Here’s the 4 Main Possible Changes Following the New FATF Rules for the Bitcoin Ecosystem
The crypto industry is bracing itself for exciting and perhaps tougher times ahead. Massive changes, some of whom poised to tilt the state of the industry forever, are happening soon. Already, it is no longer a secret that nearly every single cryptocurrency exchange will soon demand its users to verify their identities.
Mostly, the exchanges will need those transacting amounts worth over $1,000 in crypto to verify their identities. This will automatically mean that the principle of anonymity is coming to an end, albeit for a good reason.
1. The End of Anonymity in Cryptocurrency Trading
If you’ve transacted on an exchange lately, then the issue of user identity verification, or ‘Know Your Customer’ procedures, aren’t new to you. KYC is already a norm, and it’s applied by all trading platforms all over the world. Those who haven’t implemented yet are working hard and only have a couple of days to get started with it.
The move is fueled by the Financial Action Task Force’s updated protocols on Money Laundering whereby every trader has to prove his/her identity. Further, the fact that it applies to those sending or receiving more than $1,000 worth of cryptocurrencies in one go means it indeed is intended for its purpose.
2. Lots of Trading Delays
It is excellent to note that most of the trading platforms have already made the KYC procedure mandatory and ensured every trader agrees to it. But it hasn’t been all-rosy for all, especially those which link the traditional financial world with the modern, digital assets space. For some, the new directive has automatically led to rampant trading delays, a factor which has left many ruing losses they’ve incurred.
There’s a fast-spreading rumor that the new regulations will undoubtedly make the overall transactional costs shoot. Of course, it remains to be seen whether such will be the case, although the best thing to do right now would be to remain ready for it. Compliance is a bitter pill to swallow, and no single startup or a small company will be fine with it, even though nobody will avoid it.
3. Inspecting Licensed Crypto Trading Companies
The new wave of change doesn’t end with compliance and all the rigorous KYC procedures. BitLicense is set to alter the usual way of doing business among Bitcoin merchants. The new license will regulate their activities, pretty much like what custodian of funds; lenders and liquidity providers, often operate with.
But with this new directive, there’s little to celebrate about. The new measures will not only alter the ordinary way they operate but also lead to more regulatory scrutiny. The authorities will need to know what a BTC trader is involved in.
However, it’s too soon to tell whether the scrutiny will leave a bad taste in the mouths of Bitcoin holders. There’s a noticeable sense of unease among a specific class of traders, even though none has spoken about it yet.
The reason nobody has dared to rebuff the new directives is because of what’s at stake – the risk of losing one’s money transmitter license. Basically, it is undeniable that the future will be interesting for them, especially in light of this.
4. But Will All These Create A Uniform, Positive Change?
The new adjustments are meant to create a risk-free, enabling environment for those engaging in digital assets, security tokens, and cryptos in general. Full compliance isn’t without hard-hitting consequences, and everyone should better be ready for them. There are those who, as you would expect, will violate the new rules, although the idea of the same regulations going obsolete is unlikely to happen.
The speed and extent at which the guidelines will be accepted will depend upon all the parties they are imposed on. You could say it is an expertly-devised way of dividing the unity that exists between the cryptocurrency and the financial world. However, it is certainly too soon to tell.
What we can all agree on regarding the directive, however, is the end of the principle of anonymity. But whether the same will leave a positive impact on the industry or not, remains to be seen.