New regulatory guidelines in China may require citizens to verify their identities in person to deposit or withdraw 50,000 yuan when using a Chinese bitcoin trading platform.
The PBOC Aims to Standardize Regulatory Framework and Identity Verification Requirements for Chinese Bitcoin Exchanges
The People’s Bank of China (PBOC) recently revealed new requirements for Chinese bitcoin exchanges within the country. Zhou Xuedong, PBOC director of business management, has now detailed an anti-money laundering (AML) prospectus that has been sent to trading platforms for review. Last week Zhou detailed bitcoin trading platforms were not to be called “exchanges” anymore and revealed new AML rules which were sent to bitcoin-based businesses for consideration and recommendations.
This week Zhou has further explained that the central bank wants to standardize the AML framework for virtual commodity trading platforms. Zhou said to a Chinese finance publication that Beijing’s central bank management has emphasized two important aspects of the regulatory prospectus. The fundamental regulatory guidelines include self-regulation and clarity concerning criminal finance prevention and AML control measures. Furthermore, bitcoin trading platforms are required to establish a *sound customer identification system” and practice transaction record preservation.
“From the perspective of anti-money laundering — the identity of the account is very critical.” Zhou Xuedong’s translated comments said. “Transaction data synchronization can be sent to the regulatory authorities, as the basis for regulation, from this data authorities can find money laundering information and abnormal transactions.”
Depositing or Withdrawing 50,000 Yuan Worth of Bitcoin May Require ‘On-Site Certification’
The paper under review also detailed some particularly noteworthy identity verification rules for customers depositing and withdrawing 50,000 yuan. Chinese customers looking to exchange virtual currency on a platform may need to verify their identities in person for “on-site certification.” PBOC management wants bitcoin trading platforms in the region to establish and improve Know Your Customer (KYC) guidelines.
The regulatory prospectus also notes bitcoin trading platforms may also utilize “remote video certification” in order to ensure customer identity. Bitcoin.com’s correspondent from China has stated some exchanges have already implemented video verification methods this month. The Chinese finance publication also explains the “presence certification” aspect of the prospectus is a new detail being discussed in the industry, where customers must appear in person at the exchange headquarters.
Chinese Bitcoin Trading Platforms Need to Perform Self-Regulation
In addition to the new identity verification details, the proposed regulations draft says bitcoin trading platforms should hold senior management responsible for anti-money laundering standards. The PBOC recommends businesses should set up specific departments and positions that are completely focused on anti-money laundering and anti-terrorism financing practices.
The central bank explains that as well as keeping customer records, trading platforms need to maintain a complete and “accurate reproduction” of each customer transaction. Suspicious transactions with specific money laundering behaviors should be reported to the central bank’s management team immediately, the prospectus concludes.
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