Two foreign nationals charged with Cryptocurrency laundering

Two foreign nationals charged with Cryptocurrency laundering

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The United States Department of Justice has charged two Chinese nationals with laundering $100 million in cryptocurrency that was part of $230 million hacked from a virtual currency exchange by North Korean co-conspirators. Tian Yinyin and Li Jiadong were conspiring to hack a cryptocurrency exchange and launder money assets while operating an unlicensed money transfer business.

The accused did business in the United States but their business was not registered with the Financial Crimes Enforcement Network (FinCEN). They conducted business using independent accounts and provided cryptocurrency channeling services to the customers for a fee. 

“The hacking of virtual currency exchanges and related money laundering for the benefit of North Korean actors poses a grave threat to the security and integrity of the global financial system,” according to the US Attorney Timothy Shea. The North Korean co-conspirators outwitted multiple cryptocurrency exchanges’ controls by submitting forged images and manipulated identification documentation, according to the complaint. A segment of the laundered funds was used to pay for infrastructure used in North Korean spamming campaigns against the financial industry.

Don Fort, the Internal Revenue Service-Criminal Investigation (IRS-CI) Chief stated: “We will continue to push our agency to the forefront of complex cyber investigations and work collaboratively with our law enforcement partners to ensure these nefarious criminals are stopped and that the integrity of the United States financial system is preserved.”

Calvin Shivers, the Assistant Director of the FBI’s Criminal Investigative Division also commented that the FBI will actively collaborate with the domestic and foreign enforcement agencies to detect and inhibit the illegal exchange of currency. He stated: “Today’s indictment and sanctions send a strong message that the United States will not relent in holding accountable bad actors attempting to evade sanctions and undermine our financial system.”

There were more than a hundred named virtual currency accounts and addresses used by Yinyin and Jiadong. Penalties have been imposed on the two Chinese nationals and a number of cryptocurrency addresses involved by the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC). The suspects have to hand over any assets and funds involved in the plot. 

According to Acting Executive Associate Director, Alysa Erichs, “This indictment shows what can be accomplished when international law enforcement agencies work together to uncover complex cross-border crimes,”

Estonian Cryptocurrency Exchange charged for concealing hack

Estonian Cryptocurrency Exchange charged for concealing hack

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Crex24, an Estonian cryptocurrency exchange, is accused of hiding a hack from its customers after terminating trade for altcoin pairings. There has yet been no explanation provided regarding the suspension by the exchange. The deposit and withdrawal services have also been discontinued.

Kohei Kurihara tweeted regarding the news:

Despite the issues and concerns of the people, the exchange has been primarily focusing on highlighting new listings on social media, rather than addressing the concerns of its users.

According to a report by the Brazilian crypto press, Livecoin, an anonymous Crex24 user claims to have noticed suspicious activities of the alternative cryptocurrency Htmlcoin, which points to cheating on the part of the exchange. The user had to face a loss of $32,000 in cryptocurrency in mid-February, as the exchange froze his reserves.

Crex24 later announced that 200 million Htmlcoins, worth $11,200, were stolen from its wallets and that they plan on collaborating with the Htmlcoin team to recompense the investors. 

However, it was identified that on Feb 12, 1.3 billion Htmlcoins were taken out from Crex42’s wallet, worth $72,800. The funds were transferred to the Hitbtc exchange. Htmlcoin, which holds a large Brazilian customer base, was added to the exchange at the beginning of the year. In less than two months, its pairings are offline. 

Following the circulation of allegations regarding Crex24, the exchange has enhanced its KYC (Know Your Customer) requirements for processing transactions, further obstructing the customers’ ability to remove funds from the platform. 

Coin360 stated that Crex24 hosted roughly $2.62 million in trade over the past 24 hours, ranking it 137th by daily volume.

Hong Kong further strengthens its Cryptocurrency regulations

Hong Kong further strengthens its Cryptocurrency regulations

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Paul Chan, the Financial Secretary of Hong Kong, stated that the country was considering to strengthen the policy of its Cryptocurrency sector by complying with international Anti-Money Laundering (AML) laws. The new regulations are aimed at targeting virtual asset service providers, or VASPs. 

Cointelegraph mentioned this in a tweet:

The new regulations can add pressure on crypto exchanges and unofficial brokers in Hong Kong, a global crypto hub. In December the Hong Kong Monetary Authority (HKMA), recommended that the virtual asset service providers stay watchful in self-regulating their customers’ activities. 

HKMA’s AML enforcer, Carmen Chew stated that institutions should keep themselves updated with global developments to fully understand the risks and apply a strategic approach to support responsible financial innovation along with an effective ML/TF risk management. 

Although the global AML watchdog, FATF rated Hong Kong as “largely compliant” with its suggestions regarding upcoming technologies like Cryptocurrency, Hong Kong wants to further enhance its anti-financial crimes model, Chan’s speech indicated. Many states are trying hard to get ahead of FATF’s crypto guidelines. Some have even taken their initial steps in regulating VASPs (such as Paraguay) while others have formed international coalitions to monitor cryptocurrency transactions.

Enhancing security in the cryptocurrency world with KYC verification

Enhancing security in the cryptocurrency world with KYC verification

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Almost 20 years after the legislation on combating money laundering, regulators around the world are working to create global standards for the Know Your Customer (KYC) rule. These standards are applied now, in particular, to the financial and technological sectors and cryptocurrencies. The technology sector, which began with idealized anonymous peer-to-peer payments, now takes into account the security of traditional finance, which means compliance with KYC regulations.

Even though technology in some aspects has stepped far forward, the attitude of cryptocurrency to KYC was sometimes dismissive, and in some cases criminally negligent. The attitude is changing, but the debate over how the KYC rules and cryptocurrency interact is only flaring up.

