Pakistan Bans Crypto Transactions, Indian Exchanges Look Abroad and More FSA Crackdowns


By Samuel Mowers at Investorideas.com

Pakistan Bans Crypto Transactions, Indian Exchanges Look Abroad and More FSA Crackdowns

The State Bank of Pakistan (SBP) has issued a statement that it is banning all banks from partaking in the transaction of cryptocurrencies or ICOs.

The statement explains that cryptocurrencies "potentially can be used for facilitating illegal activities" and lists the following risks that individuals would have no legal protection from:

  1. a) High price volatility as investments tied to Virtual Currencies are highly unstable and are primarily based on speculations;
  2. b) Failure/closure of Virtual Currency exchanges/businesses due to any reason including action by law enforcement agencies; and
  3. c) Hacking/security compromises of crypto currency exchanges and wallet businesses as a number of instances have been recorded around the world where huge amount of funds have been lost due to the exchange/wallet operations being hacked/compromised.

This follows a similar move by the Reserve Bank of India (RBI), which announced a ban on crypto trading on Thursday. In the wake of this, the Economic Times reports that cryptocurrency exchanges like Zebpay, Unocoin, CoinSecure, BuyUcoin and BTCX India are considering moving their operations outside of India.

"Most cryptocurrency exchanges now fear that the RBI's announcement could be a death knell for the business and they would find it difficult to operate in the country.

"We have to move our company to some foreign country where regulations allow opening of bank accounts plus we won't be dealing in fiat currency. It will become a global operation rather than an India centric operation," said Shivam Thakral, CEO, BuyUcoin, a cryptocurrency wallet and exchange."

Japan's Financial Services Agency (FSA) continues to penalize crypto exchanges for not complying with recent regulation. CoinDesk reports that Eternal Link and FSHO have been ordered to halt their operations for two months.

Through its months-long inspection, the agency alleged the two operators had not properly required to customers to provide information such as purposes of trades. They had also not implemented procedures around reporting suspicious transactions to the FSA.

The failure to put such anti-money laundering efforts in place is not in compliance with the Act on Prevention of Transfer of Criminal Proceeds, the agency said.

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