AML Will Transform Cryptocurrency into a Tool of Unprecedented Control

AML Will Transform Cryptocurrency into a Tool of Unprecedented Control

The Financial Action Task Force (FATF) plans to set international regulation standards for crypto by June 2019. According to FATF, these standards will be obligatory for exchanges, financial services providers and even crypto wallets

Those people, who deal with banks more or less frequently, are familiar with their AML procedures. You can’t send or receive your own money without filling a ton of papers. Over years the AML framework becomes more and more complicated. Customers accounts get frozen left and right with the requirement to provide evidence of the origin of the funds. That makes the banking system very ineffective. Now they want to do the same with crypto.

Crypto always was the opposite of banks and regulations. It was the money for the free people, that can’t be tracked or associated with its owner. That regulation, proposed by FATF, changes the nature of cryptocurrencies, transforming them into the tool of unprecedented control. Exchanges, financial services, even crypto wallets are subject to regulations. That means that you won’t be able to buy or sell crypto without being monitored.

One year ago there were talks about the possibility of issuing government-backed cryptocurrencies. Now with this kind of regulations, there's no point for governments to bother themselves with any developments. The right of the strongest allows them to control all points where common people are able to enter crypto until there won't be any uncontrolled entry points. After that, the existing infrastructure and the nature of blockchain-based transactions can help to build the system for tracking every single citizen in the country. The libertarian idea of uncontrolled money can fail and become the same thing that it tried to fight with. The reason is simple: governments still have power and they control the circulation of fiat money. All of us buy crypto for fiat money, and that's the transactions that can be tracked or blocked by banks. In many cases, wire transfers to exchanges get blocked with an explanation that it's not safe. People can decide what to do with their own money? It seems that we can't. Governments are winning, and it was very naive to think otherwise. Crypto is becoming an alternative way to save and transfer money under the control of same old regulators.

What could be done in this situation? Of course, there are solutions to this problem. Blockchain is still a public domain and everybody can use it without restrictions, the only thing we need is to have an internet connection and a set of tools to make transactions. The most popular crypto wallets may require a KYC verification. But those same people who were anonymously developing open source clients for years will give us the new wallets. The more puzzling problem is the AML procedures on exchanges. What does it mean? The ban of all private coins? The crackdown on all exchanges, noncompliant with the international AML law?

Of course, common people won't care about it. They will care only after the next scandal, a Snowden-like leak, about governments still spying on their citizens, this time on even a larger scale. Those who want to evade the surveillance of the Big Brother... well, it's time to get back to cash, we suppose? Anyway, mainstream crypto was never supposed to be very private, but its qualities give to governments another way to control us. And we created it by ourselves. Let's see how it turns out.

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India: Banks ask customer to sign consent form over cryptocurrency regulation breach

The cryptocurrency market in India has not been up and running and maybe a far fetched dream at the moment. The banks in the country are also taking all step possible to prohibit their customers from using their services for cryptocurrency transactions. Recently, HDFC bank joined the wagon of banks forcing their customers to sign a contract. Source: Twitter According to Twitter user Crypto India YT, the HDFC bank made their customer sign a consent form after tracking some crypto trading activities. As per the Twitter user, the bank asks the customer to come to the bank and sign a form where they consent to the bank’s decision of shutting their account if they continue with crypto trading. An excerpt from the letter read: “I/We authorize the bank to close the above account without any further notice if it is observed in future that transactions have been carried out for Bitcoin/ virtual currencies.” Previously, many crypto-users in India had called out Kotak bank and Digibank for forcing the customers into signing the terms and conditions that forced the users to not do any transactions related to cryptocurrency. Recently, Kotak bank was in news, as it sent a notice to the account holder who had made a certain transaction in crypto, of shutting down the account within 30 days. The statement from the bank read: “We have observed few transactions in your account with brokers / traders, dealing in virtual currencies. Since these types of transactions are not permitted in India, we are constrained to place a credit freeze in your account. Further as per the extant guidelines, we are required to exit such relationships where transactions with brokers / traders, dealing in virtual currencies are observed.” However, the crypto-users have found a way to hack the system and continue the way they use their bank accounts without being flagged. The users informed the crypto community in India to not mention terms in relation to cryptocurrency while performing any transactions. The Chief Executive Officer [CEO] of crypto exchange in India WazirX, Nischal Shetty told the publication: “Majority of the people understand not to enter such terms in the remarks. So simply avoiding entering anything related to crypto in the payment remarks is more than enough to avoid any problems from banks. There’s no other way for banks to know if a P2P transaction was done to transact in crypto.” The post India: Banks ask customer to sign consent form over cryptocurrency regulation breach appeared first on AMBCrypto.
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Can The New Bitcoin ATM survive in Venezuela’s Tightly Restricted Forex Market?

TL: DR Venezuela’s hyperinflation and restricted access to foreign currencies makes it a hotbed for Bitcoin adoption A surge in Bitcoin demand has led to a new Bitcoin ATM being launched in the country, but can it survive if it openly threatens to upend the government issued Petrodollar? By now it’s no secret that the people of Venezuela have been facing significant hardships regarding access to a useful and stable national currency. In the last year, we’ve seen headlines of the Venezuelan Government engaging in hyperinflation (where the inflation rate was projected to surge by 1 million percent by the end of 2018) as well as enforcing severe travel and foreign exchanges restrictions that have made it almost impossible for its citizens to live normal lives. Citizens have been forced to spend barrels of money to buy everyday groceries like bread and eggs. To make matters worse, the Government has been peddling its very own cryptocurrency (the Petrodollar) to its citizens and the rest of the world as a way to raise money to pay back their massive debts and refuel its economy. Out of desperation, many citizens have turned to Bitcoin, with reports stating that the price of Bitcoin in Venezuela is now doubling roughly every three weeks, and that bitcoin trading volumes keep hitting record highs at citizens try to retain what they can out of their failing national currency. All of this has led to the recent news that Venezuela will now see its first Bitcoin ATM open in 2 weeks. The ATM is in the final stages of being set up in the national capital, Caracas. However, is the Venezuelan government ready to accept its citizens trading their national currency for Bitcoin out in the open? Venezuela’s History of Forex restrictions could be bad news for Bitcoin The country has had a poor reputation of restricting the ability of private companies and individuals’ ability to convert their local currency (Bolivars) into foreign currencies. These restrictions make it difficult for local businesses to claim profits generated in Bolivars by converting them to foreign currency, or to convert Bolivars to foreign currency when they need to buy supplies or pay debts in those foreign currencies. For citizens, the restrictions have made it easy for Venezuela’s Government to exploit peoples desperate need to claim money sent home from family members aboard by charging exorbitant fees and offering phony exchange rates. These are just a few examples of how the Venezuelan Government suppresses its people and businesses regarding the exchange of local fiat currency for foreign fiat. Will Bitcoin exchanges threaten Petrodollar the same way foreign fiat threatens the Bolivar? Now we are seeing a similar situation occur with cryptocurrencies, as the Venezuelan Government is reportedly forcing citizens to pay for essential products like passports using the new Petrodollar. At the same, time, there have been reports that LocalBitcoins was no longer accessible in Venezuela. It would be no surprise that the government would try to limit citizens’ access to Bitcoin to force them to rely solely on the Petrodollar. To that end, the Bitcoin ATM, although incredibly useful, may not last if it begins to attract too much attention and Government sees it as a threat to the value of their national cryptocurrency. At this time it’s too early to tell, but it will be interesting to see what comes out of Venezuela’s ATM in the next year. The post Can The New Bitcoin ATM survive in Venezuela’s Tightly Restricted Forex Market? appeared first on CryptoPotato.
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