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New Barriers: What Opposed The Crypto Market Development This Summer

Denis Goncharenko

Summer was hot in terms of crypto regulations and prohibitions — starting with FATF which has released guidelines for regulators, making hints for them to slowly tighten the grip. The regulators didn’t hesitate and started putting the frameworks of control around crypto industry.

From South Korea to the Netherlands, the rules of KYC and AML have been implied and sometimes over-regulations took place. The updated FATF guidelines that require virtual asset service providers (or "VASPs") to pass information about their customers to one another when transferring funds is very controversial and something that well should pay close attention to. Since VASPs are not limited to cryptocurrency exchanges but may also include individuals, there are justifiable concerns regarding compliance costs, user privacy, and the possibility of even being able to put the guidelines in practice, says Ken MISUMA, CMO of Quras:

“I recognize the need for crypto regulation to deter money laundering and terrorist financing activities from proliferating, but implementing FATF guidelines needs to be done very strategically to not spur the growth of a deepening black market of transactions. I expect to see select, highly-public crypto companies to be made examples of as companies not in compliance with the guidelines to push the greater market to adopt greater standards. As the world's first public blockchain which allows anonymous transactions in smart contracts, our team at Quras sees a vast opportunity in digital ID adoption for compliance with regulations while still protecting sensitive personal and corporate data. At the end of the day, a combination of proper education and greater communication between regulators and blockchain innovators are necessary to help our industry mature in a sensible and effective way.”

However, all these events will not be able to have any serious impact on the cryptocurrency market, says Artur IBRAGIMOV, lawyer at Prifinance company. The new FATF standards are only advisory. Secondly, much of what is said in the FATF recommendations has long been put into practice already:

“I would not call what happened restrictive measures. The G20 only supported the previously issued FATF recommendations regarding the fight against money laundering. For example, one of the recommendations is that now exchanges should collect information about their users and provide it. In practice, all major exchanges have long introduced mandatory user identification. The storage and processing of information has long been regulated under the GDPR.”

What’s more annoying, the crypto industry once again suffered from market players.

21-06-2019 13:55:13  |   Investments
As such, fTLD Registry Services, a domain name system (DNS) registry, announced restrictions of the DNS extensions from generic banking “service providers.” The proposal came amid an alleged uptick in applications for .bank domain names by crypto companies.

Heather DIAZ, fTLD director of compliance and policy stated the following:

“As the financial services arena has evolved, particularly as it relates to fintechs offering financial products/services (e.g., P2P payment providers, cryptocurrency companies), we have found that some prospective Registrants were seeking domains to enhance their legitimacy to market to regulated entities and/or consumers.”

Diaz also said the registry has never accepted a crypto company’s application for a .bank domain name, which costs approximately $1,000 to host per year. Included in this freeze are P2P payment providers, money transfer businesses, and microloan providers.

30-07-2019 12:31:05  |   News
More than that, a sudden blow came from Apple.Inc, which has announced its own Goldman Sachs-backed credit card Apple Card, integrated into the Apple Wallet app on iPhone. After that, the technological behemoth claimed that it will not allow cardholders of Apple Card to purchase cryptocurrency, casino gaming chips, race track wagers or lottery tickets.

Long earlier, in February 2014, Apple had removed all the bitcoin wallets from the App Store. After the wallet ban, Blockchain.com wrote a blog post which denounced Apple’s choice to remove the wallet application:

“These actions by Apple once again demonstrate the anti­-competitive and capricious nature of the App Store policies that are clearly focused on preserving Apple’s monopoly on payments rather than based on any consideration of the needs and desires of their users.”

Indeed, the battle for the users’ choice continues and digital asset market continues to evolve despite all regulatory and competitors’ efforts to subdue it. The adoption is slow, but even the authorities from IMF such as Christine LAGARDE admit the power of crypto assets. It means, the new market disruptions are still to come.

Image courtesy of Dailyhive

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