As gatekeepers of traditional financial markets, the most important obstacle for banks and financial institutions is to maintain, and trust, the integrity of the markets themselves. History has shown that this moral burden alone has not prevented such institutions from engaging in suspicious behavior, while governments around the world have responded by enacting regulations to ensure that these institutions adhere to the rule of law. Do
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Alliance Block CEO and co-founder Rashid Ajja
A recent Fenergo report states that in 2020, the rules of anti-money laundering (AML), Know Your Customer (KYC), Data Privacy, and Financial Instruments Guidelines (MIFID) will be revised. Penalties imposed by financial institutions to enforce regulations are a staggering 6 10.6 billion globally.
Such bigwigs have encouraged companies to update their KYC and AML processes to reduce money laundering and curb criminal activity in financial markets, despite the growing volume of cross-border activity and quality of jurisdiction. Despite the lack of, these updates are still short-lived compared to the AML and KYC processes in the world CryptocurrenciesTraditional markets are bright ahead.
A very lucrative goal
One of the long-standing obstacles to the formal acceptance of cryptocurrencies by governments around the world and the consequent widespread adoption is that it is possible that cryptocurrencies are a highly lucrative target for money laundering. In 2019, nearly $ 3 billion was laundered through various cryptocurrency exchanges, many of which lack AML and KYC processes that keep launderers away from traditional financial institutions.
One study even found that more than half Crypto Exchange There was a weak or non-existent KYC process. Laundered money can be used for everything from basic tax evasion and drug or human trafficking to domestic and international terrorism. For a fledgling industry that wants to become mainstream, it is certainly less than ideal to allow the proceeds of such illicit practices to flow into corrupt markets.
There are no KYC checks
It is important to understand that KYC’s policies are relatively new cryptocurrency Some of the world’s YC processes are performed following this fact, some exchanges allow their users to open an account without any KYC checks, and others have taken more drastic measures, such as with US customers. Instead of refraining from doing business and putting its basic principles into practice. KYC and AML policies.
In fact, some well-known U.S. exchanges have announced restrictions on U.S. consumers and the transactions that U.S. consumers can perform on their platforms, which instead of working on these important processes, One step is to retreat. If the crypto industry wants to be taken seriously, it must act seriously, not shy away from working under the guidelines that have been put in place to protect all parties.
While governments may justify blocking exchanges that are unwilling or unwilling to ensure compliance with AML and KYC, the problem is that a major attraction of many blockchain and cryptocurrency projects is their own lanes. There is no identity of religion. A system that prides itself on anonymity can force the user to provide passport details only for their transactions?
Fortunately, there are many innovative solutions being developed blockchain And now the crypto industry, such as anonymous identity verification modules, where users can verify their identity once, without having to provide or disclose their personal information, to new vendors or platforms with initially verified identities Prove your identity.
Implement the current KYC
It’s no secret that cryptocurrencies are often used ransomware Attacks, due to the ability of criminals to hide their identities and reduce the risks of funds they have. A recent report by the Ransomware Task Force, published in support of the likes of Microsoft and McAfee, outlines the various private and public reactions that can be taken to deal with the increase in ransom attacks.
The report itself recommends enforcing existing KYC and AML regulations, one goal that is easily achieved – the technology is already available. Think of it this way: If a hacker group enters the government Data base, Which just happened in Ireland, the group then steals the data of millions of people and threatens to publish it online unless the government pays a ransom in bitcoin because they can hide their identities. What will the wider financial industry do, let alone the public, with associate cryptocurrencies? Crime
As a result, the number of participants in the corrupt market will decrease and its reputation will naturally be damaged. Effective adherence to AML and KYC guidelines will not only protect the integrity of crypto markets, but also protect holders of cryptocurrencies from massive price fluctuations caused by illegal activity. Effective AML and KYC processes, legislation and guidelines will prevent this vicious cycle, so it is in our best interests to ensure that these practical and achievable goals are met.
KYC as “required”
Reliable KYC and AML processes are ‘no better than good’, but they are needed. They are essential for the future prosperity of the crypto industry. These processes play an important role in dealing with illegal activity and represent an important cornerstone for good business.
In the same way that traditional financial institutions intend to maintain the integrity of financial markets, the leaders of the corrupt industry need to take into account the negative stereotypes associated with money laundering by adopting AML and KYC measures, which are equally effective in traditional markets. You have to try to eliminate it. , Where possible, allowing anonymity. Doing so will allow the industry to thrive, take advantage of last year’s success, and become a model shift in our way of doing business.