G20 Asks FATF to Clarify AML Standards for Cryptocurrencies

G20 Asks FATF to Clarify AML Standards for Cryptocurrencies

Financial ministers and central bankers from the G20 states met over the weekend in Argentina to discuss the challenges for the global economy. They reiterated their position that cryptocurrencies do not pose a risk to the financial stability. The officials also called on the Financial Action Task Force to clarify by October how its anti-money laundering standards apply to crypto-assets.   

Also read: Ukraine’s Financial Stability Council Supports Crypto Regulatory Concept

Reiterated: Cryptocurrencies Not a Risk to Stability

The representatives of the G20 member-states said in a communique released after the meetings on July 21-22 that growth remains robust and unemployment is at a decade low. However, they also noted the need to strengthen the dialog and adopt measures to mitigate the risks for economic development like “rising financial vulnerabilities, heightened trade and geopolitical tensions, global imbalances, inequality and structurally weak growth.”

G20 Asks FATF to Clarify AML Standards for CryptocurrenciesThe statement does mention cryptocurrencies, or crypto-assets as they are called, but not among the risks that need to be addressed immediately. “While crypto-assets do not at this point pose a global financial stability risk, we remain vigilant,” the government officials stated. G20 members also issued a warning that sounds familiar – cryptos “raise issues with respect to consumer and investor protection, market integrity, tax evasion, money laundering and terrorist financing.”

Ministers and bankers didn’t miss the chance to point out, not for the first time, that crypto-assets, “lack the key attributes of sovereign money.” And, of course, they didn’t skip another favorite talking point of governments and regulators – “technological innovations, including those underlying crypto-assets, can deliver significant benefits to the financial system and the broader economy,” a confession that’s not really a concession.

G20 Wants AML Crypto Standard in October

The participants in the meeting reiterated their commitments from the G20 summit in March regarding the implementation of the standards on combating money laundering, terrorism financing and proliferation adopted by the Financial Action Task Force (FATF). They called on FATF to clarify in October this year how these AML standards apply to crypto-assets. The G20 also welcomed the updates provided by the Financial Stability Board (FSB) and the standard setting bodies, adding that it expected them to continue to monitor the potential risks of crypto-assets and assess multilateral responses.

FSB, an international organization that makes recommendations about the global financial system, announced last week a framework to monitor the financial stability implications of crypto-asset markets, as news.Bitcoin.com reported. It has been developed together with the Committee on Payments and Market Infrastructures (CPMI), another international body serving as a standard setter for payment, clearing, and settlement arrangements.

G20 Asks FATF to Clarify AML Standards for Cryptocurrencies

The previous meeting of the Group of Twenty, on March 19-20, ended with pretty much the same results, as far as cryptocurrencies are concerned. The forum did not adopt unified crypto-related regulations but urged FATF to apply their standards to crypto-assets. Right before the last summit, the Financial Stability Board dismissed calls from member-states for global crypto rules. FSB’s assessment at the time was identical – crypto-assets do not pose risks to the global financial stability.

The G20 is an international forum of government officials and central bank governors from Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, the Republic of South Africa, South Korea, Turkey, the United Kingdom, the United States, and the European Union – the economies that account for 85% of the gross world product and 80% of the world trade. Many of its members have already called for adopting global crypto regulations.

Do you expect the G20 to eventually propose common rules or guidelines for regulating the crypto space? Share your thoughts on the subject in the comments section below.   


Images courtesy of Shutterstock.


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The Daily: Minsk Mulls Rules for Exchanges, Qiwi Awards Employees with Tokens

The Daily: Minsk Mulls Rules for Crypto Exchanges, Qiwi Awards Employees with Tokens

In today’s Bitcoin in Brief, Belarus, which legalized crypto activities this spring, is now turning its attention to adopting standards for companies operating crypto exchanges and issuing tokens. We’ve covered the decision of the Russian payment provider Qiwi to motivate its employees with tokens. The Daily also features crypto news from China and Canada.

Also read: Anti-Crypto Politician Backed by Payments Firm, Grayscale Raised $250m in H1

Belarus Working on Standards for Crypto Exchanges

The Daily: Minsk Mulls Rules for Crypto Exchanges, Qiwi Awards Employees with Tokens
Belarus Hi-Tech Park

Having legalized crypto-related activities earlier this year, Belarus is now fine-tuning and expanding the regulatory framework. The Hi-Tech Park in Minsk (HTP) is currently developing standards for companies operating crypto exchanges and providers of services related to issuing and placement of tokens. According to media reports, state bodies and representatives of the legal and tech communities in the country are involved in the process.

