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EU Adopts New AML Directive to Combat Cryptocurrency Crimes

The European Union recently adopted a new anti-money laundering (AML) directive specifically targeting cryptocurrencies. It is the fifth AML directive of the EU, and aims to detect, investigate, and prevent financial crimes in the region.

Details of the Directive

The directive tagged “Directive (EU) 2015/849” allows Financial Intelligence Units (FIUs) to access cryptocurrency wallet information. These security agencies will be able to identify the owner of a cryptocurrency address, based on this latest policy. A portion of the directive reads:

It is therefore essential to extend the scope of Directive (EU) 2015/849 so as to include virtual currency exchange platforms and custodian wallet providers. Competent authorities should be able to monitor the use of virtual currencies. This would provide a balanced and proportional approach, safeguarding technical advances and the high degree of transparency attained in the field of alternative finance and social entrepreneurship.

The major highlights of the new directive include:

  • A better understanding of the risks posed by virtual currencies as well as prepaid cards.
  • Improved cooperation between FIUs
  • More comprehensive checks on transactions originating from “high-risk third countries.”

One crucial aspect of the new policy is balancing its objectives of hindering criminal finance without disrupting the region’s payment ecosystem. Commenting on the new directive, Bulgarian finance minister and President of the European Council said:

These new rules respond to the need for increased security in Europe by further removing the means available to terrorists. They will enable us to disrupt criminal networks without compromising fundamental rights and economic freedoms.

Cryptocurrency and ML/TF

A large part of the government opposition to cryptocurrency lies in the anonymity of the system. Many governments around the world are quick to declare that virtual currencies provide a viable conduit for money laundering and terrorist financing (ML/TF).

Recently, Robert Novy, Deputy Assistant Director of the U.S. Secret Service’s Office of Investigations called for “additional legislative actions” to address the dangers posed by privacy coins. Rep. Robert Pittenger of North Carolina even described virtual currencies as “one of the greatest emerging threats to U.S. national security.”

However, experts like Matt Peyer disagree, saying cryptocurrencies are for the most part overrated for terrorist finance. According to Peyer, while virtual currency transactions are somewhat anonymous, lack of places that accept them in known terror havens make them unsuitable for supporting terrorist activities.

In fact, a report from the Center for a New American Security (CNAS) revealed that only 7.929 BTC were linked to terrorist financing between 2015 and 2017.

What is your opinion on the new EU AML directive? Do you think cryptocurrencies are a viable means for terrorist financing and financial crimes? Keep the conversation going in the comment section below.

Image courtesy of Risetopeace.org, Shutterstock

Led 23

South Korea ‘Legalizes’ Cryptocurrency Trading, Bans Anonymity

· January 23, 2018 · 8:30 am

South Korea lawmakers have confirmed cryptocurrency exchanges will become de facto legal January 30 as they enact new laws about anonymity in trading.

6 Banks On Board For Change

In its most recent statements, the country’s Financial Services Commission (FSC) confirmed that exchanges must only permit trades from customers whose name matches their bank account. Foreign citizens, both native and non-native, will not be allowed to trade.

“Establishment of the system for ‘real name verification of deposit and withdrawal accounts’ for settlement will be completed by January 30, 2018,” the FSC documentation reads.*

So far, six of Korea’s major banks have signed up to implement the required monitoring changes following collaboration with the government on inspection of anonymous exchange trading accounts earlier this month.

These are Shinhan Bank, Nonghyup Bank, Industrial Bank, Kookmin Bank, Hana Bank and Gwangju Bank.

Exchanges Prepare In Advance

In reactions to the setting in stone of the new way of trading cryptocurrency, major exchanges presented various requirements for users.

Korbit, one of the leading platforms along with Bithumb, told customers to open an account at Shinhan specifically in order to continue trading.

“To use the new KRW deposit method, which is slated to be implemented within this month, you must have a Shinhan Bank account registered under your legal name. Please use this time to create a banking account at Shinhan Bank,” a post states.

South Korea Bans Bitcoin Futures As Authorities Consider Crypto Income Tax

Foreign-based customers had been able to gain access to the Korean market through virtual bank accounts and other tools, but they, along with minors, now face a moratorium of undetermined length.

On Monday, Seoul also addressed the issue of taxation on cryptocurrency exchanges, which are now obliged to pay a corporation tax and local income tax for 2017 profits amounting to 24.2%.

Markets continued to fall slightly through Tuesday, with the cementing of Korea’s official regulatory position on crypto trading having little effect on overall flat sentiment.

*This quotation is extracted from the first PDF file available in attachments via the source link.

What do you think about the latest news from South Korea’s cryptocurrency exchange regulation? Let us know in the comments below!

Images courtesy of Shutterstock

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Srp 20

Mycelium May Roll out P2P Tumbling Soon

Source: bitcoin

P2P Tumbling

There’s been no official statements as of yet – but it looks like the Mycelium Wallet will be getting built-in peer-to-peer bitcoin mixing/tumbling later this year.  The first testnet transaction from devs went out four days ago, and discussion on internal channels confirms that they’re working on integrating P2P tumbling into their popular Android wallet.

Read also: Comedy Tor Forks Emerge In Response to Appelbaum Scandal

P2P Tumbling In Mycelium Pipeline

As for details, so far we know they’re using the CoinShuffle protocol (whitepaper available here) and that it will be integrated into their growing number of peer-to-peer features, including local sales and messaging. It also shows a firm commitment to privacy and anonymity from a company previously criticised for their approach to open-source and free software.

