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.