Crypto-regulations and the issue of another “Snowden” clash in the works
These categories pose significant challenges to the use of cryptocurrencies by terrorist organizations. Even so, speculation still exists. There is a fear that the cryptocurrency money will be used to finance terrorism or funnel money from illegal activities.
It is well known that different cryptographic techniques are used to conduct illicit activities. As a result, major cryptocurrency exchanges have implemented anti-money laundering measures to compensate for fraud and hacks. Crypto exchange platforms such as Binance, Robinhood-even, and stablecoin such as Tether have incorporated this to fit the description set by regulators.
Even traders and investors are now looking for regulated exchanges with AML compliance technology that can protect their assets from financial crime and fraud. According to data from Finance Magnates, willingness to share personal information for verification procedures has actually increased by 65%.
Take an example, for example. One of the latest companies to join this party is Matrix.
Matrix, a global virtual asset trading platform, announced a partnership with Elliptic, the leading provider of virtual asset risk management and blockchain analytics solutions, to protect traders on its platform as the sector grows. The official press release said,
“Through this partnership, Matrix brings Elliptic’s trusted analytics solutions to protect all merchants on its platform with its anti-money laundering (AML) compliance and risk monitoring operations. “
In fact, different parts of the world have recognized the same thing. But, most have also welcomed regulations to keep a tight eye on massive gains. Interestingly, Abu Dhabi has seen a significant increase in the crypto space due to a strong legal framework.
The chief executive of the Financial Services Regulatory Authority, Emmanuel Givanakis, has expressed his optimism in this regard. That being said, not all countries have greeted the tokens with optimism. While the United States appears to be in an ambiguous situation, countries like China and Pakistan, among others, have parted ways with these “speculative” assets.
It’s no surprise that governments and regulators have been scrutinizing cryptocurrencies from the start. It was only a matter of time before they found a line of attack worth pursuing. Well AML, KYC, 2FA all echo one thing – Add some confidential details.
Further, the question here is: Could the increased need to share information to meet AML standards lead to yet another “Snowden” crypto showdown?
Surprisingly or not, even “crypto-executives” and influencers are now more than happy to comply with these regulations. For example, India ranks second in the Global Crypto Adoption Index, and its crypto platform owners have expressed similar sentiments regarding incoming regulations.
But sharing personal information remains one of the biggest concerns. For example, in the worst case scenario, any hack or fraud on a platform could potentially lead to an “unknown” central authority with crucial information.
Moreover, it could also harm crypto-innovation. The cryptocurrency industry has flourished in recent years, in part because blockchain technology promises to disrupt various industries, especially finance.
On the issue of fundraising as well, cryptocurrency companies have been able to raise funds quickly without having to follow complex security laws. Retail investors were able to invest money in projects that they otherwise would not have been able to access.
No more headaches?
Even though regulations are built in for law-abiding cryptocurrency users, getting verified to trade on an exchange is a laborious process. They have to provide a plethora of personal data, including their home addresses, scans of government-issued IDs, and photo or video selfies.
However, for criminals it is easier. Just pay as little as $ 150 on the black market for a ready-to-use verified account. Thus, bypassing the mandatory requirements of regulatory evils while enjoying crypto gains.
To be clear, “verified” in this context does not mean legitimate. The underground providers create these accounts with the identity of other people or under invented names, prompting exchanges to verify them as valid users. They then advertise these verified accounts for sale on Internet forums and on Telegram.
Surprisingly, when it comes to money laundering, there was also a job offer. This was well explained by a recent dialogue on the CCCC.sb forum.
“Looking for a job as a money launderer. Send offers to my DM, ”one user wrote in July.
“Of a drop,” corrected another user in a response before describing the role,
“Only your face is needed. To pass video verification via WhatsApp. From 1,500 to 2,000 rubles [$20-$28] for one pass, you can make several passes per day.
All in all, eight to ten years later, we might discover another ‘Snowden’ emerging from the hidden crypto activity taking place within this ‘centralized’ cryptocurrency ecosystem.
Additionally, cryptocurrency is still a fledgling industry with only basic mandatory measures in place. Imagine when it hits a market cap of $ 10,000. The regulations, at that point, would be even stricter.