The regulators’ view towards crypto-related projects in the United States and the European Union has not been very positive. The general consensus is that all digital assests needs to be tightly regulated, however, law makers at the moment seem to struggle with an optimal solution. One company that troies to help and shows commitment to establishing a transparent legal framework is Ripple. The company is trying to tackle the issue in several ways. Firstly, Ripple itself promotes blockchain technology and recruits more partners globaly. Secondly, Ripple establishes partnerships and invest into projects that work closely with regulators. Ripple-backed XRPL Labs, one of such projects, is currently working on a solution to help crypto ventures in the Netherlands to deal with forthcoming regulatory burdens.
The Dutch central bank announced in September that it would start regulating cryptocurrency related companies on January 10, 2020. After that date, any project that deals with digital assets will have to register, undergo audits and will be subject to stricter supervision. Additionally, companies will have to follow the Know Your Customer guidelines and report any “suspicious transaction” to authorities.
In a blog post, Wietse Wind, the founder of XRPL Labs, revealed that although he’s a supporter of crypto regulations, he’s concerned that upcoming laws could impact blockchain technology. Wind suggests that these new regulations in the Netherlands, like others in the European Union, may have a negative impact on new projects in the crypto sphere. Due to the fact that start-ups would have to go through a long approval process tomeet the requirements of regulators the cost of starting such a project would be too high.
Wind’s thinks that a good solution is to launch a “crypto regulatory compliance company” to deal with all of those matters for crypto related projects. He already has a team of developers and consultants onboard, who will focus on providing services to those wishing to work with digital assests in the EU. Wind explains that crypto platforms and apps will need to forward their end users to his new platform.
Once onboarded, the customer will be redirected back to the crypto platform/app with a token, granting the crypto platform/app to use our API to pre-authorize transactions, check for customer account status, customer limits, etc. AML / risk profile related questions will even be interaction between “the company” and the customer.
Wind said that the process would be similar to logging in to a website with your social network credentials, such as Twitter or Facebook, but “applied to cryptocurrencies” making it more transparent for regulators.
Image Sorce: Flickr
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