AML Will Transform Cryptocurrency into a Tool of Unprecedented Control
The Financial Action Task Force (FATF) plans to set international regulation standards for crypto by June 2019. According to FATF, these standards will be obligatory for exchanges, financial services providers and even crypto wallets
Those people, who deal with banks more or less frequently, are familiar with their AML procedures. You can’t send or receive your own money without filling a ton of papers. Over years the AML framework becomes more and more complicated. Customers accounts get frozen left and right with the requirement to provide evidence of the origin of the funds. That makes the banking system very ineffective. Now they want to do the same with crypto.
Crypto always was the opposite of banks and regulations. It was the money for the free people, that can’t be tracked or associated with its owner. That regulation, proposed by FATF, changes the nature of cryptocurrencies, transforming them into the tool of unprecedented control. Exchanges, financial services, even crypto wallets are subject to regulations. That means that you won’t be able to buy or sell crypto without being monitored.
One year ago there were talks about the possibility of issuing government-backed cryptocurrencies. Now with this kind of regulations, there’s no point for governments to bother themselves with any developments. The right of the strongest allows them to control all points where common people are able to enter crypto until there won’t be any uncontrolled entry points. After that, the existing infrastructure and the nature of blockchain-based transactions can help to build the system for tracking every single citizen in the country. The libertarian idea of uncontrolled money can fail and become the same thing that it tried to fight with. The reason is simple: governments still have power and they control the circulation of fiat money. All of us buy crypto for fiat money, and that’s the transactions that can be tracked or blocked by banks. In many cases, wire transfers to exchanges get blocked with an explanation that it’s not safe. People can decide what to do with their own money? It seems that we can’t. Governments are winning, and it was very naive to think otherwise. Crypto is becoming an alternative way to save and transfer money under the control of same old regulators.
What could be done in this situation? Of course, there are solutions to this problem. Blockchain is still a public domain and everybody can use it without restrictions, the only thing we need is to have an internet connection and a set of tools to make transactions. The most popular crypto wallets may require a KYC verification. But those same people who were anonymously developing open source clients for years will give us the new wallets. The more puzzling problem is the AML procedures on exchanges. What does it mean? The ban of all private coins? The crackdown on all exchanges, noncompliant with the international AML law?
Of course, common people won’t care about it. They will care only after the next scandal, a Snowden-like leak, about governments still spying on their citizens, this time on even a larger scale. Those who want to evade the surveillance of the Big Brother… well, it’s time to get back to cash, we suppose? Anyway, mainstream crypto was never supposed to be very private, but its qualities give to governments another way to control us. And we created it by ourselves. Let’s see how it turns out.
