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Globitex joins forces with Bitfury Crystal for crypto AML services

Globitex, a FinTech bridging crypto and fiat currencies for businesses, has decided to boost its anti-money laundering (AML) capabilities by partnering with Bitfury Group’s Crystal Blockchain.

Marina Khaustova, CEO of Crystal Blockchain at Bitfury

Marina Khaustova, CEO of Crystal Blockchain at Bitfury

The decision comes in the wake of the EU’s Fifth Money Laundering Directive (5AMLD).

Bitfury Crystal provides compliance and security measures through its platform, enabling configurable risk scoring capabilities based on a sophisticated machine-learned algorithm. Crystal analytics also offers risk scoring for Bitcoin, Ethereum (ERC20 and ERC721), Bitcoin Cash, Litecoin and Tether.

Marina Khaustova, CEO of Crystal Blockchain at Bitfury, told IBS Intelligence that until recently, cryptocurrency businesses have been largely left out of the regulatory fold, likely due to the complexities of the industry.

In order to develop accurate and effective regulation for crypto businesses, regulators have not only needed to understand the specific business models of these firms, but also how they interact with their customers, and various other partners, the CEO explained.

“Following the impact of 5AMLD, it will be vital for regulators and crypto businesses to work closely together in the long-term to ensure regulation promotes the success of the industry, as opposed to stifling it.

“Some criticisms of 5AMLD are that it’s reactive and too general – however, I think it’s setting the scene for much more nuanced and proactive 6AMLD/FATF guidelines. We’re now at a point where regulation development is in tandem with industry developments and with each new integration of AML requirements, we can expect to see more precise and reflective regulation,” Khaustova said.

Uldis Teraudkalns, CEO of Globitex

Uldis Teraudkalns, CEO of Globitex

The partnership will allow Globitex to provide regulatory-standard AML and CFT compliance to its crypto-related business and retail trader clients, who will see improved functionality that helps identify suspicious transactions, stolen funds and cryptocurrencies that have passed through mixers.

It also adds tools to improve risk mitigation when dealing with particular coins, greater protection of client data and advanced analytics capabilities to better understand the risk profiles of different coins. The new functionality covers compliance for bitcoin and a variety of other digital currencies, with inbuilt encryption for secure storage of client data.

Uldis Teraudkalns, CEO of Globitex, explained that prior to the latest AML directive, businesses in the crypto industry generally approached regulation in one of two ways – ‘self-regulation’ or ‘lurking in the shadows’.

“With the impact of regulation such as 5AMLD, the truth is that it is dependent on the type of crypto company it is applied to. For the former, 5AMLD has been recognition and the opportunity for these businesses to be deemed as trustworthy by the FCA. For the latter, regulation equates to uncertainty.”

Teraudkalns continued: “One thing we can be certain on is – if a crypto business model is reliant on anonymity, then regulation is always going to be a problem. As future iterations of regulation and AML compliance come to realisation, I expect we’ll see anonymity become sidelined as trust becomes of paramount importance. Crypto companies must now recognise they are key players in the financial services industry, and play by the rules accordingly.”

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