Czech Republic Plans Tougher Regulations for Crypto Exchanges

Czech Republic is on track to exceed the EU’s directive on cryptocurrency firms, to enhance the country’s Anti-Money laundering (AML) policy, local …

Czech Republic is on track to exceed the EU’s directive on cryptocurrency firms, to enhance the country’s Anti-Money laundering (AML) policy, local newspaper Hospodářské Noviny reports today.

Financial regulators in the Czech Republic is set to redefine the Fifth AML Directive (AMLD5) on cryptocurrencies as formulated by the European Union, to ensure crypto trading platforms within its environs do not indulge in fraudulent activities.

European Countries were urged by the EU Commission via the Fifth AML Directive (AMLD5), to provide transparency requirements which focus on the use of anonymous payments through prepaid cards and virtual currency exchange platforms, to curb money laundering or terrorist financing within Europe.

“The 5th Anti-Money laundering directive also increases the cooperation and exchange of information between anti-money laundering (AML) and prudential supervisors, including with the European Central Bank,” Věra Jourová, Commissioner for Justice, Consumers and Gender Equality said.

The Czech’s measure has gone a step further beyond what is stipulated by the European Union as enforced mid last year, which set up a legal framework for financial watchdogs in Europe, to regulate crypto exchanges and wallet providers to protect against fraudulent activities.

Cryptocurrency trading platforms in the Czech Republic are urged to comply with this stern measure and register their company with the national Trade License Office, or face the penalty of a fine worth 500,000 CZK (appr. $21,698).

Although the report did not state the deadline crypto exchanges are expected to comply with this directive, countries within Europe are required to abide by the AMLD5 regulation by January 20, 2020.

Additionally, the report also indicated that the new Czech Republic’s AML measure might affect companies that are not crypto-related.

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SoftBank crypto exchange adopts CoolBitX wallet for KYC

Very early on, the Financial Services Agency wanted to provide protection to crypto-asset service customers and to combat money laundering and …
Michael Ou, Founder and CEO of CoolBitX, said: “The FATF has now set firm KYC/AML guidelines for the virtual asset industry, regulating VASPs in the same way as financial institutions. Central to the FATF guidelines is the Task Force’s anti-money laundering mandate and FATF Recommendations 15 and 16, already highlighted at the Private Sector Consultation Forum hosted by the FATF in Vienna. In a major step towards safer and more wide-spread cryptocurrency adoption, we are proud to have partnered with SBI VC on CoolXWallet, a KYC/AML solution based on CoolBitX’s technology.”

SBI VC was one of the early adopters of the first wallet developed by CoolBitX in 2018, the CoolWallet S. SBI VC uses a customized version of the flagship wallet, named CoolXWallet, where users store their private keys. SBI VC addresses are linked to the users’ exchange accounts, allowing customers to only withdraw digital assets to their wallets following multiple layers of KYC.

Yoshitaka Kitao, Representative Director, President & CEO of SBI Holdings, Inc., stated: “Back in 2017, Japan was the first jurisdiction in the world to define Virtual Currency (Crypto-asset) as a legal term and establish clear regulatory guidance for Virtual Asset Service Providers. Very early on, the Financial Services Agency wanted to provide protection to crypto-asset service customers and to combat money laundering and terrorist financing. Using CoolBitX’s technology, CoolXWallet has given SBI VC an easy way to protect our customers while complying with Japanese and international KYC standards. The borderless nature of digital assets requires a solution that isn’t bound by geographical boundaries, and because of that, we are excited to implement the wallet as a secure system to drive cryptocurrency adoption forward.”

“This partnership with SBI VC is a crucial aspect to having and maintaining better security on the exchange,” continued Ou. “Currently, most KYC/AML responsibilities lie with the exchanges to ensure all transactions and individuals are legitimate. CoolBitX is happy to work with SBI VC by providing the CoolXWallet, and help in SBI VC’s effort to implement best practices in the area of KYC/AML for digital assets.”

In an effort to continue to meet the demands of the market, the CoolBitX team is now announcing the launch of Sygna, a first-to-market KYC/AML compliance-focused virtual asset transaction and security solution for VASPs, individuals, and institutions.

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Regtech start-up doubles staff, opens London and New York offices

In January, the start-up raised $30m in a Series B fundraising round led by San Francisco and London-based venture capital firm Index Ventures and …

ComplyAdvantage said its move ‘services the growing demand for modern compliance solutions’.

Regtech start-up doubles staff, opens London and New York offices

Image source: Pixabay

Regtech start-up ComplyAdvantage has opened offices in London and New York to “strengthen its foothold in major global financial markets”.

The firm has just moved to new headquarters in London’s Covent Garden and opened a new office in Bryant Park, New York, with a third site slated for the Asia-Pacific region later this year.

The business, which uses machine learning to spot risks across the databases of financial companies, said it has more than doubled its workforce since last July, now employing more than 200 staff.

The group, founded in 2014, said it was expanding into “two top financial services markets, London and New York, to service the growing demand for modern compliance solutions”.

ComplyAdvantage said it services 450 firms across 45 countries in three continents. It adds it is currently looking for new staff at offices in the UK, the US, Singapore and Romania, in roles that range from legal counsel, business development to design engineers.

$2trn in money laundering

Around $2trn is laundered every year, with less than 1 per cent of these funds ever detected, according to estimates from the United Nations Office on Drugs and Crime.

ComplyAdvantage founder and chief executive Charlie Delingpole said: “We’re strengthening our foothold in major global financial markets as we continue to build the world’s only global AI-driven database of people and companies to power anti-money laundering and financial crime detection.”

The start-up’s cloud-based technology combs millions of “structured and unstructured” data points to spot risk, helping firms to comply with sanctions, anti-money laundering and counter financing of terrorism regulations.

