On July 6, 2016, Lee purchased 2 bitcoins through a website, the unit price was 4480 yuan, and then sold at 12:14:44 on July 7. At 17:44:44 on July 6, Li bought orders for 6.141 bitcoins, and the unit price was 4,470 yuan. After that, it was sold at 12:14:52 to 15:01 on July 7. At this point, Lee bought a total of 11.141 bitcoins, spending a total of 50,000.27 yuan. At 18:05:57 on July 7, Li applied for the transfer of 3 bitcoins to the transfer address ××× through the account involved. A website immediately restricted the bitcoin transfer and the cash withdrawal and transfer of the account involved. The reason was that the account involved was registered, recharged, purchased and transferred out on the same day, and was recognized by the system as an overseas IP address. Therefore, due to the obligation and consideration of anti-money laundering, the account involved was locked. Because Li did not leave the mobile phone number, he could not contact Li immediately, and he could only wait for Li to take the initiative. From July 19th to 20:12 on July 7th, because Bitcoin could not be transferred, Li communicated with a customer service through QQ, and the customer service told him that Bitcoin would need to verify identity information. According to the format provided by the customer service, Li will send the photo of the front and back of the ID card and the reloading voucher to the authentication mailbox. At 10:26 on July 8th, Li once again contacted a customer service company for video certification, and completed the video certification at 10:37. After the customer service, the information was submitted for review. However, during Li’s account review, his account was hacked and all bitcoin was stolen. Li Mou sued the people’s court and requested a website to compensate for his economic losses.
The final court rule dismissed Li’s claim.
Second, how to avoid the risk of money laundering in the subject of digital currency transactions
- Head of FinCEN, USA: Anyone must abide by the Anti-Money Laundering Act (AML), and the stable currency is no exception.
- 2019 Global Digital Asset Anti-Money Laundering (AML) Research Report
- The head of Libra’s letter to the US Senate: accepting anti-money laundering supervision
- Ukraine approves final version of anti-money laundering law to regulate virtual asset transactions in accordance with FATF guidelines
- Academics use AI algorithm to promote bitcoin anti-money laundering
Digital currency trading platform
For the trading platform, the establishment of the anti-money laundering system should first establish a sound internal control system, clarify the division of responsibilities, set up a special compliance/risk control department, adopt real-name certification for large-value transactions or suspicious transactions, suspend transactions, and freeze accounts. And other measures; secondly, during the existence of the business relationship with the user, the KYC (know your customer) measures are implemented continuously, the abnormal situation is reported to the relevant authorities in a timely manner, and the technical standards are continuously improved to meet the global anti-money laundering regulatory requirements. If there is an outsourcing service on the trading platform, for the outsourcing organization, the anti-money laundering prevention should be agreed in the cooperation agreement.
From the content of internal control, the internal control should at least include the following rules:
(1) A valid KYC system (know your customer), including identifying and verifying the true identity of the customer based on information or data obtained by the customer and externally reliable means;
(2) Implementing classified risk customer management for different customers and applying different auditing frequencies;
(3) Preserving the information, data and information generated by the implementation of anti-money laundering and anti-terrorism financing obligations, ensuring that each transaction can be fully reproduced and that relevant work is traceable. The retention information should include the digital wallet address, IP address, and digital currency type and quantity of each party;
(4) Establish a large-value transaction and suspicious transaction reporting system. The trading platform can reasonably set the upper limit of the transaction, that is, the transaction does not support the provision of services to the customer after the transaction reaches the quota. For customers involved in the above-mentioned list of fears and sanctions, they may directly refuse to serve such customers or report to the public security organs.
In addition to the above internal management, the trading platform should actively engage security audit agencies to assess or conduct due diligence on the compliance risks of the platform itself, and timely coordinate with the rectification to continuously meet the compliance standards. In addition, the trading platform can also take the initiative to The competent authorities of national jurisdictions submit applications for entry into the “Regulatory Sandbox” to mitigate to some extent the compliance risks arising from policy or regulatory gaps.
Many companies may still have different views on whether digital currency trading platforms should fulfill their anti-money laundering and anti-terrorism financing obligations. However, it is worth noting that in the criminal elements of the criminal law in China’s Criminal Law, “knowing” or “informed” criminal activities If you have the possibility to know, and provide a fund account, assist in the transfer of funds or remitted abroad, you may face severe criminal law accountability. Therefore, the digital currency trading platform should establish the internal control system of anti-money laundering and anti-terrorism financing as soon as possible according to its actual business conditions.
Author: Chen Yunfeng