#bitcoincompliance

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Bitcoin Strength Signals Decline in Fiat Currencies

The strength of both Bitcoin and gold is an important signal for traditional foreign exchange markets about the declining value of paper fiat currencies. Ignoring the decline in value of dollars, euros, yen, and all other paper money against these two assets over recent months and years is a mistake for any investor or trader. In my first article on the role of gold and Bitcoin in markets, I suggested that the cryptocurrency would outperform the yellow metal. While I got that dead right, I did not put on a pairs trade, and if I did, I would have taken profits a long time ago. I have a feeling I will be revisiting the relationship between gold and Bitcoin again over coming months and years. The rise of Bitcoin and gold is a story that has not yet reached its crescendo by any means. https://seekingalpha.com/article/4080916-gold-bitcoin-revisited?page=5

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FINRA questionnaire includes Virtual Currencies.

The questionnaire provides a number of possible answers for respondents including whether they issue virtual currencies or are affiliated with entities that trade or invest in the area, providing insight into how FINRA believes its members may be engaging with the emerging technology. In statements to CoinDesk, FINRA sought to position the inquiry as just a small part of a larger examination process, one whose results would not be released more widely. The organization said: "The information collected through the RCA is used for regulatory and examination purposes only." Elsewhere, Pillsbury Winthrop attorney Marco Santori said he believes FINRA may be seeking to learn more about its members virtual currency activities due to complexities relating to the how broker-dealers are regulated in the US. More specifically, he posited that the reason for the questions may be that entities regulated by the Securities and Exchange Commission (SEC) are exempt from Financial Crimes Enforcement Network (FinCEN) and state licensing requirements, agencies which have been more assertive in attempting to understand and regulate the industry. http://www.coindesk.com/finra-bitcoin-risk-assessment-survey/

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Bitcoin ATM's comply with AML/KYC. Contact VCS.

Like most parts of the bitcoin economy’s infrastructure, bitcoin ATMs are evolving, and operators in the industry are looking to identify and correct these issues, while still enabling buyers to access bitcoin conveniently. Aaron Williams, founder of Coinnections, is one entrepreneur who is seeking solutions to ease the KYC requirements bitcoin ATM owners would need to implement. Currently developming the beta for an anti-money laundering software product for cryptocurrency businesses, Coinnections’ creator believes US consumers will prefer bitcoin ATMs over bitcoin exchanges in the future. “Bitcoin ATM operators benefit from their small size in that they can implement a true risk-based AML program,” Williams has said. “A true risk-based AML program can allow for lower identification thresholds while still allowing the user to buy a useful amount of bitcoin. ATM operators can also benefit from not having to comply with multiple regulatory regions.” http://www.coindesk.com/bitcoin-atms-gray-areas/

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Data Protection for Emerging Fin Tech.

Only an approach that incorporates a protective stance on the processed information at the conception of KYC and payment service technologies will be able to fulfill due diligence obligations as well as respond to transparency and anonymity needs. Take for example, a technical rule regarding the use of an account and the identification of the user that grows in correlation with the amount of money transferred or deposited to an account. This type of rule would give access and allow users to remain anonymous for transactions of low or insignificant risk, and block the account and require the identification of beneficial owners once certain ceilings have been reached. One could also foresee the parallel use of the unique identifier proposed by the 2015 Payment Services Directive for the blockchain’s pseudonymization technique. Contrary to an “all or nothing” strategy, Data Protection by Design ensures the integration of data protection and privacy principles into technologies and allows financial institutions to effectively fulfill the due diligence obligations resulting from the anti-money laundering regulatory framework. https://www.finextra.com/blogposting/12663/money-laundering-bitcoin-and-blockchain-anonymity-transparency-and-privacy-are-not-incompatible

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EU Shuns Pre Emptive regulation of Bitcoin

To avoid stifling innovation, we favour precautionary monitoring rather than pre-emptive regulation. But IT innovations can spread very rapidly and become systemic. That’s why we call on the Commission to establish a taskforce to actively monitor how the technology evolves and to make timely proposals for specific regulation if, and when, the need arises. https://www.cryptocoinsnews.com/bitcoin-due-to-get-a-watchdog-via-the-european-union/

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Consumer Data Safer with Bitcoin.

"It's an entirely new thing that opens up possibilities for much more secure consumer data," Holmquist said. For consumers who distrust the government and corporations' suspect data management activities, the fact that blockchain puts security in the hands of users makes using it particularly enticing to them, he added. "For me personally as a consumer, I feel like my information is most at risk when it is held by any company, or even governments," Holmquist said. "The nice thing about Bitcoin is it lets you have the option to essentially safeguard your own security, or safeguard your own data, because to use Bitcoin you really don't need to give much information out there." http://searchcompliance.techtarget.com/feature/Blockchain-compliance-raises-questions-of-regulatory-scope-intent

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Compliance Hurdles for Bitcoin Startups

"It was a matter of starting to read the appropriate rules and regulations," said Lane. "And along the way continuing a dialogue with the companies we had started talking with." Perhaps surprisingly, a large part of the due diligence for opening an account for a typical bitcoin company isn't that much more demanding than a non-bitcoin company, Lane explained. Most of that research, including on-site visits to those startups' offices “to make sure they are who they say they are,” is standard for corporate clients. The regulatory requirements Silvergate follows don’t dictate that the bank audit every transaction, but according to Lane, that "we have confidence that you have confidence" in who are the account holder’s clients. An analysis of the potential client's customer verification process — how the company confirms its own clients identities — is good enough, he said. http://www.coindesk.com/silvergate-banking-bitcoin-companies/

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Mobile Remitter Note: AML Risks

AML Risks for New Bitcoin Businesses: If your company is new startup using Bitcoin or other virtual currencies or digital payment systems such as BitGold, you will be scrutinized for risks by users, traditional banks, regulators, law makers, service providers and other players. To manage this risk and to mitigate challenges it is imperative to voluntarily establish vigorous AML/ KYC ongoing transaction monitoring, training, record keeping and reporting diligences. It is imperative to contact a company such as Labyrinthus LLC for a written risk assessment under current regulatory obligations, to craft a well designed AML policy as well as envision a future strategy to navigate the compliance maze. With the confidence and security garnered by working with top compliance professionals, you will be positioned to emerge as a leader in the new financial paradigm. The best and most robust startups will prevail harnessing the most in-depth knowledge and ongoing practice of fulfilling the key AML reporting and record keeping obligations, such as SARS reporting, CTR filing, sanctions screening and more. Working with Labyrinthus LLC you will be leveraging cutting edge software and have access to avant garde solutions and ideas. Contact us to team with a group dedicated to innovating and adapting with the laws to quickly allow your company to embrace the new service models and potentials unleashed by Bitcoin and other virtual currencies.