships with Russian blockchain companies for the development of this area.
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LivePod's solution would allow video creators/broadcasters and video chat providers a better incentive to concentrate on making higher quality content, which was created by strong and goal oriented team from Hungary. LivePod is an innovative technology which gives content providers a better deal to convert their talent into cash. LivePod provides a complete solution for those who provide or stream video contents and video chats; they merge Skype, YouTube and a live webinar platform – all at a fraction of the typical cost.
LivePod and KYCBench are tempting to solve industry problems such as cost, innovation and security. Therefore cooperation with KYCBench is aiming to develop an innovative, flexible and inexpensive solution, which is needed to better ordinary users along with professionals’ blockchain experience.
https://livepod.tv/
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2019 started with another high-profile scandal: Canadian cryptocurrency exchange QuadrigaCX cannot return approximately $ 190 million to its customers and the reason is sudden death of its owner, Gerald Kotten.
QuadrigaCX lost access to customer assets, as only Gerald Kotten, had access to wallets.
Most of the funds of the exchange are stored in "cold" wallets (without connecting to the network). This is an effective way to protect customer funds. It turned out that Cotten himself managed the “cold” wallets and after his death no one could get access to the funds that are stored on them.
In the Supreme Court, Kotten's widow, Jennifer Robertson, stated that QuadrigaCX owes its clients about $ 190 million in the form of cryptocurrency and fiat money. Cotten's laptop is with Robertson, as she is his only executor and beneficiary, but it does not help much. She does not know the password, and the specialist hired by the company could not bypass encryption. Robertson claims that Cotten did not leave any business records. Also, the widow of the entrepreneur reported that the "hot" wallets (which are connected to the network) kept the "minimum number of coins"…
Some believe that Cotten faked his death and left clear instructions to his wife. According to another version, the leaders of the company who took advantage of the situation are to blame. Robertson has already posted death certificate of her husband and his death was confirmed by the government.
If the company really does not have access to “cold” wallets, it will not be possible to return the funds. Cryptocurrency will remain there forever. At the same time, QuadrigaCX filed for creditor protection with the Supreme Court of Nova Scotia. But hopes of the company that the authorities will assist them and recognize their financial difficulties are gone. Accordingly to latest news victims won’t get any help from Canadian Regulator.
The moral of the story can be only one: appliance of the proper practices and standards in any company daily operations are vital and essential along security in any business. Achieving ISO27001 accreditation demonstrates commitment of KYCBench to maintaining the highest standards of data security and provides an independent, expert assessment that information security is managed in line with international best practice and KYCBench business objectives.
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End of January, 2019, on the darknet market named “Dread”, one of the vendors was reported to have been selling know-your-customer (KYC) information from top exchanges such as Binance, Poloniex, and Bitfinex. The post by ExploitDOT claimed they have “100k documents” containing user data from “every country”, where the exchanges operate. The seller’s offer is still valid and describes in details all the process, where prices start from 100 documents for $10 each with discounts for bulk purchases.
An anonymous cybersecurity expert contacted the individual posing as a buyer and got some free samples as proof that the leaked documents – KYC selfie pictures of persons holding up their identity cards or drivers’ licenses and a paper with “Binance” name and the date the picture was taken at. But this can be easily faked as number of samples was limited and it’s difficult to emphasize on how this data will be greatly useful.
All exchanges are notably praised for its security practices. Although all three deny that they were hacked, that doesn’t mean that such a breach never occurred. One of the first exchanges to deny was Bitfinex: “We want to assure our customers that Bitfinex is aware of this situation and can confirm there is no security breach to our platform. As always, if there are any queries please get in touch with our support team - https://www.bitfinex.com/support”.
Some of the mainstream media also reported that the “Largest collection ever of breached data found” detailing an 87 GB database leak, which includes over 700 million email addresses and 21 million passwords, data that had been labeled “Collection #1”. But experts assure that the data could be coming from a number of breaches by different hackers worldwide and could be two to three years old, so there is no direct danger to the general user community.
Overall, the alleged KYC hack might not be relevant, this kind of news are always disturbing and bring once again lots of attention to the security of sensitive users information.
