Traditional Banking Sector Helped to Fuel Misconceptions About Regulators’ Stance on Crypto, Says Karim Chaib
Although many global regulators are commonly perceived to be against offering regulation that is supportive of crypto, Karim Chaib, the CEO of the digital assets platform Web3intelligence, asserts that their stance is, in fact, intended “to ensure a safe and secure environment for both businesses and individuals.”
Banking Sector Behind the False Narrative
In his written responses to Bitcoin.com News, Chaib however pointed the finger at players in the traditional banking sector. He accused them of perpetuating a narrative that regulators are opposed to the crypto industry. This narrative, which was the theme from 2017 to 2023, played a significant role in discouraging people from adopting crypto, he said.
However, as key financial institutions are now openly endorsing or adopting crypto assets, the CEO of Web3intelligence stated that the misleading narrative is set to give way to the truth.
Meanwhile, when queried about his response to the assertion that users procured through gamification are substantially inferior to organic ones, Chaib was adamant that this is “only effective if it genuinely provides value to the users.”
In his responses shared via Telegram, Chaib also delved into the potential role of artificial intelligence (AI) in the crypto industry. He discussed how AI could assist industry players in flagging and labelling suspicious activities. Furthermore, he underscored the importance of education for the future prospects of the blockchain and crypto industry
Below are Chaib‘s answers to all the questions sent.
Bitcoin.com News (BCN): The crypto industry is still struggling to educate users on what crypto is all about, the blockchain, crypto trading and the world’s adoption of emerging technology. It should be said that there are so many unreliable educational sources that users do not even know where to begin. In your view, how can this be fixed?
Karim Chaib (KC): Simplifying everything in a way to teach our children in 5 minutes with simple words! Let me show you how: Imagine you have a magic notebook that everyone in the world can see and write in, but no one can erase anything. This special notebook is like a toy box that holds information about who owns what toy and how they play with it. Here’s how we make this magic notebook easy for everyone to understand and use:
Magic Notebook Explained: Think of blockchain like a magic notebook (kind of like a shared Excel file) that everyone can look at but can’t tear any pages out. This notebook is super cool because it’s always available, works really fast, and doesn’t have any “closed for the day” sign hanging on it. Plus, it makes sharing toys (or in grown-up words, doing transactions) cheaper and easier, any time you want.
Easy-Peasy Keys: To have your own page in this magic notebook, all you need to remember is a secret code made of 12 special words. It’s so easy that even a five-year-old friend can learn these words in less than five minutes! We even made a fun app for kids and parents to help everyone join in without any trouble.
Magic Powers for Everyone: With this magic notebook, you can send and receive money, or even own things like houses or shares of companies, from anywhere in the world! You’re the boss of your stuff, and you can check on it any time you want, day or night. And all you need is your secret code of 12 words.
We also know that not everyone speaks the same language, so we’re making sure all the instructions and fun facts about this magic notebook are in your language, with easy-to-understand guides from people who know a lot about it, translating all the available content (mostly videos) in real-time in your language on our “Netflix” for crypto platform called Dopamine.tv.
You see, by simplifying concepts, making education accessible and inclusive, and leveraging relatable analogies, we can significantly improve the understanding and adoption of cryptocurrency and blockchain technology. Our goal is to create a foundation that empowers individuals with the knowledge to navigate the crypto space confidently and securely.
BCN: Barring a few exceptions, regulators have been hesitant to offer supportive regulation for crypto, primarily due to tax evasion, and money laundering concerns. Do you believe that proactive anti-money laundering (AML) compliance initiatives by the industry could encourage regulators to bring forth supportive regulations?
KC: It’s a common misconception that regulators are against the crypto industry. In reality, regulators aim to ensure a safe and secure environment for both businesses and individuals. This misunderstanding largely came from the traditional banking sector, which, while they were preparing and we were developing new technology for them, portrayed regulators as unsupportive.
This was part of a narrative from 2017 to 2023 designed to keep people cautious and restrain them from onboarding startups and fintechs that were already ready. However, now banks are openly supporting digital assets after getting the necessary approvals, showing that the narrative is changing.
When it comes to Anti-Money Laundering (AML) efforts, blockchain technology — think of it as a shared, transparent notebook everyone can check — is a game-changer. It allows everyone, not just regulators, to see all transactions clearly. This transparency means that it’s possible to ensure the money being moved around is not connected to illegal activities, such as crime or terrorism.
Moreover, it goes beyond just security. If you believe in certain values, like animal welfare or do not like Elon Musk’s opinions, blockchain lets you choose not to accept payments from sources that don’t align with those beliefs. This is because all transaction data is open and available for anyone willing to look into it. It’s free speech applied for the exchange of value and wealth.
So, yes, proactive steps towards AML compliance by the crypto industry could definitely encourage regulators to introduce more supportive regulations. Blockchain gives us the tools to create a financial world that’s not only safer but also more aligned with our values. This shows regulators that we’re serious about creating a positive and transparent environment, which can lead to more supportive policies.
BCN: Can you talk about Web3intelligence’s AML infrastructure and why you aspire to set a global AML standard?
