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CEX.IO’s Head of Financial Crimes: Traditional Security Measures Not Good Enough For Crypto

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BeinCrypto spoke to Mark Taylor, Head of Financial Crime at CEX.IO, about KYC for crypto, how these protocols will change, and what global regulation could look like.

Cryptocurrency exchanges are no strangers to the confusing, difficult and laborious world of regulations.

As the crypto space gained a reputation for scams and criminal activity, legitimate exchanges needed to step up their protocols. These help ensure protection for customers and avoid implication by the exchange itself in possible illegal enterprises.

For the crypto market, however, different countries expect different protocols. This proves to be a nightmare for exchanges operating multi-nationally.

The big KYC

When it comes to financial institutions, one of the biggest and most well-known security features is Know Your Customer (KYC).

In the early days of cryptocurrency, centralized exchanges didn’t always include this feature. However, jurisdictions have become more aware of the crypto market.

As a result, these requirements have become standard for an exchange to provide its services without running into regulatory trouble.

According to Taylor, when it comes to crypto, these processes aren’t vastly different from those implemented by traditional financial institutions. This is because, like traditional finance, the protocols need to be agreed upon by the regulator.

“When considering such differences between traditional finance KYC and crypto KYC, discussion can take place about technology and cutting edge biometrics, but in reality, none of these are an answer to the KYC problem, unless regulators agree with industry as to their effectiveness and acceptance,” explains Taylor.

Interestingly, as e-money markets have emerged, Taylor explains that traditional institutions have kept up to their improved technological standards.

“Traditional financial services, of course, do not wish to be left behind and also appreciate the benefits of new technologies.”

“They now utilize the same technology and approach as new emerging markets like crypto and e-money / open banking,” he explains.

However, Taylor points out that these are only parts of a larger picture. Since KYC responds to criminals, updated regulations and technologies are just opportunities for criminals to figure out new ways to get around them.

“True effective and complete CDD processes as a whole package, watching what our customers do after passing the gatekeeper, understanding their activities and reasoning for that activity is more important than ever before.”

 “The use of old-styled control is about as effective as a chocolate tea-kettle”

For Taylor, adapting traditional security measures for crypto or any new industry is not perfect. As he explains, if they are the agreed-upon method, then it is necessary for regulatory standards. However, applying old-school techniques does mean that criminals already know how to get past them.

“So the adoption of these to any new industry and not just crypto is akin to presenting well-established criminals and launderers with an old, previously-solved puzzle. It is not new to them, and so they already know how to abuse and circumvent these controls,” he explains.

“Hacks and digital attacks are now part of the world we live in and the use of old-styled control is about as effective as a chocolate tea-kettle.”

However, despite possible failings, he acknowledges that these processes need to be followed.

Addressing the others locked out

The issue raised by some is that KYC tools don’t just keep criminals out. They also lock access to those who may need the services the most.

However, for refugees and stateless people, this process is impossible. This is because they don’t have access to the required government documents which are needed to prove who you are. As a result of their status, getting approved on a centralized crypto exchange is difficult or impossible.

For Taylor, the issue comes down to what actually needs to be solved to fix this problem. He argues that it becomes clearer where the resolution needs to come from when considering the tools’ purpose.

He references the purpose of KYC beyond verifying a person’s identity. Rather law enforcement uses KYC information to locate people if they need to.

“Those that are stateless or refugees that wish inclusion into these markets must satisfy the same criteria. If we carry out KYC or a new all-accepting method of KYC, is it enough to effectively locate these customers should the authorities wish to do so? This is the criteria that regulators and law enforcement will need to see answered before allowing KYC to be broad enough to accept this category of persons,” he explains.

As a result, he sees the work to end statelessness by entities such as the UNHCR, as key to the process of bringing those left out into the system.

“Let’s hope organizations such as UNHCR and partners are successful in their mission and just like crypto being regulated and welcomed, so can the stateless and refugees be welcomed into the modern financial system, as should be their modern-day right.’

For Taylor, there is great room for expansion of these security tools, beyond broadening who they apply for.

“KYC tools in the future are limited only by our imagination and technology.”

He acknowledges that it won’t be up to crypto exchanges but rather regulators globally. However, when considering where these tools will head, he envisions growth and improvements on the technological side.

Looking specifically at the current biometric and facial recognition technologies, he sees this expanding and improving going forward.

