Sentinel Protocol
Published in

Sentinel Protocol

The Cryptocurrency Ban Alternative: Compliance and Regulatory Solutions

Decentralized solutions have never gotten more attention than in these current times. Every bull cycle of the market brought an even greater number of investors, developers, builders and adopters of this groundbreaking technology, and the current state of the ecosystem does not make any exception. The problem with this fast paced development, onboarding millions of new users, is that the amount of theft and malicious threats increases proportionally with it. Hearing about scams, hacking, fraud and money laundering on a daily basis has become the new normal, sometimes overtaking the attention that should be focused on the real progress of the technology itself.

Through our work at Uppsala Security, we are in direct contact with these damage cases on a daily basis and are even more aware about the ongoing threats and losses that worldwide users are experiencing. Our Threat Intelligence Data Hub now contains more than 60 Million security indicators, many of these being labeled as malicious. But despite this, we chose to be on the front line as we are aware that the benefits of adopting new mechanisms and more efficient solutions outweigh the negative consequences that exist with pioneering technologies.

Despite the progress towards safer decentralized solutions, unprecedented transaction tracking products and risk assessment tools, governments and individuals still see this space as threatening, and thus severe measures are being put in place. These initiatives are being implemented as we speak, with Turkey recently announcing a country wide ban on cryptocurrency transactions which was planned to go into effect starting with April 30, 2021. Similarly, South Korea’s top financial regulators are advising that extreme measures might be implemented against crypto exchanges if these do not show a commitment towards compliance solutions. The reasoning behind these actions is that non-recoverable losses may impact the parties involved, but the issue with such drastic actions is that it can restrict the growth opportunities of its society from a technological perspective, especially while other nations are embracing the change through more acceptable counter measures.

While ongoing threats can’t be overseen, there is also an immense amount of progress being made in the cybersecurity space that we can’t neglect. This is especially valid when various key players are open to fast and close collaborations, like in the case of our recent successful swift cooperation with Bithumb, one of the leading South Korean exchanges, together with which we managed to catch a crypto scammer and even return the full amount of digital assets stolen back to the victim. Such events were unlikely to happen until recently, as they require professional investigatory tools, highly skilled researchers and tight cooperations happening at the same time, but its success has proven that fighting against hackers and scammers is not an impossible task and that it should not stop us from developing and implementing new technologies.

There are 3 simple steps that every user can take in order to support the development of these next-generation technologies and avert any collateral damage like resorting to the implementation of extreme measures by governments and regulatory bodies.

1. Educational content

One of the easiest things that we can do as a community, in an era in which free information has never been more accessible, is to be proactive in educating ourselves. Keeping away from interacting with hackers and scammers can be an easy process with the implementation of some basic cyber hygiene practices such as never disclosing private keys, always being mindful of any direct message received or double checking the visited URLs in order to avoid phishing attempts. Many of these preventive measures can actually be done through using one simple tool, UPPward, a free of charge browser extension available for Brave, Chrome, Edge and Firefox, which automatically notifies users when they interact with a malicious party. Investing just a little bit more time in educational content and learning new online safety practices has a huge potential of decreasing the overall amount of incidents in the decentralized space and the total assets lost.

2. Adoption of market ready compliance solutions and tools

Where is technology taking the economy? This question is yet to be answered, but what we do currently know is that if we want this technology to succeed, every step towards this has to be done in close accordance with the current rules and regulations implemented by various governments and global financial institutions. In the case of blockchain and digital assets, this means that if individuals, networks and projects are implementing Regulatory Compliance and Anti-Money Laundering measures, it will be unlikely to witness many total crypto bans in the future. The good news is that such solutions and products already exist on the market and can be implemented right now. We, at Uppsala Security, have a complete product suite that can withstand some of the toughest regulations, and among these we can mention products like the Crypto Analysis Transaction Visualization (CATV), the Crypto Analysis Risk Assessment (CARA) or the Interactive Cooperation Framework (ICF) API.

A concrete example of some of these tools in action was outlined in one of our Use Cases, when a leading Asian digital asset proprietary trading firm based in Singapore used our AML Tools to help meet Singapore’s PSA (Payment Services Act) Regulatory Requirements.

3. Pay it forward

True evolution with a worldwide impact happens as a consequence of our actions as a global community, not only at an individual level. In order to really progress, be it in the influence that we have on our planet, our nations or on a technology like blockchain, we need to not only proactively learn the best ways in which we can act and react, but to also pay forward our acquired knowledge. This does not have to be a complex process, as big visions are realized with small steps. Simply retweeting a valuable piece of content, sharing tips and insight into security solutions and precautionary measures or providing guidance when individuals are in need is enough in order to achieve a comfortable level of safety. Through this procedure, step by step, we can overcome the concerns of governments and institutions and thus allow technologies to continue their development towards an autonomous economy.

Uppsala Security is headquartered in Singapore and has branch offices in Seoul, South Korea and Tokyo, Japan. Follow Uppsala Security on Telegram, LinkedIn, Twitter and Facebook.



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Sentinel Protocol Team

Operating on blockchain technology, Sentinel Protocol harnesses collective cyber security intelligence to protect crypto assets against hackers, scams and fraud