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Building Trust in Digital Currency: Regulatory Challenges and Solutions

Explore the regulatory requirements and lack of transparency hindering digital currency development. Learn how AML/KYC practices are crucial in combating risks and complying with sanctions. Discover recent sanctions and fines, along with efforts to bring DC into regulated markets.

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Building Trust in Digital Currency: Regulatory Challenges and Solutions

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  1. Building regulatory trust in digitalcurrency World Regulatory requirements

  2. Lack of Transparency hindersdigitalcurrency development Lack of clienttransparencymeansrisk to industry AML/KYC TERRORISTS FINANCING SANCTIONS ISIS / Alqaeda

  3. BNP PARIBAS fined8,900,000,000 USD in 2014 HSBCfined 1,900,000,000 USD in 2012 PAYPAL fined7,700,000 USD in 2015 SilkroadclosedRoss Ulbricht jailed BitinstantclosedCharliShremarrested MtGoxbankruptcy 850 000 Bitcoin/450 mln USD lost

  4. DC are not accepted by financial institutions due to lack of transparency of beneficiaries to transaction– Banks and Money Services Business treat DC as high risk products due to lack of necessary identification processes – this impact the development of DC based services • Increasing regulatory requirements and focus on bringing DC to regulated market • Lack of trust and transparency on the DC trading market – there is no independent verification site for DC traders • No site where you can find verified vendors who accept DC

  5. Latest enforcement • Two U.S. banks have signed up to use Ripple Labs' money settlement platform for cross-bordertransactions, and the Federal Reserve appeared to gave its OK • May 5.FincenFinesRippleLabsOver AML - $700,000 over violations of the Bank Secrecy Act Money Services Business - any peron doing business, whether or not on a regular basis or as an organized business concern, in one or more of the following capacities: (1) Currency dealer or exchanger.  (...)(5) Money transmitter. An activity threshold of greater than $1,000 per person per day in one or more transactions .

  6. AML/KYC requirements for MSB • Identifytheclient: Identification refers to the collection of information about the customer in order to establish their KYC profile: • Verifythe data: Using sources of documentary evidence considered independent from the customer. The source need to be of a reliable origin and meet a number of criteria of validity. Source of verification is considered acceptable or adequate. • Screening data: againstSanctinlists, PEPs list other • Monitoring of transactions:suspiciousactivities

  7. https://www.youtube.com/watch?feature=player_embedded&v=gunA1zBnEcshttps://www.youtube.com/watch?feature=player_embedded&v=gunA1zBnEcs https://www.netki.com/#/home

  8. Pawel Kuskowski Compliance and AML expert www.Compliance360.pl pawel.kuskowski@compliance360.pl

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