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Members of the European Parliament have cast their votes overwhelmingly in favor of a new directive that introduces stricter countermeasures against money laundering across Europe — a move that will have consequences for crypto investors.
The new edict is titled the Fifth Anti-Money Laundering Directive. Its proposals included stricter border controls, tighter laws on firearms and more inclusive information sharing policy amongst state bodies. Additionally, the legislation aimed to introduce stricter controls for tax-related activities because of evident causation between funding and terrorism and other crimes.
The council explained the motivation behind the new legislation as well as its relatively speedy ratification. “The brutal terrorist attacks in France, Belgium and other European countries and the leaks concerning the laundering of money from criminal activities in tax havens, the most recent of which was the ICIJ (2) Panama papers leak, have led the Commission to propose new measures for the prevention of the use of the financial system for the purposes of money laundering and terrorist financing.”
Crypto providers now 'Obliged Entities'
The new directive touched on a number of aspects of the global financial system. The legislation allows for enhanced state access to information about the owners of firms in the EU. This is to ensure that letterbox companies cannot be used to evade tax as was the practice by the parties embroiled in the Panama papers scandal.
In order to make this enhanced access to data possible, all obliged entities would be required to gather and store data on their customers as well as related parties. “The proposed 5AMLD imposes some new due diligence obligations which obliged entities — financial institutions, related professionals, trust and gambling service providers, real estate agents, etc. — must apply to their clients, both new and existing.
This article of the directive affects the cryptocurrency sector because the term ‘obliged entities’ was widened to include electronic wallet providers and crypto exchanges.
Currently, many cryptocurrency service providers allow for transactions to be processed without thorough verification until a certain threshold is reached. Although many service providers have taken measures to implement KYC/AML practices (Know Your Customer / Anti Money Laundering), the new laws will make thorough KYC/AML compliance mandatory for all of Europe.
Interestingly, a paper published by blockchain intelligence firm Elliptic identified Europe as the region where criminals currently have the most opportunities to cash cryptocurrency out into fiat currency.
Members of the European parliament further stated: “The new measures also address risks linked to prepaid cards and virtual currencies. In a bid to end the anonymity associated with virtual currencies, virtual currency exchange platforms and custodian wallet providers will, like banks, have to apply customer due diligence controls, including customer verification requirements. These platforms and providers will also have to be registered, as will currency exchanges and cheque cashing offices, and trust or company services providers.”
How will this impact Crypto investors?
While most within the cryptocurrency industry are striving for legitimacy and motivated to leave its Wild West days behind, many in the political class still regard the sector with suspicion due to its associations with criminal activity on the dark web.
While cryptocurrency is not the cause of such activities, the relative anonymity provided by digital currencies can play a part in facilitating crime. A European member of parliament, Krisjanis Karins, explained that the legislation was created in order to keep up with advancements in technology that can be used to facilitate criminal activity.
He said: “Criminal behaviour hasn’t changed. Criminals use anonymity to launder their illicit proceeds or finance terrorism. This legislation helps address the threats to our citizens and the financial sector by allowing greater access to the information about the people behind firms and by tightening rules regulating virtual currencies and anonymous prepaid cards.”
This new regulation likely means that customers will need to input more of their personal information and provide more state verifiable documentation when registering for a wallet or an exchange. It is also likely that users may need to divulge more information on the recipients of their transactions or any other otherwise related parties. As in Japan, legislators will also likely view license applications by exchanges negatively if such exchanges continue to trade ‘anonymous’ coins like Monero and Dash.
While new KYC/AML processes will increase sign up times for cryptocurrency services, the new legislation will most likely turn into a positive for cryptocurrency investors because the more bad actors are being flushed out of the sector, the more legitimacy it will gain. This, in turn, could lead to an influx of investor money, which would push up asset valuations.
EU member states have 18 months to prepare to ratify the directive into their respective national laws.
Members of the European Parliament have cast their votes overwhelmingly in favor of a new directive that introduces stricter countermeasures against money laundering across Europe — a move that will have consequences for crypto investors
Source: https://bravenewcoin.com/insights/how-eu-money-laundering-laws-will-impact-crypto-investors
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Thailand has emerged as one the most interesting crypto and blockchain countries in Southeast Asia starting from the beginning of 2018. Despite military dictatorship, the Kingdom government has become outspoken and welcoming of cryptocurrency projects and exchanges last year and regulators are working quickly to provide a legal path for these technologies. The Stock Exchange of Thailand (SET) has plans from setting up cryptocurrency company licenses to permitting exchanges and ICOs.
