Binance, the world’s largest crypto exchange by volume, is back in the news again, but not to announce a new product line or special feature for its global client base. This time around, the company is proud to proclaim that it will lead the industry in its efforts to comply with the stringent proposals of the Financial Action Task Force (FATF). We reported back in June that the FATF had finally prepared its recommendations for the review and approval by G20 finance ministers, which could cause major issues with how the blockchain does and does not work. Binance now believes it has an answer.
As we reported in June, the new rules stated: “Global regulators [are] to ensure that “virtual asset service providers” – exchanges, custodian banks and others involved in the crypto markets – collect, hold and remit information on the counterparties to customers’ trades executed on their platforms, and make this available to law enforcement. [All companies are] to collect information about customers initiating transactions of over $1,000 or 1,000 euros, as well as details about the recipients of the funds, and to send that data to the recipient’s service provider along with each transaction.”
The FATF had sought out the counsel of such industry experts as Chainalysis to assist in their policy-making process. This crypto research firm, along with many other crypto professionals, had advised the FATF that they were attempting to overlay decades-old banking rules over a new virtual environment that was not constructed in a way to easily facilitate the retrieval of information, which they were demanding. They had noted that enormous modifications and investment would have to be made in existing blockchain platforms or there would need to be a parallel data retrieval service that connected all exchanges in order to comply with the letter of their law.
The FATF did not incorporate any of the many suggestions from outsiders into its proposals, choosing rather to ignore their advice and go their own way, the standards that bankers had become accustomed to for the past few decades. Has real progress been made to solve this conundrum? AMBCrypto reports from the official blog of Binance that:
Binance and Coinfirm announced their partnership to address the recently issued guidelines on anti-money laundering (AML) rules by the FATF.
FATF rules deal with more than just AML standards. They also address Know Your Customer (KYC) and Counter the Funding of Terrorism (CFT), but who is Coinfirm and how does its technology change the crypto world? Coinfirm is a UK-based risk and compliance platform that was founded in 2016 to deal with technology issues surrounding KYC and AML compliance. Its Trudatum data authentication platform claims to cover 70% of the cryptocurrency market. They are reputed to be the leader in the “RegTech” sector by using proprietary algorithms to provide actionable information.
Neither the blog announcement, nor the Coinfirm website discloses how or if it can truly connect crypto originators with recipients and report their true identities, the real issue at hand. The blog post, however, does emphasize that it performs its analytics in real time ”covering more than 1,200 cryptocurrencies, tokens and diverse blockchains, such as BTC, ETH and ERC-20 tokens, as well as the only provider of the recently integrated XRP.”
Pawel Kuskowski, Co-Founder and CEO of Coinfirm stated:
With Binance’s focus on providing the best user experience while attaining the highest AML and security standards (provided by Coinfirm), this partnership marks another step forward in their leadership in the market.