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Author Topic: [2019-06-21] FATF: "37 Global Crypto Exchanges Must Now Share Customer Data"  (Read 444 times)
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June 23, 2019, 07:39:56 PM
 #21

On second thought, the FATF is probably not as effective as I originally assumed. According to this 2017 report, most monitored countries have only instituted basic AML regulations like making money laundering a crime and requiring banks to report suspicious transactions. Most of their recommendations go unenforced:

Quote
As of April 2017, the level of country compliance with the FATF 40 recommendations rests at just 25 per cent across the 30 countries most recently assessed. While this is definitely an improvement since 2011, when full compliance across 160 countries was at 12.3 per cent, taking 27 years since the standards were introduced to get to a 25 per cent compliance level cannot exactly be called rapid progress. 

This sort of noncompliance may be relevant in the case of Bitcoin exchanges and brokers that don't currently require KYC:

Quote
[A]reas where the majority of countries are rated “partially compliant” or “non-compliant” include requiring firms to carry out due diligence in non-financial fields such as real estate, law and accounting (Recommendation 22 – 63 per cent of countries rated either partially or non-compliant) and making sure the authorities can identify the real owners of corporations to avoid the abuse of anonymous shell companies (Recommendation 24 – 73 per cent of 30 countries rated partially or non-compliant). 

I still expect the guidelines to further reinforce a two-tiered system of compliant and non-compliant exchanges. Services like Coinbase and Gemini will no doubt be attempting to comply with them.

Its the natural process if global adoption should happen. Maybe Libra was trigger of that, but it and more will come once more ppl will lose money on scams or illegal things are done with crypto. A lot still happens imo


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June 23, 2019, 07:43:35 PM
Merited by Carlton Banks (2)
 #22


Calling the “threat of criminal and terrorist misuse of virtual assets” a “serious and urgent,” FATF says it will give countries 12 months to abide by the guidelines, with a review set for June 2020.


"Fighting terrorism" is always just an excuse to grab more power and money for the ruling class, if the US wanted to fight terrorism, they'd punish Saudi Arabia, but instead they sell them weapons.
They don't want to say "we want to control people's finances", so they blame everything on terrorism without even showing proof that terrorists use Bitcoin.

    “… obtain and hold required and accurate originator [sender] information and required beneficiary [receipient] information and submit the information to beneficiary institutions … if any. Further, countries should ensure that beneficiary institutions … obtain and hold required (not necessarily accurate) originator information and required and accurate beneficiary information …”


What should they do if someone withdraws coins to their wallet instead of sending them to another exchange? Or deposits from their own wallet? What about mixers and other privacy schemes, are they going to outlaw them or what?

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June 23, 2019, 08:10:29 PM
 #23

What should they do if someone withdraws coins to their wallet instead of sending them to another exchange? Or deposits from their own wallet?

I'm not sure. There seems to be an implication that service providers will share information so they can identify specific persons by analyzing both sides of a transaction chain. I guess this isn't so different from Coinbase analyzing customer withdrawals multiple transactions out to identify gambling service transactions and terminate customer accounts accordingly.

This is what Bittrex and Kraken had to say:

Quote
“It’s either going to require a complete and fundamental restructuring of blockchain technology, or it’s going to require a global parallel system to be sort of constructed among the 200 or so exchanges in the world,” Roth said. “You can imagine difficulties in trying to build something like that.”

A handful of U.S. exchanges are discussing how to set up such a system, said Mary Beth Buchanan, general counsel at San Francisco-based Kraken, which does about $195 million in daily volume.

What about mixers and other privacy schemes, are they going to outlaw them or what?

Apparently the FATF guidelines mention mixing services:

Quote
The guidance even addresses services designed to obfuscate the origin of crypto transfers, saying nations should make sure that providers can either manage or mitigate the risks of transfers that use mixers, tumblers or similar tools. “If the VASP cannot manage and mitigate the risks posed by engaging in such activities, then the VASP should not be permitted to engage in such activities,” the document reads.

I know Gemini has prohibited the use of mixers in its terms of service for some time. We might see codification of laws intended to require these sorts of practices. Whether mixers would be outright banned is another matter.

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June 24, 2019, 06:23:07 AM
 #24

There are many countries who will not abide by these rules, any large decent exchange will simply pack up and move. It's not like they have to be situated on their land, servers and data are easily transferable.

that might work for a year or two until countries start getting blacklisted by the financial system. the first FATF statement on compliance with these rules is in june 2020. they may start blacklisting at that time. at the latest, it'll start happening by 2021.

the larger the exchange, the more difficult it will be to operate in secrecy or simply pack up and move. local governments will start targeting and shuttering noncompliant exchanges once the FATF brings the hammer down.

i doubt bitmex and similar exchanges will keep operating this way at that point.

