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Cryptocurrency: The Compliance Conundrum

Regulators want cryptocurrency exchanges to know who their customers are – but that requires these companies to collect very sensitive information they’re not particularly good at securing.

On Jan. 23 South Korea’s financial regulator set a date for the introduction of a new rule barring anonymous cryptocurrency trading accounts. (Or, as some sensitive snowflakes out there prefer we’d put it, “requiring customer identification for crypto trading accounts” – CoinDesk never imagined anyone in this space would want to sugarcoat unwelcome news with euphemisms, yet here we are.

The very next day, a different South Korean agency fined several cryptocurrency exchanges for failing to secure customer data. “While the security threats such as virtual currency speculation and hacking of handling sites are increasing, the actual situation of personal information protection of major virtual currency exchanges is very weak,” warned the chairman of the Korea Communications Commission in announcing the fines.

Topping it all off, on Jan. 26, Coincheck, a crypto exchange in Japan, admitted it had been hacked in what appears to be the largest single theft in cryptocurrency history. Some $533 million worth of a mid-tier crypto known as XEM were pilfered.

To read the full story click on this link about THE TAKEAWAY from CoinDesk weekly.

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