Why Cryptocurrency Exchanges Need AML/CTF?
Cryptocurrency exchanges engage in crypto-fiat exchanges or virtual currency custodian wallet services. This is deemed the most high-risk sector as it offers a less regulated channel where virtual currencies are digitally transferred, stored or traded.
As a Cryptocurrency or virtual exchange business, you are a “regulated entity”, if you;
- use/own proprietary networks for crypto-fiat exchange, and/or
- are a virtual currency exchange platform, and
- are a custodian wallet provider.
Cryptocurrency businesses involve transactions between both crypto and fiat currencies as well as between various cryptocurrencies issued privately. The anonymity of virtual currency conceals the source of funds and the ownership, allowing the proceeds of crime to be laundered through cryptocurrencies and custodian wallets. The virtual currency remittance system is exposed to risks of terrorism financing (TF) or funding of illicit activities.
Compliance of crypto exchanges and wallet providers begins with registering your businesses with your national regulators. KYC and verifying beneficial ownership information is mandated at the onboarding stage, as well as screening for Sanctions and PEP checks. Ongoing scrutiny of high-value transactions, high-risk clients, high-risk countries, fiat to crypto transactions, transaction monitoring for unusual behaviour, monitoring high-value wallets, and reporting suspicious transactions are ways that crypto businesses can remain compliant.
The ability to convert cash to virtual currencies and trade between multiple virtual currencies for profits, allows illicit funds to be integrated into the legitimate economy. Other factors like the ease of remitting money for illegal activities or to fund terrorism through the virtual exchanges, make crypto businesses vulnerable to AML/CTF compliance. The lack of transparency in transactions and ownership structures of the virtual currencies are other limiting factors. As virtual currency transactions remain outside of a formal monetary system, it is difficult for crypto businesses to be regulated.
Cryptocurrency exchanges and wallet providers are expected to establish the framework for a risk-based compliance program:
- Conduct a risk-based assessment for exposure by its services and delivery channels, types of clients, a country in which it operates or transacts with, size or pattern of transactions, and business relationships.
- Create risk reduction measures and controls to lessen risk.
- Develop an AML/CTF program: client identification, beneficial ownership, Sanctions/ PEP screening.
- Have policies and procedures in place for ongoing monitoring, as per the requirements from your regulator.
- Implement a risk-based approach to ongoing monitoring of transactions, patterns and business relationships.
Once you have set up your compliance programme, you need to put the systems in place to ensure the programme is being followed. Non-compliance may result in criminal or administrative monetary penalties.
Ongoing compliance involves:
- Training staff, and having an assigned compliance officer.
- Conducting customer due diligence (CDD), update and validate customer information, ongoing CDD and enhanced due diligence (EDD) for suspicious transactions or individuals and high-risk countries.
- Have threshold transaction reporting obligations where physical/fiat currency is accepted or paid out.
- Submission of suspicious transactions and compliance reports, and other obligations, as required by your regulator.
- Reviewing your compliance programme at regular intervals.
Our PEP and sanction screening service will help you reach your compliance requirements.
Our details scan reports provide you with an overview of in-depth information on potential risks to your organisation.
We provide access to multiple data sources to meet the varying requirements of users.
We update the information for all of our data sources daily to provide you with up-to-date relevant data.
Save the time manually checking names by using our batch scanning feature to scan bulk files of names simultaneously
Our service is straight-forward and easy use, making compliance easy by simplifying processes.
Perform due diligence by assigning risk, determining true matches and recording decisions in the NameScan dashboard.
Conduct further research into potential matches and risks to your organisation through various sources.
Use our API to integrate with your existing systems to automate the screening process.
Good, easy to use, gets it done
There are pros and cons to automated, comprehensive, fully-integrated systems. But for our workflow, we like that no integrations are required and we can use it as a standalone platform for running AML/PEP checks.
Top Level AML Solutions tailored to specific needs
Provides excellent value for money, is easy to use, accessible, and can be tailored for specific needs.
Detailed PEP/SIP Scanning with easy integration
Integration was easy with well-documented API. Both 'in house' and 'commercial' databases were detailed and provided valuable insights. The team are always accessible to provide support.
Making Life Much Easier
Been using this system for while now and really love the way that we get detailed response on every search that we conduct in matter of few seconds.
User-friendly and detailed report. Seems to be the best product on the market Industry.
Using the API for a year without any major issues
Namescan API is well documented and easy to implement. We have been making calls to the API for almost a year now and there was only one instance when the call failed.
Corporate clients due-diligence
I highly recommend NameScan as it gives a detailed check on the required individuals and entities.
NameScan helps us understand our risk
NameScan is preventing us from writing a risk for an individual or entity that my have serious liability issues. I have no issues with the software itself.
Company Secretarial Services
Perfect for our needs
Quick and easy to run checks against a wide range of sanctions and PEP lists.
Best option out there for what we need
The simplicity and quality of the reports! Our clients have commented on how good it is to have all the scanned lists in one place.
Value for money
Very positive experience particularly in obtaining valuable and timely information on subject individuals.
Pretty good platform
Easy to use and get up and running on quickly.
Chief Compliance Officer
Pleasantly Surprised with the service
I was pleasantly surprised with the service, the results received on my test scan were very insightful and I can see where this can be a very useful part of any firm's AML program.
Happy about our experience
NameScan is extremely easy to use and highly intuitive.
Makes our life easier to check clients and suppliers
As an international Trading and distribution company we rely on good data about our potential clients and suppliers. When looking for an AML/CTF vendor we found NameScan, I personally like it because it makes our life easier to check clients or suppliers in our industry which is full of fraudsters. NameScan gives me the security I need when transacting. Great idea, well done, best web development for a long time.
Simple and easy to use interface
Simple and easy to use interface. What more can you ask for to help satisfy Client Due Diligence requirements.
Your services exceeded my expectations
My first impression of your services exceeded my expectations because it provides clear and exact information which nowadays is difficult to find namely in considered credible sources. As part of constant improvement in achieving the credibility of the global financial system in general, your company is already one step ahead in providing the high valuable credible information and gaining trust from serious free from global elite influence person like me. It´s a perfect example of how independent non-governamental companies can do excellent work and achieve excellence based on high standards of integrity and bold core values, wisdom and vision for a brighter future.
Easy to use service
Easy to use and to sign up, contains user friendly outputs.
I like how the search is narrowed. It is sensitive to include full names and also first and last name (unlike other providers I tested too). Well done.
Great user experience
Great experience! It is a user-friendly interface. The dedicated team responds quickly and efficiently to any question we may have.
Excellent Service body
Excellent service who considers startups low scan volume needs. User friendly dashboard.
Quality and Comprehensive service
NameScan provides our business with a quality and comprehensive service.
Intuitive AML screening software
Great easy to navigate and AML screening software. No fluff, no frills, straight to the point.
Excellent choice for small fintech start-ups
Namescan is an excellent choice for small fintech start-ups, where paying the large up-front signup fee of other AML solution providers can be less interesting.
Chief Compliance Officer
Easy to use and comprehensive
Easy to use and comprehensive. I recommend.
User Friendly Interface
NameScan has a very user friendly interface.
Highly recommend it
Its an effective tool, user-friendly and provides a comprehensive reports. Highly recommend it.
Easy to use and convenient
NameScan's service is easy to use and convenient.
Simple and Intuitive
Simple and intuitive to use with actionable insights and reassuring.