Tag: Anti-Money Laundering

EU Proposes Cap on Anonymous Crypto Transfers

by Blockchain News

The European Union has taken a step towards greater financial transparency with a proposal to limit anonymous crypto transfers to 1,000 euros ($1,083) to combat money laundering and terrorist financing. According to a statement from the European Parliament published on March 28, the new limit would apply to transfers where a customer cannot be identified. Cash transactions would also be capped at 7,000 euros ($7,585).

The proposal is part of the Anti-Money Laundering and Countering the Financing of Terrorism package and is expected to be confirmed in a plenary session in April. Negotiations on the final shape of the bills will then begin. The new regulations will be enforced by the European Anti-Money Laundering Authority (AMLA), which was formed in June 2022.

The AMLA’s co-rapporteur, Emil Radev, stressed the importance of close cooperation between the new authority and national supervisors. He also called for the AMLA to directly supervise the riskiest crypto asset service providers and companies in the financial sector that operate in several member states.

Lawmakers overwhelmingly approved the text relating to anonymous instruments, including crypto assets, with 99 votes in favor, eight against, and six abstentions. The move is part of a wider push towards greater transparency in the financial sector, with the EU seeking to tackle the threat of money laundering and terrorist financing.

Crypto assets have long been seen as a potential haven for illicit activities due to the ease with which they can be transferred anonymously. The new regulations seek to address this issue by increasing transparency and accountability in the crypto sector.

The proposal is part of a wider push by the EU towards greater financial regulation. The European Central Bank has previously called for a global approach to regulating cryptocurrencies, warning that they could pose a threat to financial stability. The EU’s proposals also follow recent moves by other countries, such as China, to tighten regulations on crypto assets.

While the EU’s proposals have been welcomed by many in the financial sector, some have raised concerns about the potential impact on privacy and the practicalities of enforcing the new regulations. Nonetheless, the EU remains committed to tackling money laundering and terrorist financing, and the new regulations are just one step towards achieving this goal.

Source

Tagged : / / / / / /

Binance Responds to U.S. Senators Letter, Excludes Financial Data

by Blockchain News

Binance has been the subject of regulatory scrutiny on a global scale, with a number of nations implementing limits or completely banning its services as a result of allegations of regulatory infractions. The Securities and Exchange Commission (SEC) in the United States initiated an investigation into Binance.US in February over trading entities that are reportedly tied to Changpeng “CZ” Zhao, the CEO of Binance. An investigation report indicated that Binance was likely responsible for the transfer of around 400 million dollars in money from a Binance.US account to a trading business run by Zhao.

In their letter, the senators from the United States, lead by Elizabeth Warren, expressed their worries over the operations of Binance and asked for the firms’ balance sheets, AML rules, and documentation regarding the link between Binance and Binance.US. The senators charged that Binance and its American affiliate intended to circumvent authorities in the United States, evade sanctions, and assist the laundering of at least $10 billion in illicit funds. Previous statements made by Binance indicate that the two businesses are distinct organizations, each with its own autonomous management and activities.

Binance’s Hillman mentioned in his response to the senators’ letter that the cryptocurrency exchange uses both in-house and third-party tools to monitor user transactions and profiles in real time. As a result of alerts generated by transaction monitoring, Binance was able to halt more than 54,000 transactions between August 2021 and November 2022. Binance didn’t address the senators’ concerns about the exchange’s lack of openness, despite the fact that it had already provided the financial data that had been sought to the U.S. authorities. Instead, it omitted the information from the letter it had sent to the senators.

As a whole, it is probable that Binance’s answer is an effort to soothe worries and strengthen its relationship with U.S. authorities, who have been clamping down on cryptocurrency exchanges and other participants in the sector. Yet, Binance’s regulatory difficulties are far from being resolved, and it is possible that the exchange may be subjected to more scrutiny in the months ahead as authorities work to assure compliance with AML and other legislation.

Source

Tagged : / / / / /

BaFin Declines to Classify NFTs as Securities, Recommends Case-by-Case Approach

by Blockchain News

The fact that there is now a discussion going on over the appropriate approach to classify these digital assets is reflected in BaFin’s decision to not recognize NFTs as securities. This argument has been going on for quite some time. Even if there are many who think of non-fungible tokens (NFTs) as investments or crypto assets, there are also others who believe that NFTs are nothing more than one-of-a-kind digital collectibles that have no value apart from the rarity or desirability of their presence. Despite the fact that some individuals regard non-traded stocks and bonds to be investments, this is the case. It is possible that, at some time in the future, the case-by-case method that BaFin utilizes will make it possible to get greater clarification about the classification of NFTs.