Tumbling, for those new to Bitcoin, is a process used to obfuscate ownership of Bitcoin by pooling your coins with a group of other holders, and run them through a series of transactions designed to make determining their origin difficult. The biggest flaw with this system up to date was the reliance on a trusted third party to mix the coin, and return it to the participants in the proper amounts. By adding P2P tumbling to their already formidable decentralised network, Mycelium hopes to remove that flaw, and since they’re using a spec-faithful implementation of CoinShuffle, it means that the update with this change may prompt other mobile wallets to follow suit.

There’s been a lot of talk about the changes coming to Mycelium with the next major release – but this feature – one not advertised in their roadmap or goals, will likely have the biggest impact on mobile Bitcoin users – the ones that benefit most from this type of secure tumbling. More to come as we investigate the issue further.

Thoughts on P2P shuffling? Leave them in the comments!


The post Mycelium May Roll out P2P Tumbling Soon appeared first on Bitcoinist.net.

Mycelium May Roll out P2P Tumbling Soon

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Network Engineer Tries to Thwart UK Bill That Plans to Expand Surveillance State

Source: bitcoin

Network Engineer Tries to Thwart UK Bill That Plans to Expand Surveillance State

As the UK parliament is on the precipice of passing a new surveillance bill into law, one British engineer is trying to halt its progress through an anonymizing system that runs on top of the Tor anonymity network.

Also read: Blockstream Welcomes New Members to Their Team, Hires On Christian Decker

OnionDSL: The Tor-based ISP

British lawmakers are on the verge of passing a new law that expands the government’s ability to snoop on its citizens, and one network engineer believes he has a way to counter it.

The bill, which is championed by current Prime Minister Theresa May, generally aims to implement mass government surveillance throughout the UK.

Also called “Snoopers’ Charter,’ the bill’s provisions includes, among other things, requiring all ISPs in the country to keep tabs on client’s internet activity. The statute would make it mandatory for internet service providers to maintain Internet Connection Records for up to one year, and within that time must hand them over to authorities upon request.

While the controversial bill also mandates other things that are also not very favorable to privacy, it is the ISP requirements that have really got the attention of network engineer, Gareth Llewelyn, who is preparing a potential defense.

Llewelyn’s project is an anonymous ISP system that runs on Tor, which he began creating earlier this year. He presented his OnionDSL system at the HOPE (Hackers on Planet Earth) conference last month in New York. His hope is that it will make it almost impossible for the government to censor content.

To take advantage of this service, a broadband connection will have to be physically moved over to Brass Horn Communication, which is Llewelyn’s non-profit, one-man, Tor-based internet service provider. Unlike normal ISPs, the Brass Horn routing system prevents the ISP that’s run over Tor from keeping any web browsing logs. Thus, making the ISP incapable of abiding by the bill’s provision requiring it to keep customer records.

Additionally, A subscriber’s home router or PC must be configured to connect with the Tor bridge private gateway. Traffic then bounces as it normally would across the Tor network, effectively anonymizing internet activities.

Llewelyn may have produced a foolproof system to get around the bill’s ISP record keeping provisions. However, that’s assuming he will be able to get the money to fund his project in the first place because, as of right now, he has admitted that the anonymous, Tor-based project is more of a proof-of-concept that is nothing more than an act of protest against the mass surveillance laws.

What do you think of Llewelyn’s proof-of-concept for his Tor-based ISP? Let us know in the comments below! 


Images courtesy of Tor, headlines-news.com

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Network Engineer Tries to Thwart UK Bill That Plans to Expand Surveillance State

Kvě 23

The Torist Is A Literary Magazine Hosted On The Deep Web

Source: bitcoin

Bitcoinist_Literary Magazine

A new online magazine called The Torist has surfaced, and it wants to rectify some of the most common misconceptions regarding the deep web. Very few people are aware over half the sites on the deep web are perfectly legal under US law.

Also read: Lisk Gears Up for May 24th Launch

The Torist Issue One Is Available Now

The term deep web has a lot of negative connotations these days, as people often associate the term with drug trafficking, child pornography, and other illegal activities. The Torist, a newly created deep web magazine, wants to rectify this situation, as there are plenty of legal reasons to use the deep web these days.

In fact, The Torist is the very first literary magazine on the deep web, which is a significant milestone for this technology. Very few people are aware that, according to the magazine writers, over half of the deep web websites are entirely legal under US law. One of the prime examples of a legitimate website is Facebook, which is being accessed through deep web software by over one million users.

Although there is a lot of discussion regarding illegal activity taking place on the deep web these days, it is also a home for political resistance and rebellion. Consumers and enterprises tend to dismiss any form of technology that is not embraced by a mainstream audience, and both Bitcoin and the deep web seem to be prime examples of that attitude.

American University Communications Professor Aram Sinnreich stated:

“The notion that Tor is only good for buying ecstasy from a stranger is just not an accurate description of the platform’s capabilities. Someone might come to Tor to see a movie they don’t want to pay for, but it also allows them to get access to political communications and ideas that are being systematically excluded from the clear internet.”

The Torist is a magazine that can go a long way in rectifying these misconceptions regarding the deep web and Tor software. People who value privacy and anonymity on the Internet, as well as free access to uncensored content, will flock to these solutions for legitimate purposes. Accessing The Torist can be done through the deep web, and users can follow their Twitter account for the latest updates.

What are your thoughts on a literary magazine for the deep web? Will you be checking out The Torist? Let us know in the comments below!

Source: Deep Dot Web

Images courtesy of The Torist, Shutterstock

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The Torist Is A Literary Magazine Hosted On The Deep Web