AML / KYC strengthens Ante to verify crypto clients

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Being able to identify your customers accurately and quickly is no longer something cryptocurrency companies can afford to ignore.

Increasingly, having a solid knowledge of your customer (KYC) and anti-money laundering (AML) process “is a table stake to be in the industry and be a reputable player,” said Steve Munford, CEO of identity verification company Trulioo.

“We are seeing an increase in the regulation of crypto, and I think it’s just a natural development as crypto becomes more and more prevalent everywhere,” he told PYMNTS’s Karen Webster in a brief. interview. “Regulators, as in any other space, will follow.”

However, it may seem more intimidating in the cryptocurrency industry, as the core blockchain technology was designed to keep transactions strictly peer-to-peer (P2P) and as anonymous as possible.

“By nature, crypto was meant to be less transparent than other transactions,” Munford said. “I think the platforms where you can open an account and trade and trade [cryptocurrencies] go out of their way – or major go out of their way – to follow the same KYC / AML guidelines as other similar financial institutions.

Munford added that he doesn’t think anyone in the crypto space is arguing that crypto should be any different.

“I think they’re just saying, ‘Give us a little time to catch up,'” he said.

Go faster in the world

Munford, who has a background in security in other industries, said there are two other big differences crypto faces in complying with compliance laws and regulations.

One is largely public relations (PR). For a long time, the only time anyone outside of the industry heard of bitcoin and other cryptocurrencies was when they were used for illicit transactions – from the infamous drug market and from weapons on the Silk Road dark web to the recent and growing series of ransomware attacks.

However, as Munford noted, this is a tiny part of crypto. In 2020, crimes of all kinds, from fraud to ransomware to buying illegal goods, accounted for about 0.3% of all cryptocurrency transactions, according to blockchain intelligence firm Chainalysis. Of course, crypto is a $ 2 trillion industry, so it’s still a lot of money.

Also Read: 2021 Crypto Scams Top $ 7.7 Billion, Fueled by DeFi Compatible ‘Rug Pulls’

The other is the speed at which crypto companies are globalizing or globalizing.

“On average, most of our clients do business in 30 or 40 countries,” Munford said. “Crypto players are ahead of this. And they really want to be ubiquitous in all geographic regions, in all countries of the world. “

So this new industry is pushing Trulioo to expand its global footprint much faster than it had been, Munford told Webster.

“Crypto players want to be everywhere,” he said.

Many rules, one goal

One of the problems Trulioo faces is that there are many differences in the rules around the world, ranging from nuances to substantial variations.

When it comes to going global, crypto companies evolve largely by their very nature. The industry has no intrinsic connection with national borders, geography or cultures.

“So inherently they have a lot more complexity in what they’re trying to do than some traditional and regulated industries,” he said.

For companies like Trulioo, Munford added, “reaching out to industries that want to be disruptive and that want to reach these consumers globally – that’s a difficult problem.”

But, he added, it’s a good problem to tackle, as it will ultimately benefit all of Trulioo’s customers.

One of the primary goals of any identity verification process is to balance compliance with friction. This is a challenge for crypto players as they focus on creating a streamlined onboarding process.

“On the one hand, any successful identity verification company globally needs to have a holistic approach,” he said. “I don’t think there will ever be a single way to verify or authenticate the identity. We orchestrate 450 different data sources to get the right identity on individuals, based on their demographics and country.

Speaking to Webster, Munford went over some of the many pieces of identification she would have: passport, driver’s license and many more.

“You have a certain demographics that I can turn to,” he said. “I can identify you by these attributes and how long you’ve been established – you have all these different forms of identity. “

But, he added, a new immigrant to the United States or a student will not have the same level of accreditation, so there is a different set of techniques needed to verify these people.

The key is to bring them all together on one platform, Munford said.

At Trulioo, he added, “we believe that if we succeed, all of a sudden billions of people will be able to participate in the global economy, whether it is providing services, ‘buy goods or sell goods digitally,’ said Munford. . “And I think it’s pretty powerful.”

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NEW PYMNTS DATA: AUTHENTICATION OF IDENTITIES IN THE DIGITAL ECONOMY – DECEMBER 2021

About: More than half of American consumers believe that biometric authentication methods are faster, more convenient and more reliable than passwords or PIN codes; so why less than 10% use them? PYMNTS, working with Mitek, surveyed over 2,200 consumers to better define this perception gap in usage and identify ways in which businesses can increase usage.

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