KYC

Thailand’s New Cryptocurrency Regulation Requires Users to Be Physically Present to Open Accounts

04/05/2021 by Idelto Editor

The Thai government has reportedly imposed a new cryptocurrency requirement. Crypto exchanges will be required to verify users’ identities using a machine that requires the customers to be physically present.

Thailand’s New Crypto Rules

The Thai Anti-Money Laundering Office (Amlo) has announced that starting in July “local digital exchanges must verify their customers’ identities through a ‘dip-chip’ machine that requires clients to be physically present,” the Bangkok Post reported.

Currently, the account opening process at crypto exchanges is done entirely online. To approve a new account, exchanges must ensure that the documents submitted by customers comply with the regulations set by the Thai Securities and Exchange Commission (SEC) for the know-your-customer (KYC) process and suitability test.

Furthermore, the documents must also be verified by relevant government agencies. The application will be rejected if the customer submitted fake documents or resides in a country where cryptocurrency trading is banned.

Poramin Insom, co-founder and director of crypto trading platform Satang Corp., explained:

Digital asset exchanges have a duty to report any transaction worth over 1.8 million baht [$58,000] under the money laundering law, and must set up a database for inspections by regulators.

The Anti-Money Laundering Act entered into effect in 1999 and requires entities operating financial businesses and legal professionals, such as investment advisers and real estate brokerages, to report any transaction meeting its requirements. They must also keep documentation and transaction data as evidence for 5-10 years.

In addition, about 6,000 gold shops nationwide will require customers to show their ID cards when buying or selling gold worth over 100,000 baht in cash.

However, the chief executive of Hua Seng Heng, Thanarat Pasawongse, explained that most large gold shops have already been using dip-chip machines to verify customers’ identities for four to five years because it is convenient.

In general, customers must show their ID cards for cash transactions of more than 100,000 baht. A report must be Filed with Amlo for transactions worth over 2 million and business operators must report any “suspicious” transactions to the authority.

What do you think about the new ID verification requirement for opening a crypto account in Thailand? Let us know in the comments section below.

How African Users Can Buy and Trade Bitcoin Cash Without Facing KYC or Geoblocking Hurdles

13/04/2021 by Idelto Editor

Africa remains the home to a large proportion of the world’s population that is unbanked according to a 2017 World Bank Global Index survey. Many of those who are unbanked cite their lack of official identification particulars as one of the main reasons for their predicament.

Cryptos Narrowing Financial Exclusion Gap

Therefore, in their effort to reduce the number of people that have no access to banking services, Satoshi Nakamoto created Bitcoin, a decentralized digital currency and network that is available to anyone. Now, more than ten years later, the crypto asset has had successes in narrowing the financial exclusion gap as some financial services are now available to those lacking identification documents.

How African Users Can Buy and Trade Bitcoin Cash Without Facing KYC or Geoblocking Hurdles — Local.bitcoin.com is a peer-to-peer bitcoin cash (BCH) marketplace that’s available in every nation in the world.

However, the rising fees on networks such as bitcoin (BTC) or ethereum (ETH) mean the respective crypto assets may eventually become less accessible. Further, the imposition of KYC requirements by some centralized crypto exchanges or the enforcement of FATF rules means millions of individuals including many from Africa will soon be blocked from trading cryptocurrencies.

Nevertheless, some crypto exchange platforms like Local.bitcoin.com continue with their quest of making it possible for African users to have access to cryptocurrencies like bitcoin cash. Also, African users or traders will transact with the full confidence that the other party to the transaction will perform as agreed. Local.bitcoin.com’s blind escrow system ensures all parties play their part.

How to Start

So how can a prospective trader safely buy or sell bitcoin cash on Local.bitcoin.com? The first step would be to go on local.bitcoin.com and create an account. Creating an account on Local.bitcoin.com only requires one’s email address, a username, and a password. There is no KYC, an ID verification process, or geoblocking which often forces users from certain regions to use VPNs. Once an account has been created, the user is now ready to start trading.

To start trading, a prospective BCH buyer simply selects a trader from a list of sellers shown on the offers page. If the two traders agree on the sale, the transaction will proceed with the seller sending the BCH to a blind escrow account. The buyer is then expected to make the payment as agreed and once this has been received by the seller, the assets held in the escrow account will be released to the buyer. Every country in Africa is listed on Local.bitcoin.com’s peer-to-peer bitcoin cash (BCH) market like Nigeria, Zimbabwe, Ghana, South Africa, Kenya, and specific populated cities as well.

