Bitcoin ATM operators DigitalMint and Coinsource — along with blockchain analysis platform Chainalysis — have launched the Cryptocurrency Compliance Cooperative (CCC) to standardize compliance practices across cash-to-crypto businesses.
One major catalyst for the CCC: A growing number of reports that only requiring a cell phone number from users isn’t enough of a deterrent to stop bad actors, like money launderers and child traffickers, from using them.
Marc Grens, CEO and founder of Chicago-based DigitalMint, said he’s encountered resistance from some of his competitors in the cash-to-currency kiosk space over setting up more rigorous compliance measures. They say anything that adds friction to the transaction process is bad for business.
“They're actively promoting less regulation, less interference, less KYC and more anonymity because they're making too much money,” Grens told Crypto Investor. “So when you're making too much money, and you've raised capital, and have other stakeholders involved that expect you to reach specific numbers, it makes it really challenging for you to find ways to slow it down by enhancing your compliance program.”
The group is casting a wide net, soliciting members from cash-based cryptocurrency money service businesses, regulatory bodies, financial institutions, suppliers, non-governmental entities and law enforcement agencies.
“The nefarious use cases plaguing this industry are well documented by several law enforcement agencies, and include fraud, elder abuse, and drug and human trafficking,” said Seth Sattler, director of compliance for DigitalMint. "While a small number of Bitcoin ATM operators go above and beyond with know your customer (KYC) and anti-money laundering (AML) protocols, others in the cash-to-crypto industry simply turn a blind eye and are complacent to these bad actors by simply applying the bare minimum customer protections, which in many cases allow for completely anonymous transactions.”
The Cryptocurrency Compliance Cooperative members include:
- Surety Bank
- Palmera Consulting
- Royal Business Bank
- Anti-Human Trafficking Intelligence Initiative
- The Knoble
- Trust Stamp
- Metropolitan Capital Bank
Bitcoin ATM operators DigitalMint and Coinsource — along with blockchain analysis platform Chainalysis — have launched the Cryptocurrency Compliance Cooperative (CCC) to standardize compliance practices across cash-to-crypto businesses. Subscribe for full article
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