KC: Web3intelligence is working on building a unique AML infrastructure because we listened to what our clients needed. Just like when reading news, it’s important to have different sources to get the full picture, the same goes for AML information. Relying on just one or a few sources can lead to biased or incomplete views, which isn’t good for making important decisions. Here’s why we’re aiming to set a new global standard for AML:
1)Diversity of Sources: Depending on just one source for AML checks can create a monopoly like (“World-check” in traditional finance), which can unfairly label businesses or individuals as compliant or non-compliant. We believe in offering choices, so businesses can cross-check information from multiple sources.
2)Operational Safety: Having multiple sources ensures that if one goes offline, it doesn’t put your entire operation at risk. This redundancy is crucial for business continuity and risk management.
3)Cost Efficiency: In an ideal world, businesses should only pay for the AML data they need, negotiating directly with various providers. By commoditizing AML data, we’re pushing for a market where choices are broad and costs are fair.
4)Standardized Scoring: Currently, each AML provider has its own way of scoring risk, which can be confusing. We’re advocating for a universal scoring system, from A+ (clean) to C- (dirty), similar to credit scores. This makes it easier for compliance officers to make informed decisions and align with partners.
5)Transparency and Empowerment: By providing open access to our source code and educational materials, we’re empowering compliance professionals and everyday users. This transparency allows everyone to understand the AML process better and actively participate in shaping a proactive regulatory environment.
In summary, our goal at Web3intelligence is not just to offer another AML solution but to transform how AML is approached globally. We’re committed to providing a system that’s diverse, reliable, cost-effective, and easy to understand, setting a new standard that benefits everyone involved.
BCN: The DOPE token, which is at the core of the Web3intelligence ecosystem, reportedly serves as a licensing model. Could you talk about what this licensing model is and how, if at all, it helps institutions prevent illicit activities on their platforms or protocols?
KC: At the heart of the Web3intelligence ecosystem, we have the $DOPE token (Dopamine), which plays a crucial role in our licensing model. This model is designed to do much more than just grant access to our technology; it actively involves everyone in the process of improvement and customization. Here’s how it works and its benefits, especially in preventing illicit activities:
Open Access: Holding the DOPE token gives you the keys to our entire tech suite. This means anyone can dive in, understand how things work, and even tweak the tools to better suit their needs.
Community-driven Improvements: When users enhance our tools or develop new ways to use them, these innovations aren’t kept in a private notebook. Instead, they’re shared back with the entire Web3Intelligence community. This way, our platform evolves with the collective intelligence and efforts of its users, continuously enhancing its capabilities.
Empowerment Through Participation: By allowing everyone to contribute to the development and improvement of our infrastructure, we’re not just building technology; we’re crafting a community that has a say in the future of Web3. This inclusivity ensures that our ecosystem reflects the diverse needs and insights of its users.
Focusing on Compliance: The compliance module, designed to meet global standards, is a cornerstone of our ecosystem. It ensures that every part of our infrastructure is built with the highest standards of legality and safety in mind. This central focus helps institutions prevent illicit activities on their platforms by providing them with the tools and knowledge to do so effectively.
Always-evolving Infrastructure: The DOPE token and its associated licensing model ensure that our infrastructure remains “always green,” meaning it’s perpetually updated and improved based on real-world feedback and advancements. This dynamic growth ensures that businesses in the Web3 space, not just in finance, can rely on a cutting-edge, compliant, and secure foundation.
In essence, the DOPE token is more than just a cryptocurrency; it’s a way for institutions and individuals alike to actively participate in and benefit from a secure, compliant, and community-enhanced Web3 ecosystem. This model not only democratizes access to technology but also strengthens the collective ability to prevent and address illicit activities across platforms and protocols.
BCN: Andrew Chen, a general partner at Andreessen Horowitz, said in a recent newsletter that users acquired through gamification are “much worse” than organic ones. Chen argues that gaming mechanics aren’t effective without inherent engagement and retention. Do you agree with that assertion?
KC: Yes and no! Gamification has been demonstrated to help humans learn quicker and more efficiently. So, for the gamification of acquisition, it only works if it genuinely brings value to the users. To bring value to users, gamification needs to truly offer something that improves their condition, whether it be learning new skills or increasing their material or spiritual wealth.
These incentives are what get the game going. It’s true that mechanisms to maintain engagement and retention must be aware of users’ progress; we must always focus on delivering the next bit of value. We utilize gamification to teach valuable skills like compliance, trading, new projects, and the technology itself, constantly reassessing how we can provide more value to users eager to engage and grow.
BCN: Crypto and artificial intelligence (AI) are two of the biggest technological breakthroughs of our times. How do you see AI’s impact on the crypto industry, especially in terms of compliance?
KC: AI is impacting every aspect of our businesses already, in compliance it helps providers with flagging and labelling suspicious behaviours, but we also use data science and AI to create models to help our clients and users trade better and generate more wealth. AI combines the advantage of high-speed calculation with opinionated principles making it unbeatable in delivering high-speed, low-cost, fairly accurate insight.
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