Amit Sharma, John A. Squires
Underway FTX The debacle is the latest in a string of recent cryptocurrency disasters (Terra Luna, Blockphi, ), fundamentally questioning not only the future of the sector but also its very role in financial services.
Amit SharmaCEO and Founder Finklusive, Regtech company providing a global full-stack AML/FCC platform connecting traditional banking with blockchain and web-based financial services and virtual asset networks John A. Squires One of the world’s leading fintech/regtech attorneys, and in the case of FinClusive, director, explains why compliance is the way forward.
Some commentators are voicing that the FTX meltdown has triggered an “endgame” for cryptocurrencies, while others are worried about the lingering. “Crypto Winter”Whether crypto demise rumors are highly exaggerated or actually prescient can only be assessed by revisiting the original value proposition of the sector. We need to rethink the role that virtual assets and the technology that underpins them can play in making society better.
Crypto promises to decentralize an entrenched economic system that early enthusiasts are plagued by imbalanced centralized control and a handful of dependent and costly “middlemen” anointed as gatekeepers. It started when I tried
Early coins/tokens were not originally intended entirely for asset speculation or generating huge returns. However, as many investors spurred this growth in search of immediate returns, and many cryptocurrency products flooded the market with a seemingly insatiable appetite, exchanges and trading engines were abandoned and launched. I was.
No one seems to have asked, “For whose benefit, at whose risk?” Thus, speculation and “getting in the game” frenzy have become synonymous with crypto itself, hindering true value creation and innovation.
back to basics
The promise of cryptocurrencies can only be restored and fulfilled by returning to the first principle of providing universal, equitable and secure access to the economic system. Incorporate governance and accountability that was left to poorly understood third parties. Protect direct transfer of value between counterparties (peer-to-peer or P2P).
The good news is that there are many services and real businesses that can modernize governance and compliance, enable security through universal access and privacy protection (such as digital identities), and facilitate real-time transfers of value (payments) between people. That’s it. It already exists and is used today!
companies like Finclusive Embracing truly positive change through the use of distributed ledger technology (DLT), including embracing and embedding regulatory compliance, to increase basic access to financial services and the economic resilience and prosperity it brings. has made an impact.
Yes, you heard us right – compliance is the answer, not the enemy. Given the events of 2022 and beyond, any demonstration of the industry’s dedication to innovation, democratization and change should begin with the words ‘risk and compliance’.
Importance of CaaS
In terms of “products,” FinClusive is an innovative Compliance as a Service (CaaS) platform, an automated workflow in one designed for traditional banking to modern financial technology and web-based financial services. pioneering full-stack FCC solutions. CaaS supports a wide range of industries and is built to comply with the latest global FCC standards and best practices in an increasingly globalized, decentralized, peer-to-peer financial services environment.
As finance continues to become cross-border, decentralized and peer-to-peer, innovative compliance solutions like CaaS are becoming more important, especially for individuals and organizations committed to the principles of a sound and trustworthy financial services economy. increase.
“Compliance is the answer, not the enemy. Increased regulation and supervision must be embraced, not sidestepped.”
But to achieve true “democratization,” even at a high level, regulatory engagement and demonstrating rules that we all agree on and are willing to commit to is essential.enter rule book – FinClusive and industry-led living policy framework on how virtual assets and the Web3 community can move forward.
Embedding compliance controls with the power of DLT can drive inclusion while enhancing the attributes of transparency, auditability, and security. The rulebook represents a proactive and disciplined approach to governance in this area. It democratizes crypto’s laudable core principles and is increasingly being regarded as a guide for non-financial companies to develop and add products for their clients and user base.
Applications of the identity space are rapidly becoming central to financial services. FinClusive incorporates digitally verifiable credentials (FinClusive ID or FinCID) that are part of the KYC/KYB process and creates utilities to manage the mandatory verification required for financial services.
FinClusive is also the only US-based non-bank issuer and validator of the Legal Entity Identifier (LEI), combining these technologies to provide automated KYC and KYB verification, transparency, and privacy. It provides protection while building an ecosystem of trust between all parties. .
Additionally, identities can be verified in near real-time and customers/partners can associate these unique identifiers with the underlying transactions. FinClusive’s “FinCID” therefore enables tracking while protecting the underlying personal information. In a world where more and more people interact across borders and more and more with strangers, these applications promote safety, accountability and inclusiveness.
For the industry, blockchain-enabled applications are currently underutilized as a key security infrastructure component. Security should be at the heart of every step, every product, distribution channel, and data warehousing. NIST-based standards are built into every aspect of FinClusive’s compliance-centric platform. This is paramount in his native web- and cloud-based global operating environment.
This kind of integrated and innovative security system has proven that it can leverage the powerful attributes of blockchain and build on top of a decentralized compliance infrastructure. The time has come for this concept to become truly practical across the industry.
It couldn’t be more clear that change is coming, especially regarding the regulatory context in which crypto assets operate. Whether the industry more broadly chooses to put cryptocurrencies back into a promising future remains to be seen, and investors are playing a key role in this realignment.
Emphasizing the real use cases of cryptocurrencies (compliance, security, digital identity and payments) could prolong the day if the sector so chooses. Because there are real and tangible benefits for society, from financial inclusion to driving real economic growth, resilience and achieving greater outcomes. Safety, health, and security come from technologies that have hitherto been categorically unutilized in these ways. If so, we can all seize and capitalize on the true and realizable promise that virtual assets can bring to the global economy.
Amit Sharma, John A. Squires