Adverse media, in the context of regulatory compliance, refers to the process where customers or businesses are vetted to ensure they don’t have any negative or problematic exposure in various forms of media, such as news channels or social media. Typically carried out on higher-risk individuals, the screening might be looking for involvement in criminal activities or terrorism (posing a risk of money laundering or terrorism financing for example), but the scope of adverse media can cover a whole range of potential onboarding issues with an individual or company (such as any risk to the company’s reputation).
As might be expected, the variety of different types of media that has come into use over the past decade or more significantly complicates the task faced for adverse media checks. Traditional news sources, such as newspapers and television news programmes, have been expanded and newer, digital media now includes social media (Facebook, Twitter, Instagram), video sharing platforms (YouTube, Vimeo, TikTok), forums (Reddit, 4chan, Quora) and other online blogs or websites.
It’s necessary to carry out adverse media checks as part of enhanced customer due diligence with the identification of high-risk clients - those that may have a connection to criminal activity. Besides being a compliance requirement, adverse media checks help weed out criminals such as money launderers and fraudsters who would otherwise take advantage of an unsecured opportunity, and avoiding conducting business with those of a bad reputation will help a company maintain their good reputation and the benefits that go with it.
With the sheer amount of news sources, websites, forums, social media and the like, the issue with adverse media checks is the scale of the data that needs to be scanned and evaluated, which makes it prohibitive for manual methods and instead requires a comprehensive, automated solution; however, a human element is needed to review the final outcomes to determine if the individuals found in the adverse media truly match the identity of those under review or not. It’s not just the appearance of an individual appearing in the adverse media check that needs to be reviewed; the legitimacy and frequency and independence of any news sources also need to be evaluated in conjunction. In addition, just because an individual or business doesn’t show up when a search is done, there’s no guarantee that they won’t show up in the future, so for higher risk customers, performing a single check isn’t sufficient for compliance purposes and ongoing monitoring is necessary.
Naturally, for such a vital part of the compliance process, Blockpass provides adverse media checks as part of its KYC Connect® solution. Complying with AML regulations, KYC Connect® includes advanced AML screening, ongoing monitoring, PEP and Adverse Media screening. Automating the process, making it simple to integrate and streamlining the process, Blockpass is bringing all the benefits of conducting adverse media screening whilst reducing the time and effort required.
Blockpass has grown significantly in size and use since its inception, both in the number and range of users and organizations it has partnered with, and the scope of its work. Blockpass continues to develop its digital identity protocol with updates and additions to improve the compliance experience. The existential need for DeFi projects to be regulatory compliant and the recent integrations have led to a surge in interest for Blockpass’ On-Chain KYC® solution which promises to change the way blockchains enable compliance. Its recent integration with TrustSwap expands Blockpass’ services to a whole new raft of businesses and solutions.