- The news that Binance has implemented CipherTrace Traveler caused consternation within the crypto community
- The move is the latest example of tough regulation of the cryptocurrency space which has been promised for years
- Such regulation represents a new dawn for cryptocurrency
The announcement that Binance has integrated CipherTrace Traveler so it can comply with the Financial Action Task Force (FATF) travel rule resulted in a range of reactions from the cryptocurrency community, most of them negative. However, given that governments have been piling pressure on cryptocurrency-handling institutions to do more to tackle illegal use of cryptocurrencies in recent years, the faux shock and incredulity shown by many in the community shows that they belong to a bygone age of crypto.
FATF Rule Extension Was No Surprise
The FATF was formed in 1989 to offer cohesion around anti money laundering operations across its 36 member states. One of the 40 recommendations the FATF made was rule 16, otherwise known as the ‘travel rule’, which requires that money transmitters collect details on customers transferring over a certain amount of money, with EUR/USD 1,000 being the recommended threshold.
Rule 16 was extended in 2019 to include cryptocurrencies, news that didn’t exactly go under the radar, so it’s fair to say that the cryptocurrency world had fair warning of what was coming. Even without this development, the clamor for greater regulation of the cryptocurrency industry has been gathering strength ever since the 2017 bull run, so anyone surprised by what we are seeing has either been living under a rock or has the foresight of a mole and has no one to blame but themselves.
Cryptocurrency OGs Have a Decision – Past of Future?
What we are seeing has been inevitable for years, and it’s just the start. If you’ve got an issue with regulation of the cryptocurrency market then you will either have to switch to a fully DeFi existence (with the result that you will find cashing out of your crypto very hard) or you can accept that your transfers will be tracked. The governments of the world were never going to allow a trillion-dollar asset class like cryptocurrency go unregulated, and if you really thought they would then we have a bridge we’d like to sell you.
The intrusion of Big Brother was always going to happen and, whether you like it or not, a regulated and monitored cryptocurrency system is what’s coming. Cryptocurrency’s Wild West is slowly being outlawed, as it always was going to be, but in doing so the glass ceiling of investment is on the verge of being smashed. A properly regulated cryptocurrency ecosystem is ripe for massive investment, but only when those who are waiting on the sidelines can trust that their money is going to be ‘safe’ – or at least safer than it is now.
The question is, are you going to quit all the major crypto exchanges in a huff because they might find out who you are, or are you going to suck it up, accept that this was always going to be the case, and ride the inevitable wave?