My Musings on Crypto Regulations (Part-1)

The #cryptocurrency industry today is reeling under the after-effects of a brutal crypto winter and a string of failures that rocked the industry in 2022, but it cannot be disputed that the industry as a whole has come a long way from its early days.?

In fact, the #crypto world has experienced tremendous growth in the past few years, despite what the industry has gone through over the last year. And with growth came increased scrutiny from governments and financial authorities looking to prevent malicious actors from using virtual activities for illicit activities.

However, truth be told, their fears are unfounded, as crypto’s use in illicit activities has been minimal vs. cash’s prevalent use in financing such activities. For instance, the latest report from Chainanalysis puts the illicit share of crypto transaction volume at a mere 0.24%.?Yes, you read that right!

Although I got a bit sidetracked, this is something that I wanted to highlight, as many have criticized cryptocurrencies as if they were exclusively responsible for all the problems that our world is facing. A Majority of cryptocurrencies in circulation are downright scams, but a few are truly amazing and will change the world for good. Yes, I am a true crypto believer!

Coming back to crypto regulations, one significant development came in 2019 in the form of the #FATF Travel Rule, which requires virtual asset service providers (read: crypto businesses) such as cryptocurrency exchanges and crypto wallets to collect their user’s personal data and exchange it along with transactions. And although the minimum transaction value at which the FATF Travel Rule’s requirement is triggered is set at $1000/€1000, the countries are free to change it as they deem fit.

Currently, only a few countries have adopted the FATF Travel Rule. However, that is about to change sooner or later, as #cryptoregulations have become a hotly debated topic globally, especially with #India taking over G20’s presidency recently.?

Now the question is how VASPs can comply with the FATF Travel Rule. Well, they need a Travel Rule Solution like Shyft Veriscope. Head over here to learn all about Shyft Veriscope.?

Next week, I will be back with a detailed article on what the FATF Travel Rule is all about in detail and how VASPs can comply with it.?