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Crypto Regulations (Monitoring System and Compliance of BSP) - Coggle…
Crypto Regulations (Monitoring System and Compliance of BSP)
FATF recommendations
Foreign Countries Regulations
Similarities
Differences
Terminologies and Definitions of what constitutes a Virtual Asset
Not within Scope
Digital Units of Exchange
Online Games
Issued by merchants
Circular No. 944 (2017) Guidelines for Virtual Currency (VC) Exchanges
FATF Recommendation
Circular No. 1108 (2021) Guidelines for Virtual Asset Service Providers
Virtual Assets (Not Issued or Guaranteed by any jurisdiction and do not have legal tender Status)
VA Custodians
Digital Units
Out Of Scope
Online Game Currency
Issued by merchants (Gift Cheques)
Within Scope
Funds
Other assets
Virtual Currencies
Virtual Asset Service Providers (VASP)
VA Custodians
Administration
Safekeeping
Create and Secure VA Wallets
Strengths, Weaknesses, and Relevance based on findings by TRISD
Crypto Use case
Cryptocurrencies Focus XXX
Remittances and wire transfers
Electronic payments
Financial inclusion
SEC Recommendation
FATF Guidelines and Recommendation
Audited Entity Financial Statements
External Auditor
Records of Transactions, Identity, and dates by all VC Clients transacting with VA - Recommended by Sir
Infrastructure and Tools needed to monitor transactions by Virtual Assets
Virtual Currencies
Virtual Exchanges
Circular No. 808 IT Risk Management Guidelines
Circular 982 (2017) Enhanced Guidelines on information Security Management
IT Risk Management System (ITRMS)
IT Profile Classification (Nor Recommended - Too Lite)
Simple (Ex: Rural Bank)
Minimal IT services
Stand Alone IT resources
Small Number of Clients
Complex (BDO)
Ubiquitous Services dependent on IT
Business Strategies Dependent on IT
Utilizes Emerging Tech
Primary
Large Number of Electronic Transactions
Large Value Transactions
Severe dependence on IT
Moderate (Ex: Bank of Camalig)
Basic Digital products and Services
IT Primarily Supports traditional financial activity
IT Related Risks
Operational Risk (Product or Service Delivery)
Strategic Risk (Earnings and Capital)
Reputational Risk (Public Opinion)
Compliance Risk (Violation of regulations)
Prices change quickly
Potential for unlawful use
Prone to theft or loss
VC transactions are immediate and irreversible
VC holdings are not insured by any central authority
Focuses on ensuring traceability (Conflicts with primary function of Crypto) Originator - Beneficiary - Exchange Link - Recommended by Sir
Prevent Money Laundering
Convert FIAT to Crypto, use blockchain to anonymously deposit, then convert crypto to Fiat
Policy, tools, infrastructure, processes to make VA's compliant with BSP
IT Rating System regarding Compliance
The Entity’s Information System for Cryptocurrency Transactions