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Cryptocurrency

Over 50% of Crypto exchanges have weak or porous KYC checks

A new study has shown that a large number of crypto exchanges have weak KYC identification protocols.

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Over 50% of Crypto exchanges have weak or porous KYC checks

It’s surprising to note that more than half of the world’s crypto exchanges have weak KYC identification protocols — with exchanges in Europe, America, and United Kingdom among the worst offenders, according to a new study by blockchain analysis firm, Cipher Trace.

Despite existing crypto AML regulations, many countries continue to host virtual asset service providers (VASPs) with deficient KYC.

READ: All Tech Companies eventually became Fintechs- Google to launch new debit card

CipherTrace research discovered that just this year alone, 56% of VASPs globally have weak or porous KYC processes, meaning money launderers can use these virtual asset service providers to withdraw or deposit their ill-gotten funds with very minimal to no KYC.

The importance of strong KYC processes:

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  • Financial Institutions employ Know Your Customer (KYC) processes to confirm the identity of their customer.
  • These processes typically involve the collection and verification of a customer’s personally identifiable information (PII)—including, but not limited to, government-issued ID, phone number, email address, physical address, and more.
  • Exact KYC requirements vary by jurisdiction, meaning criminals can use jurisdictional arbitrage to choose to go with poor KYC procedures to further obfuscate their flow of funds.
  • Strong KYC procedures can mitigate money laundering. A VASP with strong KYC will know the real identities of users complicit in transactions involving stolen or nefariously gained cryptocurrency.
  • Strong KYC procedures should also prevent bad actors from registering with fake credentials, such as synthetic IDs or stolen identities, making the laundering of cryptocurrency much harder.
  • Weak KYC procedures, on the other hand, can easily lead to a VASP becoming a go-to location for criminals either to convert ill-gotten cryptocurrencies into fiat or to use the VASP as a mixing service, allowing criminals to convert coins and sever ties to previous flows of funds.

READ: Reps to probe DStv, StarTimes for ignoring ‘pay per view’ subscription

In September 2020, FATF released its Virtual Assets Red Flag Indicators of Money Laundering and Terrorist Financing Report.

The report warns that criminals when moving their illicit funds, “have taken advantage of the varying stages of implementation by jurisdictions on the revised FATF Standards on VAs and VASPs.” This action is known as jurisdictional arbitrage.

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When looking at the weakest KYC countries in the world, CipherTrace analysts discovered that 60% of the top 10 worst KYC countries in the world are in Europe, 20% are in Latin American and Caribbean countries, and the final 20% is in APAC countries.

READ: NIPOST’s new charges could have ruined the e-commerce/logistics industry

Criminals reportedly exploit the gaps in AML/CFT regimes by moving illicit funds to VASPs domiciled in jurisdictions with non-existent or minimal AML/CFT regulations on VAs and VASPs.

According to the FATF, VASPs should be wary of the following red flags involving KYC:

  • Customers utilizing VASPs in a high-risk jurisdiction lacking, or known to have inadequate, AML/CFT regulations for VA entities, “including inadequate CDD or KYC measures”
  • Customers receiving funds from or sending funds to VASPs “whose CDD processes are demonstrably weak or non-existent”

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Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment Trading and Financial Market Analysis. Member of the Chartered Financial Analyst Society. You can follow Olumide on Twitter @tokunboadesina or email [email protected]

1 Comment

1 Comment

  1. Anthony

    October 3, 2020 at 8:36 pm

    How can I withdraw from Euros to bitcoin and to my local currency Please

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Cryptocurrency

Large entity moves Bitcoins valued $244 million

BTC whale moved about 18,901 BTC estimated to be worth about $244million, some hours ago.

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3 BTC whales move 140 million worth of Bitcoins from Binance

As the price of the Bitcoin, the world’s flagship crypto breaches above $13,000 price levels, a growing amount of large entities in recent times have been increasing their transactional volume at the world’s most popular crypto.

Data obtained from Whales Alert, a crypto analytic tracker, revealed that an unknown BTC whale moved about 18,901 BTC estimated to be worth about $244 million, some hours ago.

READ: 5 major reasons it’s good to buy Bitcoin

READ: Jaiz Bank reports 45.3% profit increase in H1 2020, involved in 21 litigations

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READ: PenCom okays N2.58billion for relatives of 591 deceased workers in three months

Meanwhile, at the time of writing, Bitcoin traded at $13,064.05 with a 24-hour trading volume of $18,700,010,754. BTC price is down -1.8% in the last 24 hours. It has a circulating supply of 19 million coins and a max supply of 21 million coins.

Explore Data on the Nairametrics Research Website

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What this means: From a macro level, the increase in the number of these large entities can be considered bullish.

  • At the time this report was drafted, Bitcoin was still trading around the $13,000 support levels, as investors have kept buying BTC at its support levels.
  • Nairametrics believes the increased buying pressures by notable institutional brands are partly responsible for the non-dilutable crypto recent highs while it is difficult to predict market movements. BTC whales have shown historically that they often determine the BTC trend.

