It looks like more and more countries are banding together to potentially fight against cryptocurrency fraud.
Some Countries Are Examining New Ways to Fight
As we head deeper into cryptocurrency territory – still relatively unknown – the chances of fraud have increased tenfold. Problems ranging from SIM-swapping to phony initial coin offerings (ICOs) are running rampant, and everyone seems to be on the edge about the dangers that allegedly lurk around every corner.
Among the most common fears are those involving money laundering, tax evasion and other serious white-collar crimes. Some countries, like Japan and the United States, have general frameworks designed to fight against these issues and others like them, but many neighboring nations freely admit to hosting lagging resources for monitoring and keeping cryptocurrency activity within a system of checks and balances.
In addition, the idea of being monitored or supervised all the time while exploring cryptocurrency territory raises some serious constitutional questions and potentially goes against the ideals and initial goals of digital assets. Many of these cryptocurrencies are designed to be decentralized; tools against the centralized nature of all traditional financial institutions. If regulation indeed becomes a serious marker in the space, that could ultimately bring one of crypto’s biggest advantages to a point of non-existence.
Nevertheless, the fears stated above still live, and several countries – including Australia and Singapore – are now banding together to form a new system in which all suspicious cryptocurrency-related activity is reported within each country’s regulatory band. For example, if something strange occurs on a Singapore-based cryptocurrency exchange, the legislators within that country will not stand by idly and tackle it on its own. It will report the news to its neighbor Australia and warn them that there’s a potential crook out there and to watch out.
The program is being developed by the Financial Action Task Force. Thus far, the organization has garnered the cooperation of about 30 separate nations, all of whom cite money laundering as a serious threat. Measures and actions designed for monitoring further crypto activity are slated to be fully established sometime next year.
Sometimes, It’s Best to Go Out on Your Own
Not all countries are choosing to participate, and instead are selecting a more individualized or “singled out” approach. Czechia, for example, has recently announced that all crypto businesses looking to establish headquarters within its borders must register with the country’s Trade Licensing Office. Those who fail to do so are potentially looking at fines of up to $560,000.
The ruling is being established through the European Union’s fifth Anti-Money Laundering Directive (5AMLD). The idea is not so much to penalize companies that don’t play by all the rules, but to establish higher trust and give potential customers and investors the chance to know who they’re doing business with.
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