Crypto and Anti Money Laundering, what you need to know!

With new advances on global finances, AcuityTec is a leader and are part of the trend of welcoming crypto currency into business. We also know that challenge here is making sure that our clients are dealing with customers who are validated, to use the new exchange.

With this in mind, we would like to share with you some important information, so are you comfortable with the facts of crypto currency, and how our processes of Know Your Customer, Compliance and Risk Management are available to allow you to step into change with confidence.

Crypto-currency has been making headlines recently with an increasing value, but what does it mean for the future of global finance? The truth is the digital goal is experiencing a dramatic surge in popularity, with most people using them for various transactions due to their accessibility across national borders. These assets make it easier for someone living abroad to perform transactions of their choice with little to no restrictions. 

As more regulation is put into place, crypto assets will continue to be a viable option for those looking to get rich quickly or stay under the radar from authorities. However, how can an organization protect itself from potential vulnerabilities in the crypto space as these assets become more mainstream? Read on to find out more about Anti-Money Laundering (AML) and how it can help with Crypto!

Why is Anti-money Laundering Important for Crypto Exchanges?

As countries worldwide continue to adopt cryptocurrencies, firms need to keep up with anti-money laundering compliance. For years authorities have been fighting against AML risks associated with crypto, but now several approaches are being taken in different areas such as Switzerland and Japan. 

There’s a global call for regulations as governments begin to regulate cryptocurrencies. The Financial Action Task Force (FATF) announced they’d release international Anti-Money Laundering standards in 2019. 

FATF issued a revised set of guidelines that brought cryptocurrencies into its purview. This was an international agreement, and many other countries across Europe have since adopted these regulations for Anti-Money Laundering purposes – including Great Britain! 

These developments show positive momentum in regulating the new industry; however, we can expect more progressions moving forward where certain aspects related to AML will become clearer over time, such as VASPs registration, etc.

In the United States, FinCEN has had a regulatory framework for cryptocurrencies in place since 2018. In 2019 they issued new guidance to bring these virtual currencies under their remit as well.

The fact is most financial institutions can no longer claim ignorance or hide even if they are not involved directly. By banking digital assets, chances are they will be significantly impacted directly or indirectly by customers who adopt cryptocurrencies. For these reasons, AcuityTec is committed to move and grow with these changes offering products and services that will support the merchant’s fight against Anti-Money Laundering.

Changing Regulation for VASP and FIs

Regulators around the world are grappling with cryptocurrencies. In America, FinCEN – a bureau regulating cryptocurrency since 2017 – released amended guidance that brought crypto under their remit as endorsed by FATF (Financial Action Task Force). 

Europe is another jurisdiction where AML regulations include KYC/AMLA requirements for VASPs who wish to provide services related to these new technologies. As more and more regulators are including cryptocurrencies within their AML financial services regulation, it will become harder for criminals who want to hide in anonymity to find ways around these rules.

Tracing Cryptocurrency

Cryptocurrency has offered the world a more decentralized, secure, and reliable way to move money. It has been a popular way to make income anonymously. However, every cryptocurrency coin on the blockchain ledger can be tracked without any room for anonymity or concealment. Today, there are software vendors that have designed tools used for tracking and investigating cryptocurrencies. 

Because of its anonymity, holders must convert their currency into fiat currencies or vice versa for use; this leaves them vulnerable and traceable by law enforcement agencies while trying to withdraw from exchanges that do KYC/CDD on customers.

Many regulated platforms offer AML programs; this requires gathering customer identification data through established procedures so appropriate action can be taken when necessary. 

As a cryptocurrency exchange or wallet provider, you want to ensure that your customers are who they say they are. But what happens when law enforcement needs more than just their name and address? 

The answer: KYC information for all customer transactions in compliance with anti-money laundering (AML) laws was passed by governments worldwide, including those in North America. This was designed to provide access to authorities any time through established procedures!

There is increasing use of this software by government agencies, law enforcement, and financial institutions with a common goal to track, trace and assess cryptocurrencies. The software traces cryptocurrency and allows VASPS or FI’s to understand which other specialists they are dealing with due to AML compliance.

Most of these software vendors have teamed up with screening vendors and traditional monitoring to create more room for existing AML processes and systems. 

Conclusion 

The fact is, Cryptocurrencies are not without their flaws. One of the biggest is that they’re traceable, with public information available to everyone on how much money was sent where and when it happened in real-time – even if an end-user isn’t necessarily identifiable by name or picture right away.

However, the cryptocurrency market is complicated for FIs because it operates outside the traditional framework of AML. Several risks, including cybercrime, can’t be ignored even though some countries have improved over time. 

But this doesn’t mean they should ignore cryptocurrencies altogether; rather, they need to learn more about them, so they know how best to approach regulating or not regulating digital assets within a financial system.

How can AcuityTec be there for your business?

Acuitytec offers comprehensive coverage of global AML risk data sources including sanction lists (such as OFAC, UN, EU, DFAT, PEP, HM Treasury and many more), law enforcement lists (Interpol, country-specific government and state agencies, and police forces), and governing regulatory bodies (financial and securities commissions) from around the world.

Our AML Watchlist Services also helps merchants comply with domestic and international Anti-Money Laundering (AML), Counter Terrorist Finance (CTF), and sanctions enforcement regulations.

Our AML Package gives you instant access to all the necessary lists to facilitate business decision making process and regulatory compliance efforts.

Regulatory AML Compliance with Full Control

Due Diligence

Automatically performed on high-risk customers through technology and data collected from numerous global premium data providers.

Sanction and Official Lists Screening

AML/CTF requires individuals to be validated against watch lists. With Acuitytec, customers are screened automatically against Sanction and Official Lists.

Real-Time Risk Scoring and Fraud Alerts

Every customer and transaction is given a risk score that enables specific actions within Acuitytec.

Set risk rules with system actions that are instantly applied based on the variable scoring outcomes, giving you full control and adapting our services to your specific business needs.

For more information about KYC and AML Compliance, visit our website and chat with our Risk Management professionals. 

Leave a Reply

Your email address will not be published.