The cryptocurrency advocates have traditionally been against the regulation due to its decentralized nature, but we think that the crypto industry need much more trust and confidence to expand, avoiding a large number of frauds and scams.

In 2021, the US Securities and Exchange Commission (SEC) chair Gary Gensler said that he believed crypto platforms need regulation to survive.
Indeed, in the last few years, the cybercrime community had a strong interest in the crypto platforms.
The same year, the SEC imposed approximately $2.35 billion in total monetary penalties against digital asset market participants.

In September 2022, we have seen a big outrage as SEC Claims that all the Ethereum transactions need to happen in USA. Indeed, it’s becoming increasingly evident that SEC Chief Gary Gensler views Ethereum as a security. Globally, around 90% of regulators have a team working on crypto regulations now.

Like all other financial infrastructures, crypto needs to be built upon trust, and Btrustor wants to play a role in delivering a Trust Certificate for the crypto industry.
Having regulations in place to verify the identity of recipients and ensure that checks are done to prevent money laundering and other fraud is essential to building that trust.

The global crypto industry understands this, which is why they are pushing for regulations. Much of these regulations revolve around AML (anti-money laundering) and KYC (Know Your Client).
Money laundering is a global issue, affecting both fiat currency and cryptocurrencies. To combat the financing of criminal activity, regulatory bodies have rushed to enact stringent anti-money laundering legislation to prevent money laundering via cryptocurrency exchanges and custodian services.

According to a 2022 report from the leading blockchain analytics company Chainalysis, criminals laundered $8.6 billion in cryptocurrency in 2021, a 30% increase over the previous year.

AML frameworks have been enacted with measurable differences in each jurisdiction. Due to the inherently global nature of crypto transactions, crypto companies now tasked with complying with AML legislation fear that they will run into complexity and end-user friction.

In the US, crypto assets are now considered legal and fall under the Bank Secrecy Act (BSA) jurisdiction. In effect, cryptocurrency exchanges must register with FinCEN and comply with AML and combating the financing of terrorism (CFT) regulations.

Regarding the KYC programs, they typically consist of three components: identification of customers, due diligence, and ongoing monitoring.

1) Customer Identification (CIP)
A customer identification program, or ‘CIP,’ verifies that the customer is who they claim to be by utilizing reliable and independent data. Verification information may include:
– The client’s legal name
– Date of birth
– Address
– Verification documentation such as a driver’s license or passport
– Business licenses and articles of incorporation from enterprise customers.

2) Customer Due Diligence (CDD)
Customer Due Diligence, abbreviated as ‘CDD,’ is a new client or business relationship risk assessment. Financial service providers assign risk ratings to accounts based on background checks, customer surveys, and reviews of the client transaction history.

3) Continuous Monitoring
Continuous monitoring is constantly reviewing transactions for signs of criminal activity. When suspicious activity is discovered, VASPs are required to file Suspicious Activity Reports (SARs) with FinCEN or other appropriate law enforcement agencies.

Btrustor is using tools ensuring a crypto company is well regulated and hold the license needed to operate on its market.

Btrustor Business Certification Label and Trust Index