Global monetary watchdog, the Financial Action Task Force (FATF), has added its voice to the growing chorus of concerns over Facebook’s Libra and other stablecoins. Mass adoption of such currencies could hinder efforts to detect and stamp out money laundering and terrorist financing, Reuters reported on Oct. 18. Managing the potential risks of mass adoption Speaking to reporters in Paris, FATF president Xiangmin Liu said that both stablecoins — and the companies behind them — would be subject to global standards on cryptocurrencies and traditional financial assets: “If stablecoins were to become widespread, it could potentially lead to new risks …

United States Treasury Secretary Steven Mnuchin has attributed the recent spate of firms abandoning Facebook’s Libra stablecoin project to regulatory concerns. On CNBC’s Squawk Box on Oct. 14, Mnuchin stated that companies are abandoning the Libra project because it is “not up to par” with American Anti-Money Laundering standards, saying: “If they don’t meet the standards of our money-laundering standards and the standards that we have at FinCEN, we would take enforcement actions against them. I think they realized that they are not ready, they are not up to par and I assume some of the partners got concerned and …

Regulators are clamping down on cryptocurrency, and companies around the world are feeling the strain. In late June, one of the most authoritative regulatory organizations worldwide, the Financial Action Task Force (FATF), issued new guidelines on how digital assets should be regulated. While FATF recommendations are not legally binding, the G-20 stated that it uses them to regulate cryptocurrencies for Anti-Money Laundering (AML). For businesses that fail to make the grade, this could mean being shut out of lucrative international markets. No punitive measures have yet been imposed, but companies and crypto exchanges alike are acting fast. What are the …

Hong Kong's securities regulator, the Securities and Futures Commission (SFC), has officially released regulations for crypto fund managers. The SFC published the regulatory circular on its website on Oct. 4. In the 37-page document titled “Proforma Terms and Conditions for Licensed Corporations which Manage Portfolios that Invest in Virtual Assets,” the SFC provided terms and conditions for corporations managing portfolios that invest in virtual assets. Organization and management structure According to the document, virtual asset fund managers in Hong Kong should always maintain liquid capital of a minimum of 3 million Hong Kong dollars ($383,000) and its variable required liquid …

Blockchain analytics firm Chainalysis has announced the launch of its on-demand compliance and investigations software for several Ethereum (ETH)-based ERC-20 tokens. The company announced in a press release published on Oct. 3 that its Know Your Transaction (KYT) tool now supports tokens such as Basic Attention Token (BAT), DAI, GoldX, Maker (MKR), OmiseGO (OMG) and 0x (ZRX). Aggressive support expansion Furthermore, the company also announced plans to roll out support for 23 additional cryptocurrencies, including XRP, DASH, unshielded ZCash (ZEC), Dogecoin (DOGE) and Ethereum Classic (ETC) over the next three months. Per the release, Chainalysis’s KYT tool is currently being …

Major cryptocurrency exchange Binance has partnered with crypto analytics startup Coinfirm to improve its anti-money laundering (AML) compliance. New platform for FATF compliance The integration of Coinfirm’s blockchain-agnostic AML Platform will purportedly streamline Binance’s compliance with the AML rules issued by the Financial Action Task Force (FATF), according to a press release published on Oct. 3. The new measures set up by the FATF require that cryptocurrency operators establish the identity behind crypto funds senders and recipients, conduct proper due diligence to ensure they are not engaging in illicit activity, and develop risk-based programs, among others. Binance will deploy Coinfirm’s …

BitShares Decentralized Exchange (DEX) gateway CryptoBridge announced on Oct. 1 that it has implemented mandatory user Know Your Client (KYC) verification. European regulation is responsible According to the announcement, the reason for the upcoming mandatory KYC is the 5th EU Anti-Money Laundering Directive (AMLD5). Interestingly, CryptoBridge also noted that the company wants to challenge international financial regulation, writing: “While we still strive to present new challenges for international financial regulation, we are facing the 5th EU Anti-Money Laundering Directive (AMLD5) and will adjust our gateway services to pave the way for CryptoBridge moving forward.” Because of this policy change, all …

Executives at the Bank of Ireland (BOI) could join a trial in the case against Mark Scott, who allegedly helped launder nearly $400 million via cryptocurrency scam OneCoin. Four BOI witnesses to testify remotely On Sept. 29, the government of the United States submitted a court motion seeking the testimony of four witnesses via closed-circuit television from a remote location in Ireland. Initially set for Oct. 7, the trial has been adjourned to Nov. 4, while a final pretrial conference is scheduled for Oct. 28, as reported by fintech publication FinanceFeeds in early September. All four witnesses are current or …

Having trumped up the risks of unregulated cryptocurrencies earlier this year, Dutch bank ABN Amro NV finds itself in the midst of a major money-laundering scandal. On Sept. 26, Bloomberg reported on news of a criminal probe into the bank’s alleged failures to report suspicious transactions and to adequately vet its clients. ABN AMRO — which remains over 50% government-owned after a costly bailout — saw its shares slump by as much as 10.3% in Amsterdam trading. This represents the highest plummet since June 2016, with the bank’s Additional Tier 1 bonds falling the most in six months, as Bloomberg …

South Korean cryptocurrency exchange Upbit announced that it will cease trading support for six cryptocurrencies, including some so-called privacy coins. Block the possibility of money laundering In a Sept. 20 notice, UpBit announced that the exchange will delist and cease trading support for Monero (XMR), DASH, ZCash (ZEC), Haven (XHV), BitTube (TUBE) and PIVX by Sept. 30. The exchange added that it will no longer support deposits in these cryptocurrencies and will cancel orders requested before the end of the transaction support in Korean won, Bitcoin (BTC), Ether (ETH) and USDT markets. Upbit clarified that the reason for delisting these …

Security researchers have identified a new trend of lucrative and illicit conversions from Bitcoin (BTC) to cash in their analysis of dozens of dark web marketplaces and forums. Financial scammers are selling cold, hard cash for only 10 to 12 cents on the dollar to buyers willing to provide a prepaid fee in Bitcoin, according to the new Q3 2019 Black Market Report from Armor’s Threat Resistance Unit. Dodging risks The money laundering scheme sees cybercriminals offer up bundles of cash — typically from $2,500 to $10,000 — in exchange for a 10% to 12% fee payable in Bitcoin. Once …

Facebook’s Libra stablecoin must meet the highest Anti-Money Laundering (AML) and terrorism financing standards, according to United States Treasury Under Secretary of Terrorism and Financial Intelligence Sigal Mandelker. Business news outlet Reuters reported Mandelker’s remarks on Sept. 10. Cryptocurrencies must comply Per the report, Mandelker also told reporters in Geneva that any cryptocurrency operating in the U.S. — including Libra — has to satisfy local regulatory standards. Regulators are concerned by Libra Global financial regulators are concerned about Libra, with the European Central Bank’s key legal official Yves Mersch recently saying Facebook’s stablecoin is “beguiling but treacherous” during a speech …