Startup aims to identify Bitcoins that come from suspicious activity

MatrixVision CEO Marco Crispini argues that self-regulation of the Bitcoin system is the necessary path into the mainstream.

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Startup aims to identify Bitcoins that come from suspicious activity

MatrixVision CEO Marco Crispini argues that self-regulation of the Bitcoin system is the necessary path into the mainstream.

And his startup, which launched November 15 at Bitcoin Singapore, intends to facilitate this by matching patterns of Bitcoin wallet cash-outs to anything regulators in a specific jurisdiction could consider “suspicious behavior.”

This serves to comply with regulators and governments that consider Bitcoin businesses money transmitters and require such entities to take certain steps to identify illegal activity such as money laundering.

The law requires self-regulation of such businesses, and Crispini is position his startup as the tool to do this.

The method of pattern-matching works like this: MatrixVision would comb through any available information about a given transaction along the blockchain and cross-reference this with data from the outside world.

So, in a hypothetical Crispini offered on Reddit, if a Canadian Bitcoin business was repeatedly cashing out transactions slightly below that country’s reporting threshold, MatrixVision would identify that activity so regulators would be able to ask, “What’s going on here?”

Aware of the controversy over CoinValidation, a tracking system that could weed out allegedly shady Bitcoin users, Crispini makes a point to differentiate his startup by saying it would not actually mark Bitcoins.

This way, compliance could be achieved without devaluing the currency or segregating sets of Bitcoins as more worthy.

Some in the Bitcoin space are having nothing to do with the idea, though.

The lone Reddit response Crispini’s thread got suggested that giving in to governments’ demands for self-regulation is acquiescing and admitting “we all must obey orders from politicians.”

One CoinDesk commenter reminded readers to continue to fund the Dark Wallet project, which maintains and strengthens the ability of digital currency users to remain anonymous and exchange money privately.

Crispini is aware of these complaints but stands by regulation compliance as the right move forward because money transmitters need to “keep [their] heads above water.”

“I’m a big believer [in Bitcoin], but it needs to be more accessible, more mainstream. Bitcoin businesses do need some degree of regulation, and the ones dealing with huge amounts really need to have some peace of mind,” he said.

The Bitcoin conference in Singapore featured a number of thinkers, speakers and panelists, many of whom focused discussions on the Bitcoin economy as it continues to boom in Asia.

 

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