As regulators worldwide work to crack down on money laundering, cryptocurrency industry firms have had to adjust their practices to meet new compliance standards. The European Union and Hong Kong have recent undertakings in this field, proposing regulations to enhance AML enforcement in the crypto realm. EU's MiCA bill was recently agreed upon in October 2022 and will soon be voted on by the EU Council. A similar effort in Hong Kong was proposed via their consultation paper in March 2021, completing submissions at the end of the month and is due to be enacted by June 1.

One company seeking to expedite the process is VAF Compliance, a Dubai-based firm that has launched a Telegram Bot to aid businesses in their efforts to comply with the new regulations. This service works by judging the risk levels of accepting tainted cryptocurrency funds using a growing list of sanctioned wallet addresses. It is compatible with multiple blockchains and offers report fees for transactions conducted in different blockchains. It remains to be seen if their process will become the industry standard but it is a noteworthy step forward in helping recognized and less-known exchanges adhere to the regulations.

Notabene, a company specializing in helping crypto wallet companies comply with the Financial Action Task Force's Travel Rule, has given the EU praise for their adoption and implementation of the rule. Lana Schwartzman, the company's Regulatory and Compliance Chief, noted the EU's quick action and grace period in allowing the industry time to adapt to the changes. The EU Travel Rule requires identity checks conducted between the two ends of a crypto transfer.

Other companies like China's HashKey and OSL are already registered and comply with the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Ordinance 2022. They are joined by ZA, Hong Kong's largest virtual bank, which also provides crypto firms with fiat-to-crypto conversion rails, similar to the recently-liquidated Silvergate bank.

Overall, the strictercrypto money laundering regulations act as an effort in the industry towards better compliance and trust between exchanges and investors, as well as governments and regulatory bodies. Excitingly, these changes have led to the development of innovative solutions like the Telegram Bot from VAF Compliance, whose influence could help the industry reach higher levels of regulation in the near future.



Other News from Today