With major State players like the United States, China and Australia expressing concerns over the legality of blockchain based payment and lending platforms, it’s understandable that many prospective investors are reluctant to back emerging blockchain companies. It’s true that the future of blockchain regulation remains uncertain, but recent trends point to the technology’s probable acceptance by international regulators in the long term. For now, there are a few key steps that blockchain companies can take to remain compliant with international law and safeguard their investors’ best interests. Among the handful of blockchain based payment systems working to ensure the legality of their services, the Etherecash platform earns particularly high-praise. With its careful adherence to KYC and AML guidelines, Etherecash is a top pick for investors keen on legality and long-term growth.
Know Your Customer
The lawyer backed Etherecash platform is exceptional in its upholding of strict KYC guidelines. Widely adopted in the early 2000’s, Know Your Customer (KYC) guidelines are meant to ensure that a company can verify the identity of its clients to protect against illegal activities like money laundering or bribery. While particular KYC guidelines can vary from nation to nation, they typically require a company to perform due diligence in collecting proof of its customers’ identities. To gain access to many of the Etherecash platform’s core functions, users are required to provide proof of their age and citizenship with a blockchain compatible country. This is why, for now, citizens of the USA, Australia, New Zealand, Pakistan, Canada, Nepal, China, Somalia, Bangladesh, South Korea, Lebanon, and the Central African Republic aren’t able to participate in the Etherecash ICO. Adhering to KYC guidelines is a simple procedure, but it ensures that the Etherecash platform remains accountable, transparent and up to par with industry standards.
Anti-Money Laundering
Anti-money laundering (AML) regulations have been drawn up by a number of international bodies, the Financial Actin Task Force (FATF) and International Monetary Fund (IMF) among them. A feature of international finance since the late 1980’s, AML guidelines are meant to combat illegal operations like market manipulation, tax evasion, or drug trafficking. To generate income from illegal activities, offending parties have to launder their funds, typically by running them through a perfectly legitimate business to make it look like the money was obtained legally. In broad stokes, AML guidelines require companies that deal with financial transactions to do their best to ensure that they’re not aiding in money-laundering activities. As with KYC, AML standards can vary, but they typically require that companies monitor suspicious activity and verify the origin of large sums of money. With its lawyer backed smart contracts and immutable transaction records stored on the blockchain—coupled with its adherence to KYC guidelines—the Etherecash platform demonstrates best practice with upkeeping AML standards.
The Future of Blockchain Regulation
By keeping up with KYC and AML guidelines, the Etherecash platform exemplifies how blockchain companies can operate with transparency and integrity in the emerging blockchain ecosystem. Upholding best practices to remain compliant with international regulations not only safeguards investors’ interests in Etherecash, it also serves as a model for how other blockchain companies can work towards mainstream adoption. All signs point to blockchains’ long-term growth, and it seems likely that a focus on compliance will be the key to expanding the blockchain ecosystem to countries like the US and China soon.