No Censorship

Meanwhile, because Local.bitcoin.com is a peer-to-peer platform, traders can agree on a payment method that satisfies both parties. Since Local.bitcoin.com is decentralized, there is no way even the company’s staff can censor or stop certain transactions. Like onchain bitcoin cash (BCH) transactions, exchanges between two parties should be censorship-resistant as well.

To Illustrate, BCH buyers from countries like Zimbabwe, which is blocked from accessing the global financial system, will state their preferred methods of paying. A seller that is amenable to these conditions will then respond to the offer. After the same process as described above has been repeated, the seller will receive his payment while the Zimbabwe-based buyer gets his BCH.

For prospective African crypto traders that wish to trade on centralized exchanges but lack access to Visa or Mastercard, Local.bitcoin.com provides a secure alternative means of funding a trading account. For peer-to-peer traders, Local.bitcoin.com enables even small traders to trade as the fees on the BCH network make this possible.

Is it easy to buy BCH via local.bitcoin.com? You can share your thoughts in the comments section below.

Central Bank of Nigeria Blocks Fintech Startups From Accessing KYC Service— Decision Described as an ‘Attack on All Fintechs’

12/04/2021 by Idelto Editor

The Central Bank of Nigeria (CBN) has recently suspended the provision of the bank validation number (BVN) service to all fintech and third-party partners. The decision means non-banks entities include crypto startups “have lost one of the most comprehensive means of identity verification in the country.”

New Identification System

Before the latest decision, the CBN accepted the use of the BVN alongside any other acceptable identity documents for KYC purposes. According to the apex bank, this service helped to “check risk and determine whether or not there is an element of money laundering, fraud and other corruption-related activities.”

However, as one local media report explains, the central bank’s sudden decision may be linked to the Federal government’s determination to change Nigeria’s identification system. The report says:

Over the last few months, the Federal government has been changing the unique means of identification of all agencies, parastatal and industries to National Identification Numbers (NIN). Examples include UTME/ JAMB registration, voter registration, Banks and SIM cards.

Nevertheless, the report still warns that the removal of the BVN service could potentially “increase the cost of onboarding customers.”

Following reports of the suspension of the BVN service, Bitcoin.com News sought the views of some players in Nigeria’s crypto industry. Most of the players agree the suspension is not specifically targeted at the crypto industry. However, some are adamant the move is just a continuation of CBN policies that seek to stifle innovation and to block young people from participating in the economy.

Nathaniel Luz, a cryptocurrency thought leader, characterizes the CBN’s latest decision as a clash between “old and new money.” He adds that the suspension of the BVN service shows that the CBN continues to use the same playbook to frustrate the Nigerian youth. In a post on Facebook, Luz wrote:

There is a handwriting on the wall— the fact that most ‘traders’ on the Nigeria Stock Exchange (NSE) are over 50 years and there is no pipeline for young people flowing. Old men are trying to use every means possible to frustrate new money guys from economic independence. This is very specific, knowing that this is a decade where we expect a global shift/wealth transfer.

An Attack on Fintechs

In the meantime, another crypto space leader, Chiagozie Iwu, a CEO of a local crypto exchange, expressed surprise at the CBN’s decision to suspend the use of the BVN service for verification. He said while crypto and fintech start-ups have, with the aid of the BVN service, been trying to make the space (fintech and crypto space) cleaner, the suspension of the service removes the ability to do the KYC on users. Iwu offers his thoughts on why the CBN made the decision:

“It is becoming very obvious that they just looking for every way of attacking fintechs (both crypto and non-crypto).”

Iwu suggests that because some fintech start-ups like Flutterwave now handle “volumes which banks can only dream of”, the CBN is now coming to the aid of banks via the suspension of the BVN service.

Meanwhile, at the time of writing, the CBN had still not disclosed its reasons for the suspension of the BVN service. Bitcoin.com News will update readers once the CBN explains the reasons for the suspension.

What are your thoughts on the CBN’s decision to suspend the BVN service? Tell us what you think in the comments section below.

“Probably The Largest KYC Data Leak In History” Demonstrates The Importance Of Bitcoin Privacy

29/03/2021 by Idelto Editor

The alleged hack has left millions of users’ personal data — including passwords and addresses — available for 1.5 BTC on the dark web.

As much as 8.2 terabytes of personal information data has allegedly leaked from users of India-based MobiKwik mobile payment’s wallet application and onto the dark web, according to a report from India Times.

A white hacker who highlighted the breach called it “probably the largest KYC data leak in history,” per India Times.

