Topic: [2019-06-21] FATF: "37 Global Crypto Exchanges Must Now Share Customer Data" (Read 512 times)

Meanwhile the owners of the exchanges like yobit remain anonymous... what the fuck is this?

Monero is not 100% safe. There are rumors that the authorities are now able to track at least some of the XMR transactions.

I consider it a challenge and a arms race. Now maybe people will pay attention to the dark net more and monero more. States lost credibility, they want debt slavery, modern monetary policy, negative interest rates, bail ins, cashless society, they want to use the blockchain based id for social credit system and minority report style tracking with 5g bandwidth to fuel it.

It's not just the US. In fact, all the G20 countries already publicly affirmed their commitment to implementing these rules. The FATF blacklist has been a very effective tool in forcing countries into compliance. This works because local governments will heavily pressure exchanges to comply, for fear of being blacklisted by the global financial system.

According to a press release shared with Bitcoin Magazine, the partnership wants to mediate between government officials, crypto companies and cryptocurrency users by creating a proof-of-knowledge identity protocol that doesn’t relinquish user information. In function, this would resemble something like a zero-knowledge proof, which is a cryptographic function that allows one party to reveal that it knows certain information without conveying the information itself.

The solution involves a smart contract platform with shared access between exchanges and other relevant cryptocurrency service companies. This cryptographically secured tool will facilitate an identity hub that will satisfy FATF’s crypto travel rule while also keeping the true identity and information of each user concealed.

“Our focus is on creating federated standards for identity, which are blockchain agnostic,” Joseph Weinberg, Shyft’s founder, is quoted as saying in the release. “We make sure KYC checks can be transferred across networks in a secure manner without compromising identity information. This program bridges a critical gap between new regulatory standards and existing exchange operations to greatly strengthen the crypto ecosystem with a practical implementation of the FATF’s Travel Rule.”

This doesn’t mean that exchanges and regulators won’t have access to personal info if they want it, however. The data bridge will allow its overseers to disclose information “when compelled to do so by legal authorities,” though this is already something that happens today (see Coinbase forking over user information to the IRS, for example).

I think all this will do is drive people away from regulated platforms, and onto P2P ones.

To be clear: FATF’s recommendations for anti-money-laundering policies are not binding; member countries adopt them by passing legislation or writing regulations. However, countries that fall egregiously out of compliance with FATF standards get put on a blacklist, making them radioactive to foreign investment.

Under the new guidance published, the required information for each transfer includes:

        (i) originator’s name (i.e., the sending customer);
        (ii) originator’s account number where such an account is used to process the transaction (e.g., the VA wallet);
        (iii) originator’s physical (geographical) address, or national identity number, or customer identification number (i.e., not a transaction number) that uniquely identifies the originator to the ordering institution, or date and place of birth;
        (iv) beneficiary’s name; and
        (v) beneficiary account number where such an account is used to process the transaction (e.g., the VA wallet).

He's a snake oil salesman.

Have you even looked at that platform? It looks like it was coded by complete novices.

More importantly, "McAfee Magic" is not actually an exchange. It's just an interface that integrates APIs from other exchanges. You still need to have accounts at these exchanges -- and you need to complete their KYC processes.

  Looks like we will have to chose Magic, new crypto-trading platform from John McAfee. https://www.coindesk.com/john-mcafees-new-crypto-trading-platform-magic-goes-live
  He is a freedom fighter this days, I follow him on Twitter.

that might work for a year or two until countries start getting blacklisted by the financial system. the first FATF statement on compliance with these rules is in june 2020. they may start blacklisting at that time. at the latest, it'll start happening by 2021.

the larger the exchange, the more difficult it will be to operate in secrecy or simply pack up and move. local governments will start targeting and shuttering noncompliant exchanges once the FATF brings the hammer down.

i doubt bitmex and similar exchanges will keep operating this way at that point.

What should they do if someone withdraws coins to their wallet instead of sending them to another exchange? Or deposits from their own wallet?

What about mixers and other privacy schemes, are they going to outlaw them or what?

The guidance even addresses services designed to obfuscate the origin of crypto transfers, saying nations should make sure that providers can either manage or mitigate the risks of transfers that use mixers, tumblers or similar tools. “If the VASP cannot manage and mitigate the risks posed by engaging in such activities, then the VASP should not be permitted to engage in such activities,” the document reads.

Calling the “threat of criminal and terrorist misuse of virtual assets” a “serious and urgent,” FATF says it will give countries 12 months to abide by the guidelines, with a review set for June 2020.

    “… obtain and hold required and accurate originator [sender] information and required beneficiary [receipient] information and submit the information to beneficiary institutions … if any. Further, countries should ensure that beneficiary institutions … obtain and hold required (not necessarily accurate) originator information and required and accurate beneficiary information …”

On second thought, the FATF is probably not as effective as I originally assumed. According to this 2017 report, most monitored countries have only instituted basic AML regulations like making money laundering a crime and requiring banks to report suspicious transactions. Most of their recommendations go unenforced:


This sort of noncompliance may be relevant in the case of Bitcoin exchanges and brokers that don't currently require KYC:


I still expect the guidelines to further reinforce a two-tiered system of compliant and non-compliant exchanges. Services like Coinbase and Gemini will no doubt be attempting to comply with them.

As of April 2017, the level of country compliance with the FATF 40 recommendations rests at just 25 per cent across the 30 countries most recently assessed. While this is definitely an improvement since 2011, when full compliance across 160 countries was at 12.3 per cent, taking 27 years since the standards were introduced to get to a 25 per cent compliance level cannot exactly be called rapid progress. 

[A]reas where the majority of countries are rated “partially compliant” or “non-compliant” include requiring firms to carry out due diligence in non-financial fields such as real estate, law and accounting (Recommendation 22 – 63 per cent of countries rated either partially or non-compliant) and making sure the authorities can identify the real owners of corporations to avoid the abuse of anonymous shell companies (Recommendation 24 – 73 per cent of 30 countries rated partially or non-compliant). 

that might work for a year or two until countries start getting blacklisted by the financial system. the first FATF statement on compliance with these rules is in june 2020. they may start blacklisting at that time. at the latest, it'll start happening by 2021.