“For example, if we get a fingerprint scan, how can we then be 100% sure it belongs to this person? So we then come to the question of central databases, but also the larger philosophical question on freedoms and personal right to privacy.”

“Of course, biometric residence permits and identity documents do currently exist, and I do see them becoming more commonplace. In the far future, we may also have chemical, biological identification (DNA), but this also raises the same questions,” he explains.

Global KYC standards still up for debate

However, while Taylor may see technologies navigating improvements, he isn’t hopeful for global financial security regulations.

“Global standards on any form of regulation, KYC or otherwise, would always be welcomed if it could be agreed upon with industry and governments globally.”

“It is one of the most difficult parts of operating an international financial business – managing the differing rules around the world. If taken at a high level, most rules currently in place for governments all try to do the same things. Reduce customer exposure, protect customers, be effective and efficient, and reduce the likelihood of abuse by bad actors, money launderers, and terrorists,” he says.

“However, who would have thought the same end goal could be reached in so many different ways! So if we could agree as a globe on KYC standards and what is acceptable and what is not, it would be a game-changer for regulated entities. This would reduce costs and increase efficiency and customer service.”

However, Taylor doesn’t see this happening.

“Call me a cynic, but I really cannot see the world’s governments coming together and establishing an agreed-upon framework that is the same across the globe or even similar enough to allow companies to have just one approach and process.”

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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After working in news and lifestyle journalism, Leila decided to bring her interest in cryptocurrencies and blockchain to her day job. She now runs the Features and Opinions desk at BeinCrypto which fits perfectly with her enthusiasm for crypto’s social and political impact.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://beincrypto.com/mark-taylor-on-the-future-of-crypto-kyc-and-security/

Blockchain

Binance Coin, Filecoin, Tron Price Analysis: 13 June

The recent market fall has led to traders rushing toward sell-offs, even as Bitcoin’s price started to consolidate. The king coin’s downtrend on June 12, which led to an over 6% fall in valuation,

The post Binance Coin, Filecoin, Tron Price Analysis: 13 June appeared first on AMBCrypto.

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The recent market fall has led to traders rushing toward sell-offs, even as Bitcoin’s price started to consolidate. The king coin’s downtrend on June 12, which led to an over 6% fall in valuation, was followed by several alts such as Binance Coin, Filecoin, and Tron’s TRX. Breaking through important support levels, these coins also faced rising selling pressure and depleting capital inflows. Their south-bound movement kept them vulnerable to additional losses going forward.

Binance Coin [BNB] 

Source: BNB/USD, TradingView

Binance Coin continued on its downtrend. After gaining over 33% just between May 31 and June 2, its valuation fell by 20% during June 7-9. Still trading in the red, the coin was priced at $337.8 at press time. After testing resistance at $365, it had fallen a further 13.2% over the past week.

Relative Strength Index or RSI dipped below the median line on June 10 to 39.8 at press time. If selling pressure continues to mount, the coin could be headed for the oversold zone. As Parabolic SAR’s dotted line hovered above the candlesticks, a downtrend for the price action could be noted.

However, according to Awesome Oscillator’s histogram, bullish momentum could be seen creeping in although it was too early to declare a positive price movement based on the indicator alone.

The support at $304 remained strong and could act as a savior if BNB continues its downward movement.

Filecoin [FIL] 

Source: FIL/USD, TradingView

Filecoin lost 26% of its valuation during the market reduction on June 7. The coin fell through support lines at $84.5 and $75.5 and had since lost further valuation during the price fall on June 11. It was trading at $69 and saw slight gains on the four-hour chart with the emergence of a green candlestick at press time.

Chaikin Money Flow indicated that traders rushed to sell their holdings on June 12, as the capital outflows mounted way over the inflows. Selling pressure also continued to be overpowering, as Relative Strength Index continued to hover over the oversold region since June 8. The convergence of the Bollinger Bands did highlight the reduced volatility of the market and price action could be constricted going forward.

Tron [TRX] 

Source: TRX/USD, TradingView

The blockchain network recently hit several milestones. Tron’s daily active users hit an all-time high of 5.26 million, while the total daily transaction count has also hit an all-time high of 6.22 million on Tuesday.

Nevertheless, Bitcoin’s retracement on June 10-11 proved to be detrimental to Tron, which fell by over 12% during this time. The coin broke through its support at $0.069 but found new support at the $0.065 mark, with the former acting as a strong resistance. The 24-hour trading volume for the coin also fell by 31% over the past day.