The new set of rules and regulations is intended to supplement the basic framework outlined in the presidential decree “On the development of the digital economy”, which entered into force on March 28, Denis Aleinikov, senior partner at a Belarussian law firm, told Forklog. He shared details on the progress so far: “We’ve established that a token is not a security […]. Any organization is allowed to issue and sell tokens through residents of the High-Tech Park.”

The Daily: Minsk Mulls Rules for Crypto Exchanges, Qiwi Awards Employees with Tokens

The legal expert added that entities in the field will be obliged to prove charter capital of at least $500,000. The standards will also regulate the activities of HTP residents and detail the requirements for those that want to issue and trade digital tokens. The Hi-Tech Park is actively participating in the process after it was granted right of legislative initiative with another presidential decree in June.

Payment Provider Qiwi to Award Employees with Tokens

The Daily: Minsk Mulls Rules for Crypto Exchanges, Qiwi Awards Employees with TokensThe blockchain subsidiary of the Russian payment provider Qiwi plans to supplement the salaries of its employees with awards paid in tokens. The motivational program will be launched by Qiwi Blockchain Technologies in the second half of 2018 and will be based on the Russian Masterchain platform. Several dozens of employees will receive their awards in QBT tokens by the end of the year. The subsidiary plans to allocate up to 50 percent of its profit to the program.

The tokens will be divided into two categories. Part of them will come with voting rights, allowing their holders to participate in different company decisions. Employees won’t be able to exchange the tokens for fiat money but will have the opportunity to convert them to corporate bonuses. According to Konstantin Koltsov, Director for Corporate Affairs, the system will allow employees to be directly involved in the company’s development. Qiwi also plans to create a blockchain-based HR platform.

Companies with ‘Blockchain’ in The Name Surge in China

The Daily: Minsk Mulls Rules for Crypto Exchanges, Qiwi Awards Employees with TokensIt’s no secret that adding “crypto” or “blockchain” to the name of a company comes with some image benefits. Since cryptocurrencies are not favored by authorities in Beijing, Chinese companies from the crypto sector have been left with only one choice. As a result, China has seen a sixfold increase in the number of new firms registered with “blockchain” in their names, The South China Morning Post reported.

According to an estimate based on government data gathered by Qixin.com, there are now more than 4,000 Chinese companies that identify with blockchain. Over 3,000 firms registered since January use the Chinese translation of the term describing the distributed ledger technology behind cryptocurrencies like bitcoin – “qukualian”. In comparison, their number for the whole 2017 was only 555.

The analysis of the official data has produced another interesting finding – 16,600 companies that were established within the past 12 months had “blockchain” listed as part of their lines of business. SCMP comments that despite the reservations of the Beijing government on crypto exchanges, coin offerings and mining, the interest towards the technology in China remains strong.

Bitcoin Ownership and Awareness Increase in Canada

The Daily: Minsk Mulls Rules for Crypto Exchanges, Qiwi Awards Employees with TokensA survey conducted by the Bank of Canada has detected a twofold increase in the number of people owning bitcoin (BTC) over 12 months. About half of crypto owners said they regularly use bitcoin to buy goods and services or transfer money. The Bitcoin Omnibus Survey was carried out in December, when the prices of cryptocurrencies reached all-time highs, but the results were published recently.

According to another study, “Bitcoin Awareness and Usage in Canada: An Update”, the awareness of Canadians about bitcoin increased from 64 to 85 percent during the same period. The authors also found that the residents of the predominantly francophone province of Quebec were the most Bitcoin-aware citizens.

Meanwhile, the province’s state-owned power company Hydro-Québec has been allowed to charge crypto miners and blockchain promoters increased rates until regulations for the industry are introduced. Régie de l’énergie du Québec, the local energy sector regulator, has recently accepted most of the new Hydro-Québec’s demands. A rate of 15 cents (CAD) per kWh, double the tariff for residential clients, will be applied.

What are your thoughts on today’s news tidbits? Tell us in the comments section below.


Images courtesy of Shutterstock, HTP.


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Blockchain Experts Tell Congress How Crypto Tech Can Combat the Flow of Counterfeit Goods

Leveraging blockchain technology can help improve supply chain management and shipping as well as help protect United States companies from pirated products shipped from other countries which are causing unfair competition and disrupting markets. This claim emerged from presentations and testimonies from experts who spoke at the Congressional hearing of the United States Subcommittee on … Continued

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23 Cryptocurrency Exchanges in South Korea to Self-Regulate, 10 Opt-Out

23 Cryptocurrency Exchanges in South Korea to Self-Regulate, 10 Opt-Out

The need for cryptocurrency self-regulation in South Korea is rising as banks still refuse to issue new virtual accounts for most crypto exchanges. The Korean Blockchain Association is preparing self-regulatory standards. Thirty-three exchanges were asked to undergo a review; twenty-three agreed but ten refused, according to local media.

