TECH SCOPE
TradFi and crypto face the same threats
One must not forget that crime works the same in both worlds , inside TradFi and within crypto . The origins of illegitimate funds are the same , and so are the techniques to clear them . At the end of the day , only the instruments chosen to clean illicit wealth are different . While TradFi does have its means to detect and prevent money laundering and terrorist financing , crypto has its own additional ones , especially when it comes to the traceability of payment flows .
In addition to the proven preventive and detective measures within the TradFi world , the full traceability of the journey of virtual assets from source to their current destination can be unveiled by only one operator at any time , independent from which and how many intermediaries were used in between .
Be objective : Information over persuasion
At the political level , there is a lot of consideration in terms of proportionality , inclusion , fairness , techagnostic principles and the increased competitiveness of the European Union ( EU ). Unfortunately , this often does not translate to a practical approach and perception of a particular topic . As the first-ever female Nobel prize winner , Marie Curie from Poland is believed to have stated , “ Nothing in life is to be feared ; it is only to be understood . Now is the time to understand more , so that we may fear less .” 4
When discussing and discovering new and disruptive technologies , we must particularly remember this wise advice . In this regard , in the early days of crypto it was common to hear the industry characterized as “ dubious ,” “ shady ,” “ illegal ” and “ without any value .”
These kinds of comments were and are still made even after the adoption of new regulatory regimes in the EU . Those statements are usually expressed without a proper understanding of the subject matter while being governed by emotions based on misrepresented information without further research . There is an unspoken difference between being “ informed ” versus “ persuaded .” Other technologies also saw similar , if not the same , negativity ― the internet , car , telephone or even printing press . Then , in hindsight , people change and acknowledge these technologies after being properly informed .
Regulatory developments
It was clear from the beginning that it would not take long before national authorities would take notice of the opportunities and the risks emerging from the new industry . So , it was obvious to visionary but diligent-thinking entrepreneurs that sooner or later regulations comparable ( or even stronger ) to those in the TradFi world would be imposed . Hence , they set up their businesses already in preparation for that , in terms of having know your customer and monitoring processes in place as well as robust AML frameworks .
Once regulation was on the horizon , empowered by the Fifth Anti-Money Laundering Directive and the subsequent national adoptions , these operators saw themselves as already well prepared , whereas new players on the market , who did not do their homework or underestimated the efforts that it takes to keep a business compliant and free from crime , vanished from the scene rather quickly .
84 acamstoday . org