Yet, it is difficult to apply current legal frameworks to non-fiat currencies such as NFTs since these assets are not standardized and cannot be exchanged. This makes it difficult to apply existing legal frameworks. Those in charge of regulation are presented with a challenge as a result of this. The phrase “crypto assets” refers to non-fungible tokens that cannot be traded for other currencies and is an exception to this norm. BaFin is under the impression that non-financial transactions will not be in conformity with the licensing requirements outlined in the Payment Services Supervision Act, nor will they be subject to BaFin’s supervision regarding the prevention of money laundering. This is due to the fact that non-bank financial transactions are not regulated in the same manner that payment services are.

Notwithstanding the difficulties that are associated with recognizing them, non-fungible tokens are becoming an increasingly popular category of digital collectibles. This is despite the fact that identifying them may be difficult. The majority of non-fungible token (NFT) collectors acquire NFTs for reasons related to status, distinctiveness, and aesthetics rather than with the purpose of utilizing them as an investment, according to research that was undertaken by the metaverse site Metajuice. As the market for non-traditional assets (NFTs) continues to increase, the legal frameworks that control it will need to change in order to provide investors and collectors a higher degree of transparency and protection. This will be necessary in order to accommodate the market’s growing size.

Source

Tagged : / / / / / /

Pakistan Banks Develop Blockchain-based KYC Platform

by Blockchain News

The Pakistan Banks’ Association (PBA), a group of 31 traditional banks operating in Pakistan, has signed off on the development of a blockchain-based Know Your Customer (KYC) platform. The move aims to strengthen the country’s Anti-Money Laundering (AML) capabilities while countering terror financing – an initiative led by the State Bank of Pakistan (SBP).

As reported by the Daily Times, the PBA signed a contract on March 2 to develop Pakistan’s first blockchain-based national eKYC banking platform. The Avanza Group has been tasked to develop the blockchain-based eKYC platform named “Consonance,” which will be used by member banks to standardize and exchange customer data via a decentralized and self-regulated network. This will enable banks to assess existing and new customers, and to share customer details based on consent.

The member banks of PBA include international establishments such as the Industrial and Commercial Bank of China, Citibank, and Deutsche Bank. The blockchain platform will improve operational efficiencies, primarily aimed at improving customer experience during onboarding.

Joining other countries in the race to develop a central bank digital currency (CBDC), Pakistan has recently signed new laws to ensure the launch of a CBDC by 2025. The SBP will issue licenses to electronic money institutions for CBDC issuance. “These landmark regulations are a testament to the SBP’s commitment toward openness, adoption of technology, and digitization of our financial system,” said Deputy Governor of SBP Jameel Ahmad.

The use of blockchain technology for KYC purposes offers numerous benefits to the banking industry, including reduced costs and enhanced security. The development of Pakistan’s first blockchain-based national eKYC banking platform is a significant step towards the country’s digitalization of its financial system. By standardizing and sharing customer data, Pakistan’s banking industry will be better equipped to fight money laundering and terror financing while improving customer experience during onboarding.

Overall, the development of the blockchain-based KYC platform demonstrates the PBA’s commitment to providing its members with cutting-edge technology to improve operations and customer experience. The move also reflects Pakistan’s willingness to embrace blockchain technology as a means of strengthening its financial system and combatting financial crimes.

Source

Tagged : / / / / /

AML compliance mandatory for foreign crypto exchanges, says Korean regulator

by Cointelegraph

Eun Sung-soo, chairman of South Korea’s Financial Services Commission (FSC), has said that foreign crypto exchanges that deal in the Korean won must comply with the country’s Anti-Money Laundering standards.

According to The Korea Herald on Tuesday, Eun made these comments while fielding questions from lawmakers about the FSC’s plans to regulate crypto exchange giant Binance.

Eun reiterated the need for overseas exchanges that offer won-denominated crypto trading pairs to comply with the same Anti-Money Laundering standards as platforms based in the country.

As part of this compliance, these foreign exchanges will have to register with the Korea Financial Intelligence Unit — the FSC’s AML watchdog.

The FSC chairman’s remarks also offer another indication of South Korea’s efforts to maintain strict oversight on its local crypto market. Back in April, the government announced an interagency operation aimed at combating illegal cryptocurrency dealings including money laundering and tax evasion.

As previously reported by Cointelegraph, a recent investigation uncovered $1.48 billion in illegal overseas crypto transactions with over 30 people implicated in the case.

Eun’s directive for exchanges to register is part of the revised law announced back in March but is scheduled to take effect in September.

Related: South Korea’s small crypto exchanges face increasing regulatory heat

Apart from AML compliance, exchanges must also utilize real-name account trading. As such, platforms must forge banking relationships with financial institutions in the country.

Presently, only the “big four” — Korbit, Bithumb, Coinone, and Upbit — are in compliance with the real-name trading provision. Smaller crypto exchanges are reportedly finding it difficult to secure banking partnerships and risk being banned from operating once the six-month grace period elapses in late September.

Meanwhile, major South Korean banks are entering into the crypto custody business with Woori becoming the latest financial institution to announce a custodial product for cryptocurrencies.