EU Warns Malta of the Dangers of Ignoring Money Laundering

[alexcopper]

https://bitcoinmagazine.com/articles/eu-warns-malta-of-the-dangers-of-neglecting-money-laundering

Malta aka Blockchain Island has become the mecca crypto due to its favorable crypto laws. With the flood of crypto money to the island it's been taking the right steps to work on compliance such as partnering with crypto security firm CipherTrace to identify and prevent crypto crime.

Steps like this seems to help make the government quite happy in how to handle crypto and manage risk in countries. Would you agree? What else do we need to implement or be sure to watch out for?

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[akeegan]

I think having the team at ciphertrace is a good start for AML. Just wondering what more the EU thinks needs to be done and what their expectations are looking like for overall compliance. The balance between not to much invovlement and just enough

[timerland]

Steps like this seems to help make the government quite happy in how to handle crypto and manage risk in countries. Would you agree? What else do we need to implement or be sure to watch out for?

I'm not sure as to how Malta would respond - they are probably raking in a lot of revenue since crypto businesses prefer them as a destination as opposed to countries with stricter KYC/AML requirements in the European Union.

There is no incentive for them to tighten their rules too much, although they obviously need to prevent the clear cut cases.

This warning could have for sure been sparked because Malta is seen to take away business from the rest of the countries in EU, when it comes to regulated/licensed bitcoin businesses, while the warning about AML may only be what's happening on the surface.

[dunfida]

Steps like this seems to help make the government quite happy in how to handle crypto and manage risk in countries. Would you agree? What else do we need to implement or be sure to watch out for?

Just a casual thing for a certain country to follow on.If you do fully accept or integrate crypto into your vicinity then its no brainer that
the current organization wont really go overboard and should comply when it comes to safety and risk management.Money laundering or frauds
is one of the possible things that can happen on crypto tx but come to think that even fiat do have it.

[gentlemand]

I'm not sure as to how Malta would respond - they are probably raking in a lot of revenue since crypto businesses prefer them as a destination as opposed to countries with stricter KYC/AML requirements in the European Union.

Malta is a minnow. The more they attempt the buck the existing order of things the harder other countries will come down on them. No one operates in a vacuum. All the EU would need to do is turn off the banking and funding taps and Malta will be brought to heel in a matter of hours.

Malta would be monumentally stupid to ignore this, and this is why places like Binance flocking there may wind up getting screwed. I'd be less inclined to trust a company that moved to Malta than one that stayed put.

[squatter]

Malta would be monumentally stupid to ignore this, and this is why places like Binance flocking there may wind up getting screwed. I'd be less inclined to trust a company that moved to Malta than one that stayed put.

Sounds like Binance may soon be on the run again. Hong Kong, Japan, Malta... where to next? The British Virgin Islands?

Or maybe Binance will finally be brought to heel like Shapeshift was? Bitfinex and some others are still managing to offer trading without KYC if you don't transfer fiat money, but the pressure on exchanges from regulators really feels tangible now.

[gentlemand]

Or maybe Binance will finally be brought to heel like Shapeshift was? Bitfinex and some others are still managing to offer trading without KYC if you don't transfer fiat money, but the pressure on exchanges from regulators really feels tangible now.

Only a matter of time. If they think they're somehow 'bigger' than the overwhelming weight of twitchiness when it comes to money then they're dreaming and very stupid.

It may not be cool but it's the way of the world it's not going to magically go away. They'd be better off coming in from the cold rather than drawing it out. And their non dex won't cut it either.

[avikz]

https://bitcoinmagazine.com/articles/eu-warns-malta-of-the-dangers-of-neglecting-money-laundering

Malta aka Blockchain Island has become the mecca crypto due to its favorable crypto laws. With the flood of crypto money to the island it's been taking the right steps to work on compliance such as partnering with crypto security firm CipherTrace to identify and prevent crypto crime.

Steps like this seems to help make the government quite happy in how to handle crypto and manage risk in countries. Would you agree? What else do we need to implement or be sure to watch out for?

Money laundering is a serious crime and every country should take steps to remain in compliance as per the global standard! I am happy to see Malta is taking right steps to take their economy to another notch higher!

