Kategorie: Crypto News

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EU postpones final vote on its MiCA regulation

  • The European Parliament passed the comprehensive Markets in Crypto-Assets, MiCA legislation in October 2022.
  • The final vote on the bill was originally set for February 2023, but has now been pushed to April.
  • The crypto sector is increasingly in the regulatory spotlight following high profile collapses of crypto companies like FTX.

The European Union wants to see proper crypto regulation across its member states, even as a global push for a harmonized approach gathers pace. 

Uniquely, the EU is in the process of finalizing its Markets in Crypto Assets regulation (MiCA), the comprehensive cryptocurrency regulations framework set to usher in a new dawn for crypto in the region.

But the final vote on the regulations will not come at least until April this year, the latest report on the topic suggest. 

EU postpones MiCA vote, again

This latest delay – the second for the highly anticipated MiCA rules following the vote’s push from November last year to February 2023 – is down to a snag in the translation of the regulations.

Notably, MiCA is a 400-page rule book that needs to be translated into 24 official languages across the EU bloc. The requirement that the document be available in all the official languages before going to a crucial final vote has necessitated the postponement to April 2023.

The MiCA bill was first introduced in the European Parliament in September 2020, with lawmakers passing the bill in October 2022.

Crypto remains in the spotlight as policymakers and regulators look to harmonize the oversight of the industry following a spate of major bankruptcies in the last year. Among these is the collapse of FTX and multiple other crypto companies tied to disgraced crypto exec Sam Bankman-Fried.

The post EU postpones final vote on its MiCA regulation appeared first on CoinJournal.

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Bitcoin now at its pre-FTX collapse level

  • At press time, bitcoin (BTC) was trading at $21,507.97.
  • Bitcoin price has surpassed where it stood on November 5 just prior to the FTX collapse.
  • It now stands at its highest price since mid-September last year.

2022 was definitely not a very good year for crypto and especially for bitcoin (BTC) which was trading below $20K for quite a while before the year’s end. Bitcoin had plunged all the way down to about $15,000 in wake of the FTX collapse before attempting a comeback that saw it stuck close to $16,500 for several weeks before embarking on this current rally since the beginning of 2023.

Bitcoin has now corrected the price dip that was caused by the latest crypto misfortune, the FTX collapse that took place at the beginning of November. Early this morning, the price of bitcoin surged to a daily high of $21,564.50 before slightly pulling back to $21,507.97 at the time of writing.

What is behind today’s BTC price surge?

While the general cryptocurrency market is on a bullish trajectory, today’s sudden surge in bitcoin price is largely attributed to this morning’s larger-than-expected decrease in the Producer Price Index (PPI) for the just concluded month of December. The retail sales in December also dropped way below their forecast.

December’s PPI dropped by about 0.5% bringing the year-to-year rate down from 7.3% to 6.2%. The year-over-year rate dropped by about 5.5% against a forecast of a drop of 5.7%.

On the other hand, December retail sales dropped by 1.1% against a forecast drop of 0.8%. Combined with the decline in November, this marks the first time retail sales have dropped back-to-back by more than 1% post the pandemic.

The post Bitcoin now at its pre-FTX collapse level appeared first on CoinJournal.

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An introduction to KYC: the most significant feature in the crypto world

The initial level of anti-money laundering (AML) reasonable care is called “know your customer,” or KYC for short. The Know Your Client (KYC) processes are initiated as soon as a new customer is accepted by a financial institution (FI). Financial institutions may determine a client’s potential for financial crime using these procedures. When doing business, cryptocurrency exchanges are required to have a “Know Your Customer” (KYC) procedure to:

  • Check the accuracy of the data they have about their clients and customers.

  • Get a better grasp on the nature of their prospective clients’ actions and make sure they’re above board.

  • Establish the likelihood that their clients pose a money laundering danger.

How do VASPs demonstrate KYC compliance?

Many VASPs use a multi-step “Know Your Customer” procedure to guard against scams. Here are the measures to take:

  • Step 1: Customers’ identifying information (such as their complete names, birthdates, and addresses) must be collected.

  • Step 2: Check the information you gave against your government-issued ID (visa, state driver’s license) and proof of address (electricity bill).

  • Step 3: Check the user’s data against government records that track politically exposed persons (PEPs) and blacklisted people.

