Can the Financial Action Task Force (FATF) begin to prosecute tech developers who don’t work for Bitcoin? What is being done with financial fraud on blockchain networks, and how bad is it? On this week’s episode of The Bitcoin Bridge, Ian Lee of blockchain analytics firm Merkle Science addresses these questions and more.
Lee, who is now the VP of business growth at Merkle Science, shares his journey into the blockchain analytics and forensics industry.
He was once a lawyer, but he presumably knew more about the legal aspects of on-chain transactions than the average person. And the fact that he claims he “didn’t have a lot of followers at the beginning,” the market has evolved, and most players now recognize that oversight is unavoidable. It is up to us who are aware of the consequences of collaborating with regulators and, ideally, achieving better results.
Merkle Science provides financial institutions, law enforcement, and analysts with various goods and services.
In addition, the company has created some innovative simulation tools to help detect fraudulent transactions based on user behavior, and it consults with government agencies in Singapore to inform them on blockchain issues (and DeFi models). This work has a lot of depth, and we’ll undoubtedly return to explore some of them in greater depth at a later date.
On the other hand, FATF is a subject that is currently on everyone’s mind. The international organization publishes frequent recommendations and updates, many of which (but not all) become legislation in different primary jurisdictions.
Is Asia keeping up with the rest of the world? On the one hand, they can be more challenging than their Western counterparts, but they remain open-minded and willing to resist overly restrictive rules that may stifle creativity. Lee explores how governments in the area have responded to the FATF’s most recent package of recommendations (released only last week) and provide some surprising insights into which aspects of it they’re considering.
It would be interesting to see how the FATF recommends legislation for software developers, primarily part-time or small-startup software developers who only work on non-custodial software. Regulating or requiring these developers to follow the same rules as financial institutions might discourage them from pursuing such a career. Lee discusses the topic and speculates about what could happen.