Whitewashing The Dirty Market of Cryptocurrencies And ICOsStan Vazhenin l FintechRanking.com
“At the meetings with representatives of cryptocurrency wallets, cryptocurrency exchanges and marketplaces, as well as those with whom they want to work (banks that issue cards and open accounts, regulators that make claims), one can constantly hear the same questions: Who are these customers? What do you know about them? How did you check them? Where did they get this money from? Who bought these tokens and from whom?” – Vladislav Solodkiy wrote in his new book The First Fintech Bank’s Arrival.
South Korea and Taiwan decided to ban ICOs right after China. Bitcoin and ICOs had been in trouble in China since February, when the central bank, aiming to stem illicit capital flows, ordered exchanges to halt virtual-currency withdrawals until they could identify their customers (KYC, AML, “source of funds”). And it is only one problem.
Anson Zeall, the head of Singapore’s Cryptocurrency and Blockchain Industry Association, or Access, said his organization had heard from 10 companies which had encountered problems with their banking relationships in Singapore. The banks didn’t give a reason for their action, Zeall added. Chia Hock Lai, president of the Singapore Fintech Association, said some of his organization’s members also experienced account closures.
Several days ago one Singaporean cryptocurrency-related firm, CoinHako, said its bank accounts had been closed by DBS bank, which didn’t provide any reasons. CoinHako, which provides cryptocurrency and digital assets wallet services, said it would be no longer able to process deposits and withdrawals in Singapore dollars. “The closure of our bank account might be due to matters pertaining to” anti-money laundering rules and know-your-customer requirements, co-founder Yusho Liu said. That’s “why we go the extra mile to meet compliance standards set by” the MAS, he said.
Koh Ching Ching, a spokeswoman for OCBC bank, said the bank reviews customer accounts for risk management purposes “and may close these accounts for various reasons.” UOB bank declined to comment.
The Monetary Authority of Singapore has taken a leading role in efforts to promote Singapore as a regional center for financial technology, and is one of the organizers of a ‘fintech festival’ due to take place in November. “If this is the case, we would urge Singapore to take a leadership role and demonstrate how to come to an effective resolution among all parties,” Anson Zeall said in a statement. Access has 106 members and the Fintech Association has 185.
The MAS has said it will regulate the offer or issue of digital tokens if they constitute products regulated under the Securities and Futures Act. It doesn’t regulate virtual currencies per se, a similar position to that taken by central banks and regulators in other countries. The MAS said in a statement that it doesn’t interfere with commercial decisions taken by banks “including those in relation to the establishment and termination of business relationships.” Banks are expected to establish suitable procedures and controls, including those governing customer transactions and relationships, and to comply with customer due diligence requirements of MAS rules on preventing money laundering and the financing of terrorism, the statement added.
Barclays closed down student’s account after his dealings in bitcoin: Charles Bartlett, a 17-year-old student and aspiring entrepreneur, is still waiting for an explanation after being “sacked” by his bank earlier this year. Unfortunately, his is not an isolated case. A small number of people, estimated to be in the low thousands each year, are told that their bank has made a “commercial decision” to close their account. Banks tend to offer no explanation and customers who ask for one are brushed off.
The market for ICOs has exploded to $2.2 billion – and how all of these post-ICO companies will (convert and) spend their “millions”? “Millions of nothing” – if traditional banks will not be open-minded enough to work with the new economy.
How to whitewash the black&grey market of cryptocurrencies and ICOs? “Many are still trying to avoid solving these problems and prefer to spend money on lawyers in order to keep out of these problems, rather than solve them. A small list of the largest players yet follows the right path: they are licensing their own services and building up customer verification processes. But these are proprietary solutions based on their own understanding and capabilities, and this is not always convenient for their final clients. In addition, they are expensive and time-consuming for both sides,” – told me Akim Arhipov, CEO of BAASIS ID, blockchain-based digital KYC solution from Singapore. Last week their team has become the winner of startup-battle Slush Singapore.
Recently, DataDepot in cooperation with BaaS-platform BAASIS has developed a unique stand-alone product BAASIS ID. This is an online only solution, which verifies the first and last name, passport, checks against international blacklists of people involved in money-laundering, criminal or terrorist activity, verifies the mobile number, bank card, residence address, profiles in social networks, and also makes and stores a video record to confirm personal filing, as well to compare the image with a photograph in the passport and social networks. The contract for the transfer, processing, storage, and exchange of this information with your service is signed by an individual with an electronic signature, and this contract is also always available to all participants of this process. The product has already been tested by the first international customers, has been approved by Monetary Authority of Singapore and Data Protection Authority of Singapore, and is currently before regulators in other countries.
With the SEC and MAS issuing new resolutions regulating the ICO market and while other countries are considering legalization of cryptocurrencies, it’s the first online only solution, which can be easily integrated into any website or mobile application, and the customer does not leave your service while passing the entire procedure. All the data is always available online for you and your client. The data is securely protected, stored on blockchain and can only be disclosed to third parties with the permission of your service and the customer. The cost of one verification is several times cheaper compared to the case when you do all the same manually or through partner networks. The online integration compatible with all platforms allows the client to go through all the steps without leaving your service interface, quickly and without wasting time on meetings and commuting. There are no fees for the beginning of the use of the product, monthly subscriptions or advance deposits - you are paying a transparent price for each verification.
What: presentation of The First Fintech Bank's Arrival book
About the book: https://goo.gl/qz51hy
Where: INSEAD (1 Ayer Rajah Avenue, 138676, Singapore)
When: 7th October, 13:00
Entrance: FREE -> RSVP here: https://goo.gl/ayCJSR