A potential weak link in the regulation of the cryptocurrency market is still the human factor, which helps attackers bypass laws
The BeInCrypto editors talked with Dmitry Volkov, the chief technical director of the CEX.IO crypto exchange, and found out how effective the cryptocurrency market regulation proposed earlier by the FATF is. Despite the extensive list of patterns that should help identify suspicious transactions, CEX.IO believes that the main schemes of attackers remain unaffected.
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Attackers often trick victims into offering trust money management or get-rich-quick tokens in the midst of a pump & dump.
“The age of the 'client' is often one of the prominent factors. Naturally, when cryptocurrencies start to go mainstream, it is normal for older people to become interested in them. But often the verification of the authenticity of requests from such clients pays off, ”Volkov said.
Most people, according to Volkov, help scammers themselves, without verifying the authenticity of the proposed investment schemes:
“It is enough, for example, to check the official website. Fraudsters often do not hesitate to steal photographs using questionable designs and vocabulary. "
Despite the fact that AML / KYC sometimes helps to weed out intruders, the responsibility of protecting access to funds (password and login) remains with the user, the expert added.
Consumer rights Protection
In an effort to tighten the circulation of digital currencies, the leading member states of the European Union have previously called for stronger regulation of the circulation of stablecoins. At least Germany, France, Italy, Spain and the Netherlands have already called on the European Commission to increase pressure on stablecoin issuers, arguing tightening "consumer protection" and "preserving state sovereignty in monetary policy."
Nevertheless, the issue of regulating the cryptocurrency market is much more complicated than it might seem at first glance. In June 2020, the head of the American division of the cryptocurrency exchange Binance.US Catherine Coley criticized the methods of verifying users on a lease or rent bill.
“This means your name must be listed on the lease or utility contract. Do you know how many women there are who don't have their name listed on utility bills or rent? Does this mean that they cannot access cryptocurrencies? ”- said the head of Binance.US.
At the same time, Kolya noted that institutional investors had already identified the main players in the cryptocurrency market, and the price of bitcoin "reached the level required to enter the market."
Human factor
The Chief Technology Officer of CEX.IO believes that anti-money laundering and Know Your Customer (AML / KYC) policies alone “will not save a user who gave access to his account on the exchange to a scammer who convinced the customer of his legitimacy. ".
“It's like giving your apartment keys and address to a stranger on the street and expecting your home to stay safe. Well, or how to go to a specialist who bought a diploma in the metro for a surgical operation, ”he added.
However, despite the potential arrival of institutions, Binance now has much more important things to do.
A lawsuit in the amount of over $ 9 million was filed against the exchange from another trading platform - Fisco. According to the plaintiff's statements, Binance facilitated money laundering in the amount of 1,451 BTC (more than $ 9 million), which were previously stolen from Fisco accounts.