Bollinger Bands remained diverged during this time, indicating that market volatility was picking up. The appearance of a red line below Awesome Oscillator’s histogram suggested that bullish momentum was starting to surface on the coin’s price action. Moreover, MACD’s histogram closed in one a bullish crossover, even as the lines remained below the equilibrium and moved in alignment with one another.

Since the indicators suggest that bearish momentum is declining, TRX could defend $0.065 support from a breakdown. In case the support is broken, the coin could face a plunge of over 20% towards the next support at $0.055.


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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://ambcrypto.com/binance-coin-filecoin-tron-price-analysis-13-june

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Why NFL’s Russell Okung Asked Nigeria To Adopt The Bitcoin Standard

Following El Salvador’s decision to grant Bitcoin the status of legal tender, other government officials in the region have hinted at adopting similar measures. Most of the interest seems to have a source in developing countries. Their populations have been the most benefit from Bitcoin’s open and censorship resistance network. NFL’s professional player Russell Okung […]

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Following El Salvador’s decision to grant Bitcoin the status of legal tender, other government officials in the region have hinted at adopting similar measures. Most of the interest seems to have a source in developing countries. Their populations have been the most benefit from Bitcoin’s open and censorship resistance network.

NFL’s professional player Russell Okung wrote an open letter to the Nigerian government. He asked the official of this country to adopt the Bitcoin standard “or risk falling behind”.

Okung is of Nigerian descendant and is well-known for his pro-BTC stance. He famously used the phrase: “Paid me in Bitcoin”, as a demand to his team’s management. The professional football player has kept an eye on the situation in El Salvador and believes that “soon every nation will be faced with this decision”.

Therefore, Okung argues that it will be more beneficial for the country to be first in Africa to make BTC legal tender. In that way, Nigeria will “will enjoy significant advantages globally for generations to come”.

Similar to El Salvador, Nigeria and other countries in Africa have placed their fate in “the hands of global central bankers”. Okung believes these entities have acted for their own benefit and not those of the Nigerian people.

The NFL’s player emphasizes that the current global economic outlook calls for fast and extreme measures. Other countries, Okung claims, such as Russia, China, Kenya, and Iran use Bitcoin in some form to “circumvent U.S. sanctions” and retake more participation in the global financial system. He adds:

I’m proposing an equally aggressive approach to national Bitcoin adoption which would significantly bolster every sector of the Nigerian economy and revitalize the spirit of every Nigerian domestically and abroad.

What Countries Risk By Not Adopting Bitcoin

Nigeria has a troublesome history with the cryptocurrency. A national ban was imposed in the country, only to be removed after a couple of days when BTC’s price rose 46%. The measure caused people to panic buy BTC to protect their savings, businesses, and hedge against the situation described by Okung.

Data from Statista indicates that around $400 million are traded in cryptocurrencies in this country for 2021 alone. This suggests that the Nigerians have a lot of interest in this asset class.

The African country has seen a wave of massive protest, as a report from The Guardian claims. Nigerians have been celebrating Democracy Day and have mobilized to manifest rejection for their government’s bad governance.

The report claims that Nigeria is one of the most corrupt countries around the globe. Thus, seems logical that their citizen has high Bitcoin adoption levels. At the same time, it seems improbable that government officials will give BTC legal tender status. Still, Okung presented his arguments, he seems to understand the benefits for Nigerians and what truly it’s at stake.

(…) a delay in pursuing a national plan for bitcoin adoption will risk a scenario where Nigeria is left behind and its citizens excluded from the possibility of significant wealth creation and preservation.

At the time of writing, BTC trades at $37,464 with moderate gains in the daily chart. BTC experienced high volatility during the weekend. In order for the bulls to take control, the $40,000 resistance must be flipped into support in the short term.

Bitcoin BTC BTCUSD
BTC with moderate gains in the daily chart. Source: BTCUSD Tradingview

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://bitcoinist.com/why-nfls-russell-okung-asked-nigeria-to-adopt-the-bitcoin-standard/?utm_source=rss&utm_medium=rss&utm_campaign=why-nfls-russell-okung-asked-nigeria-to-adopt-the-bitcoin-standard

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How will the drop in this metric affect UNI, CAKE, SUSHI, AAVE?