What is Know Your Customer verification?

Due to the digitization of the international financial system and the increasingly stringent regulation of the industry, regulatory compliance is on the rise. What used to be a secondary area that occasionally caused a headache for investment bankers and traders is now becoming an important centre for big data processing.

KYC is the process of checking who your customers are, either they are who they claim to be or someone else. In the period from 2000 to 2010 in most jurisdictions: in the USA and Canada, in most European countries, South Africa, Russia, India, Singapore, South Korea, China, and Japan legislation was passed for KYC and AML regulation (anti-money laundering laws). As a result, banks and related financial institutions began to comply with the requirements of anti-money laundering legislation.

Cryptocurrency exchanges are currently considering fiat ramps as the main component of their product. Such changes have led to dependence on banks and payment systems, requiring the same level of compliance that they adhere to.

For almost all organizations involved in payments, KYC rules are designed to prevent criminal activities such as fraud, money laundering, terrorist financing, the use of stolen funds, bribery, corruption, and other suspicious financial transactions. Today, most of the KYC rules are associated with strict regulatory compliance, often in the name of protecting consumer rights. But ultimately it is a risk management process.

Often, large companies themselves manage their own KYC rules, this is done by the staff. Small companies, by contrast, outsource verification processes to third parties. Regardless of who is involved in KYC, the process usually does not change. Clients must send identification documents: address, bank statements, and sometimes explain the source of their funds.

Keeping confidential documents is as important as using them. In the pre-cloudy era, banks had to duplicate documents to insure themselves against the loss of a document. Files were copied and stored on various unrelated servers.

Thanks to Amazon and other cloud storage providers, institutions and third-party verification providers now encrypt AES-256 KYC guidelines and securely store them on cloud servers like Amazon S3.

KYC in cryptocurrency

In the early years of Bitcoin and the first cryptocurrency exchanges, the KYC rule was practically not known. Users could make transactions without revealing their identity, often without even creating an account.

Now, most major exchanges and crypto-financial services providers are facing pressure from government agencies and have taken appropriate measures to implement the KYC principles. Users expressed their dissatisfaction, but they are already faced with these processes and accept them in their daily lives. Cryptocurrency is still regarded as an anarchist financial instrument within its community. And yet, when it comes to shareholders, business needs to play by the rules to attract investment and achieve faster growth. 

Despite the work being done to eradicate illegal or unethical behaviour and legitimize the industry, more than two-thirds of cryptocurrency exchanges last year still did not adopt sufficient and adequate KYC principles. 

Those who continue to work without applying the KYC rule will be constantly at risk, and most likely they will have to work in obscure or secret jurisdictions that protect themselves from lawsuits. This approach is unlikely to fill users with confidence. Ultimately, they will gain access to “dark money” and a small number of law-abiding, privacy-conscious consumers. As a result of this, the expansion of the exchange will become virtually impossible.

Decentralized Exchanges (DEX) was once seen as the next wave of cryptocurrency exchanges. It is understood that anonymous peer-to-peer trading can solve many problems with centralized exchanges, including the need for KYC rules. Large exchanges have already implemented their versions of DEX, but they have selectively chosen the advantages of decentralization: lower infrastructure costs increased security and user-controlled tools. 

Cryptocurrency is a world-class game. If you want to conquer new markets, you must demonstrate achievements in the field of corporate responsibility. Selective disintegration is the best answer to this challenge. Finding a suitable provider that can ensure uninterrupted operation with minimal cost and guarantee data security is the real challenge that the industry is facing.

The future of KYC

We are currently witnessing the advent of RegTech 3.0, a regulatory technology that digitizes a wide range of regulatory compliance processes. RegTech technology is designed to reduce costs, improve consumer protection and identify risks long before regulatory authorities intervene. This technology uses a combination of new technologies, such as artificial intelligence, machine learning, RPA (robotic automation of technological processes and production) and biometrics, but at the same time signals significant changes in the strategic direction. Instead of an isolated review of consumers and their behaviour, regulatory compliance is now seen as a valuable source of data.

Self-governing identity is another concept actively explored by researchers in the blockchain world who are looking for an alternative to centralized identity on the Internet, where verifiers, not verified ones, are under control.

But for the time being, machine learning and biometrics are considered as the potential technologies to enhance online security and verify the identity of customers. With tangible results in the form of customer satisfaction and data security, investment in better technologies is recognised as a key to an efficient financial ecosystem. By using artificial intelligence for real-time and swift KYC verification, the crypto industry can get a real push. 

Supplementing blockchain with KYC offers endless possibilities

Supplementing blockchain with KYC offers endless possibilities

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While you may be tempted to think that decentralized and anonymous blockchains are safe because they are free of control from a single authority and work transparently, the reality, however, is a bit different, they are constant targets of scams. Even though the encryption makes it difficult to hack a blockchain system, its anonymity makes it a haven for criminals. Bitcoins and other cryptocurrencies based on blockchain are used by the criminals for illicit money transfers.  

Blockchain technology based on a distributed ledger system has great potential and is increasingly being adopted in different industries. However, there are some challenges and concerns over the design and implementation of distributed ledger systems. One of the major concerns over the decentralized ledger system is data integrity and data protection. As recent developments in data privacy and protection laws proffer the user an authority on their data, the businesses are answerable to the user on how or where the data is being used. 

Realizing this, technologists and researchers are coming up with new technologies that can help embed blockchain-based businesses into the existing legal framework for data protection, customer due diligence, and Anti-Money Laundering (AML). Artificial Intelligence-based due diligence solutions are considered the best bet for this purpose but before discussing it let’s look at how blockchain works.

