The Financial Action Task Force (FATF) revealed that crypto exchanges operating in the United Kingdom pose low money laundering (ML) and terrorist financing (TF) risks.
The global standard setter for ML/TF to evaluate the overall efforts that the UK has put in combating the money-related illegal activities. As the study touched on various topics, including corporate transparency and economic sanctions, it also explored how the country was faring in a relatively new crypto space.
FATF observed that the UK authorities were aware of the risks associated with the growth of new payment technologies like bitcoin, and confirmed that they were taking proper measures to mitigate its use among launderers and terrorists. Excerpts:
“The UK acknowledges the inherent vulnerabilities associated with the anonymity of VCs, and while the risk of ML/TF in this area is assessed as low, the UK acknowledges that there are intelligence gaps and VCs are being used in illicit activity (particularly in online marketplaces for the sale and purchase of illicit goods and services). As a result, the UK intends to regulate virtual currency exchange providers under its implementation of the EU’s fifth Anti-Money Laundering Directive.”
The global watchdog awarded its highest rating to the UK for effectively managing the ML/TF standards, both inside and outside the crypto space. However, it also cautioned the country about how the financial institutions (FI) still need to work on their policies, controls, and procedures to minimize potential ML/TF risks in the booming crypto sector.
“However,” FATF asserted, “there is no requirement on FIs to assess the risks of new products and business products and delivery mechanisms, although this is covered in non-binding guidance.”
Global Crypto Regulations
The FATF report arrives ahead of the introduction of its global crypto regulatory framework, scheduled by June 2019. The initiative is likely to assist G20 nations to construct a uniform law for the crypto space, especially to govern crypto exchanges, initial coin offerings (ICO) and digital wallet services. It would also enable a frictionless coordination between financial regulators across the G20 nations.
“We will regulate crypto-assets for anti-money laundering and countering the financing of terrorism in line with FATF standards and we will consider other responses as needed,” the nations pledged.
Overall, the FATF report proves that cryptocurrencies are still not very popular among financial offenders and terrorists, mirroring what has been found by Europol this year. The European law enforcement agency that terrorists didn’t use bitcoin or any other crypto asset to fund any of their attacks in Europe.
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Innovative technology companies are leveraging blockchain technology to build next-generation business models and Content Delivery Networks (CDNs) for video streaming, a multibillion-dollar industry that continues to grow. According to data revealed by Theta Labs, one of the companies covered below, the video content and streaming market accounts for 67 percent of current internet traffic and could reach 82 percent by 2020. The new players promise to decentralize global video streaming, while at the same time making it more efficient.
LBRY
According to Jeremy Kauffman, co-founder and CEO of the blockchain-based content distribution platform , blockchain technology could transform the monetization of online content by altering the way that creators get paid, and .
The LBRY protocol allows creators to publish online, making their content discoverable with a small payment in LBRY’s own cryptocurrency token. Viewers pay creators in LBRY tokens to see their work.
“[Blockchain technology] allows us to build technology that’s owned by the users rather than any one party,” Kauffman . “That’s the problem that blockchain [technology] solves.”
Kauffman explained that under the LBRY model, creators are paid without an intermediary taking an inappropriately large cut. Since LBRY is a protocol, the company can’t control what gets discovered.
Kauffman said that LBRY recruited 4,000 YouTubers in specifically targeted demographics, several of which have 500,000 or more subscribers, which seems a good first step toward challenging YouTube in its own turf.
Theta Labs
YouTube’s co-founder Steve Chen himself, as well as Justin Kan, co-founder of Twitch, are among the advisors of , a subsidiary of live video streaming company , which is announcing a new blockchain-based decentralized video streaming network.
“Theta’s innovation is set to disrupt today’s online video industry much in the same way that the YouTube platform did to traditional video back in 2005,” said Chen. “One of our biggest challenges had been the high costs of delivering video to various parts of the world, and this problem is only getting bigger with HD, 4K and higher quality video streams. I’m excited to be part of the next evolution of the streaming space, helping Theta create a decentralized peer-to-peer network that can offer improved video delivery at lower costs.”
Theta is developing a new blockchain-based network, outlined in the , which could enable users worldwide with unutilized PC bandwidth and resources to cache and relay video streams to others in the network, while mining Theta tokens at the same time, similar to bitcoin and Ethereum. According to the company, the new peer-to-peer decentralized network will allow for much more efficient, high-quality streaming without the need to develop expensive content delivery network infrastructure.
In December, Theta will implement its first generation of ERC20-compliant tokens on the SLIVER.tv platform. These application tokens can be used for virtual gifting and incentivizing streamers. Eventually, these ERC20 tokens will be 1:1 exchangeable for native Theta tokens when the new blockchain launches at the end of 2018.
“We’ve been on the cutting edge of live streaming technology, and by leveraging blockchain [technology] we will truly be able to transform the video and entertainment industry,” said Mitch Liu, co-founder and CEO of Theta Labs. “Theta will be uniquely built to leverage the incentive mechanisms of the blockchain, enabling end-users to contribute their excess PC bandwidth and resources to relay video streams to others and earn Theta tokens at the same time. It’s a win-win for all stakeholders in the ecosystem.
“We’re committed to solving the challenges of today’s video streaming industry,” Liu told bitcoin Magazine. “We think there’s a huge opportunity to democratize the video delivery infrastructure, to reward end users with excess PC resources and bandwidth to help stream to their neighbors and friends.”
“I think the Theta team is going to revolutionize video delivery with its new native blockchain,” Theta advisor and CEO told bitcoin Magazine. “I’m thrilled to be part of this innovative, organic platform to decentralize streaming. This will impact a number of industries from esports to advertising, benefiting our esports fans as well as influencers and content creators. I can see how Theta’s peer-to-peer mesh network will empower our G FUEL community, rewarding them with Theta tokens when they help stream to others in the network.”
Stream
Another new video platform, , has received $5 million to back its Ethereum-based Stream Token in an advisor round of funding led by blockchain investment firms including Pantera Capital, Fenbushi Capital and CoinFund, as well as individual participants like Jed McCaleb, David Johnston and Andrew Yashchuk.
Founded by , Stream wants to facilitate direct transactions between content creators and consumers with a zero-fee structure. Yu was a successful early cryptocurrency investor who became an internet celebrity with videos that received tens of millions of views. In 2011, Yu left his studies at Harvard and accepted a $100,000 , like Ethereum creator Vitalik Buterin before him, eventually launching and Stream.
The Stream Token to allow digital media creators to earn a fair living from their work, without being exploited by streaming platforms that take unreasonably large shares of their revenue. It is also designed to free content creators from the strictures of advertising models that limit creativity and freedom of expression.
“Stream Token is part of the larger Silicon Valley movement to fulfill the original intention of the internet: universal access to information. We can finally reward those who share information without curtailing freedom of expression. Content creation doesn’t have to be a zero sum game,” said Greg Kufera, CTO of Stream. “And we’re ensuring it won’t be.”
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