Doing business as a cryptocurrency exchange these days is following all the rules as imposed by the government especially if one is based in USA or accepting transactions from American citizens. I am not anymore surprised if all legitimate exchanges will follow this proposed rule of exchanging or sharing customer information with each other as this is being done with traditional banking system. Soon we will witness exchanges being burdened by the same banking rules by the government and refusal to follow means one has no privilege of doing business. Well, as for me, this can be the eye-of-the-needle test for many exchanges...which in my opinion can be better than experiencing an exchange which just evaporated without a trace. Again, this is my opinion.

 
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June 24, 2019, 06:51:00 AM
 #25

I consider it a challenge and a arms race. Now maybe people will pay attention to the dark net more and monero more. States lost credibility, they want debt slavery, modern monetary policy, negative interest rates, bail ins, cashless society, they want to use the blockchain based id for social credit system and minority report style tracking with 5g bandwidth to fuel it.

In many ways the point of cryptocurrency is to keep them from knowing what, who, when etc There *should* be numbered account and hidden deposit boxes in the swiss. Compulsory taxation should end globally.
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June 24, 2019, 08:18:44 PM
 #26

  Looks like we will have to chose Magic, new crypto-trading platform from John McAfee. https://www.coindesk.com/john-mcafees-new-crypto-trading-platform-magic-goes-live
  He is a freedom fighter this days, I follow him on Twitter.
  I think dex-platforms can do much about their customer information`s, we log-in with wallet directly, all they see it`s address.

 
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June 24, 2019, 08:27:07 PM
Merited by Carlton Banks (1)
 #27

  Looks like we will have to chose Magic, new crypto-trading platform from John McAfee. https://www.coindesk.com/john-mcafees-new-crypto-trading-platform-magic-goes-live
  He is a freedom fighter this days, I follow him on Twitter.

He's a snake oil salesman.

Have you even looked at that platform? It looks like it was coded by complete novices.

More importantly, "McAfee Magic" is not actually an exchange. It's just an interface that integrates APIs from other exchanges. You still need to have accounts at these exchanges -- and you need to complete their KYC processes.

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June 24, 2019, 08:41:13 PM
Merited by Carlton Banks (1)
 #28

  Looks like we will have to chose Magic, new crypto-trading platform from John McAfee. https://www.coindesk.com/john-mcafees-new-crypto-trading-platform-magic-goes-live
  He is a freedom fighter this days, I follow him on Twitter.

He's a snake oil salesman.

Have you even looked at that platform? It looks like it was coded by complete novices.

More importantly, "McAfee Magic" is not actually an exchange. It's just an interface that integrates APIs from other exchanges. You still need to have accounts at these exchanges -- and you need to complete their KYC processes.

Even if it was an actual exchange - I wouldn't touch it with a shitty stick, or anything else with the McAfee name on it for that matter.

PIA went evil: https://bitcointalk.org/index.php?topic=5203968.msg53160131#msg53160131 Unofficial & Uncensored SYSCOIN thread: https://bitcointalk.org/index.php?topic=4748031.0    Do not trust Yobit/HitBTC/BiteBTC/coinsbit/p2pb2b/Mercatox/C-cex/Poloniex/WEX/KuCoin/LiveCoin/TheRockTrading/Bitfinex/ADAB/Okex/TradeSatoshi/Gate.io/Changelly/Freewallet.org scam exchanges or ICO's by known scammers like HashCoins/Ambisafe/Bountyhive - they WILL scam you! Use diligence & research. Buy coins, sell coins - don't invest in stupid shit. If your questions aren't answered - don't touch it.
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June 24, 2019, 09:16:34 PM
 #29

Quote
To be clear: FATF’s recommendations for anti-money-laundering policies are not binding; member countries adopt them by passing legislation or writing regulations. However, countries that fall egregiously out of compliance with FATF standards get put on a blacklist, making them radioactive to foreign investment.

It'll be interesting to see how many countries actually comply with this. Sanctions are easier said than done, especially when there is national interest in some countries to keep things running as they are right now to ensure that businesses are more attracted to them.

I personally think though that this type of regulation is inevitable, and would come regardless of the bull market given the growth in adoption and market size. In essence, this is a draconian restriction put on people to make their bitcoin transacting process much more difficult than it should be.

Quote
Under the new guidance published, the required information for each transfer includes:

        (i) originator’s name (i.e., the sending customer);
        (ii) originator’s account number where such an account is used to process the transaction (e.g., the VA wallet);
        (iii) originator’s physical (geographical) address, or national identity number, or customer identification number (i.e., not a transaction number) that uniquely identifies the originator to the ordering institution, or date and place of birth;
        (iv) beneficiary’s name; and
        (v) beneficiary account number where such an account is used to process the transaction (e.g., the VA wallet).

I also would not be surprised at the least if they decided to append this list further. Namely, forcing people to provide source of funds, why they are transacting, etc. on regulated platforms. I think all this will do is drive people away from regulated platforms, and onto P2P ones.

 
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June 25, 2019, 12:07:20 PM
 #30

I think all this will do is drive people away from regulated platforms, and onto P2P ones.

Agreed, which is a good thing & how it should have been done in the first place.

