A new report was released on Tuesday by Crystal blockchain Try to classify cross-border Bitcoin (BTC) transactions based on their “country of origin”what can have important consequences for them Travel rule of Financial Action Group (FATF).
Analysts used Exchange-to-Exchange (E2E) transactions and their country of origin to categorize Bitcoin transfers by origin. Despite the fact that Bitcoin by nature has no limits and that The country in which the operation is carried out does not fully indicate the source of the fundsThis classification is required to comply with the travel rule.
Crystal noted important differences between the countries where cryptocurrency exchanges take place and the flow of money. The United Kingdom is the country with the largest number of registered stock exchanges with 50, followed by Hong Kong, Singapore and the United States, each with about half the number of companies.
Of the $ 33 trillion Bitcoin that was sent between exchanges, The Seychelles represent the vast majorityafter Crystal. This is largely due to Binance and Huobiwhat according to the researchers are included in the jurisdiction of the tax haven.
About 45% of Bitcoin’s transfer volume came from the G20 countries, which include the 20 largest economies in the world. Vice versa, The small islands of the Seychelles accounted for 31% of the global volume in the first half of 2020. In 2013, 91% of the volume was managed by the G-20, mostly by Gox, taken from Japan. Crystal noted that regulatory work was negligible at this point, making the jurisdiction irrelevant.
The researchers show that since last year The Republic of Seychelles has been growing in volume worldwide because the travel rule increases compliance costs for replacement in the G-20.
According to the researchers’ conclusions Pressure from regulators has resulted in some exchanges closing their doorswhile others moved abroad. However, they found that the increasing presence of institutional clients is putting pressure on the contrary. They mainly work in locations that are fully compliant and licensed.
The travel rule, Adopted at the end of 2019, requires that all cryptocurrency transfers contain identifying information, such as the author’s name and physical address, an account ID as well as the name and account number of the beneficiary. This would apply in particular to transfers from exchange to exchange and would require extensive communication between the different units.
As Cointelegraph has previously reported, some specific jurisdictions, including the United States and the European Union, They are only gradually applying the recommendations more flexibly. For example, the exchange of cryptocurrencies in the European Union could be relieved of the additional burden.
A slow implementation could partly be due to a lack of technical preparation. On Tuesday, BitGo announced the release of a travel compliance API based on the InterVasp standard released in May. According to an expert in crypto regulation, lIt can take years for a travel rule to be fully implementeddespite the June deadline.