Earlier this 12 months I predicted three main themes & # 39; s in cryptocurrency for 2019: Cryptocurrency could be embraced as & ldquo; regtech & rdquo; it might play a vital position in implementing sanctions by monetary establishments and regulators, and anti-money laundering (AML) practices would turn into stronger in Asia.
It seems that 2019 was an essential 12 months for cryptocurrency by way of rules, however extra by way of readability by the Monetary Motion Activity Pressure (FATF) and FinCEN, than automating the compliance packages of banks and regulatory supervision. Specifically, FinCEN explicitly states for the primary time that blockchain evaluation is a crucial a part of an efficient AML answer and an essential think about cryptocurrency corporations & rsquo; potential to adjust to the Financial institution Secrecy Act (BSA). FinCEN makes it clear that Know Your Buyer (KYC) processes are additionally essential, and cryptocurrency corporations also needs to anticipate strict supervision subsequent 12 months.
We additionally noticed extra readability within the SEC rules. The Blockstack Reg A approval, for instance, was the primary approval of its type and reveals a path to SEC-approved IPO-type fundraising with a crypto token. Whereas different corporations have beforehand used Regulation A, that is the primary time traders have acquired a token as an alternative of shares within the firm. & Nbsp;
Now that now we have the readability of the rules, I believe that 2020 shall be an essential 12 months to embrace cryptocurrency as a regtech.
Cryptocurrency certainly continued to turn into essential for the enforcement of sanctions, significantly associated to the commerce in fentanyl. I anticipate this development to proceed.
Though our actions in Asia have been expanded and anti-money laundering practices are being strengthened there, we nonetheless see the laundering of enormous quantities of unlawful funds by means of some OTC brokers working from China. Cash stolen by means of the PlusToken rip-off is an effective instance of this.
A notable milestone that I had not predicted was main bulletins from legislation enforcement businesses that credit score blockchain evaluation as a vital instrument in figuring out suspects and making arrests. The announcement by the Ministry of Justice of the removing of Welcome to Video, the most important baby pornography website ever based mostly on the quantity of fabric saved, the arrest of the proprietor and operator and greater than 337 website customers in 38 international locations together with identification and rescue of 23 minors had been an essential occasion for the trade. Legislation enforcement mentioned how they may use blockchain evaluation to make arrests and rescues that will in any other case not have been doable. This was an essential instance of how blockchains can truly provide extra transparency in monetary transactions, not much less.
In 2019, main gamers additionally entered the cryptocurrency ecosystem, significantly Fb and Constancy. With Libra, Fb has the power to make cryptocurrency obtainable for his or her big consumer base, resulting in extra basic use. This will after all result in monetary inclusion for each good and dangerous actors, and the chance of cash laundering should be restricted. Transaction monitoring shall be wanted to fulfill the expectations of regulators all over the world. And the introduction of Constancy & rsquo in digital asset custody and buying and selling providers can also be a blessing for the trade and can pave the best way for additional acceptance by monetary establishments.
Lastly, CME Bitcoin futures was an thrilling improvement and I anticipate it’s going to proceed to enhance.