In June 2018, Thai government permitted a few cryptocurrency exchanges and broker-dealers to apply for operating licenses and legalized 7 cryptocurrencies: Bitcoin, Ethereum, Bitcoin cash, Ethereum classic, Litecoin, Ripple, and Stellar. According Bangkok Post, if SET application to become brokers and dealers for digital asset trading is successful, Thailand’s stock exchange will become one of the first in the world to setup a separate crypto exchange.
In the last week of January, 2019 Bank of Thailand (BOT) announced ‘Project Inthanon,’ its central bank digital currency (CBDC) initiative: “The BOT and the participating banks will collaboratively design and develop a proof-of-concept prototype for wholesale funds transfer by issuing wholesale Central Bank Digital Currency (Wholesale CBDC).” This is a very similar project to the ones, initiated by other central banks, including the Bank of Canada, the Hong Kong Monetary Authority and the Monetary Authority of Singapore. BOT outlined a roadmap of the project, where it is planned to cooperate with other eight participating banks for a prototype creation for testing of key payment features such as a liquidity-saving mechanism and risk management. Phase 1 is expected to be completed by the end of March 2019, and its outcome will be very telling of Thailand’s progress in Southeast Asia.
Nevertheless Thailand is still at the early stage of adoption and every country in the blockchain adoption phase is at different stages, there are signs of a healthy competition between Southeast Asian nations which will benefit industry and its progress in the region.
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The "blockchain" makes it possible to manage information securely with a distributed, decentralized and synchronized registry and will be the main tool in the finance sector after 2020, according to Spanish experts.
This data storage and data transmission technology, on which cryptocurrencies or digital currency are based, is a trend that is becoming "mainstream" in financial applications and, according to the founder of the Bitcoin Foundation, Jon Matonis, will be used "on a large scale" in the sector in 2020.
Last Tuesday, January 22, at the Movistar Center in Barcelona, KYCBench team visited FinTech & Blockchain: Disrupting FinTech meetup, organized by Blockchain Institute & Technology Barcelona.
Eternity ambassador in Spain, Manel Ruiz, talked about the blockchain revolution on the finance sector and Pablo Ruiz, CEO of WallWings and Infinit and professor of Blockchain Institute & Technology updated on the latest innovation in blockchain and fintech.
With the proliferation of financing systems through the internet, various fintech business models have been generated, the objective of which is to streamline the economic operations of companies.
Fintech deals with companies that offer their customers innovative financial products and services, through the use of ICT technologies. That means that it unites technology and finance with the objective of creating financial services that are easy to hire, understand and with a standardized price that allows access to a greater number of people and companies, both investors and borrowers.
The fintech, as the blockchain, are the most advanced companies. 77% of them foresee adopting it as part of their systems in two years and 90% of the payment means companies foresee adopting them for that same year.
KYCBench again had a great opportunity to meet several companies, from financial institutions to large retail businesses, which are already working to implement Blockchain solutions to be pioneers of technological change and share our ideas with these experts while networking.
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Delinquent U.S. federal and state tax filings or unreported 2017 or prior tax years’ transactions may force taxpayers dealing in crypto to liquidate significant positions in cryptocurrencies at lower values to pay outstanding tax liabilities to the IRS, including interest and penalties.
The meteoric rise of Bitcoin and other convertible virtual currencies’ value in 2017 were followed by a steep decline during 2018. The bursting of the virtual currency valuation bubble and continued market volatility will likely present many tax planning challenges for investors and businesses going forward. For some U.S. taxpayers, the situation is much worse.
In May of 2018, a U.S. Department of Justice attorney indicated a possible need for new voluntary disclosure procedures, however, at the tax symposium held in November 2017 by the State Bar of Texas Tax Section, Daniel Price of the IRS’s Office of Chief Counsel dismissed the stories that the IRS intended to establish a separate, voluntary disclosure program for unreported income related to offshore virtual currencies.