Blockchain and Distributed Ledger systems  

In a nutshell, a blockchain is a form of distributed ledger system representing a digital data structure in which records are organized in cryptographically sealed blocks. These blocks are time-stamped, replicated, and synchronized. Distributed over peer to peer networks they are often maintained by consensus algorithms. Blockchain technology is also referred to as a status transition machine where the specific token is assigned a status using cryptographic values within a blockchain.

Data Protection and Blockchain

Blockchains are designed with a high level of transparency to ensure trust in the system. However, this transparency also makes it challenging to comply with data regulation and protection regulations such as GDPR and AMLD5. BLockchains transparency is considered incompatible with data protection regulation because it is pseudonymous, not anonymous. A person is represented in the blockchain system with a public key created with cryptographic values. GDPR, on the other hand, defines it as personally identifiable information (PII). And once the data is written on the blockchain it is impossible to alter or delete that data. 

Moreover, the dualistic categorisation of data processors into controllers and processors by the GDPR raises issues such as no controller in the blockchain. Therefore many of the rights individuals are granted towards a controller cannot be addressed, as blockchain technology is not controlled by any centralized entity. These tensions between data protection regulations and blockchain in many challenges like unknown provider, alien jurisdiction, conflict of laws and many more.

Integrating Automated KYC verification solutions with blockchain


However, blockchain can guarantee more data privacy as well as data security, if the personal data is kept off the blockchain and only the key to transactional data is transformed into the blockchain. Data protection is crucial when using a distributed ledger system. To keep the system secure from hackers and bad actors, the personal information could be verified by performing customer due diligence for every entity entering the blockchain system, this way the consumers will be verified easily without entering their data on the blockchain.

The problem that constitutes here is that the time required for manual KYC verification contributes to rigid customer experiences and the errors that could lead to fatal losses. Nevertheless, employing an automated KYC verification solution could solve this problem easily.

Blockchain and Anti Money Laundering

Another major consideration in blockchain technology is security for users and businesses in general. Unfortunately, in almost any sort of blockchain both public and private, including cryptocurrencies, token networks, or Initial Coin Offerings (ICO) related blockchains, the security is watertight on one end and the other if a successful hack or phishing attack is successful it is not traceable.

The anonymity of blockchain means that the stolen data remains visible but untouchable. 

With such a possibility, in an unregulated space succumbing to massive speculation, regulators around the world are formulating protocols to govern everyone’s best interests in the blockchain era.

AML and KYC regulations around the wold have wider implications than the cryptocurrencies alone, but the main display of their implementation happens in the digital world. Applied to blockchain technology, AML implies KYC processes and, at times, conducting due diligence on the origin of the assets by tracing transactions or asking the bringer of the funds to prove the source of income. However, there lie challenges in (i) the early implementation of KYC/AML standards and (ii) the ability to understand the technology underlying the Blockchain to be able to identify the origin of the assets. When implementing a blockchain-based business, a company should work with KYC/AML tools even when raising private funds.

To enhance the KYC verification process companies can utilise AI-based verification tools that could be integrated into the registration process on a website, into which customers enter their basic personal information. Online fraud management and AML scanning tools can undertake background checks and document whether a source of funds seems plausible.

Harnessing blockchain 

Understanding Blockchain enables comprehension of its potential challenges and risks. It is important to understand the tools at hand before initiating or evaluating a Blockchain-based project. Supplementing blockchain with KYC verification has many possibilities and can help to fight against data theft, identity fraud, money laundering, and other illicit crimes that could be conducted by negatively exploiting blockchain technology. 

Digital Currency ‘Sand Dollar’ Launched by the Bahamas

Digital Currency ‘Sand Dollar’ Launched by the Bahamas

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The Central Bank of the Bahamas (CBOB) has introduced a digital version of the Bahamian dollar, starting with a pilot phase in Exuma in December 2019. The digital currency will then be extended to Abaco in the first half of 2020.

This initiative is termed as ‘Project Sand Dollar’ and the digital currency is also the name given to the proposed central bank digital currency (CBDC). The initiative is a continuation of the Bahamian Payments System Modernization Initiative (PSMI) which began in the early 2000s. 

The CBB said in a statement, “The Bahamian PSMI targets improved outcomes for financial inclusion and access, making the domestic payments system more efficient and non-discriminatory in access to financial services.”

The bank did mention that the digital currency is not a stable coin or a cryptocurrency but is just a digital version of the existing paper currency. The intention behind the digital currency is to help smooth things over for people who don’t have access to a physical bank. 

The press release further stresses that the bank is doing its best to make sure the services are available to everyone and streamlined to be as fast as they can be. This process includes accelerating payments system reform, adding new categories of financial service providers and using the digital payments infrastructure to ensure the accessibility of traditional banking services for everyone. 

There will be certain limitations on the sand dollar as well. For now, businesses cant have more than $1 million in their digital accounts and residents max out at $500. Businesses aren’t allowed to transact more than one-eighth of their digital wealth per month as well. 

According to the Governor of CBOB, John Rolle, the conditions are favorable for the more widespread adoption of electronic payment systems. 

DOJ Arrested Three Individuals In A $722 Million Cryptocurrency Ponzi Scheme

DOJ Arrested Three Individuals In A $722 Million Cryptocurrency Ponzi Scheme

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The Department of Justice arrested three men on Tuesday, December 10, on charges of running an elaborate Ponzi scheme of $722 million since 2014. 

