Whitelist-only crypto withdrawals coming soon claims Ari Paul


Crypto investor Ari Paul has predicted that within a year or two much of the crypto ecosystem will only allow withdrawals to whitelisted addresses.

In a tweet on August 26, the BlockTower Capital co-founder and CIO Ari Paul forecast that there may also be a division between ‘clean’ coins that can be traced to regulated institutions and all others.

Global financial regulators are increasingly demanding stricter compliance levels for crypto exchanges and companies. Paul reinforced that point by saying the biggest exchanges are racing to implement compliance processes having already been informed that they are not up to regulatory standards.

The concern, as always, arises from money laundering using cryptocurrencies. Traditional exchanges already require KYC (know your customer) and have account limits, but users can withdraw to any wallets they like.

New Financial Action Task Force (FATF) regulations are changing that with a ‘travel rule’ that will require Virtual Asset Service Providers (VASPs) to collect and transfer customer information during transactions.

Paul suggested there may come a stage where accounts on centralized exchanges across the globe are treated the same as bank accounts with the same controls and surveillance, and also suggested that there may be a new business boom in ‘laundering’ crypto assets into the whitelisted category.

“I think you will get a real ecosystem of whitelisted coins as well as a robust gray market with small conduits between them.”

The ever tightening regulations can be seen in BitMEX’s recent announcement that a User Verification Programme would commence on August 28 and need to be completed by early next year. The company has previously been somewhat lenient on regulatory compliance.

Under the new requirements, BitMEX users will need to submit full identification disclosure within six months, a process similar to the one customers need to go through when opening a bank account.

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