Based on recent regulatory compliance changes in various jurisdictions, Komodo has to start considering how it’s going to move forward safely.
Regulatory compliance rules are changing quickly, specifically in the last month.
Those working on AtomicDEX have had to start paying attention to various compliance measures that are becoming increasingly relevant in the crypto space. The recent BitMEX allegations are one example of where individuals have been charged with the illegal operating of an exchange and money laundering schemes. This is what Komodo and its development team have to start considering how to handle, and quickly.
https://www.cftc.gov/PressRoom/PressReleases/8270-20
Komodo is clearly not the only ones being affected by this new regulatory push. The position moving forward is to ensure that those associated with Komodo and working on the project here can continue to do so in a safe environment.
The following FAQ is based on our current status. In future posts, we will release additional information as it becomes available.
1. What does this mean for the AtomicDEX project?
The version of AtomicDEX that the developer community at Komodo supports will be seeking clarification on what compliance means for AtomicDEX and its further development. Our Komodo Q4 2020 roadmap is still in play, and we’re still targeting a stable beta release by the end of the year.
2. Is AtomicDEX going to have KYC/AML integration?
Yes, the version that the official Komodo development team is providing will include KYC/AML compliance. How this gets implemented is yet to be determined and will be decided based on best practices as advised through regulatory and legal compliance counsel.
The protocol and AtomicDEX project, like all of Komodo, will remain open source technology.
3. Why now, what led to this decision?
This push has been triggered by some massive changes concerning compliance laws and regulations in both the EU and the US. An example of this fallout can be seen in recent litigation against BitMEX and individual developers associated with it.
4. I thought AtomicDEX was a peer to peer solution and non-custodial, so why would we worry about regulations and why are these changes necessary?
AtomicDEX is and remains a non-custodial decentralized exchange solution; however, its protocol process could be viewed as acting as a facilitator service enabling users to find and trade with others in an unregulated fashion.
Although there is no central server connecting the actual trading partners, services, and nodes that handle trades require compliance. The exchange system, platform, or whichever party supports these activities is legally liable.
5. This is a lot of information. What can I expect to see moving forward for those working to develop AtomicDEX?
The Komodo Q4 2020 roadmap is still in play, and we’re planning a stable beta release of AtomicDEX by the end of the year as well as stress tests following the v0.3 initial beta release in the coming weeks. Right now, we are moving towards the public launch of a non-custodial exchange that meets regulatory compliance for AML/KYC. By being proactive, we can prevent a situation like the one BitMEX is currently going through.
Furthermore, this direction will bring more legitimacy to AtomicDEX and enable us to target new end-user and business audiences that wouldn’t have been possible otherwise.