Telegram’s new bot for crypto exchanges in the EU: it will help comply with AML and KYC rules

VAF Compliance, an anti-money laundering (AML) specialist, has launched a new Telegram Bot that enables crypto companies to comply with AML and Know Your Customer rules as more global licensing regulations come into effect. Let’s take a detailed look at the details.

Telegram’s new Bot supporting crypto: the specifics

Telegram’s new Bot for crypto exchanges is compatible with multiple blockchains, offering support in both English and Chinese. Specifically, the service will judge the risks of companies accepting tainted cryptocurrency funds using a growing list of sanctioned wallet addresses.

According to the Dubai-based company, companies can pay fees for transaction reports on multiple blockchains. VAF also recently gave cryptocurrency exchange Huobi a C rating for transactions involving a cluster wallet linked to terrorism and child abuse.

Not only that, US senators last month accused Binance, the world’s largest cryptocurrency exchange, of being a “hotbed of illegal activity.” Hence, anti-money laundering tools such as VAF’s bot can help crypto companies in the European Union and Hong Kong comply with incoming legislation.

Notabene, a company that helps cryptocurrency wallet companies comply with the Financial Action Task Force’s Travel Rule. Grew to include crypto transactions in 2019, favored the approach taken by European regulators.

Specifically, when the latter applied the Travel Rule to cryptocurrencies in their upcoming Markets in Crypto-Assets bill. Indeed, Lana Schwartzman recently told BeInCrypto the following:

“They were open and moved quickly.”

According to Schwartzman, head of regulation and compliance at Notabene, the new rules give the industry a ‘grace period’ to comply. MiCA‘s subset of fund transfer rules require identity checks at both ends of a cryptographic transfer.

According to Alice Nawfal, COO of Notabene, the US could use the MiCA strategy and develop money laundering compliance by being willing to work together with the industry.

This MiCA bill, agreed upon by European lawmakers in October 2022, will be voted on by the EU Council later this month.

The Telegram Bot service assesses the risks associated with accepting crypto as payment

The innovative Telegram Bot solution for crypto exchanges is the latest addition to VAF Compliance’s suite of compliance services, which includes outsourced compliance managers and transaction monitoring.

By now, the financial industry has undergone a transformational shift with the advent of cryptocurrencies and blockchain technology. However, although these innovations have brought transparency and decentralization, compliance remains a significant challenge that could undermine the industry’s potential.

In this respect, cryptocurrency exchanges are particularly vulnerable to compliance issues. Hence, the implementation of robust Know Your Customer (KYC) and Anti-Money Laundering (AML) policies is essential to maintain it.

Not only that, recent scandals in the cryptocurrency industry, such as the collapse of FTX and Terra/Luna, have led to increased legal scrutiny and a steady increase in personal wallet addresses included as sanction identifiers.

In fact, according to a Chainalysis report, OFAC imposed sanctions on two Iranian nationals associated with the SamSam ransomware strain by designating their Bitcoin addresses as identifiers in SDN list entries.

In addition, the number of personal wallet addresses included as sanctions identifiers has steadily increased since 2018. Unfortunately, although recent sanctions against entities providing money laundering services to criminals have had a positive impact, alternative money laundering services can still be found.

In this sense, VAF Compliance’s Telegram Bot can help individual clients and small businesses avoid situations where they might unknowingly accept “contaminated” funds.

With this service, VAF Compliance aims to democratize access to AML solutions to all users, who can now assess risks before accepting cryptocurrencies, receive a clear and intuitive report, understand the risks associated with interacting with other wallets, and prevent the receiving of crypto with criminal origins.

VAF Compliance’s study on the Huobi crypto exchange

In addition to the launch of the Telegram Bot service, VAF Compliance recently conducted a study on the crypto exchange Huobi. The latter, received a C rating based on transactions from the cluster wallet featuring addresses related to child abuse, terrorist financing, and OFAC sanctions, among others.

Being from and for the region, VAF Compliance can certainly help companies avoid such unfavorable situations. While UAE crypto regulations lay the foundation for a prosperous future in the blockchain and crypto space.

During the analysis, VAF Compliance used virtual asset survey software and publicly available blockchain information to successfully identify and confirm the origin and destination of funds.

As a result, the report includes portfolio balances, transaction flow, and the extent to which the specific portfolio cluster is exposed to various addresses. The case specifically demonstrates how VAF Compliance can detect flaws and risks in the operations of cryptocurrency exchanges and help institutions safely interact with crypto wallets.

This is done through in-depth screening of withdrawals and deposits associated with these wallets for potential money laundering risks and penalties.