EAEU states to standardise the labeling of illicit Bitcoin transactions

In Kazakhstan, the International Association of Crypto Compliance (WACC) will be established to implement unified AML/CFT standards in the market, according to Dmitry Machihin, founder and CEO of BitOK.

The new public association will be formed by leading industry figures from the EAEU. The head of WACC will be elected at the first congress.

Among the association’s objectives:

• certification and training of AML specialists, banking staff, and software development;
• cooperation with similar associations in the EAEU and beyond;
• standardisation of AML procedures and address tagging among local providers;
• ensuring VASP compliance.

The announcement was made during the UN Office of Counter-Terrorism congress held in Tashkent on 14 November. Representatives of the OSCE, Interpol and other organisations countering criminal activity, as well as participants from the crypto industry, also attended.

During his remarks, Dmitry Machihin stated that states exaggerate the role of illicit cryptocurrency transactions, using this to justify various bans at national levels.

According to him, in the first half of 2023 there was a decline in the volume of operations related to illicit activity — more than 60% compared with the same period in 2022.

«The share of “dirty” cryptocurrencies does not exceed 1% of total volume. Meanwhile, the number of wallets is significantly higher than the actual number of users making transactions — no more than 100 million,» the speaker explained.

Machihin believes that exchangers, exchanges and protocols are not doing enough on AML/KYT, and providers of blockchain-analytics solutions lack a common approach to address tagging. It is precisely this problem that WACC is meant to solve, the expert concluded.

In December 2022, the OSCE and the UNODC announced a project to combat the criminal use of cryptocurrencies in Ukraine.