The DOJ issued a press release about the main incident saying, 

‘Matthew Brent Goettsche, 37, of Lafayette, Colorado, and Jobadiah Sinclair Weeks, 38, of Arvada, Colorado, are charged by indictment with conspiracy to commit wire fraud and Goettsche, Weeks, and Joseph Frank Abel, 49, of Camarillo, California, are charged by indictment with conspiracy to offer and sell unregistered securities…Two defendants remain at large and their identities remain under seal.’

According to Assistant Director in Charge of the FBI’s Los Angeles Field Office, Paul Delacourt, 

‘Those arrested today are accused of deploying elaborate tactics to lure thousands of victims with promises of large returns on their investments in a bitcoin mining pool, an advanced method of profiting on cryptocurrency…The defendants allegedly made hundreds of millions of dollars by continuing to recruit new investors over several years while spending victims’ money lavishly.’

The press release gives further details about the operations of ‘BitClub Network’ and how it fooled investors. The network was a pretend mining pool operation that fooled investors through false returns on Bitcoin mining operations while not actually mining any Bitcoin. The three individuals arrested were the ones who operated the network and claimed to offer shares in a ‘mining pool’ for Bitcoin. 

According to the press release by DOJ, Goettshce considered his target audience as ‘dumb’ investors and said he was ‘building this whole model on the backs of idiots’. ‘BitClub Network’ traveled the entire world to sell to new investors and made claims that they were too big of a company to fail. 


$4.4 Billion Worth Cryptocurrency Stolen in 2019

$4.4 Billion Worth Cryptocurrency Stolen in 2019

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The crypto analytics firm, CipherTrace released its Q3 2019 Cryptocurrency Anti-Money Laundering (AML) Report which reveals that the cryptocurrency has lost a staggering $4.4 billion in thefts and hacks, so far this year. 

Damages from the crimes related to digital currency soared to $4.4billion in just the first nine months of the year which is up more than 150% from $1.7 billion in all of 2018. 

digital currency soared to $4.4billion


CipherTrace is a verified crypto and blockchain intelligence company and its third quarterly report for 2019 addresses “cryptocurrency regulation, nefarious actors within the ecosystem, impending legislation, international trends, and prevailing sentiments.” 

According to CipherTrace, an extensive investigation of the Know Your Customer (KYC) processes of digital currency exchanges and the investigation revealed striking results. About 65% of the world’s largest digital asset exchanges ‘lack strong KYC policies’. 

CipherTrace, an extensive investigation of the Know Your Customer (KYC) processes of digital currency exchanges


The Financial Action Task Force (FATF) published guidance for regulations regarding cryptocurrency on June 21, 2019. FATF is an intergovernmental association that is responsible for forming standards for legal, regulatory and operational measures in order to mitigate money laundering, terrorism financing, and other illicit activities. The guidance was published under the name of ‘Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers.’

The report released by CipherTrace reports that 

“With only seven months left for nations to pass laws and virtual asset service providers (VASPs) to comply with the guidelines, the majority of exchanges are not equipped to handle basic KYC, let alone comply with the stringent new funds ‘Travel Rule’ included in the updated FATF guidance.”

According to the updated FATF guidance in the Travel rule, the virtual service providers (VASPs) are responsible for the secure transactions and keeping track of personally identifiable information (PII) of the senders and recipients of all transactions involving cryptocurrencies ‘values at or exceeding USD/EUR 1,000’.  

In order to satisfy the requirements of the Travel Rule, strict KYC procedures are required. Countries not following the FATF guidelines might be subject to “political ostracization, financial sanctions, and are added to a FATF blacklist, which documents countries that it judges ‘to be non-cooperative in the global fight against money laundering and terrorist financing.’”

A number of crypto-asset exchanges have already delisted privacy coins but according to CipherTrace, 32% of the trading platforms are still listing privacy coins. Amongst this 32 %, there are those exchanges as well with ‘weak or porous KYC’. 

FastBitcoins Joins Hands with Shufti Pro for Screening of their Customers

FastBitcoins Joins Hands with Shufti Pro for Screening of their Customers

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London, UK – (October 2019) Shufti Pro joins forces with FastBitcoins to allow them to provide safe, secure and user-friendly Bitcoin services that enable the Bitcoin economy via their merchant client base. Shufti Pro will provide them a global risk cover through its state of the art AML screening and document verification services.

Shufti Pro is an identity verification and KYC/KYB/AML screening service provider that can verify the identity of people through document verification, face verification, etc. Recently it onboarded a bitcoin business, FastBitcoins and it will verify and perform AML screening on FastBitcoin’s customers in real-time through document verification.

The demand for Bitcoin is growing globally as more people come to understand its worth as a store-of-value. As a result of this, governments around the world are increasing regulatory scrutiny in a bid to maintain fraud-free virtual currencies markets. 

By adopting Shufti Pro’s screening services, FastBitcoins is providing duty-of-care to the people trusting its services, when they are required to identify those they are doing business with, ensuring their legal commitments are fulfilled in a manner that is simple and secure for their clients. The services of Shufti Pro delivers true value for its customers. 

Danny Brewster, MD at FastBitcoins expressed his confidence in this collaboration and said: “Our success comes down to making sure our customers can buy Bitcoin in the fastest and simplest way possible. Where the requirement to verify customer identity arises, Shufti Pro has ensured we can handle it in a straightforward, user-friendly manner. The main reason we selected Shufti Pro is that they offer a reliable technology at a competitive price for a start-up, we are placing trust in them to keep the data provided by our users safe and secure and it was not a decision that was taken lightly when choosing to work with them.” 

