Cryptocurrency’s future has been hanging in the balance for quite some time now. The current scenario is quite different than the perception that was the talk of the town in the last few months of 2017, when cryptocurrency in general and bitcoin in particular, was considered the thing of the future. But then the volatile nature of this cryptoasset was revealed, when it lost 75% of its value and billions of dollars vanished into thin air. For the past few months, bitcoin price has been stable, with a few highs and lows that have more to do with the market value of the US dollar than anything else.
The biggest downside of this slump is attributed to the loss of trust in cryptocurrency in general, as there were several promising blockchain-based ventures that were banking on the success of bitcoin to launch new platforms. Is all hope lost? Not necessarily, there have been several “fortune-tellers” predicting bitcoin’s ultimate rise from the ashes. Don’t take my word for it, just Google “bitcoin price will go up to 100k” and you will find articles from the likes of Forbes and CNBC discussing this possibility. But for this to actually happen, adapting to government regulations and accepting some sort of compliance is a must. It is the only way to reverse bitcoin’s fortune or improve it for other cryptocurrencies launched by several platforms in order to provide in-app purchases and features to their blockchain-based ventures.
What Does the Future Hold for Cryptocurrency?
Cryptocurrency has many believers around the globe, especially in those places where authorities allow crypto-platforms to operate. Blockchain-based platforms from all over the world can easily incorporate in these jurisdictions and comply with their regulations for cryptocurrencies.
One of the most important facets of such regulation is to stop financial risk elements and prevent those involved in money laundering from trading cryptocurrencies via these platforms. Most ICOs performed to raise funds for blockchain-based projects also adopt AML compliance in order to allow authentic and risk-free investments.
What Does AML Compliance Mean?
AML stands for anti money laundering and these compliance guidelines are particularly useful in dealing with users that are blacklisted by various financial regulators and law enforcement agencies for their involvement in money laundering and other financial crimes. Vetting the credentials of every investor against sanctions lists and financial risk databases allows ICO-conducting entities and other crypto-platforms to ensure that no known criminal or blacklisted entity is using their platform to launder money for illegal activities.
How Does AML Compliance Serve Crypto’s Interests?
AML compliance can be highly beneficial for crypto-ventures by earning them brownie points for the ability to comply with authorities’ stance against financial risks. Not to forget that these AML guidelines will also protect the business interests of crypto-ventures by turning away suspicious crowd that can become a liability in the future. ICOs can ensure that a risk-free clientele is brought onboard with the help of AML compliance, whereas crypto exchanges and crypto wallets can make sure that the crypto tokens they are hosting on their platform do not carry funds from the unwanted crowd.
It should not be forgotten that to this date, the cryptoverse is still lacking the trust of major players, such as e-commerce stores, mobile payment platforms, and financial institutions – and they hold the key to success if cryptocurrency ever wants to realize its true potential. With measures such as identity verification and AML compliance, cryptocurrency will be able to gain much-needed support from regulators as well as major industries, which will not only help boost its credibility but reduce its volatility as well.
How to Best Protect Crypto’s Interests?
By engaging a company that provides identity verification services, cryptocurrency platforms can achieve much-needed credibility. Some of these verification services offer not only KYC services but AML compliance solutions as well. They can verify the identity of an incoming customer with the help of facial verification and ID authentication. Additionally, any financial risk attached to an incoming user can also be vetted in real-time. Using artificial intelligence and machine learning algorithms, any attempt of facial spoofing or identity fraud can be detected in real-time.
Views presented in this article are those of the author and do not necessarily represent those of Coinlaw.io team.