By adhering to these protocols, banks can determine whether their customers are at risk for money laundering as well as other misappropriation of funds related to their usage of cryptocurrency. When a client’s identity and other details are verified, they are given access to a limited set of features on a bitcoin trading platform. 

How does one keep track of crypto trades? 

A cryptocurrency transfer monitoring network provides cryptocurrency marketplaces and financial institutions with assistance in spotting anomalous or questionable behavior that they are required to disclose to government regulators. Additionally, this technology assists law enforcement in their pursuit of criminals. The security of a cryptocurrency wallet may be tracked by keeping an eye on its transaction activity. Toolkits developed by firms like Bitsoft360, Crystal Blockchain, Coinfirm, etc. are used by cryptocurrency-related exchanges.

Is Know Your Customer (KYC) compliance essential for cryptocurrency wallets?

Since only custodial wallets have access to their users’ encryption keys, they are the only ones required to follow KYC procedures. The VASP document explains that the Financial Action Task Force (FATF) considers “every legitimate or natural entity who swaps, retains, safe-keeps, distributes, transforms, or somehow distributes VAs on account of some other physical or legal entity” to be a VASP. 

Since VASPs are now considered “monetary organizations,” they too must implement rigorous annual compliance requirements (FYC).   To comply with regulations, VASP-related custodial wallet providers must have a “Know Your Customer” (KYC) policy.

In what ways may cryptocurrency KYC help you?

Here are some of the reasons why cryptocurrency exchanges get a major advantage from operating in conformity with regulatory requirements, even though doing so necessitates certain alterations to their operational procedures and presents some challenges:

An increase in consumers’ faith in business

Trust in businesses and their products can only increase when their users’ identities are independently verified. Customers are more inclined to stick with a trading platform if they believe the firm is taking reasonable precautions to keep their funds secure.

Reduced instances of fraud and money laundering 

Nearly one billion dollars in cryptocurrency was reported stolen from over 46,000 customers between January and March 2022. As Fletcher predicted, identity verification procedures that are thorough and accurate could cut down on fraud and improve the market’s reputation.

Lessening potential legal trouble

Strong “Know Your Customer” (KYC) procedures can help organizations stay ahead of changing regulations. By demanding government-issued credentials and tracking payment situations and holdings, KYC approaches allow VASPs to detect and limit false identity cases, avoid financial fraud, and evaluate client risk. 

By taking these measures, companies may lessen their exposure to legal and governmental concerns, freeing up resources that can be used toward other goals, such as improving exchange rates, speeding up processes, and ensuring compliance.

Improved market conditions 

Speculative, anonymous transactions are a major driver of the bitcoin market’s instability. The industry as a whole benefits from the greater stability and value development enabled by KYC procedures with enhanced identity verification.

Is Know Your Customer (KYC) mandatory to purchase cryptocurrency? 

You may buy VAs without completing a “Know Your Customer” check. Examples of non-KYC services are cryptocurrency ATMs and DEXs. Unlike DEXs, which are decentralized, blockchain-based P2P exchanges that allow for large-scale crypto asset trading, crypto ATMs allow customers to acquire bitcoin using cash or debit cards. Instead of serving as financial intermediaries, DEXs rely on algorithmic automation to carry out these functions.

What dangers exist while purchasing cryptocurrency without KYC?

It’s quite risky from a regulatory perspective to purchase virtual currencies without first undergoing KYC. Financial authorities, including the Office of Foreign Assets Control (OFAC), have fined cryptocurrency exchanges for alleged sanctions violations. Black market accounts, which pose a risk to assets, may be flagged as false by a platform.

Lack of “Know Your Customer” in exchanges

Popular DEXs like Uniswap and Bisq does not require KYC procedures from their users. These marketplaces connect sellers and purchasers of digital money by matching orders according to price and quantity. In the world of cryptocurrencies, a “liquidity pool” is a collection of commodities that can be quickly and easily converted into cash to settle incoming buy and sell orders. Assets are provided not by banks or other institutions but rather by end users. 

How does “Know Your Customer” (KYC) connect to the ‘Crypto Travel Rule? 

When discussing cyber safety, “Know Your Customer” and the “Crypto Travel Rule” are both essential concepts to grasp. While the Travel Rule mandates that FIs and VASPs obtain and communicate opponent information, KYC gathers and transmits data about the persons and institutions that utilize the FI or VASP.