Contrary to some taxpayers and tax practitioners’ expectations, the Internal Revenue Service (IRS) is unlikely to provide a separate, voluntary disclosure program to assist taxpayers who failed to report income taxes resulting from virtual currency transactions.
The IRS Voluntary Disclosure Practice still remains an option. However, the Practice generally does not guarantee a taxpayer immunity from prosecution. Nor does it offer penalty relief.
Generally, for penalty abatement, a taxpayer has to show reasonable cause for failure to report and disclose. Taxpayers who have unreported income from convertible virtual currency transactions, unfortunately, face a multitude of civil—and possible criminal—penalties and charges of tax evasion and other crimes.
In October 2018, the Information Reporting Program Advisory Committee (IRPAC) issued a public report that provided a number of specific recommendations and also expressed concerns over various tax reporting and compliance issues. The IRPAC, a collaborative forum between the IRS and tax professionals, also expressed interest in helping develop information reporting and withholding guidance for virtual currency transactions.
The report recommendations came two years after the Treasury Inspector General (IG) for Tax Administration Report was released. The September 2016 Report openly criticized the IRS and its management for its absence of strategy, guidance, and reporting, including failure to execute management oversight as well as adequate controls. Though the IRS agreed with the report, no specific recommendations were made to the IRS’ Office of Chief Counsel.
It appears, based on available public records, that there was no formal coordination with the Department of the Treasury’s Office of Tax Policy since the report issuance.
Source:
https://cryptoslate.com/internal-revenue-service-cryptocurrency-penalties-tax-evasion-compliance/
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In 2018, several Spanish universities - have started institutional courses including Bitcoin, Ethereum, ICOs, smart contracts, and Crypto-Economics. Now you can get Master or Diploma in Ethereum, Blockchain Technology and Crypto-Economics, and other programmes within just six months from some of the most prestigious business institutions, such as Instituto de Empresa Business School in Madrid and other universities in Seville, Pamplona and Barcelona.
Spain is starting to accept crypto coins – in Barcelona it is becoming very popular, from retail business to tourist and local restaurants. CrossFit centers in Madrid and Granada, operated by Singular Box, offer to its customers to pay gym memberships in Bitcoin and other tokens and the reaction from its members is very good. And other gyms and even network of holistic health clinics across the country have followed the stream, as they “believe cryptocurrencies are the future of commerce in all industries”.
Earlier in October 2018, the Spanish government made a decision to begin taxing crypto earnings and Spanish investors now are obliged to disclose their cryptoassets in order to create transparency for digital assets taxation, the measures seek to make holders of crypto wallets declare them nevertheless whether they are in Spain or offshore.
The Spanish traditional banks have also showed interest in crypto acquisition, expressing that independent citizens are not alone in their desire to hold cryptocurrencies. The Central bank of Spain has also mentioned about creating its own digital currency and issued a report stating, that “digital currencies and blockchain technology could benefit Spanish monetary policy and financial infrastructure.”
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In 2018, barely a month passed without an official at a financial institution or government department calling on crypto to clean up its act. In the last quarter of the year alone, the United States Department of the Treasury, the Canadian Parliament and the Russian Federal Financial Monitoring Service all urged or announced the introduction of Anti-Money Laundering (AML) laws for cryptocurrencies, and all of them based their moves on the (noticeably mistaken) presumption that cryptocurrencies are a primary haven for criminals, who use them either as a medium of exchange for illicit goods or as a means of hiding (i.e., laundering) the source of dirty money.
As reported by Reuters, when the U.S. Financial Industry Regulatory Authority (FINRA) imposed a $10 million fine on 26th of December 2018 for compliance failures in the firm’s anti-money laundering program, this penalty didn't actually go to a crypto exchange or crypto-related business. Instead, it went to Morgan Stanley, the 38th biggest bank in the world (and the 6st biggest in the U.S.). A deeper inspection of recent history reveals that the traditional financial world, in fact, has just as serious a problem with money laundering as crypto, if not a more serious problem.
