Crystal Blockchain: Peer-to-Peer Exchanges Need Regulation to Lower Money Laundering Risk
At the V20 Summit in November 2020, the Financial Action Task Force (FATF) announced that regulatory requirements for peer-to-peer (P2P) exchanges along the lines of those for Virtual Asset Service Providers (VASPs) will likely emerge in 2021 to combat money laundering (ML). The FATF is now collecting data on these exchanges to allow their guidelines to reflect P2Ps.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210203005351/en/
Volumes (in BTC and USD) sent to and received by P2P Exchanges 2019-2020 (Graphic: Business Wire)
The Virtual Asset (Service Providers) Act, 2020 (
VASP
Act) came into effect on 31 October 2020 and provides a
framework for the regulation of virtual asset service providers
(
VASPS).
Cayman has been a particularly attractive jurisdiction for the
establishment of virtual asset service providers and, up until now,
service providers have operated within the existing regulatory
regime.
The new framework provides greater certainty, ensures compliance
with internationally recognised standards and provides an exchange
of information with the Cayman Islands Monetary Authority
(
CIMA) which will enable the regulator to stay
abreast of industry practice and support development.
By 31 January 2021, entities which are engaged in or wishing to
Blockchain Security Firm CipherTrace Clarifies how Virtual Asset Service Providers, Money Service Businesses are Categorized by Regulators
Blockchain security firm
CipherTrace recently explained and discussed the differences between virtual asset service providers (VASPs), money service businesses (MSB), money transmitters, digital asset customers, and how they impact crypto-related compliance measures.
CipherTrace noted that cryptocurrency, digital assets, convertible virtual currency, and other terms seem to all describe the same or similar concepts. The blockchain firm pointed out that a cryptocurrency exchange may also be called a Virtual Asset Service Provider (VASP), Virtual Asset Entity, Digital Asset Customer (DACs), Money Service Business (MSB), or other names “depending on the context.”
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On 18 December, the Financial Crimes Enforcement Network (FinCEN) at the U.S. Department of the Treasury announced highly anticipated and controversial new proposed requirements designed to mitigate illicit finance risks associated with “unhosted” virtual currency wallets and wallets hosted in certain foreign jurisdictions with weak anti-money laundering regimes. Unlike customers who rely on the custody services of financial institutions subject to anti-money laundering and combating the financing of terrorism (AML/CFT) requirements to send and receive virtual currency, users of unhosted or “self-hosted” wallets can transact directly with one another and with hosted wallets using their own private keys, creating potential illicit finance risks. FinCEN’s proposed rule would, if enacted, create new obligations for banks and money services businesses (MSBs) including virtual asset service providers (VASPs) engaging
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Legislation in Luxembourg for Blockchain based Tokenization Is Progressive and Supported by Fintech Sector, Tokeny Solutions CEO Says
The
Luxembourg House of Financial Technology (LHoFT), an organization focused on driving innovation for financial services in Luxembourg by connecting the local and global Fintech industry participants, recently shared an update from
Luc Falempin, the CEO at
Tokeny Solutions, a company that aims to drive liquidity for private markets.
The Future of Capital Markets Luxembourg has been an extremely fertile ground for us to develop our services. The legislation around tokenisation is very forward thinking and the Fintech community here is super innovative. – @LucFalempin