Huobi Begin to require stricter AML procedures for users.
Recently, One of the leading Chinese bitcoin exchange, Huobi.com has sent a notification to some of its users to inform them of a set of new Anti-Money-Laundry(AML) requirements.
Regarding to Huobi’s new policy, Huobi users with potential money laundry risks are now required to provide explicit details and proof of the sources of their funds, destinations of bitcoins, as well as their purposes for withdrawing. All are caused by Huobi’s previously incomplete KYC(Know Your Customers) and AML requirements.
In this letter, Huobi exchange cites AML regulations imposed by Chinese regulators including the People’s Bank of China (PBOC) and China Banking Regulatory Commission. some of users of Huobi must now provide:
1.Account information used to log in at the exchange.2. Explanations and evidence of the sources of their deposits.
2.Destinations and evidence of the bitcoins or other cryptocurrencies withdrawn.
3.Explanations of the purposes of their withdrawals.
As proof of their funds, Huobi customers are required to provide for a detailed list of historical transactions of the customer’s bank account used to deposit funds on exchange. The burdensome requirements include:
1.The bank transfer records to the exchange’s account.
2.Written explanations of the sources of the funds transferred.
3.Relevant proof that can back up the explanations given above.
For instance, Alice wants to purchase 10,000 RMB worth bitcoin. Firstly, she needs to authorize bank to transfer the money to her Huobi account. To better understand this process, we assume that Alice’s already transferred 10,000RMB from her Bank of China account to huobi account, authorized by HSBC. After the transaction completed, Huobi will receive the funds from HSBC. Hypothetically, a strict KYC regulation will require Alice to explain the source of the funds, details of the transactions, destinations of bitcoins and where the funds will be send to.
Market analysis suggests that Huobi’s new policy is a response to People’s Bank of China’s (PBoC) bitcoin supervision policy in order to improve AML management. It is believed there will be more appropriate standards of supervision coming out in the future.
Bitcoin price’s been fluctuated in past years. Since 2017, China has listed a long set of rules and more guidelines have kept pilling up. Pei, Yigen, vice president of Citibank (China) states：
“digital currency like bitcoin can’t replace the existing currency. Though 99% of the bitcoin transaction volunm occurred in China, people should be aware of the high risk in this market.“
General speaking, it is not easy for regular bitcoiners to understand, detect or recognize the regularity of the blockchain technology behind the bitcoin. In this case, inexperienced investors are at high risk level.