Shufti Pro is also excited to onboard FastBitcoins for identity verification and AML screening of their customers. Shufti Pro will provide document verification and AML screening services to FastBitcoins. Mr. Victor Fredung expressed the excitement of his company towards this collaboration and said,

“We’re delighted to have FastBitcoins onboard and look forward to maintaining this collaboration for the longterm. Shufti Pro will deliver its unrivaled risk cover to FastBitcoins through document verification and AML screening of its prospective clients. Our services are best suited for them because we give a truly global coverage in our identity verification services delivered with a high-precision rate.” 

About FastBitcoins 

FastBitcoins provides a complete solution for business owners looking to make extra income from the Bitcoin revolution. Their point-of-sale technology empowers merchants to expand their product offerings and attract new customers with innovative services based around the world’s most recognized digital currency.

Merchants use their simple handheld terminal to let customers buy and sell Bitcoin, make payments in Bitcoin, and purchase prepaid vouchers from over 5,000 international brands, all with no previous experience required.

About Shufti Pro

Shufti Pro is an identity verification service provider that offers KYC and AML solutions to worldwide clients. Using a hybrid approach of AI and HI technology, Shufti Pro delivers results within 30 seconds with accuracy as high as 98.67%. Having verified users in over 232 countries, Shufti Pro is a pioneer in IDV services to cover a large number of countries.

You can visit Shufti Pro here:

Shufti Pro Limited

1st Floor, 35 Little Russell St, Holborn,

 London WC1A 2HH, UK

[email protected]

Flexentral joins hands with Shufti Pro for KYC & AML

Flexentral joins hands with Shufti Pro for KYC & AML

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BATH, UK – (October 8th, 2018) Shufti Pro has partnered with Flexentral to provide its next-generation KYC and AML compliance services to this blockchain based company. Flexentral is basically a developer and publisher of a digital platform software that intends to simplify work management and make it flexible for managers and workers. Shufti Pro is an AI-based end-to-end identity verification SaaS product that offers multiple validation services to its customers.

Flexentral tends to introduce a harmonized platform where digital advancement of the modern age are utilized to make project management and task completion hassle-free for users. In doing so, it covers the entire work cycle starting from the recruitment of employees, leading to contracting and eventually resulting in payment at the completion of the assigned task. Powerful analytics tools are also part of the product so that project managers can get a visual brief about worker performance and progress they have achieved in light of payroll paid to workers.

To put it simply, Flexentral wanted to cater 2 categories of users: one who needs work done and the other that can do that work. But creating a reliable platform where trust dictates the terms of engagement led Flexentral on a search for a reliable KYC partner. Due to its blockchain based technology, in-app payments to workers from managers were also required to be made in a cryptocurrency. “Grain” was chosen as the token currency to pay for the services rendered by workers for managers on this digital platform. To ensure honest and transparent transactions, AML compliance was also necessary. The search of Flexentral concluded with Shufti Pro that promised similar flexibility as was desired by the European tech company. Shufti Pro can perform real-time KYC verifications with AML screening checks being performed in the background.

Talking about the collaboration between the 2 companies, CEO of Shufti Pro, Mr. Victor Fredung, said:

We were impressed by the business model of Flexentral as it had a lot of things common, in principle, with Shufti Pro. We are all for transparency and trust. Same was the intention of folks at Flexentral. Teams of experts from both companies shared ideas and worked diligently to integrate KYC verifications and AML checks from Shufti Pro into the digital platform from Flexentral”

Shufti Pro is already a GDPR compliant product which further made the decision easier for Flexentral to opt for this AI based ID verification product. Data security and usage of personal data for an explicit purpose were already clearly defined as per GDPR guidelines ensuring that Flexentral will not encounter any unnecessary compliance issues or monetary fines. The integration process was flawless as Shufti Pro maintains an updated API and SDK integration documentation.

About Shufti Pro

Shufti Pro is an emerging name in ID verification services. It was founded on 31st October, 2016 in Bath, UK. The goal of the company is to enable its clients with seamless customer experience, fraud prevention and undeterred revenue generation. The company offers state of the art SaaS, which engages Artificial Intelligence and Human Intelligence to provide ID verification services. Businesses can now conduct easy digital verification processes with lesser friction and more advanced technology. Currently offering its services for all countries of the world along with Universal Language Support, the company is located in United Kingdom with its global office in Sweden.

Please visit Shufti Pro here.

Shufti Pro Limited

[email protected]

Unit C401, Westfield Shopping Centre,

Ariel Way, London, W12 7FD

About Flexentral

Flexentral envisions an open, honest and transparent labor economy, servicing tasks and work with a platform providing instant insight in compliance, diversity and budget.

KYC and AML Compliance can help cryptocurrencies to earn legitimacy

KYC and AML Compliance can help cryptocurrencies to earn legitimacy

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Cryptocurrencies are currently limited in use by virtual currency enthusiasts or by lottery bidders who are in to for the easy money , promised by cryptocurrencies’ volatile prices. Genuine KYC practices and AML compliance measures can help cryptocurrencies earn much needed legitimacy in the eye of not only national regulators but also in the eye of general populace. To be honest, right now cryptocurrencies are haunted by the reputation of a “monetary tool for cyber criminals”. Last years, ransomware attacks and the demand of hackers to be paid in bitcoin did no good to the reputation of cryptocurrencies. Conventional and status quo forces in financial world are already paying big bucks to downplay the utility and scope of cryptocurrencies. Reliable and easy to use KYC services can help cryptocurrencies to garner the repute like conventional means of transaction. AML Compliance will also give the financial regulator a break from continually cracking down on individuals and exchanges dealing in cryptocurrencies.

Why Cryptocurrencies need KYC and AML Compliance?