READ: Two strange Bitcoin whales transfer $290 million worth of Crypto

Quick fact: At the BTC market, investors or traders who own large amounts of Bitcoins are typically known as Bitcoin whales.

  • This means that a BTC whale would be an individual or business entity (with a single Bitcoin address) owning around 1000 Bitcoins or more.
  • As BTC whales accumulate BTCs, bitcoin’s circulating supply reduces, and this can weaken any bearish trend bitcoin finds itself in.
  • This means that over time, it’s possible that as BTC approaches its fixed supply of 21 million, the price of BTC will go up, with BTC’s present demand factored in.

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Cryptocurrency

Bulls on rampage, Ethereum wallets now record high

The number of Ethereum addresses (EOAs) holding at least 0.1 ETH just crossed the 10,261,111 million mark for the first time.

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Number of contract calls on Ethereum rises by 300%

Retail investors are rushing big time, over owning a stake in the world’s second most valuable crypto by market value. Its rise has not been surprising to many crypto experts in the crypto-verse, as the rise of DeFi Crypto partly helped Ethereum usage reach an all-time high coupled with the fact that it’s now trading over $400.

According to reports recently released by Glasscode, the number of Ethereum addresses (EOAs) holding at least 0.1 ETH just crossed the 10,261,111 million mark for the first time.

READ: FG liberalizes the Mining sector, grants 5 years tax concession to miners

“The increase in gas usage indicates a continuous growth in the use of Ethereum’s platform, as measured by the number of transactions, as well as demand for block space, as measured via gas per transaction,” said Wilson Withiam, research analyst at data provider Messari.

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READ: There are now 10,016 Bitcoin ATMs globally

Data from Coingecko at the time this report was written showed Ethereum traded at $408.30 with a daily trading volume of $11 billion. ETH price is down -1.6% in the last 24 hours. It has a circulating supply of 110 million coins and a max supply of ∞ coins.

Quick fact; Ethereum is a cryptocurrency designed for decentralized applications and deployment of smart contracts, which are created and operated without any fraud, interruption, control or interference from a third party.

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READ: Buying sign: Number of Bitcoin Big players at record high

Ethereum is a decentralized system, fully independent, and is not under anybody’s authority. It has no pivotal point, and its platform is connected to thousands of its users through their computing system around the world, which means it’s almost impossible for Ethereum to go offline.

Gas is the token that energizes Ethereum’s blockchain. It is the standard used to calculate the number of charges an individual needs to pay in order to make transactions on Ethereum’s blockchain.

READ: Ethereum whales move over $50 million of Ether to Uniswap

Like with many other crypto assets, speculating with Ethereum can be highly profitable and has had a good history of giving its investors huge returns. However, there are also many other options to make income from Ethereum. These options include Ethereum mining, Ethereum faucets, and Ethereum staking.

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Cryptocurrency

Crypto for music, AUDIO up by 500%

Binance Labs, the investment and incubation arm of Binance, has made a strategic investment in Audius.

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A newly designed crypto is presently gaining waves with the aid of the world’s biggest crypto exchange Binance.

A few days ago the decentralized music streaming platform Audius (AUDIO) launched its crypto. The coin traded as low as $0.04 on launch day, according to Coinmarketcap.

READ: Crypto: UniSwap gives each owner over $2,000

However that became history as the macro, showing Binance would be supporting the pretty unknown crypto catalyzed a steep upward price movement that sent it as high as $0.50, which represents a surge of 1,125% in a span of a few hours, before presently trading at the time this report was drafted at 0.21140 with a gain close to 500% since its launch.

The macro making this crypto asset blue hot amidst thousands of crypto is largely attributed to these statement released by Binance

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READ: OUSD: Stablecoin that pays you interests like a bank

Binance Labs, the investment and incubation arm of Binance, has made a strategic investment in Audius – a decentralized streaming protocol giving everyone the freedom to distribute, monetize, and stream any audio content. Specifically, Binance Labs led an extension round for Audius worth $1.25 million.

With 750,000 monthly active users (MAUs) and over a million streams each month across more than 100,000 tracks, Audius has teamed up with top artists like deadmau5, 3LAU, and RAC to help crypto cross the chasm.

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READ: Crypto: Popular Hedge Fund, Grayscale record best quarter ever

Audius features a native platform token – AUDIO – that is staked for security, feature access, and governance. AUDIO is earned by users to shape future iterations of the protocol, creating a community dynamic in ownership unique to a music industry full of middlemen.

The means of artists being able to connect directly with fans is one that speaks to the ethos of web3, and one that the Audius community will be exploring closely over the coming months.

READ: Crypto exchanges with most valuable crypto-assets in the world 

“Audius and its approach to mainstream crypto adoption are among the strongest we’ve seen. We’re glad to have Binance supporting this vision as we are both heavily aligned in creating a more accessible future for crypto,” Head of Binance Labs Wei Zhou said about the investment.

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That said, the popularly known Binance founder Changpeng Zhao shared the news about the company’s investment in Audius via Twitter

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