In November last year, the Reserve Bank of India (RBI) levelled a 30.10 million rupee fine (about $420,000) on Deutsche Bank, which had failed to observe Indian KYC and AML regulations. Also in November, French bank Société Générale agreed to foot a hefty $95 million bill in order to settle charges that it had contravened U.S. AML regulations, a bill which comprised an even bigger charge of $1.34 billion for breaking U.S. trade sanctions against the likes of Cuba, Iran and Libya.
Moreover, in December, Latvia's financial regulator levied a 1.2 million euro charge on BlueOrange Bank for AML noncompliance, while FINRA fined Swiss bank UBS $5 million for similar violations. And back in August, China's central bank, the People's Bank of China, fined five financial institutions anywhere from $100,000 to $250,000 each for falling foul of AML laws, including Ping An Bank, Shanghai Pudong Development Bank and the Bank of Communications, accordingly to Cointelegraph.
While the cryptocurrency industry is rapidly tightening up its own codes and conduct, crypto exchanges are increasingly observing Know Your Customer (KYC) and AML regulations and new trade bodies are being established with the aim of erecting self-regulatory guidelines for the crypto industry to follow. And industry aimed to become a fully legitimate and secure feature of the global economic landscape.
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When it comes to cryptocurrency regulation, there is a lack of consensus on how to protect investors. Criminal activity such as fraud, hacks and theft is prevalent, not only in the crypto reality, but in the traditional financial world also. Some exchanges have denied Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance, claiming it infringes on the user’s right to privacy.
There are a number of crypto exchanges doing everything in their power to avoid having to introduce KYC. These exchanges require no lengthy signup process and no interminable wait for KYC checks to be approved, but such platforms are the exception rather than the rule. For legal and regulatory reasons, exchanges and similar financial organizations within the crypto sector are usually obliged to perform KYC.
There is evidence to show that instances of money laundering and other financial crimes are significantly lower in the crypto space than they are in the traditional financial sector. Onerous KYC and AML regulations also serve to deter new entrants, increase compliance costs for crypto companies, and arguably stifle innovation. Rather than deter criminals and increase transparency, some argue that all KYC/AML does is financially exclude those who lack the documentation to prove their identity – a particular problem for the world’s 1.7 billion unbanked. While some exchanges, such as Binance, are famously KYC free, its decision to partner with blockchain forensics firm Chainalysis is evidence that Binance is taking its regulatory obligations seriously. The crypto exchange, the world’s largest by trading volume, is now preparing to introduce KYC for its customers, accordingly to bitcoin.com.
KYCbench has developed a GUI friendly and cryptographically secure KYC platform to verify sensitive KYC data businesses, wanting to improve on their existing regulatory compliant KYC processing procedures. KYCbench is built to fulfill the requirements of the GDPR and to comply ISO27001 standard in handling and storing of personal data. KYCbench works to establish a tailored and customized solution, which would allow KYC processing requirements to be applied with each client, business and startup in the most cost efficient way.
KYCbench, your reliable KYC partner
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SWIDOM is the largest end-to-end international blockchain agency based in Kyiv, Ukraine, focused on fundraising and service providing, being expert in building communication with all types of projects and companies.
SWIDOM helps ambitious teams to raise capital in three key areas - ICO, STO and VC, raised more than $150m for projects like NAGA, BANKEX, and many others in both public and private sales, covering all services from business development and community management to security and legal services.
Blockchain investor and Evangelist, Co-Founder at SWIDOM David Shengart has demonstrated success delivering partnership contracts with more than ten biggest banks within CIS, the EU, and Asia region; devising improvements, planning executable strategy, building teams, coaching, and leading cultural/ competence change.
Therefore strategic partnership with KYCBench brings SWIDOM and their customers to the world of official regulations compliance. This will result in the integration of the KYC verification process, which will benefit the cryptocurrency service sector by insuring trust between users and providers.
Cooperation framework with a KYCBench, GDPR and ISO27001 compliant KYC platform solution, aims to significantly increase the security and desire to eliminate any potential threats associated with financial damage and other criminal activities of the ICO, STO and VC investors.
KYCbench, your reliable KYC partner
www.kycbench.com
GDPR & ISO/IEC 27001:2013 compliant
Please contact KYCbench today, the most reliable ID verification processor at: contact@kycbench.com
Join our Telegram Groups:
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