Also read: Japan’s DMM Bitcoin Exchange Opens for Business With 7 Cryptocurrencies

23 Exchanges to Self-Regulate

23 Cryptocurrency Exchanges in South Korea to Self-Regulate, 10 Opt-OutThe Korean Blockchain Association is preparing a self-regulatory review of cryptocurrency exchanges operating in the country as well as launching standards for self-regulation. Jeon Jae-jin, chairman of the association’s self-regulation committee, was quoted by Seoul Finance explaining, “We will focus on establishing the safety and transparency of the exchanges.”

“The association predicted [that the] self-regulatory review will be smooth,” the news outlet noted, adding that thirty-three member exchanges were asked by the association to undergo a self-regulatory review. Twenty-three of them agreed; the remaining ten refused and were cast out of the association. Among them was Coinnest, whose CEO was recently arrested.

According to the publication, the member exchanges at the time of this writing are Glosfer, Nexcoin, Neoframe, Upbit, Bithumb, Gopax, Coinlink, Scoin, Okcoin Korea, Whalex, Zeniex, Kairex, Kcx Exchange, Komid, Korbit, Coinone, Coinzest, Coinplug, Crypto Company, Dexko, Korea Encryption, Money Exchange, and Huobi Korea.

Fair Trade Commission’s Suggestions

23 Cryptocurrency Exchanges in South Korea to Self-Regulate, 10 Opt-OutThe association revealed that it is working with a law office to develop the standards for crypto exchanges, Zdnet Korea reported, adding that they are expected to be “released in a few weeks.”

The Korean Fair Trade Commission (KFTC), which recently ordered twelve crypto exchanges to revise their consumer contracts, has also provided recommendations for the standards. The agency says they should “contain a wide range of disclaimers, restrictions on unauthorized deposits and withdrawals, restrictions on the arbitrary use of services, and corrective clauses on identity and password management,” the publication detailed, adding that:

The association plans to incorporate the [K]FTC’s recommendations in the development of the standard terms and conditions.

The exchanges that agree to a review “will be checked for compliance with the self-regulation set by the association, focusing on security, coin listing procedures, capital and other investor protection.”

New Account Issuance Needed

Since the implementation of the real-name system at the end of January by the South Korean government, small and medium-sized crypto exchanges were unable to open new virtual accounts. Banks have opted to only open them for the country’s biggest crypto exchanges: Upbit, Bithumb, Coinone, and Korbit.

“The exchanges expect that this self-regulatory review will be an opportunity to demonstrate the stability of the exchanges,” Seoul Finance wrote and quoted an official of the association:

Since our affiliates actively cooperate in creating a healthy market, we expect [this action] to lead to new account issuance and market activation.

The results of this self-regulatory review are expected to be announced at the end of this month. With self-regulatory compliance, the association and affiliated exchanges plan to request banks to issue new virtual accounts for small and medium-sized exchanges again, the publication conveyed.

What do you think of 23 crypto exchanges opting-in to self-regulation while 10 refused? Let us know in the comments section below.


Images courtesy of Shutterstock and the KFTC.


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35 Countries, EU and FATF Agree to Revise Global Cryptocurrency Standards

35 Countries, EU and FATF Agree to Revise Global Cryptocurrency Standards

Thirty-five countries and the European Commission have asked the Financial Action Task Force (FATF), responsible for setting global anti-money laundering (AML) policies, to revise its standards relating to cryptocurrencies. The organization promised to present its revised AML countermeasures for cryptocurrencies at the upcoming G20 meeting of finance ministers.

Also read: Indians Look to Buy Bitcoin Overseas as Regulations Tighten

35 Nations and EU Want Better Crypto AML Policies

35 Countries, EU and FATF Agree to Revise Global Cryptocurrency StandardsAt the Financial Action Task Force (FATF) meeting in Paris, held between February 18 and 23, members representing 35 countries and two organizations “urged the global body to improve the understanding of money laundering risks relating to cryptocurrencies,” Yonhap reported.

Established in 1989, the FATF is an inter-governmental body whose objectives are to set standards and promote effective implementation of measures to combat money laundering, terrorist financing, and other related threats, its website describes.