The potential of cryptocurrencies is hugely substantial with a decentralized economy where each application or blockchain based venture can have its own specific cryptocurrency to perform transactions and buy assets & items. Cryptoxchange make it even easier to pay from one currency to another

The surge in interest meant many cryptocurrency exchanges, where coins are traded, were overwhelmed with demand. Many of the biggest closed their doors to new customers as they grappled with a backlog in customer verification. While crypto remains a largely unregulated space, regulators around the world have signalled they are watching it closely. Crypto companies have been proactively following the kind of ID checks and money source verification that are commonplace in the world of regular finance in a bid to head off any future regulatory troubles.

AML Compliance for cryptocurrencies

Thanks to blockchain technology, crypto-currencies inherently possess the potential to actually reduce AML risks when compared with fiat currencies. The blockchain is an online public ledger, where each transaction is supervised, validated and recorded as a complete transaction history. Public ledger viewers and crypto-miners are immediately notified of any transfer from one holder to another. Furthermore, unlike counterfeit hard-currency, which governments spend significant sums trying to combat, crypto-currencies are almost impossible to forge as each carry their own unique characteristics, which are verified from end-to-end by miners. Without verification of all transaction phases, including the departure wallet, the destination wallet, the currency type and amount, the transaction is blocked instantaneously without any human supervision. In this sense, the digital trail could better serve AML regulations than existing fiat paper trail.

In order to perform a much more effective KYC and utilise AML Compliance services, cryptocurrencies must have to turn to reliable ID verification solutions. As we have seen in recent pasts, even the liberal financial regulators have started clamping down and fining crypto exchanges for being involved in money laundering activities. If crypto enthusiasts and bigwigs in virtual currency sphere want to rid their products from unwanted financial criminals and there can be no better alternative then Shufti pro. It is an end-to-end ID verification SaaS product utilising the mechanics of Artificial Intelligence. KYC services from Shufti Pro will help crypto exchanges and management of ICOs to ascertain the identity of users that sign up for their virtual currencies or show interest in them at the time of ICO. AML compliance solution will help them to get rid of financial risk posing investors, no matter which part of the world they belong to.

Shufti pro has an industry best processing time of 30-60 seconds when it comes to KYC services. Documents printed in every language of the world can be verified by Shufti pro and its services are available in every country of the world. AML Compliance by Shufti Pro is performed with the help of back ground checks using a mega databank that contains data from 1000 Whitelists and Sanction Lists. In addition to that, Shufti Pro databank includes profiles from 3000 databases maintained by national, international and regional watchdogs.

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AML & KYC Compliance: 5 Ways AI is Supporting the Fight Against Financial Crimes


International Tax Body to curb Cryptocurrency based Tax Evasion

International Tax Body to curb Cryptocurrency based Tax Evasion

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Tax enforcement authorities from Australia, Canada, the Netherlands, the United Kingdom and the United States have have came together to form a Joint Chiefs of Global Tax Enforcement that will be informally known as J5. One of its major task will be to check on tax evasion being done on profits made via Cryptocurrency. The five relevant tax authorities include the American Internal Revenue Service Criminal Investigation (IRS-CI), the Australian Criminal Intelligence Commission (ACIC) and Australian Taxation Office (ATO), the Canada Revenue Agency (CRA), the Dutch Fiscale Inlichtingen- en Opsporingsdienst (FIOD) and the British HM Revenue and Customs (HMRC).

The five law enforcement agencies have agreed to share intelligence and expertise and to work on joint operations to crack down on professionals who make a living out of enabling tax crime. This inter-government body was formed in response to a request by the Organisation for Economic Co-operation and Development (OECD) to reduce tax crime, calling for action from countries to ratchet up their efforts to prevent such individuals helping organised crime groups and wealthy offshore tax evaders hide income and assets using the global financial system.

Cryptocurrency will be a highlighted source of vigilance for J5, as Cryptocurrency allows for easy international transfers, which is a cause for concern among government agencies due to the difficulty of investigating and prosecuting cryptocurrency-related crimes.

The current Global Tax Enforcement initiative needs to be seen as a first step. It would also be helpful if it was more open and transparent than JITSIC has been for much of its existence. There is a public debate about the competence of tax authorities who now need to be more transparent about what they are doing.

At their first meeting last week, the J5 brought together leading experts in tax and other financial crimes from each of the five member countries. Together they developed tactical plans and identified opportunities to pursue cyber criminals and enablers of transnational tax crime. The J5 will do this through the sharing of data and technology, conducting operational activity and taking advantage of collective capabilities.

The Joint Chiefs of Global Tax Enforcement comes as an unwelcome development to many in the cryptocurrency community. The whole cryptocurrency ethos centers around using decentralized technology to build trustless and incorruptible infrastructures. An announcement made July 3rd, 2018, shows that five countries have joined in the formation of J5 as an attempt to dig deeper into crypto investors and their failure to report profits made.

Johanne Charbonneau, Director General, Canada Revenue Agency said: “The formation of the J5 demonstrates the serious commitment of governments around the globe in enhancing international cooperation in fighting serious international tax and financial crimes, money laundering, and cybercrime through the use of cryptocurrencies. The J5 complements the important international work of the OECD through operational collaboration. Our collective efforts and experience will be shared to jointly identify and address the increasingly sophisticated and global schemes and the professional enablers that facilitate such schemes.”

This is supposedly not the first attempt from such countries. For instance, the IRS of U.S took Coinbase to court, as an effort to get information regarding their customers. This was predominantly done to validate which individuals failed to report their appropriate incomes in their tax returns. While taxes are one thing, the main concern that many country officials fear include any terrorist-based crimes. Especially given the fact that such individuals will be able to finance their assets without getting caught and doing so in a private and secure manner.

