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Open a bank account today and you will almost certainly be subject to identity and background checks, as well as tracking your activities. This is because the police of financial transactions are one of the most powerful tools in law enforcement. Identifying a “dirty” money that arises illegal activities, criminals can identify and their abused gains recovered.
In order to oppose this, criminals often go through the process of “washing” their robberies, passing through seemingly legitimate transactions so that it seems to be derived from non-criminal activities. In order to combat that, in the fight against money laundering (AML), it is widely adopted, demanding financial institutions and other regulated entities must prevent, detect and report to drawing money. Without a legitimate explanation where large deposits came, banks and other financial institutions are unlikely to accept them.
Cryptoturferences such as bitcoin were published as a dream of money laundering – enabling fast, pseudonymous transmission by borders, while bypassing financial institutions that are usually believed in the implementation of AML controls. So how can a regulated business fulfill their responsibilities for AML when handling Bitcoins, especially when trying to determine the source of funds?
It is quite simple, if it can be shown that the funds came from another reliable business, such as exchanges – for example showing verifiable reception. Behind that, the Bitcoin blocking chain provides a potential solution. The public book of all transactions provides funds for monitoring the payment between Bitcoin addresses. Identities are not recorded but Studies They showed that the analysis of the chain block and external data can be determined by some identity. Therefore, we have a potential for monitoring Bitcoin payments and finding their source – whether it is an exchange, silk road, gambling service or a reported theft. This technique is certainly not perfect – a coin mixing service or a disguised address can help to cover up the source of funds – but at least it can be used to verify legitimate transactions.
Consider an automated AML service for Bitcoin. For a particular Bitcoin transaction, the “risk result” could be ensured, based on its history – it is determined through the analysis of the block. The transaction would be “greater risk” if he had clear links to mixing services, proven theft or entities such as a silk road. It would be “lower risk” if clear links can be made to reliable institutions (eg regulated exchanges / suppliers) or for coinbrational transactions. Each given transaction could be compiled by several inbound transactions, with different histories, so the overall risk factor must be properly reduced appropriately. Malte Möser and colleagues at Munster University descriptive Just such a service.
But what are the consequences of using these techniques for Bitcoin Aml? The issue of the black list of certain coins based on their history, or “taint”, is controversial in the Bitcoin community. Can Bitcoin function as a relevant currency if it is not a bless – ie. If some coins are worth more than others for their implementation? Probably not – in many cases, the black and list would happen for a while after the coins were infected – for example, theft could be reported days after it happened. Until then, they may have gone through the hands of many innocent parties. A guilt-free person left the Bitcoin holding when the black and list came into force suddenly discovered that they were divorced. Who would use such currency when that risk exists?
It seems inevitable that there will be a thin in any currency in which there is a “history” associated with each unit – as is the case with Bitcoins. So what is the solution – are the crypt currency convicted? Extensions to Bitcoin, such as Zerokoine seems to avoid taint problems by impossible to connect transactions, resulting in a higher currency in cash. This makes this using a coin mixing at the protocol level, eliminating any reliance on trusted third parties. The risk is that any such system could become known as a refuna for money laundering and will automatically refuse to regulate the companies as too high.
It is more likely that the regulations will be relaxed and adapted to correspond to the unique risks and opportunities that cryptoprenters represent. AML rules currently in force were adopted at the time of reinforced safety fears in the 11th. September, and sufficiently anti-money laundering and counter-terrorist financing regulations. This has resulted in a huge load Responsibilities for banks and other companies, which have been fighting since then.
Bitcoin growth can provide an incentive to completely review the role and efficiency of AML regulations, and there is even any relevance in the world in which money can flow as information.
Regulation of items of financial services
