Binance receives an official letter of commendation acknowledging the role they played in assisting the UK crime-fighting unit in combating cybercrime.
Duty to Combat Crimes
The letter commending Binance on their active involvement in the investigation debunks that common narrative. The common rhetoric that cryptos are used to perpetrate illegal activities therefore there is a need to increase regulation oversight. Following this narrative, the recent spate of regulatory enforcement on Binance was quite concerning.
On the other hand, the letter commending Binance on their active involvement in the investigation debunks that common narrative. In a letter dated June 23, 2021 was commended for assisting in an investigation involving supply of controlled drugs on the dark web.
One of the concerns in any financial platform is the ability to prevent and also track illicit transactions. The platform must not be allowed to be utilised for illegal or suspicious activities. To this end, the regulators has imposed anti money laundering (AML) and counter terrorism funding (CTF) protocols that will prevent improper movement of funds. These standards are determined by a global money laundering and terrorist financing watchdog called the Financial Action Task Force (FATF). It is an intergovernmental body to set uniform and effective standards to prevent proliferation of these illegal activities that are harmful to the society.
The AML and CFT standards are uniform and it applies across the board to financial institutions, asset management firms and crypto exchanges. These comprehensive sets of protocols are able to weed out clandestine activities irrespective of the asset class.
Effectiveness of Regulating Compared to Banning
Regulated industry mandates a certain set of compliance. This would be the precondition to the granting of license or approval to operate within the jurisdiction. Institutions that deal with crypto assets are as likely to be utilized by bad actors for illicit activities as traditional financial institutions. There can be a few options which are available to the regulators. They can choose to apply the same set of regulations as traditional financial institutions, to apply a complete ban or to overregulate the industry.
We have seen countries that sought to ban trading of crypto assets such as Nigeria and India only to realise that such decision carries no effect. What these decisions do is to push the industry to operate in the dark. This will then be a fertile ground for questionable activities to take place without a centralized institution to monitor and be held accountable. Common enforcement methods such as freezing of accounts, confiscation of assets and demand for information have no application.
Therefore this recent acknowledgment is telling of a more symbiotic relationship that could be fostered through proper regulation.
Institutions Prefers Regulations
Institutions the likes of Binance, Coinbase and other crypto based companies need a regulated space to operate. These crypto based institutions cannot attract larger interests unless they are properly regulated. The same consideration is also applicable to institutional customers. Adoption can only take place where the law is clear and the policies are receptive.
The path ahead to stem out criminal activities in the crypto space is to make the space compliant. There is an accountable body that is capable as a monitoring and reporting centre of suspicious activities. In the past, where regulations are haphazard and in a state of disarray, the confusion and lack of cohesive efforts combating crime was a breeding ground for criminal activities.
Binance is Ready and Willing
Binance has time and again reiterated its stance towards compliance. The efforts that it took in making strategic appointments by hiring the right people are part of its larger aspiration by remaining legal and compliant. The regulators must realise that licensed institutions have obligations. These obligations make for effective enforcement.
Source : bsc.news
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