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Top Cryptocurrency Crackdowns.

Techsense Team I 9:11 am, 22nd November

Cryptocurrency popularity is growing and so is its price. As of February 2021, Bitcoin’s market value had reached $1072 billion. Cryptocurrency is making financial transactions easier, but unfortunately, it is also attracting the wrong kinds of users. This has led to several countries banning cryptocurrencies, including China, Saudi Arabia, Morocco, and Turkey. Since it does not come under the purview of any financial regulations, cryptocurrencies are being used for several illegal activities.

There are several ways nations are fighting the illegal use of cryptocurrency:

1. Tapping into criminal error

Cryptocurrencies are not as anonymous as most people would like to think. Since it uses blockchain technology there is always a virtual record of all the transactions on the blockchain network. Blockchain, being publically accessible, can be used to track the digital footprints of all cryptocurrency traders. Since cryptocurrency transactions are transparent in nature, criminals find it harder to convert them to fiat money and getaway.

2. Increasing communications

There should be more effective communication between businesses and governments of various countries. It will help nations detect patterns of cryptocurrency use. Regular reporting of these patterns can help governments crack down on the illegal use of cryptocurrencies.

3. Bring crypto into the purview of financial regulations

Governments around the world are altering regulations keeping cryptocurrency in mind. Financial regulations on cryptocurrency usage will minimize criminal cryptocurrency activities. It will also influence the effect of blockchain technology on legal and compliance matters.

4. Anti-money laundering regulations

Governments should consider introducing anti-money laundering regulations like the European Union and ensure that all cryptocurrency exchanges are compliant.

5. KYC requirements

Many countries have mandated Know your customer (KYC) to get people to reveal their identities before making a cryptocurrency transaction.

6. Align cryptocurrency with existing legislations

It is necessary to align cryptocurrencies with existing anti-terrorism and anti-money laundering legislation to ensure digital currencies are not used for criminal or terrorist activities.

7. Keeping track of changing regulations

Every day, one or the other country introduces stipulations around cryptocurrency regulation. Keeping track of regulatory changes can ensure compliance and prevent the illegal use of cryptocurrencies.

8. Review activities within different cryptocurrency networks

It is crucial to review the activities within the cryptocurrency network and its interfaces with the financial system. For example, keeping track of how cryptocurrency is being converted to cash or how it is being used to trade.

9. Enhance transparency

Measures must be put in place to heighten transparency and safeguard cryptocurrency investors. Registration requirements and mining volumes of cryptocurrency tokens should be subject to disclosure. This will allow existing and prospective members of the cryptocurrency network to be aware of what they are getting into.

10. Exceeding threshold value must be declared

If holders of cryptocurrency tokens exceed a threshold value, they must be required to disclose the same. Companies that service cryptocurrencies should also report their gains and losses to their customers. This will prevent problems like tax evasion and money laundering.

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