The distinction between “Know Your Customer” and the “Travel Rule” 

Before enabling a consumer to use their system, a VASP must do know-your-customer (KYC) checks to ensure that they comply with international rules. The Travel Rule goes even further by requiring that personally identifiable information of consumers be shared and stored when purchases between two VASPs that have already done KYC on their clients exceed a certain level.

How come Anti-Money Laundering and Know-Your-Customer measures are so vital to the cryptocurrency sector?

Customers and VASPs alike benefit from strict observance of AML and KYC rules. Virtual currencies, unlike fiat cash, lack a robust regulatory structure. 

Criminals are increasingly capitalizing on the ability to send money while concealing its origin and destination. The risks of money laundering, terrorism funding, and other forms of illegal financing may be reduced by standardizing regulatory standards and conducting Know Your Customer and Anti-Money Laundering inspections.

Final thoughts 

Cryptocurrency transactions are far more secure when KYC is used. To prevent fraudulent fraud and ensure the safety of financial transactions, Know Your Customer (KYC) measures are essential. Although this post does not provide insights on KYC implementation, it has given you enough details to make a wise plan.

The post An introduction to KYC: the most significant feature in the crypto world appeared first on CoinJournal.

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The Problem of Identity Theft And Blockchain Era – Ways to Address It

  • The blockchain, what it is and how it works.
  • The problem of identity theft for blockchain-based businesses.
  • How blockchain helps businesses tackle the issue of identity theft.

Blockchain‘s rising popularity may be attributed to its promise of safe monetary operations and the elimination of identity theft. 

There will be astronomical yearly expenditure on the blockchain, estimated at $20 billion, with the banking industry alone contributing about $522 billion. Then why is everyone talking about it? Blockchain is favored by both users and businesses because of its ability to securely store user data.

Visualize the magnitude of identity theft on a worldwide scale. Unfortunately, victims of identity theft often don’t find out until they experience severe consequences. If online stores don’t take identity theft seriously, they risk losing customers and damaging their image. Blockchain gives individuals more control over their data and a more secure way to avoid identity theft.

The blockchain: What is it?

Blockchain is a network of technologies designed to securely gather user data and distribute it over the internet in chunks. The blocks are a network of data centers that conduct safe public transactions using encryption. Each transaction in a chain must be recorded in a distributed ledger.

A problem for blockchain-based businesses: Identity theft

Customers aren’t the only ones who suffer from identity theft; internet companies are at risk as well. To achieve their goals, cybercriminals use a wide variety of tactics, such as hacking, account takeovers, and credit card theft. Examples of a few of the most typical forms of identity theft are shown below.

The scam of fake IDs

Synthetic identity theft occurs when several victims’ personal information is used to create a single fraudulent persona. To complete the operation, it is common practice to combine fake information with real user records that have been stolen. Criminals create new identities to engage in other fraudulent schemes. For instance, cybercriminals may create phony profiles in order to seem affiliated with legitimate companies and launder money using these accounts.

Online shopping fraud

Con artists prey on those who make purchases on digital platforms, making online purchasing dangerous. People of dubious provenance populate these online marketplaces, hoping to mislead customers into giving over their credit card data. With the use of enticing offers and phishing emails, imposter online shops can trick unsuspecting customers into giving over their personal information.

Identity theft in the healthcare industry

Insurance companies and hospitals must be on the lookout for cunning scammers who steal people’s medical identities. 

The theft of a patient’s medical identification information might provide the perpetrator with access to sensitive medical information that can be sold for profit. Since there aren’t any foolproof identity verification systems in place when patients register or make insurance payments, this kind of scam often goes undetected.

Theft of social security numbers

A further method of committing identity theft is through using stolen Social Security numbers (SSNs). 

The nine-digit SSN is a form of identification that is typically given to people at birth. Online scams like medical and kid identity theft would be impossible without them. Cybercriminals often use social security numbers to acquire the suspect’s accounting transactions and file fraudulent tax returns.

Avoiding identity theft with blockchain

There are a few ways in which blockchain technology improves security for user data and prevents fraudulent identities from being accepted into the system. The following are examples of some of these:

Providing a safe and sound method of financial transactions

When it comes to fighting identity theft, blockchain is generally seen as a potential cybersecurity solution. Due to the high degree of security it offers, it may aid in preventing private information from falling into the wrong hands. Blockchain’s distributed ledger is an electronic database that stores transactional data. Data saved on the blockchain is secured by employing encryption techniques to ensure the privacy of all users’ data. 

