Blockchain.com account closure

[JohnnyDoe]

Quite strange...

Generally, in my experiences with this type of financial institution, you keep the compliance officers on quite a tight leash and have to keep them in line with corporate goals (to make as much money on fees and safeguarding account interest as possible) which is a direct product of leaving your clients alone when possible. You shouldn't put the board into compliance positions, though, it brings in bit too much light 😉

The regulators don't care too much about AML on its own. If you are not doing things too publicly and not giving them a bad name somehow, they will not strike on AML alone. They will use AML deficiencies as a way to increase your fine or grounds for revocation if they are already planning to impose these punishments – it is good for strengthening their position and one can always find issues in AML because there is no fixed model or rulebook.

On the other hand, I think I know more operators who have had the license revoked OR voluntarily relinquished it OR sold the entity than those who still have PI/EMI/CASP to date. EU is not comfortable for doing business in the financial sector and the only saving grace is the central bank access to SEPA clearing.

This is only theory, unfortunately.
The reality is that the sector is polluted by monkeys, and things happen randomly. Sometimes you can obtain results with bananas, when you don’t care it’s just randomness.
Plus, many of these EMIs exist just for reasons only known to their owners. Genuine customers are a nuisance.

 

[Filda]

This is only theory, unfortunately.

I think not, but it's a rather small part of the sector. I was involved in the management of an EU PI in the past which has had its license revoked (actually for relatively small issues in the grand scheme of things; I think you well know how regulators can be) and we had a more strict approach to compliance officers that meant they had to leave the customers alone if there were not serious worries.

Serving legit but high-risk clients WITHOUT VC funding and loss operations, WITHOUT background dirty-money operations is possible, though surely not in the monkey messes like Lithuania, Estonia, UK, where so many payment providers have jumped in and trapped themselves. And with time it's getting only harder and harder to operate this way.

The reality is that the sector is polluted by monkeys, and things happen randomly. Sometimes you can obtain results with bananas, when you don’t care it’s just randomness.

Definitely. Well, who has the money and effort and temperament to deal with regulators that never worked in a private company once in their lives and know AML only from the tellings of people far far away from any practical activity? Simply does not make sense for many people with legit-ish interests to enter the market at all

Plus, many of these EMIs exist just for reasons only known to their owners. Genuine customers are a nuisance.

Yes, of course, I was trying to insinuate this, often these companies just serve customers from the market at a loss and with overly-careful compliance while the rest of the team is focused on laundering (processing in various ways?) money from alternate sources. But it is a fault of the regulation itself (as is usually the case) because the profitability of legit operations in the EMI space is quite low. Nowadays it has gotten better because safeguarding accounts pay more reasonable interest. Although it has also become more profitable to just structure in Canada MSB/Australia RSP and use EU only as a BaaS.

 

[JohnnyDoe]

And the monkey virus has spread to crypto exchanges

 

[Marty McFly]

And the monkey virus has spread to crypto exchanges

Most are being held hostage by the government - see Binance, which was once the best exchange and nobody even knew where they were located.

 

[Columbus]

Most are being held hostage by the government - see Binance, which was once the best exchange and nobody even knew where they were located.

Dont you think that eventually bitcoin will become more custodial?

 

[Marty McFly]

Dont you think that eventually bitcoin will become more custodial?

Unfortunately we are already witnessing this, with the ETFs nonsense and all the brainwashing going on. The general public needs more education and to understand self-responsibility.