Bitcoin maximalists are currently gaining from the dropping altcoin market capitalization. Another group in on that is DeFi project traders and HODLers. This weekend, the altcoin market capitalization

The post How will the drop in this metric affect UNI, CAKE, SUSHI, AAVE? appeared first on AMBCrypto.

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Bitcoin maximalists are currently gaining from the dropping altcoin market capitalization. Another group in on that is DeFi project traders and HODLers. This weekend, the altcoin market capitalization dropped further. In the past 7 days, the altcoin market capitalization has dropped along with a drop in altcoin prices. BNB, ADA, DOGE, XRP, DOT and CRV have dropped and this has increased the accumulation, investment inflow.

Low marketcap projects have offered high returns over the past 7 days. There are several factors supporting this narrative. Increasing trade volume of DeFi projects has increased in proportion to altcoin market cap. The demand across exchanges has increased and there is an increase in the number of unique wallet addresses and TVL. This may change the narrative of DeFi to bullish.

High market cap projects may lead to the increase in demand and investment inflow proportionate to the interest of their users. The low market cap projects continue to face a correction when traders exit. The drop in altcoin market capitalization has a direct impact on DeFi users.

Is the diminishing altcoin market capitalization bullish for DeFi

Source: DuneAnalytics

The diminishing altcoin market capitalization has had a direct impact on the investment inflow, the number of traders and the demand across exchanges. This is bullish for DeFi projects as the rising number of users and the metrics related to number of trades, wallets and users indicate a growing interest, investment, institutional investment inflow and growth in DeFi market capitalization.

With the rise in the number of DeFi projects, there is a surge interest from institutions. With the upcoming biggest smart contract event of the year, it is likely that DeFi projects like UNI, CAKE, SUSHI, AAVE that haven’t rallied in the past 2 weeks would rally following increasing demand and popularity, social media mentions.

When the average price chart of these projects is observed, and they are ranked in accordance to their ranking of growth in Active users, there is a strong correlation between users and market capitalization. AAVE, UNI, SUSHI have ranked the highest. Though ranking does not have a direct correlation with social volume and price, it has increased following drop in altcoin market capitalization. This builds a bullish case for DeFi in the following two weeks.


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Source: https://ambcrypto.com/how-will-the-drop-in-this-metric-affect-uni-cake-sushi-aave

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Canadian Purpose Bitcoin ETF Holdings at an All-Time High

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The Purpose Bitcoin ETF holdings have reached an all-time high of 19,692.149 BTC despite the current bitcoin market decline.

Sponsored
Sponsored

The dip in the bitcoin market has not scared off Canadian investors. By considering the Purpose Bitcoin ETF re-accumulation, there is an indication that investors are buying the dip. Over the last month, Purpose’s holdings have increased by 963 BTC.

BTC is currently sitting at $36,028, a steep drop from its all-time high of $63,000. However, despite the flash crash, which brought the price down to around $30,000, the ETF has been steadily gaining over time.

Sponsored
Sponsored

Its holdings at the current price amount to around $709 million.

William Clemente III

Purpose Bitcoin ETF success

The Purpose Bitcoin ETF launched in February 2021. It is hosted by the Canadian investment company Purpose Investments. 

The company won approval for the ETF from Canada’s regulators and continues to be successful. Two days after its launch, the ETF grew its assets under management (AUM) to over $400 million.

It’s not the only ETF Canada has or the only groundbreaking move coming out of the country. In April, Purpose Investments marked another first, with the world’s first direct custody Ether ETF.

This ETF offer investors the chance to invest directly into physically settled ether.

No signs of ETF approval from U.S.

Not only was the bitcoin ETF a first for Canada, but it was also a first for North America. It was hoped that this bold move would encourage its southern neighbor, the United States. However, this was not the case.

The U.S. is still to approve an ETF, despite the multiple applications from various parties. In addition, it appears even the success of the Canadian ETF hasn’t been able to sway regulators.

Most recently, the SEC delayed its decision on VanEck’s latest filing just hours before the deadline. This keeps it in the pile of over a dozen applications that are still in limbo.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

Share Article

After working in news and lifestyle journalism, Leila decided to bring her interest in cryptocurrencies and blockchain to her day job. She now runs the Features and Opinions desk at BeinCrypto which fits perfectly with her enthusiasm for crypto’s social and political impact.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://beincrypto.com/canadian-purpose-bitcoin-etf-holdings-at-an-all-time-high/

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