The leak apparently includes ID scans, passports, emails, phone numbers and addresses, and is currently for sale on hacking forums for 1.5 BTC, per the report. Reporting entity Technadu lists the assets for sale as:

“The seller lists the following as included in the massive pack:

Total 350GB MySQL dumps – > 500 databases
99 million – mail, phone, passwords, addresses, lots more data, apps installed, ph manf., IP address, GPS location
40 million – 10 digit card, month, year, card hash (sha256)
lots of databases with all company data
~7.5 TB of ~3 million Merchant KYC data – passports, Aadhar cards, pan cards, selfie, store picture proof, etc., used to get loans on the site.”

Upon entry of email addresses or phone numbers, the portal returns valid user information, per Technadu.

MobiKwik has since denied the claim, stating, “Some media-crazed so-called security researchers have repeatedly attempted to present concocted files wasting precious time of our organization as well as members of the media. We thoroughly investigated and did not find any security lapses. Our user and company data is completely safe and secure,” Technadu reported.

Regardless, the alleged leak highlights the importance of avoiding centralized databases which store user data. These are massive targets representative of extremely powerful access to personal information, and will always be points of attack for hackers. The avoidance of KYC collection is emphasized by many within the Bitcoin community as there are no third parties who ensure bitcoin funds or their owners are protected, so circumventing these targets is paramount.

Although this may seem to come from an overabundance of caution, the alleged MobiKwik hack clearly demonstrates the value behind following privacy practices.

New FATF Guidance Applies Regulatory Standards to Decentralized Exchanges, Defi and NFTs

24/03/2021 by Idelto Editor

On March 19, the Financial Action Task Force (FATF) published draft guidance on the risk-based approach to virtual assets. The newly updated guidance now applies anti-money laundering and know-your-customer rules to stablecoins, decentralized finance (defi), and non-fungible token (NFT) assets.

FATF Defines Decentralized Exchanges and Defi as a Virtual Asset Service Providers

For a while now, cryptocurrency proponents have said that one day, global regulators would likely target decentralized finance (defi) and the latest non-fungible token (NFT) hype. For a while now, the Financial Action Task Force (FATF) has been trying to come up with a regulatory standard for cryptocurrencies businesses called a “virtual asset service provider” (VASP). Things like the FATF’s Travel Rule have always been controversial, but regulators from a number of countries have been adopting the organization’s guidance. Recently Gibraltar updated its guidance notes to align with the FATF rules and South Africa has been attempting the same.

The FATF’s latest guidance is merely an update of some of its past recommendations toward virtual assets (VA) and VASPs. However, the updated version now discusses stablecoins, defi, and NFTs, as things like decentralized exchanges (dex) are considered VASPs. The newly revised guidance suggests imposing anti-money laundering and know-your-customer (AML/KYC) rules toward dex applications. The FATF calls these platforms “Decentralized or distributed applications (dapp) or a platform that offers “exchange or transfer services.”

“A dapp, for example, is a term that refers to a software program that operates on a P2P network of computers running a blockchain protocol— a type of distributed public ledger that allows the development of other applications,” the latest guidelines note. “These applications or platforms are often run on a distributed ledger but still usually have a central party with some measure of involvement, such as creating and launching an asset, setting parameters, holding an administrative ‘key’ or collecting fees.”

The global regulator’s guidance adds:

Dapps can facilitate or conduct the exchange or transfer of [virtual assets].

‘The FATF Is No Stranger to Defi, Dex, and NFTs’

FATF’s latest guidance essentially defines a non-fungible token (NFT) as a VA as it defines a stablecoin. The latest guidance on NFT, defi, and stablecoins indicate that the FATF has noticed these emerging trends within the crypto space. Additionally, the FATF tweeted about the guidance and asked for commentary about the 99-page report. “The FATF wants to hear your views on draft guidance for taking a risk-based approach to virtual assets and virtual asset service providers,” the organization tweeted. “Relevant private sector stakeholders can take part in the public consultation.”

The report also touched upon VA transfers to and from unhosted wallets. “The FATF recognizes that unlike traditional fiat wire transfers, not every VA transfer may involve (or be book-ended by) two obliged entities,” the FATF guidance says. In instances in which a VA transfer involves only one obliged entity on either end of the transfer (e.g., when an ordering VASP or other obliged entity sends VAs on behalf of its customer, the originator, to a beneficiary that is not a customer of a beneficiary institution but rather an individual VA user who receives the VA transfer.”

Of course, the conversation about the FATF’s new definitions for defi, NFTs, stablecoins, dapps, and dex applications was a topical discussion on social media. “FATF ain’t no stranger to defi, dex & NFT,” Björn Godenrath tweeted. “Classification as a virtual asset service provider brings market participants into the scope of traditional money laundering regulations (if they can be identified),” he added.

What do you think about the FATF guidelines and definitions tied to defi and NFTs? Let us know what you think about this subject in the comments section below.