Tag Archives: KYC

‘Digital Asset’ businesses embrace regulatory compliance with new industry group

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dataAnnounced this week at the Inside Bitcoins conference  the new DATA industry group aims to represent businesses not just in the Bitcoin space but any digital asset including, “emerging payments, virtual currency, and other financial technology innovations”.

DATA, or the Digital Asset Transfer Authority’s founding members include the CEO’s of leading Bitcoin businesses such as BitInstant, BitPay, & BitStamp as well as the CEO’s of other digital currency businesses including Ripple’s OpenCoin and Ven.

However, the groups stated goals seem sure to heat up the regulation debate.

From DATA’s official announcement …

To reach this potential, to inspire confidence in the services we offer, and to ensure fair and responsible treatment of consumers and merchants, we believe our industry must evolve in compliance with law and regulation. We must work proactively with regulators and policymakers to adapt their requirements to our technologies and business models. We must develop and implement common risk management and compliance standards that address the public policy concerns associated with our businesses. And our firms must build risk management and compliance programs that meet those standards.

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Bitcoin, Regulators and Online Markets – a look at the World of Bitcoin Exchange

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forexExchanges are the link between the old world of banking and the new world of crypto-currencies; they play a vital role in supporting the growing Bitcoin economy. If Bitcoin hopes to continue rapidly gaining new users it needs this bridge between the old and new systems to be up and functioning. While Bitcoin is in no way dependant on a link to the traditional banking system, its smooth transition into mainstream use certainly is.

Unfortunately these bridges which make up the exchange market are concentrated and often broken.  This leads to concerns over reliability and security, which can cause market panic and extreme volatility. As Bitcoin enters the mainstream a wave of new businesses, services and software developers have recently dedicated their efforts to solving this problem. Their task will not be easy, and the while the exchange rate has seen some recent stability, there is a long way to go before obtaining bitcoins can be called user friendly and reliable.

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UK regulator will not require Bitcoin exchanges to register

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CoinDesk is reporting that in a letter send to an exchange start up the UK, financial regulator HM Revenue & Customs (HMRC)  has stated that the proposed exchange has no need to register under money laundering regulations.  However the letter does make it clear that HMRC may change their mind and require registration in the future.

Via CoinDesk…

The letter from HMRC reads as follows:

“With reference to your enquiry at this time there is no requirement to register with HMRC under the Money Laundering regulations, however HMRC recognise that the issuing of Bitcoins represent an emerging development.

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The e-gold story

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As Bitcoin continues its move towards the mainstream and Bitcoin businesses experience rocky relations with bankers and regulators, now is a good time to look at previous leaders in the digital currency world.

In the late 90’s and early 2000’s, e-gold was the industry leader.  As one of the world’s first successful online payment systems e-gold was a pioneer using many now standard practices such as SSL connections and API’s.  Brought down by a run in with regulators in 2008 the e-gold story is required reading for anyone involved in the digital currency world.

Sent in by Wikipedia editor Cadwallader, below is a thoroug review of the e-gold story.

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Liberty Reserve Shutdown

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liberty-reserve-logoThursday last week Liberty Reserve went offline. On Friday Arthur Budovsky Belanchuk, the owner, was arrested in Spain after a joint money laundering investigation by US and Costa Rican authorities. The allegations are that Liberty Reserve was financed using money from child pornography websites and drug trafficking.

The Tico Times, an English newspaper in Costa Rica, is reporting that Budovsky has been under investigation since 2011 after a request from a prosecutor’s office in New York.  Liberty Reserve is a Costa Rican business and Budovsky is a Costa Rican citizen of Ukrainian origin.

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FinCEN Issues “Guidance on Virtual Currencies”

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fincen.header-editThis guidance was issued to “provide clarity and regulatory certainty for businesses and individuals engaged in an expanding field of financial activity.” Or put another way, FinCEN explains who exactly they intend to regulate.

FinCEN covers their bases here discussing “users, administrators, and exchangers… persons creating, obtaining, distributing, exchanging, accepting or transmitting” virtual currencies, both centralized and de-centralized, e-currencies and e-precious metals.

  • FinCEN sees those dealing in virtual currencies as their regulatory responsibility
  • Users, and Bitcoin miners seem to be exempt from regulation for the moment
  • Buying or selling virtual currencies for “any reason” can make you a money transmitter and subject to FinCEN regulation
  • Virtual currency dealers are NOT necessarily foreign exchange dealers
  • FinCEN rules can also apply to those dealing in e-precious metals
  • However, Prepaid Access rules do NOT apply to virtual currencies

Summary below.

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Voucher-Safe, a Next Generation Digital Currency – Part III

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voucher-safe-icon-256Part I looks at the motivation behind Voucher-Safe, the evolution of digital currency and how Voucher-Safe transactions work.

Part II  examines the Voucher-Safe economy, trust, security and software.

This final part looks at Voucher-Safe’s interaction with Bitcoin, Issuers and OnionPay.

 

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The new Ripple, a decentralized exchange, a payment system, and a currency all its own

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RippleOut very soon, the new version of Ripple has has undergone a dramatic renovation.

Ripple was created by Ryan Fugger in 2006 as a trust network where people can grant each other credit, and anyone can ‘be their own bank’. The project has since been acquired by a team of developers including Mt. Gox creator Jed McCaleb. Ryan’s trust network is still there, but it is now one feature of a much expanded system.

The new features of the soon to be open source software include the possibility for a decentralized currency exchange, a p2p transaction network, “Gateways” for bringing other currencies into the system, and Ripples (XRP), a new digital currency.

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