There are at least three reasons why you need to use the AML cryptocurrency screening services in 2020. The cryptocurrency business is growing and developing every year. Today, if you have a cryptocurrency business, most probably you are using or you consider using AML screening service to be sure you do not accept “dirty” cryptocurrency.
Here are these reasons:
REASON ① – COMPLIANCE
The main reason is to comply with the cryptocurrency regulation. The AML legislation does not set forth the concrete measures, but it rather gives a general understanding of what needs to be done to mitigate the risk of money laundering or terrorist financing.
The AML measures may differ and companies may have different approaches. The most important aim of compliance is to prevent your services from being used for illegal activity. That’s why one has to show to the supervisory authority that the maximum measures have been taken to mitigate all the risks. One of those measures for cryptocurrency business is to screen the customer’s wallet addresses for fraud or money laundering risks. Moreover, such measures need to be documented in the internal AML rules of procedure. It is also advised to keep the proof in order to present to the supervisory authority when they come to check you for compliance with the AML/KYC regulation.
More about the legal perspective of AML screening service can be read in our blog here.
REASON ② – BANK ACCOUNT
The second reason for deploying an AML screening for the cryptocurrency is needed if the company will start applying for different bank accounts in traditional banks or online banks. Banks want to see that the company has robust internal AML procedures. Usually, these are the internal AML rules of procedure and agreements with outsourcing KYC providers. In addition, a company dealing with cryptocurrency should present the internal procedures of how the risks of new technologies are mitigated. This way, banks get the idea that the company is committed to doing its best in terms of fighting against money laundering. Consequently, such companies have higher chances to open an account.
REASON ③ – FINANCIAL STABILITY
The third reason is to avoid being blocked by crypto exchanges. If you have an account in the biggest crypto exchanges, for example, Binance, and send cryptocurrency with a shady history, you take the risk of being blocked. Be sure many exchanges deploy the service of AML screening and if they detect that you are transferring dirty cryptocurrency on their addresses, they might suspend your account. It applies not only for cryptocurrency businesses but also for individual customers who use crypto exchanges for depositing, trading, etc.
Be proactive and prepared for any risks! We are here to keep your business clean and growing. Contact us at bdo@amlbot.com for additional information and consultation.