The Effect of Cryptocurrencies on Financial Crimes
Cryptocurrencies have recently entered our lives and become well-known in the financial markets worldwide. Unfortunately, the attention to crypto exchanges has also attracted financial crimes to the market. There are many gaps in AML regulations in the market, and criminals use them to launder money, finance terrorist groups, bribery, and fraud. Regulators worldwide keep imposing more regulations to support the organizations in the industry against financial crimes.
Why is AML compliance important for Crypto Exchanges?
Companies in the crypto industry should develop strong AML compliance programs since regulators worldwide keep imposing more regulations on the industry. Governments worldwide have been approaching the crypto industry cautiously, such as China and South Korea where there are strict restrictions on mining and crypto exchanges. However, countries like Japan and Switzerland allow their citizen to use crypto exchanges in trade.
Financial Action Task Force (FATF) keeps developing AML regulations for the crypto industry to make the industry a safer place for organizations and individuals. The efforts of FATF might change how governments and individuals view the industry. The important people in the Crypto industry state the importance of AML regulations without hurting the industry's decentralized finance.
What are the AML regulations for Crypto Exchanges?
Asian regulators are taking progressive steps to make AML regulations stronger, Monetary Authority of Singapore (MAS) ramped up its engagements with the sectors in 2018. The EU's Fifth Anti-Money Laundering Directive (5 AMLD) listed regulations for the crypto industry. As more regulations were issued, businesses in the crypto industry started adopting monitoring and compliance tools.
AML Compliance For Crypto Exchanges - Case Study
How Do Crypto Exchanges Ensure AML Compliance?
FATF releases guidance for industries to help them with their compliance progress. Businesses must comply with the regulations FATF imposes to not face any penalties from authorities.
Companies use
Know Your Customer(KYC)
,
Customer Due Diligence (CDD)
,
Sanctions
and
PEPs lists
,
Adverse Media Screening
services to comply with regulations.