Since small island countries like Malta can't have big production industries due to lack of land, crypto or ITes can be their best bet to provide jobs to the mass. Associated risks will always be there for anything new, but what matters the most is the willingness of the government to manage the risk and grow against all odds. Malta is setting up an example!

[joniboini]

Malta is setting up an example!

They just accept and 'legalize' anyone who wants to start their business because they want to get money. Sure, crypto and tech-friendly because that's their opportunity.

Whatever the case it might be, I think it's impossible for them to not do any KYC for any crypto business in the near future. The risk of money laundering is too big. Unless we somehow can make every crypto user smart enough and care enough not to scam each other.

Even if they apply KYC, some malicious users would still fake their KYC if it's possible, and when that time comes, I think dex volume will increase. So either you risk your identity or deal with something on your own without any backing from the government.

[Jating]

Malta would be monumentally stupid to ignore this, and this is why places like Binance flocking there may wind up getting screwed. I'd be less inclined to trust a company that moved to Malta than one that stayed put.

Sounds like Binance may soon be on the run again. Hong Kong, Japan, Malta... where to next? The British Virgin Islands?

Or maybe Binance will finally be brought to heel like Shapeshift was? Bitfinex and some others are still managing to offer trading without KYC if you don't transfer fiat money, but the pressure on exchanges from regulators really feels tangible now.

And it's going to be difficult to get away from it. Sure, Binance has what a year or two but sooner or later those regulators will be clamping down on everything that is crypto related and Binance or Malta will not be an exceptions. The pressures will be too much that it's they have to give what the policy makers in EU wanted.

So it will be interesting what Binance will do in such cases, where are they going to run, or are they simply gonna allow what the regulators will say and them not giving a fight?

[dothebeats]

Perhaps the reason why EU is pressing Malta so hard on setting up regulations is because most crypto businesses are taking refuge on the said island and do their business in there instead of the big guys in the Union. The question is up until when would they be able to be so 'crypto-friendly'? For sure, there will come a time that the little island would be a hotspot for money laundering and other stuff if left unchecked, and that's why the EU is stepping in. Of course, due to favorable crypto conditions, Malta becomes the 'Swiss bank account' of legitimate and illegitimate crypto users alike, and that's no good in the long run.

[figmentofmyass]

So it will be interesting what Binance will do in such cases, where are they going to run, or are they simply gonna allow what the regulators will say and them not giving a fight?

they move their headquarters once a year already. for all we know, malta wasn't even a long term plan. it was probably just a temporary holdover so they could exit japan as quickly as possible after japanese regulators warned them about unlicensed exchange operation. bitfinex settled on BVI after hong kong; seems like a pretty good choice.

[rmilly]

Interesting topic regarding regulations and different countries. I always wondered why so many businesses were setting up in malta and cayman islands. I think for compliance purposes malta did the right step with ciphertrace and may even be the prime example for other countries accepting crypto imo

[Harlot]

Wish they could say the same thing for Swiss and Cayman Islands bank  accounts which have been used by big time criminals as part of their money laundering process. If they want money laundering to stop they should also step up their game for this banks in order for this criminal activity to stop. Just by putting their attention all in crypto first won't solve the problem, I just don't think that its efficient for them to focus on a small industry like ours at first.

[lohncontrol]

I'm not sure as to how Malta would respond - they are probably raking in a lot of revenue since crypto businesses prefer them as a destination as opposed to countries with stricter KYC/AML requirements in the European Union.

Malta is a minnow. The more they attempt the buck the existing order of things the harder other countries will come down on them. No one operates in a vacuum. All the EU would need to do is turn off the banking and funding taps and Malta will be brought to heel in a matter of hours.

Malta would be monumentally stupid to ignore this, and this is why places like Binance flocking there may wind up getting screwed. I'd be less inclined to trust a company that moved to Malta than one that stayed put.

Always Malta was the controversial country.

[lohncontrol]

https://bitcoinmagazine.com/articles/eu-warns-malta-of-the-dangers-of-neglecting-money-laundering

Malta aka Blockchain Island has become the mecca crypto due to its favorable crypto laws. With the flood of crypto money to the island it's been taking the right steps to work on compliance such as partnering with crypto security firm CipherTrace to identify and prevent crypto crime.