In January, the start-up raised $30m in a Series B fundraising round led by San Francisco and London-based venture capital firm Index Ventures and joined by UK private equity house Balderton Capital.

Amlo goes high-tech to tackle laundering

Pol Maj Gen Preecha believes criminal suspects will increasingly transform their money into digital currencies such as bitcoins as the virtual format will …

Pol Maj Gen Preecha Charoensahayanon sees cryptocurrency as a new challenge of the Anti-Money Laundering Office (Amlo) under his leadership.

“It will be a tool of new money laundering,” acting Amlo secretary-general Preecha said when asked to explain his vision of the road ahead as the office prepares to mark its 20th anniversary on Aug 20.

In his view, Amlo’s work will be focused on two areas in the near future — one involving its traditional duty to prevent and crack secret plots to hide illegal assets, and the other in connection with the unfamiliar role of probing new hideouts in the cyber world.

Pol Maj Gen Preecha believes criminal suspects will increasingly transform their money into digital currencies such as bitcoins as the virtual format will make it harder for authorities to trace their financial transactions.

He is keen not to let that situation happen.

“That’s why we’re amending laws to prepare us for new online missions,” he said.

The Amlo chief will first look at the Anti-Money Laundering Act. He wants to add a sectio n requiring providers of cryptocurrency exchange services to report activities to the office.

This will enable Amlo officers to keep track of changes in currency formats. He said the information is crucial if they need to trace money activities on internet-based platforms.

He said the law change corresponds with international standards which regulate these service providers and demands they scrutinise their customers’ behaviour and report irregular transactions to authorities.

Though Amlo officers currently do not receive complaints, or deal with, cases directly involving virtual currencies, they need to stay alert.

“We may not find any clue, but that doesn’t mean the wrongdoing does not occur,” he said.

Last year the public was alerted to a bitcoin scam involving a prime suspect, Prinya Jaravijit, an elder brother of actor Jiratpisit, or “Boom”. The businessman was accused of fooling Finnish investor Aarni Otava Saarimaa into investing a total of 797 million baht to buy shares of three companies.

Mr Saarimaa was also told to pay in the form of bitcoins which was later secretly withdrawn by the suspect.

This case, which was handled mainly by the Crime Suppression Division (CSD), was not under the direct responsibility of Amlo, but it showed digital currency can be used as part of a crime.

“We have to brace for it,” Pol Maj Gen Preecha said, referring to a need to keep abreast of high technology that makes and manages digital currencies.

The issue was at the top of his priorities after he was selected to succeed deputy national police chief Rungroj Saengkhram who assumed the acting leadership at Amlo last year.

Pol Gen Rungroj replaced Pol Maj Gen Romsit Weeriyasan, who was at the top job for only six weeks before being transferred on Aug 14 last year to work as an inspector-general attached with the Office of the Prime Minister. The transfer order was issued by the defunct National Council for Peace and Order.

Pol Maj Gen Preecha, a former deputy chief of the Metropolitan Police Bureau, has seen his work progress smoothly at Amlo after serving as its deputy secretary-general for nearly two years.

In the first half of this year, Amlo seized or froze illegal assets worth up to 934 million baht.

But despite having full authority to deal with these allegedly laundered assets, Pol Maj Gen Preecha said he prefers to see Amlo become more cautious to avoid facing counter-lawsuits lodged by suspects.

Amlo officers will stick to laws which allow them to exercise power on 28 offences including drug trade and cheating.

To avoid exposing itself to conflicts with accused people, “We’ll also try not to unveil details of some crucial cases,” Pol Maj Gen Preecha said.

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Elliptic Introduces Data Set to Flag Crypto Money Laundering

The paper was a joint work of Elliptic scientists and MIT-IBM Watson AI Lab researchers: “Graph convolutional networks are still a young class of …
Market NewsAugust 3, 2019 by Kelly Cromley

Elliptic, cryptocurrency compliance firm, has unveiled the Elliptic Data Set aimed towards recognizing crypto trades linked with money laundering.

Elliptic, which has built a data pile of 200,000 Bitcoin (BTC) trades having a value of over $6 billion, asserts that it owns the largest bunch of sorted out trade data that is openly offered for any cryptocurrency across the world.

The data set is structured to assist users establish illegal transactions and also trades associated with money laundering, terrorist financing (CFT) or sanctions violations. Furthermore, the data set is intended to bring down compliance costs and finally ward off criminal use of cryptocurrencies.

About the data set release, Mark Weber, co-author of the paper titled “Anti-Money Laundering in Bitcoin: Experiments with Graph Convolutional Networks for Financial Forensics,” said as mentioned below. The paper was a joint work of Elliptic scientists and MIT-IBM Watson AI Lab researchers:

“Graph convolutional networks are still a young class of methods, and we’re in the early days in these experiments, but we do believe GCN’s power to capture the relational information in these large, complex transaction networks could prove valuable for anti-money laundering.”

Last month, Financial Action Task Force stated that it is aiming to increase regulation over cryptocurrency exchanges to prevent cryptos from being utilized in money laundering and related offences.

At that time, Secretary Steven Mnuchin said:

“By adopting the standards and guidelines agreed to this week, the FATF will make sure that virtual asset service providers do not operate in the dark shadows. This will enable the emerging FinTech sector to stay one-step ahead of rogue regimes and sympathizers of illicit causes searching for avenues to raise and transfer funds without detection.”

Again in June, Coin Center, a non-profit research and development institute centered on crypto-related public policy concerns, advised Her Majesty’s Treasury not to widen the boundaries of the AML / CFT laws of the United Kingdom. Coin Center further argued that widening AML monitoring responsibilities to crypto exchange software coders or customers would “breach U.K. citizens’ free speech and privacy rights.”

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