The FATF currently comprises 35 member jurisdictions and two regional organizations. Member countries include China, France, Germany, India, Japan, South Korea, Russia, South Africa, Sweden, Turkey, United Kingdom and the United States. The two organizations are the European Commission and the Gulf Co-operation Council.

35 Countries, EU and FATF Agree to Revise Global Cryptocurrency Standards
FATF meeting.

At the meeting last week, “Member countries were worried that the anonymity and money laundering risks of cryptocurrency transactions had grown with electronic wallets” and mixing services that hid the identity of their owners, Sedaily described. The Hankyoreh elaborated:

The FATF discussed the need to revise its own international standards…along with the revision of the virtual currency guideline created in June 2015, and agreed to report the response to the G20 Finance Ministers’ Meeting in March.

In addition, China was elected as the next vice-chairman at the meeting, effective from July 2019 to June 2020, the publication noted.

Korea – First to Draw Up AML Guidelines

35 Countries, EU and FATF Agree to Revise Global Cryptocurrency StandardsDuring the meeting, South Korea briefed the FATF on “its obligations related to cryptocurrency transactions to tackle money laundering,” Korean officials said on Monday.

The country’s Financial Services Commission (FSC) said in a statement that “South Korea’s anti-money laundering guidelines for cryptocurrency trading were the first to be drawn up” among the FATF members, the news outlet wrote.

South Korea has banned anonymous trading of cryptocurrencies and introduced the real-name system which went into effect on January 30. The country’s Financial Intelligence Unit (FIU) also published anti-money laundering guidelines for financial institutions. They are required to properly verify their customers, Yonhap detailed, adding that they are also obligated to closely monitor financial transactions and “conduct enhanced customer due diligence if a virtual currency exchange is suspected of using employee accounts for virtual currency-related financial transactions.”

What do you think of these countries asking the FATF to revise the global anti-anti-money laundering standards? Let us know in the comments section below.


Images courtesy of Shutterstock and FATF.


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South Korean Prime Minister Imposes Crypto Code of Conduct on Government Officials

South Korean Prime Minister Imposes Crypto Code of Conduct on Government Officials

The South Korean prime minister has ordered a new code of conduct to be prepared and implemented specifically to address the actions of government employees regarding cryptocurrency regulations. This follows the recent case of possible insider trading which is being investigated.

Also read: Cryptocurrency Activities Will Be Legal and Tax Free in Belarus Starting in March

Prime Minister Orders New Code of Conduct

South Korean Prime Minister Imposes Crypto Code of Conduct on Government Officials
Prime Minister Lee Nak-yeon.

The South Korean Prime Minister Lee Nak-yeon made an announcement on Tuesday following criticisms regarding the government’s handling of cryptocurrency regulation.

Lee noted that the public is angry because an “employee who worked in the virtual currency countermeasures department was found to have earned profits from virtual currency transactions,” Yonhap described. Citing that the Financial Services Commission (FSC) is still investigating the issue, Lee emphasized, “The legal nature of virtual currency has not yet been defined, but the people are angry.”

Subsequently, he “ordered the Human Resources Innovation and Citizens’ Rights Commission to prepare and implement the principles and standards that each institution should follow,” Sedaily explained. Yonhap then quoted him saying:

Each agency should take necessary measures, such as supplementing the code of conduct for employees in charge of virtual currency issues.

South Korean Prime Minister Imposes Crypto Code of Conduct on Government OfficialsHowever, an FSC official revealed that it is “difficult to apply the Capital Market Law or the National Public Service Act” to the insider trading case since “virtual currencies are not financial products prescribed by law,” Dong-A Ilbo reported.

Earlier this month, the FSC, the Fair Trade Commission (FTC) and the Financial Supervisory Service (FSS) advised their employees to refrain from trading cryptocurrencies during work hours, Yonhap noted.

Better Coordination Needed

South Korean Prime Minister Imposes Crypto Code of Conduct on Government OfficialsThe prime minister also emphasized the need for better coordination among ministries, citing the recent confusion when the Ministry of Justice independently announced a bill to ban cryptocurrency trading, sending panic across global cryptocurrency markets. However, the FSC soon made its own announcement stating that the matter has not been discussed and the bill is strictly the initiative of the Ministry of Justice alone.

Lee said last week that “that the government’s position on virtual currency remains unchanged, but the opinions of government ministries may differ,” Asia Economy wrote. Yonhap quoted him reiterating that the final government position will be announced after an inter-ministerial coordination, noting that:

As each ministry pursues a policy, it is necessary to adjust in advance the matters that need to be reconciled between the ministries.

What do you think of the Prime Minister’s response? Let us know in the comments section below.


Images courtesy of Shutterstock and the Korean government.


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