UAE based Crystal Intelligence during a recent webinar revealed how crypto risk in GCC differs from global patterns noting that in Iran 1.4% of Iran’s annual GDP flows through cryptocurrency. 20 percent of 21 million Iranians are active crypto users. It was noted that this activity is often invisible to on-chain analysis as it occurs through domestic exchanges and informal P2P networks.
According to Nicolette Brown, Chief Intelligence Officer and Content Director at Crystal Intelligence, Oman P2P crypto markets is nearly $3 million in daily transactions while mobile payment methods and gift cards in GCC are creating new compliance and blind spots. She also noted that traditional hawala networks are integrating with crypto infrastructure.
In a poll during the webinar, 74% of our respondents saw fraud and unchecked Peer-to-peer trading platforms as a challenge, 13% saw risks of insider abuse and non-compliance with VASPs, and 6% each saw laundering risks in gift cards and using privacy coins and mixers.
On the question of how prepared crypto platforms in GCC were to detect and mitigate risks, only 3% noted that they were very prepared, 33% somewhat prepared, while 40% noted they were minimally prepared.
Traditional informal value transfer systems, such as Hawala, a trust-based payment system via informal agents, are now moving to crypto, especially in South Asia and the Gulf. These well-established networksoperate outside formal banking systems.
Nick suggested that, rather than criminalizing these systems, regulators consider the following steps to gain information rather than forcing activity further underground, licensing and supervising these networks and opening taxation and job creation opportunities.
Introducing KYC and reporting requirements, leveraging them to improve the visibility of crypto flows.
“The reality is a progressive regulator could look at it and say, ‘We can’t stop them, but we need to supervise them. We need to see what they’re doing. We need to give them access to blockchain intelligence tools.”
