The major reason why all the cryptocurrencies have increased reputation is that they offer transactions that are not controlled by the government. But it seems it’s time to say goodbye to this uncontrolled method.
Alexandra Wijmenga-Daniel, spokeswoman of Financial Action Task Force - a multi-government effort that creates regulations for resisting money laundering and funding terrorism that is supported by approximately by 200 countries (the USA included) - said that FATF is going to declare a note to define how member nations should manage virtual assets on June 21. These new regulations will be applied to those businesses that are operating with cryptocurrencies, like custodians and exchanges.
Of course, everything is mostly connected with how every country will interpret these new regulations, but as Eric Turner, head of research at Messari Inc., responded: “This is the biggest threat to crypto nowadays”.
Still, these rumours are not coming into life, many impressive projects are rising in the market who are sure they will find a solution to the situation. One of them is Bitfoliex a crypto exchange and a wallet with an implemented multi-signature technology, which intends to make good modifications in the crypto market.
These regulations will want exchanges to gather data about all the customers that are trading money over 1000 USD or EUR, also they’ll need details about those, who received this money. All the information must be sent to the recipient’s service provider with every transaction,
John Roth, head compliance and ethics officer at Bittrex (has over $58 million trading volume daily), said: “This sounds simple, but it will be very costly and difficult. Nowadays wallet addresses on ledgers are absolutely anonymous, so an exchange has no means to know who is going to receive money. They will either demand a reconstruction of blockchain technology or parallel technology development to be sort of constructed among the 200 or more exchanges all over the world. I’m sure you are able to imagine how difficult it’ll be”.
Kraken’s general counsel said, that they’re trying to find a solution for this and cooperate with international exchanges to develop something, but this is just a case one the government wants to apply rules from 20th century to the life in 21st.