Operating lawfully.
WHAT IS TYPICALLY REQUIRED
Registration or licensing Customer identification and verification Sanctions screening Transaction monitoring Suspicious activity reporting Record keeping A designated compliance officer
WHAT CUSTOMER VERIFICATION INVOLVES
Identity documentation, verified Risk assessment Ongoing review
WHAT TRANSACTION MONITORING MUST DETECT
Patterns indicating laundering Transfers to or from addresses associated with crime Structuring to avoid thresholds Activity inconsistent with the customer's profile
WHAT BLOCKCHAIN ANALYSIS PROVIDES
Tracing of funds across addresses, and identification of addresses associated with illicit activity.
WHY IT IS EFFECTIVE
Public ledgers are permanently analysable.
WHAT THAT MEANS
Pseudonymity is not anonymity, and analysis improves over time.
WHAT SCREENING SHOULD COVER
Addresses, against known illicit sets Customers, against sanctions lists
WHAT TO DO ON A MATCH
Follow the defined process, and do not proceed while investigating.
WHAT RECORD KEEPING MUST SUPPORT
Reconstruction of any transaction, years later.
WHAT TO BUDGET FOR
Compliance as continuing cost.
WHAT TO ENGAGE EARLY
Legal counsel familiar with this sector.
WHAT TO NEVER DO
Build first and establish the regulatory position afterwards.
