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Only 14% of 216 global crypto exchanges are licensed by regulators

source-logo  chepicap.com 28 March 2019 21:00, UTC

According to a recent report by regulatory technology startup Coinfirm, only 14% of 216 global cryptocurrency exchanges are licensed by regulators.

The London-based global leader in compliance technology for cryptocurrencies and the blockchain-based financial ecosystems, took a closer look at 216 global cryptocurrency exchanges to outline the key risks that can be associated with these exchanges.

'Exchanges are gatekeepers to the crypto markets, if this responsibility is exercised effectively and diligently then they can provide control, stability, security and comfort', the report states.

'Know Your Exchange is one of the most important challenges for market participants and financial institutions looking for exposure to this sector.'

According to the report, Coinfirm evaluated the exchanges into seven categories of risk, including license and authorization, Customer Due Diligence and Know Your Customer compliance, Anti-Money Laundering compliance, sanctions, senior public figures, jurisdiction, and negative and adverse media.

69% of the exchanges that Coinfirm evaluated, do not have complete and transparent Customer Due Diligence and Know Your Customer compliance procedures, while only 26% introduced AML procedures such as monitoring transactions or recruiting a money laundering officer.

I'm shocked. Completely shocked. Study by Coinfirm found 69% of crypto exchanges don't have “complete and transparent” KYC procedures. And only 26% of exchanges had a “high” level of AML procedures https://t.co/uLdySABMnu

— Amy Castor (@ahcastor) March 27, 2019

Read more: Analyst predicts $55,000 Bitcoin after halving in 2020

60% of the evaluated exchanges offer support for fiat currencies, while 40% still conduct exchanges only between cryptocurrencies.

Perhaps most interestingly, Coinfirm identified Binance as having a high regulatory risk based on exposure to anonymous activity, since deposits and withdrawals for values below 2 Bitcoin reportedly did not require Know Your Customer compliance procedures.

Samuel Lim, Binance’s Chief Compliance Officer, dissagreed that users supposedly can deposit and withdraw thousands of dollars worth of crypto without any KYC.

He stated that Binance, in every single jurisdiction that it operates in, adheres to all local rules and regulations and has built trust among the public through its developments, services and values since its inception.

'For all of our regulated/licensed businesses, the standard followed is the model which is approved by the regulating body, including Jersey, Uganda, Malta and Singapore', he told Coindesk.

“Coinfirm identified Binance as having a “high” regulatory risk based on “exposure to anonymous activity,” since deposits and withdrawals for values below 2 bitcoin (less than $8,000 as of press time) reportedly did not require KYC as of February 2019.” https://t.co/yXa3FW7pLJ

— BugM (@bugdavem) March 27, 2019
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