Steps like this seems to help make the government quite happy in how to handle crypto and manage risk in countries. Would you agree? What else do we need to implement or be sure to watch out for?

Money laundering is a serious crime and every country should take steps to remain in compliance as per the global standard! I am happy to see Malta is taking right steps to take their economy to another notch higher!

Since small island countries like Malta can't have big production industries due to lack of land, crypto or ITes can be their best bet to provide jobs to the mass. Associated risks will always be there for anything new, but what matters the most is the willingness of the government to manage the risk and grow against all odds. Malta is setting up an example!

It's a paradox but much regulatory in crypto will drive away investors.

[Kemarit]

Wish they could say the same thing for Swiss and Cayman Islands bank  accounts which have been used by big time criminals as part of their money laundering process. If they want money laundering to stop they should also step up their game for this banks in order for this criminal activity to stop. Just by putting their attention all in crypto first won't solve the problem, I just don't think that its efficient for them to focus on a small industry like ours at first.

They won't because they are still slaves of the fiat systems for many many years. And since they are threaten by crypto, they have to step up and not let loose of this industry as Malta has been the safe haven for exchanges like Binance. They are really putting a lot of attention on crypto for the last three years, specially when it boomed in 2017 so they have to put at end to this. So obviously, Malta is a target now and I'm sure their will be other countries that they can bully and enforce everything they want to have total control again.

[gentlemand]

It's a paradox but much regulatory in crypto will drive away investors.

No it won't. It's the price of doing business. If people refuse to countenance it then they won't get to play.

Many more investors will be driven away from platforms that don't toe the line and may be crushed at any moment.

I believe Coinbase will still be here in five years. Unless something changes I do not think the same about Binance.

Stuff like this - https://thenextweb.com/hardfork/2019/06/12/bitcoin-cryptocurrency-fatf-regulation/ is not easing up, it's heating up.

[Harlot]

~snip~

They won't because they are still slaves of the fiat systems for many many years. And since they are threaten by crypto, they have to step up and not let loose of this industry as Malta has been the safe haven for exchanges like Binance. They are really putting a lot of attention on crypto for the last three years, specially when it boomed in 2017 so they have to put at end to this. So obviously, Malta is a target now and I'm sure their will be other countries that they can bully and enforce everything they want to have total control again.

That seems to be right, I know most of the politicians out here who are also against cryptocurrency have something to hide with their swiss bank accounts, now that people have this kind of power with cryptocurrencies they seem to be afraid  that normal people like us can transfer money without their rules stopping us. Now they are hot on our heads just because they see us taking advantage of the system. They are really worried about the economical imbalance it will bring once a lot of people will start getting rich with the industry.

[squatter]

It's a paradox but much regulatory in crypto will drive away investors.

No it won't. It's the price of doing business. If people refuse to countenance it then they won't get to play.

Many more investors will be driven away from platforms that don't toe the line and may be crushed at any moment.

I believe Coinbase will still be here in five years. Unless something changes I do not think the same about Binance.

Stuff like this - https://thenextweb.com/hardfork/2019/06/12/bitcoin-cryptocurrency-fatf-regulation/ is not easing up, it's heating up.

I don't think it'll drive away investors, but it could definitely change the nature of current trading practices. Some -- including Coinbase -- are speculating that these FATF guidelines will drive investors away from exchanges and back to peer-to-peer trading:

U.S. exchanges may also lose customers, as instead of going through an exchange or another virtual-asset service provider (VASP), some may simply start trading with others directly, to safeguard their privacy.

“I get why the FATF wants to do this,” Jeff Horowitz, chief compliance officer at San Francisco-based Coinbase, the largest U.S. crypto exchange. “But applying bank regulations to this industry could drive more people to conduct person-to-person transactions, which would result in less transparency for law enforcement. The FATF really needs to consider the many unintended consequences of applying this specific rule to VASPs.”

If he's right, it could be a double whammy for exchanges. Increased compliance costs and a smaller share of retail investors.