June 5, 2024
Hidden Road Ceases ByBit Access for Clients
Latest Cryptocurrency News

Hidden Road Ceases ByBit Access for Clients

Hidden Road, a Citadel-backed brokerage firm, has officially ceased access to the ByBit exchange for its clients, as notified weeks ago. Differences in Know Your Customer (KYC) verification procedures and Anti-Money Laundering (AML) regulations between Hidden Road and ByBit have prompted the restriction on services, according to Bloomberg. ByBit has pledged to conduct an audit of its brokerage business to ensure compliance with regulatory policies.

Debate Over KYC and AML Regulations in Decentralized Finance

KYC verification and anti-money laundering regulations have sparked debate within the crypto community. Research published in the academic journal Policy Design and Practice suggests that AML regulations have minimal impact on illicit financial activities. The report states, “Anti-money laundering policy intervention has less than 0.1 percent impact on criminal finances, compliance costs exceed recovered criminal funds more than a hundred times over, and banks, taxpayers, and ordinary citizens are penalized more than criminal enterprises.”

A graph depicting total global revenues for illicit finance. Source: Policy Design and Practice Journal

Moreover, the research indicates that total global proceeds from criminal activity accounted for only 3.6% of total GDP in 2018. Projects like Tornado Cash, Samurai Wallet, and Monero have sought to circumvent these regulations by offering crypto mixer and tumbler services. However, in April, U.S. federal authorities arrested the developers of Samurai Wallet, Keonne Rodriguez, and William Lonergan Hill, for allegedly violating money laundering laws. The U.S. Department of Justice (DOJ) charged them with conspiracy to commit money laundering and conspiracy to operate a money transmission service without licensing.

Before this, the U.S. Treasury accused Tornado Cash of facilitating money laundering and moved to charge and arrest its founders. U.S. and European authorities accused the Tornado Cash developers of laundering $7 billion in digital assets in 2022. Alexey Pertsev, Roman Semenov, and Roman Storm, the developers, were subsequently charged and arrested. Pertsev is currently serving 64 months in prison for his involvement in the project.

Image by AndyPandy from Pixabay

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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