Response to FATF Regarding Regulation & Monitoring of Virtual Assets

[jjbanks994]

https://ciphertrace.com/response-to-fatf-on-vasp-regulation/

CipherTrace just published their recommendations regarding the Financial Action Task Force regulations. What people I don't think realize is how big of a problem money laundering can be and poses a threat to the world financial system. I know a lot of people are anti compliance but I think it's necessary. What are your thoughts?

[jdarren]

This is just the first wave of the FATF regulations I think we will see this year

[squatter]

The occasional transactions designated threshold above which VASPs are required to conduct CDD is USD/EUR 1,000.

That's quite a low threshold. Do we know exactly what customer due diligence entails with regard to FATF standards?

I'm curious what kind of time-based constraints would be considered for that $1,000 threshold. Not only is the threshold low, but I'm sure standards will be added to prevent payment structuring below the CDD threshold. It could be $1,000 aggregated per day, per week, etc.

[magneto]

CipherTrace just published their recommendations regarding the Financial Action Task Force regulations. What people I don't think realize is how big of a problem money laundering can be and poses a threat to the world financial system. I know a lot of people are anti compliance but I think it's necessary. What are your thoughts?

It is necessary to a certain degree. Beyond that degree certain regulations become draconian, and the potential benefits of actually stopping money laundering or terrorism funding becomes minuscule compared to the restrictions imposed on regular, everyday bitcoin users.

We all know however that the general direction that regulatory authorities are trying to pursue is going to be tightening regulations in the future, so it wouldn't come as a surprise if some or even the majority of the suggestions in this report actually materialises.

I think they raise an interesting point in authorising certain exchanges to freeze balances. This again shows that it's probably best to store bitcoin in only trustless wallets going forward, as exchanges can not only freeze your funds on their own will, but may be propelled to do so by their governments.

Interesting read for sure, though unclear how it'll affect the p2p economy. Seems like the focus here is on centralised exchanges mostly.

[Harlot]

Cryptocurrencies such as Bitcoin, or derivative currencies such as Litecoin and Bitcoin Cash can be analyzed with blockchain analytics tools, and therefore tracking the entire transaction chain is not necessary. However, privacy-oriented cryptocurrencies, such as Monero which is designed for anonymity and includes a money-laundering currency mixing technology in the protocol, need much stronger regulation and oversight. Fortunately, Monero as a “View Key” capability which may be adapted to meet regulatory requirements with sufficient technical analysis and oversight. 

Well if they left out cryptocurrencies that has a normal blockchain behind them then I am all for it. I'm even surprised that the tried to left out coins such us Bitcoin and Litecoin on having a general regulation instead they might have a special regulation regarding these privacy regulation which I think money launderers have move to specially since authorities have catch up on how to track transactions in the blockchain. I'm for this regulation since launderers are criminals anyways.

[dothebeats]

The occasional transactions designated threshold above which VASPs are required to conduct CDD is USD/EUR 1,000.

That's quite a low threshold. Do we know exactly what customer due diligence entails with regard to FATF standards?

I'm curious what kind of time-based constraints would be considered for that $1,000 threshold. Not only is the threshold low, but I'm sure standards will be added to prevent payment structuring below the CDD threshold. It could be $1,000 aggregated per day, per week, etc.

What's even scarier is if they would go to great lengths such as snooping into one's banking records just to know whether the individual has the capability to transact/meddle with the said amount. For those regularly trading with the said amount, this might pose as a problem and a major annoyance. Furthermore, they could even ask for more KYC documents in order to 'exempt' people from that $1000 threshold, which I think is already too much.

Good thing I'm not affected by such regulations.

[buwaytress]

The occasional transactions designated threshold above which VASPs are required to conduct CDD is USD/EUR 1,000.

That's quite a low threshold. Do we know exactly what customer due diligence entails with regard to FATF standards?

I'm curious what kind of time-based constraints would be considered for that $1,000 threshold. Not only is the threshold low, but I'm sure standards will be added to prevent payment structuring below the CDD threshold. It could be $1,000 aggregated per day, per week, etc.

Actually that's pretty high. CDD for even a money transfer office in the EU triggers at EUR 100 (nope, no zeroes missing), and if I recall correctly EDD (enhanced dd) triggers ar EUR 500. We're now talking about tightening measures where cash-based remittance especially almost always trigger CDD. It could be that FATF CDD is equal to EDD in EU under AMLD though. Indeed would be pretty intresting.

And yeah, that $1,000 is just one level. There's all kinds of systems to detect smurfing (Repeatedly below threshold) and network connections.

[alexcopper]

The occasional transactions designated threshold above which VASPs are required to conduct CDD is USD/EUR 1,000.

That's quite a low threshold. Do we know exactly what customer due diligence entails with regard to FATF standards?

I'm curious what kind of time-based constraints would be considered for that $1,000 threshold. Not only is the threshold low, but I'm sure standards will be added to prevent payment structuring below the CDD threshold. It could be $1,000 aggregated per day, per week, etc.

Actually that's pretty high. CDD for even a money transfer office in the EU triggers at EUR 100 (nope, no zeroes missing), and if I recall correctly EDD (enhanced dd) triggers ar EUR 500. We're now talking about tightening measures where cash-based remittance especially almost always trigger CDD. It could be that FATF CDD is equal to EDD in EU under AMLD though. Indeed would be pretty intresting.

And yeah, that $1,000 is just one level. There's all kinds of systems to detect smurfing (Repeatedly below threshold) and network connections.

That's actually really interesting to compare the numbers to. I would have thought more or if not the same. I would like to know about these other systems you say that detect smurfing..

[Theb]

Billions of dollars that has the potential to change a country has been loss just because a few greedy bastards don't want to pay properly on how much they are really earning. Now with what theybare proposing I am thinking off that this is some kind of virtual warrant for the crypto industry on which they can legally track and connect each transaction from a certain person where they can identify if they are laundering their money or not. For some this might be viewed as an extreme measure but what I see is this is the only thing that could potentially work and eliminate major money laundering problems.