Category Archives: Know Your Customer

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Russian Industrialist Union Launches Arbitration Body for Crypto Disputes

A Russian lobby group has run out of patience waiting for cryptocurrency regulation and has decided to formulate its own regulatory group to deal with disputes.

The Russian Union of Industrialists and Entrepreneurs (RUIE) normally lobbies for the cryptocurrency sector regarding regulation and fintech infrastructure but has now taken another step further by forming an arbitration group.

The group will extend the breadth of its usual scope and attempt to handle disputes arising from cryptocurrency transactions, smart contracts and token sales. In order to deliver an efficient and informative service, the RUIE has called on expert advice from with the sector.

The main problem appears to be the volume of cryptocurrency queries and disputes jamming Russian courts. A recent example involved a church in Irkutsk, Siberia’s largest state, which was taken to court for draining too much power from the local grid through crypto mining. In another major case, the St Petersburg City Court lifted a block on crypto media website, after the District Court shut down its site in July 2016.

The same St Petersburg court annulled a trial court decision to ban 40 other Bitcoin-related websites, previously accused of spreading information about digital currency that “is not backed by any real asset and does not provide information about its owners”.

The Russian government is reviewing cryptocurrency regulation under the Digital Assets Regulation Bill filed on 25 January. The bill defines cryptocurrencies and tokens as digital financial assets. If the bill passes in its current form, it would allow trading on cryptocurrency exchange operators with authorized Know-Your-Customer (KYC) standards. This would also apply to initial coin offerings (ICOs) established in Russia.

Until then, bodies such as RUIE can certainly plug the gap left by regulators’ standoff approach to dealing with disputes needing some kind of arbitration. However, appeals do continue to find favor with the courts. The new body claims that it will have a broader remit settling disputes across the whole crypto sector although will have no recourse to changing current laws pertaining to cryptocurrencies.

The body will convene for the first time early next year.


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Hong Kong Sees Green as Ireland Comes to Fintech Week

Hong Kong FinTech Week was certainly a productive few days for two visiting companies from Ireland, both opening doors to the Far East with newly-secured deals.

The green army descended on Hong Kong this week with no fewer than 14 Irish fintech firms showing their wares as part of the #IrishAdvantage Enterprise Ireland’s trade mission to China; representation aimed at promoting tech in payments, banking, insurtech, cloud communications and biometrics.

The two successful companies, Global Shares and Know Your Customer, appear to be leading a charge from the Irish Republic with, Daon, CurrencyFair, Solgari, Fenergo, Leveris, Fineos, Corylitics, Intuition, Priviti, Fexco, Kyckr and Circit also attending.

Global Shares are now celebrating a USD 15 million deal with online brokerage firm Huanying International, with plans to provided a range of financial services. The other successful company, smart technology client verification solution provider Know Your Customer (KYC), has partnered up with Hong Kong-based fintech company Neat Limited to enhance that company’s AML processes more effectively. Republic of Ireland Minister for Business, Enterprise and Innovation Heather Humphreys commented:

“The deals we’ve seen formalized today by Global Shares, Know Your Customer and CurrencyFair at Hong Kong Fintech Week demonstrate how much value Irish fintech companies can deliver to partners worldwide… It’s heartening to see recognition from companies the world over for the Irish fintech advantage.”

Early this year, another Irish company, Dublin-headquartered money transfer player CurrencyFair, broke into the Asian market. With an EUR 20 million investment drive, the Irish company acquired Hong Kong’s Convoy Payments, not only opening up business to Hong Kong and Asia but also to giving CurrencyFair access to existing US markets.

The recent Irish successes are not unusual, according to Enterprise Ireland CEO Julie Sinnamon, who suggested that Irish companies usually fare well in doing businesses in Hong Kong and was pleased to see these successes, adding:

“Between them, these companies have secured significant wins with some of the world’s leading financial services companies in Hong Kong such as HSBC, Standard Chartered and Bank of China as well as local Hong Kong entities such as the Securities & Futures Commission and the Hong Kong Jockey Club.”


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More Than 2 out of 3 Crypto Exchanges Don’t Know Their Customers (KYC)

A recent study held among 25 different cryptocurrency exchanges across Europe and the US revealed that only 32% perform full KYC identity checks on their users, writes Bitcoinist.

The study conducted by analytics house P.A.ID Strategies that out of these 25 exchanges, all based in the US and Europe, two-thirds failed to comply the requirements of the so-called Know Your Customer (KYC) procedure. New anti-money laundering regulations are due to come into effect in 2019, and it’s thought that the KYC checks will encourage crypto exchanges to examine their operations more carefully in terms of compliance.

The exchanges not compliant with KYC regulations were found to be allowing users to trade in cryptocurrency and fiat without providing official ID, or even going through the standard KYC check. Most of these allowed users to start trading simply by providing a telephone number and a current email address. Some 68% of those questioned fell into this non-compliance category.

John Devlin, chief analyst at P.A.ID, commented: “Cryptocurrency wallets and exchanges want to enjoy the same trust as the wider traditional financial services, but for this to happen they need to rise above the sometimes-dubious reputation of cryptocurrencies’ past and be seen as ‘model citizens’ of the economy.”

To give more credibility to the space things are about to change, as the European Parliament’s Committee on Economic and Monetary Affairs has stated that cryptocurrency exchanges, as well as wallet providers, need to identify their users. The directive known as AMLD5 will be in effect from June 2019.

The new rules will ensure that the branding of a non-compliant company will be impacted, but signing up to an exchange need not be complicated for the user. Kalle Marsal, COO at Mitek, a company selling identity verification technology, which commissioned the study held by P.A.ID, points out:

“Wallets and exchanges want to change perceptions of lawlessness and it’s a relatively straightforward fix. Identity verification processes can be—if implemented correctly—simple for the customer and no barrier to signing up. …By incorporating systems that are just as future-looking as cryptocurrency itself, exchanges and wallets can be both competitive and compliant with regulatory demands.”


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