Citadel-backed encryption stops customers from accessing Bybit
Hidden Road, a Citadel-backed brokerage firm, has officially suspended ByBit exchanges for Hidden Road clients who were notified of the upcoming change weeks ago.
According to Bloomberg, the suspension of the services was caused by differences between BitBit and BitTorrent in regards to Know Your Customer (KYC) verification procedures and Anti-Money Laundering (AML) laws.
In response, ByBit said it would conduct an audit of the brokerage to ensure regulatory policy was properly implemented.
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Know your customer authentication and counterfeiting rules have become hot topics in decentralized finance, creating divisions in the crypto community.
A study published in the Academic Journal of Policy Design and Practice found that AML regulations had little effect on illegal financial activities.
“Anti-money laundering policy intervention has less than 0.1 percent impact on criminal financing, enforcement costs are more than a hundred times greater than the criminal funds recovered, and banks, taxpayers and ordinary citizens are penalized more than criminal enterprises,” the report said.
According to the academic study, in 2018 the total international income from crime accounted for only 3.6% of the GDP and it has shown a tendency to stay close to this number for all the previous years.
Several projects like Tornado Cash, Samurai Wallet and privacy coin Monero have tried to break these rules by offering users crypto mixer and tumbler services.
In April, US federal authorities arrested Keon Rodriguez and William Lonergan Hill, the founders of Zamora Wallet, for violating money laundering laws.
The United States Department of Justice (DOJ) charged both Davis with money laundering and conspiracy to operate a money transmission service without authorization.
Long before the DOJ targeted Samurai Wallet, the U.S. Treasury Department indicted Tornado Cash for alleged money laundering and moved to charge and arrest the founders of the popular hybrid service.
U.S. authorities and their European partners have accused Tornado Cash's developers of hoarding $7 billion in digital assets by 2022. Tornado Cash devs Alexey Pertsev, Roman Semenov, and Roman Storm were all subsequently arrested and charged with their work on the mixer protocol.
Percev was arrested and tried by Dutch authorities and is currently serving 64 months in prison for his role in the project.