On the bright side, this is one more positive sign that will actually push forward the crypto enthusiasts to actually spend cryptocurrency as opposed to just buying them and using it for profit-taking only. The only legal basis for tax evasion using cryptocurrency is when virtual currency is converted to fiat and is not declared to authorities by the crypto enthusiast. When converted into fiat and a person realises profit has been earned on the asset, it is the legal and right thing to subject that profit taxation. By just making profits and conversion to fiat for unprecedented profits, people are actually destroying the decentralized ecosystem instead of supporting it. But by living largely on cryptocurrency, no profits are realized, and no centralized government has a claim over your asset.

Cryptocurrency Exchanges and negative KYC Compliance

Cryptocurrency Exchanges and negative KYC Compliance

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KYC & AML Compliances are not being upheld by almost 68% of the cryptocurrency exchanges around the globe. Only 32% have been found to be fully following the compliance rules.

This means that one way or another, once the revised AML directives are in place in the year 2019, these companies will have to completely reform the way they operate, in accordance with the EU Regulations.

An analytics study conducted by the P.A.ID Strategies disclosed the non-compliance of more than half of the cryptocurrency exchanges based in the U.S. and EU region.

Reasons of Non-Compliance

With a sample size of a quarter of a hundred, P.A.ID Strategies proved that many of the crypto exchanges fail to verify the identity of their users. Majority of the Cryptocurrency exchanges take place without requesting any substantial proof of identity or official documentation to screen the user before permitting the exchange. The general practice entails asking the user merely for their mobile number or email address.

This information is nearly not enough to carry out IDV or risk assessment checks. In addition, they can easily be obtained from various other sources. It is not uncommon for people to update their contact information, especially email addresses, on their social media profiles. Being highly prone to identity theft, this data definitely requires substantial refinement and close scrutiny.

AML Compliance for Cryptocurrencies

After May, 2018, the GDPR regulations came into place, which required the companies, ICOs and Cryptocurrency exchanges that are located in the EU region, to update their data protection and access policies. Similarly, in June, 2018, the EU launched a fourth AML directive that was basically directed at combating the cryptocurrency crimes and curb terrorist financing. The directive explained in great detail how the organisations must update and maintain their AML screening processes. If unfollowed by any, strict actions (e.g. they may be sanctioned)  are in place to ensure complete order and protect the virtual marketplace.

A fifth AML directive is also set to come forth in June 2019, which is expected to enhance the security systems by enforcing stricter laws.

Effects of KYC on Cryptocurrencies

Rest assured, the crypto world would be a much better place with secure transactions. Following KYC & AML regulations would limit the number of frauds and prevent huge losses. Crypto crime can be reduced if the identity of the investors for ICOs and users at the Cryptocurrency exchanges is properly and thoroughly verified. Their complete information must be requested and matched against their original, state-issued ID documents. The authenticity of those documents must be checked as well. This will combat forgery and identity theft issues, hence, diminishing incidences of money laundering, terrorism and stolen cards.

If users are to trust the cryptocurrency exchanges, the only way to do that is to ensure that their transactions are safe, their money is not going towards any illicit causes, and that if their identity gets stolen, then their funds are not being wrongly used/accepted at the exchanges. Yet, up until this point, the cryptocurrency exchanges are failing to comply with the KYC & AML regulations, resulting in higher frauds and consequently, higher losses.

The easiest way for companies in the EU to secure their assets and finances is to employ identity management softwares that are easily integrated within their systems.

Shufti Pro solves these issues for you by providing a global service for IDV and AML screening. Our readily integrate-able RESTful API and SDKs make it a complete and hassle free package for your needs.

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Hazards of Ransomware are real for Cryptocurrency Miners

Hazards of Ransomware are real for Cryptocurrency Miners

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Cryptocurrency may well be the future of economic landscape and it has the potential of taking the entire FinTech category to a whole new level. But like any technological advancement, few elements and individuals always crawl out of their holes to make some easy buck by defrauding people. Well, unfortunately, cryptocurrency has also find its proverbial pirates. Cryptocurrency miners are now using ransomware to earn money off the people that might be interested in these new age virtual currencies.

The appeal of cryptocurrency is fueled by the unsubstantiated rise in prices of Bitcoin over the few years. This increase in prices, gave rise to a trend where thousands of tech enthusiasts and people looking to earn easy money, lined up to benefit from Bitcoin bubble. Several of them even opted to mine these coins themselves to get even a better chance of earning sure shot profits. Now, this led to many hackers and online bandits to mine potential ransomware to earn even higher amounts. Some even launched their own coins and virtual currency to even avoid detection by authorities or crypto-vigilanties.

What is a Ransomware?

Ransomware works like a common malware but instead of leading to hacked crucial information or documents, the person attacking your personal computer locks down access to important and vital data. Access to that information is gained by the hacker by successful entry of ransomware to your computer. This can be in the form of a file that you clicked upon or a doctored software that you tried to install on your computer. In order to regain access to their files and important documents, users are asked by hackers to pay them specific amount of money, otherwise, their vital data will be deleted or dumped for good. Ironically, ransomware attackers even ask users to pay them in major cryptocurrencies like Bitcoin so that transactions are not traceable by authorities.

A normal user of Personal Computer might not consider itself to be target of such an attack but trust us, when we say that the extent of hazards attached with ransomware are huge. Your personal photographs, your personal chat history, address books and credentials you use to login to your bank accounts from your home computer are all at risk, if you are attacked by a ransomware.

Businesses and employees working in corporate sector are another regular target of ransomware. A simple click on an unsafe link from a workstation, has the potential to risk entire company’s digital databank and servers. In a recent global attack of ransomware, companies were made to pay millions of dollars to safeguard their important files, documents and data from permanent deletion.

