The shady activities of some cryptocurrency exchanges has been demanding stricter regulation for years, and now it’s finally coming, one country at a time. On July 1, one of South Korea’s biggest banks declared its intentions to closely monitor the accounts of crypto exchanges, Cointelegraph reports.
Shinhan Bank is planning to take “special measures,” going so far as to having dedicated staff to analyze the accounts of exchanges, and inspecting their transactions. They do so with the goal of avoiding any accusations that they are passively participating in the actions of criminals.
Because dedicated staff to just this one purpose could be considered expensive, Shinhan will shift to using artificial intelligence using deep learning for the task later in the month. The hope is that it will be able to learn from fraudulent transactions and identify them more quickly and accurately. Machine learning is also more likely to be able to monitor more transactions, and more accurately, than a human could. A spokesperson noted:
“We have set up a comprehensive plan for the elimination of telecommunication and financial fraud… We will continue to implement preventive measures so that customers will not be harmed in the future.”
This type of financial monitoring is necessary because of the multiple exchanges that have fallen victim to hacking, or to the perhaps criminal actions of their owners. The hope is to avoid any extra damage than necessary when exchanges like Bithumb get hacked, which is almost guaranteed to keep happening until the industry matures.
These types of measures could have helped guard against the problems of QuadrigaCX, whose deceased former owner, Gerald Cotten, was recently revealed to have used the business’ funds, and thus its customers’, in pretty much any way he liked, gambling it away on margin trading allegedly. He even had the exchange’s systems set up so his activity would not be traced.
But if financial institutions were keeping an eye on accounts, and countries forced crypto businesses to handle their money with accountability, that type of corruption could be done away with. It’s a future that responsible experts in the field have been calling for, and that some of the shadier types are hoping to avoid.
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