We should have safeguards in place to prevent any kind of theft or breach into the system from happening and they are activated the moment they are spotted. As a result, customers of online services may deal with confidence knowing that their personal information is being protected. 

Using ID verification tools like Bitcoin loophole or Chainanalysis, distributed ledger technology (DLP) in blockchain may validate customers’ identities across different channels.

The snackable wall against fraud

An attacker may easily compromise a centralized network and remain undetected for long periods. Identity verification systems are very vulnerable to a single point of failure, which may result in the loss of millions of dollars by giving criminals access to sensitive information such as credit card numbers, Social Security numbers, and other personal details. 

With blockchain, the situation is quite different since identity thieves have to physically move from one location to another, which takes a lot of time and energy.

Blockchain employs Public Key Cryptography (PKI) to build a decentralized, digital network comprised of individual blocks of data. PKIs are crucial because they prevent widespread data breaches and safeguard individuals’ personal information.

Title to individual data

Synthetic identities are used by cybercriminals to impersonate legitimate businesses and get access to sensitive information, such as credit card and bank account details. Banks lose a significant amount of money due to identity theft every year, and the number of cases is rising. 

Bad credit, massive credit card debt and flags from financial authorities are all possible outcomes.

To circumvent this issue, blockchain technology provides public keys that may be used to initiate a safe transaction between two parties. Users gain control over their data when, for example, personal details such as their birthdays are recorded in a distributed ledger. This provides an extra safeguard for all of your digital chats.

Last but not least

Protection against identity theft is crucial for businesses of all stripes. Know your customer (KYC) and anti-money laundering (AML) rules can be easily implemented via client identification verification, which also helps reduce the costs of cybercrime. 

Companies in the blockchain industry may use ID verification services to quickly and easily add new users. Identity verification service providers in the blockchain industry may use this to speed up the onboarding process for new customers. 

Blockchain companies may meet global KYC and AML criteria and secure their customers’ loyalty by providing IDV solutions powered by AI.

The post The Problem of Identity Theft And Blockchain Era – Ways to Address It appeared first on CoinJournal.

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SEC’s crypto-related penalties hit $2.6 billion in 2022

  • The SEC’s first crypto-related enforcement action was in July 2013.
  • The agency has brought 127 such actions since, with 30 of these in 2022 representing a 50% increase from 2021.
  • The monetary penalties across the settlements with the regulator reached $2.61 billion by the end of last year.

According to a recent report by Cornerstone Research, the US Securities and Exchange Commission (SEC) has overseen 127 crypto-related enforcement actions since 2013. 82 of the actions so far have been litigations and 45 of them administrative proceedings.

SEC crypto-related fines hit $2.6 billion by 2022

The US Securities and Exchange Commission (SEC) has recently come under heavy criticism after cryptocurrency exchange FTX collapsed. For the most part, many have questioned the regulatory watchdog’s tendency to swing into action after events that see the ordinary public suffer huge losses in the market.

And no doubt, the SEC swiftly charged former FTX CEO and founder Sam Bankman-Fried following his arrest. Also charged were Alameda’s Caroline Ellison and FTX’s Gary Wang. Just a few days ago, as we highlighted, the agency filed charges against crypto platforms Gemini and Genesis.

It’s a pattern that falls in line with what has been labelled as “regulation by enforcement.”

Indeed, even as the crypto market navigates the crypto winter, regulatory clarity remains a long way off. However, enforcement actions have increased rapidly since the SEC’s first such move in July 2013.

In 2022, the securities market watchdog filed 30 enforcement actions touching on 79 market participants, including the February charge against crypto lender BlockFi.

Per the Cornerstone Research report, the enforcement actions in 2022 were against 56 individuals representing 71% of the allegations and 23 were against firms (29% of the actions). The total enforcement actions over the past year was double the actions filed in 2021, the report noted.

In terms of monetary penalties, settlements with the agency hit $242 million in 2022 – with the total fines since 2013 amounting to $2.61 billion as of 31 December 2022. As CoinJournal reported in October, the SEC fines include the $1.3 million levelled against celebrity Kim Kardashian for her promotion of the crypto project EthereumMax.

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