Case Studies of Ransomware via Cryptocurrencies

The out of the box concept of using personal computers for virtual currencies mining is real subtle. Hackers have designed some well guised mining programs that specifically target computers that have either an outdated Operating system or that are using non-effective firewall against such brute force. Typically considered to be stowaways, these ransomware are very hard to detect and payments via cryptocurrencies remain largely untracked. Even when detected, it is very hard to remove and you have no other way to pay them off to rid your computer from these malicious bots. Not to mention, there is this huge blow to the performance of your PC due to a large, yet anonymous, workload.

Although, it seems to be a dangerous path for crypto enthusiasts and people interested in ICOs but in actuality, if you do a proper research before buying cryptocurrencies, you will be safe. Don’t forget to check out reviews for an ICO from some leading crypto enthusiasts. Also make sure that you only invest in an ICO that already has placed stringent KYC and AML compliance measures. To avoid being targeted by hackers, make sure that you are using perfectly updated OS on your personal or work computer. A powerful firewall is also a must-have feature on your computer to ward off unwanted access to your computer.

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Shufti Pro partners with Cryptology – Leading Crypto & Fiat Exchange Platform

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The Global Exchange platform has selected Shufti Pro for unique automated digital KYC processes that improves overall efficiency.

BATH, UK – (May 27, 2018) – Cypher PTE Ltd, aka Cryptology, has now simplified its onboarding, and verification processes with Shufti Pro’s pioneering AI based technology that uses Machine Learning algorithms to make split second decisions with complete efficiency. With real-time user identification, Cryptology remains on top of it’s due diligence without having to worry about being on constant alert for falsified individuals entering the system. Shufti Pro will now take care of that.

Cryptology is one of its kind start-up company that envisions to make exchange of cryptocurrency hassle free for its users. Currently operating through its iOS and Android apps, Cryptology plans to extend its business operations with the help of a web application as well in near future. With easy to use interface that supports multiple wallets, Cryptology presents a stock exchange for crypto enthusiasts. Working for a reliable crypto future, Cryptology is looking to resolve issues like complexity of fiat transactions, high commissions and sluggish customer support.

The need for KYC

To ensure secure transfers and in order to eliminate the risks of fraudulent activities or fake users on their newly launched crypto exchange, Shufti Pro was chosen by Cryptology. Shufti Pro will be providing PCI compliant KYC Services on their chosen mobile/web platforms. The distinctive features of KYC services from Shufti Pro will allow Cryptology to verify credentials of its users from all around the globe. By having a KYC partner that affords universal language support; Cryptology’s global outreach to it’s user will be fully enabled.

Fraud prevention and risk mitigation are not the only features that Shufti Pro brings to this partnership. The Artificial & Human Intelligence Hybrid system of Shufti Pro also provides real time verification so that the users of cryptology don’t have to wait for hours before their identity and financial credentials can be verified. Flawless SDK integration of Shufti Pro with Cryptology app will create a hassle free UI/UX for the members.

Talking about the partnership with Cryptology, CEO of Shufti Pro, Mr. Victor Fredung said that, “We are proud to have partnered with an upcoming venture like Cryptology. Their business model was in need of a reliable identity verification system that also provided a seamless integration with their iOS and Android Apps. Shufti Pro ticked all those boxes. Not only that, but the scope of our worldwide services and universal language support means that any person sitting in any part of the globe, having credentials in any language, will be able to buy and sell cryptocurrency on Cryptology apps. Now that is what we call a giant leap towards a crypto future”

On the other hand, COO Cryptology Mr. Anton Kalin has this to say about the partnership: “Cryptology is a newbie-friendly global cryptocurrency exchange. It provides credit and debit card deposit options, lots of tokens to trade, and easy verification procedure at the same time. Guys from Shufti Pro do exactly what we expected them to do, automating KYC and letting us grow faster. They were the first to respond to our cooperation request! We are totally happy to have chosen them and definitely look forward to continuing our highly productive cooperation.”

Implementation of KYC services for a cryptocurrency exchange is a welcoming opportunity for market enthusiasts who want to benefit from huge potential of cryptocurrency without risking their investment capital or identity credentials. PCI and GDPR compliant identity verification services from Shufti Pro will also ensure that the data shared by Cryptology customers and members for verification will be fully secure and cannot be breached by any brute force.



About Shufti Pro

Shufti Pro is an emerging name in identity management and KYC/AML. It was founded on 31st October, 2016 in Bath, UK. The goal of the company is to enable its clients with seamless customer experience, fraud prevention and undeterred revenue generation. The company offers state of the art SaaS, which engages Artificial Intelligence and Human Intelligence. Businesses can now conduct easy digital verification processes with lesser friction and more advanced technology. Currently offering its services for all countries of the world along with Universal Language Support, the company is located in United Kingdom with its global office in Sweden. Please visit Shufti Pro here.

Shufti Pro Limited

[email protected]

+44 (123) 456-7890

190 Englishcombe Ln, Bath, United kingdom.

About Cryptology

Cryptology is a team of crypto enthusiasts looking for ways to offer mass access to the crypto market through a marketplace that would cater to all needs at once.Company’s main goal is to simplify the digital & fiat currency exchange transactions for all users. Cryptology strives to create a single platform bringing together fiat transactions and a variety of tokens. Complex procedures will become a thing of the past, as users will be able to buy tokens with fiat currencies. Everything you need will be available on a single platform. You won’t have to deal with high commissions on fiat transactions, difficult KYC procedures and slow support. The key advantage of Cryptology is its own payment system that allows them to manage fiat transactions and offer users, a competitive service fees.