PIA went evil: https://bitcointalk.org/index.php?topic=5203968.msg53160131#msg53160131 Unofficial & Uncensored SYSCOIN thread: https://bitcointalk.org/index.php?topic=4748031.0    Do not trust Yobit/HitBTC/BiteBTC/coinsbit/p2pb2b/Mercatox/C-cex/Poloniex/WEX/KuCoin/LiveCoin/TheRockTrading/Bitfinex/ADAB/Okex/TradeSatoshi/Gate.io/Changelly/Freewallet.org scam exchanges or ICO's by known scammers like HashCoins/Ambisafe/Bountyhive - they WILL scam you! Use diligence & research. Buy coins, sell coins - don't invest in stupid shit. If your questions aren't answered - don't touch it.
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July 02, 2019, 10:04:35 PM
 #31

Apparently CipherTrace and Shyft have an answer to the privacy concerns around customer data sharing vis-a-vis the new FATF guidelines. They'll create a "proof-of-knowledge identity protocol that doesn’t relinquish user information" -- and I guess we'll just have to take them at their word.

Always nice to have the likes of CipherTrace watching our backs -- and sniffing around our wallets. Roll Eyes

Quote
According to a press release shared with Bitcoin Magazine, the partnership wants to mediate between government officials, crypto companies and cryptocurrency users by creating a proof-of-knowledge identity protocol that doesn’t relinquish user information. In function, this would resemble something like a zero-knowledge proof, which is a cryptographic function that allows one party to reveal that it knows certain information without conveying the information itself.

The solution involves a smart contract platform with shared access between exchanges and other relevant cryptocurrency service companies. This cryptographically secured tool will facilitate an identity hub that will satisfy FATF’s crypto travel rule while also keeping the true identity and information of each user concealed.

“Our focus is on creating federated standards for identity, which are blockchain agnostic,” Joseph Weinberg, Shyft’s founder, is quoted as saying in the release. “We make sure KYC checks can be transferred across networks in a secure manner without compromising identity information. This program bridges a critical gap between new regulatory standards and existing exchange operations to greatly strengthen the crypto ecosystem with a practical implementation of the FATF’s Travel Rule.”

This doesn’t mean that exchanges and regulators won’t have access to personal info if they want it, however. The data bridge will allow its overseers to disclose information “when compelled to do so by legal authorities,” though this is already something that happens today (see Coinbase forking over user information to the IRS, for example).

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July 05, 2019, 11:26:10 AM
 #32


It's not just the US. In fact, all the G20 countries already publicly affirmed their commitment to implementing these rules. The FATF blacklist has been a very effective tool in forcing countries into compliance. This works because local governments will heavily pressure exchanges to comply, for fear of being blacklisted by the global financial system.

I also was thinking that this is only a recommendation and had hope that most of the countries will decide not to comply. This is bad, that they will be forced to do it. As others have mentioned this is a big job for exchanges and will force many exchanges to go under because they will not have the resources to collect this data.

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July 05, 2019, 05:41:18 PM
 #33

I consider it a challenge and a arms race. Now maybe people will pay attention to the dark net more and monero more. States lost credibility, they want debt slavery, modern monetary policy, negative interest rates, bail ins, cashless society, they want to use the blockchain based id for social credit system and minority report style tracking with 5g bandwidth to fuel it.

Monero is not 100% safe. There are rumors that the authorities are now able to track at least some of the XMR transactions. And dealing in the dark market can be a double edged sword. Both the authorities an the dark market vendors can target you. You may be doing perfectly legal dealings, but once you give your delivery address to these vendors it can make you very vulnerable.

 
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July 05, 2019, 07:00:51 PM
 #34

Monero is not 100% safe. There are rumors that the authorities are now able to track at least some of the XMR transactions.

source?

no method is guaranteed to work. part of the problem with blockchains is we're leaving permanent records behind for analysis. methods that work today may be deanonymized tomorrow.

for now, i haven't seen any indication that monero---when used properly---is broken. you have to account for the anonymity set. if you cascade multiple transactions, you can likely beat law enforcement analysis, at least for now.

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July 05, 2019, 09:35:26 PM
 #35

summarizing what they are saying is, give the following documents the exchanges like yobit:

- Your bank account number

- your passport

- your IP

-  Bank statement

- proof of address

Meanwhile the owners of the exchanges like yobit remain anonymous... what the fuck is this? In my country to have a bank account  becoming a major headache because of documents that ask

 
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July 05, 2019, 11:13:24 PM
 #36

Meanwhile the owners of the exchanges like yobit remain anonymous... what the fuck is this?

nothing will change for yobit and other small shady exchanges like it. they already don't comply with local laws (or laws where their customers reside). if they got shut down tomorrow, no one would be surprised.

it's the exchanges where operators are trying to play by the book where things will get increasingly draconian---bitstamp, coinbase, gemini, kraken. i won't be surprised if even bitfinex starts forcing mandatory KYC. that would really be the end of an era!

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July 05, 2019, 11:29:26 PM
 #37

Implementing this plan can spend more years, but if this regulations can become successful hope can it bring for crypto into stronger possibility to become world wide currency, and hope this news can't effect of this recent bitcoin price stability.

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