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Noncompliant Crypto Exchanges Seized by FBI

June 2024

The U.S. Attorney's Office, Eastern District of Michigan issued a press release last week to announce action taken by the FBI's Detroit Field Office in which the seizure of nine virtual asset exchanges that were found to be involved in illicit activities took place. 


In conjunction with the Virtual Currency Response Team (VCRT), the Cyber Police Department and Main Investigation Departments of the National Police of Ukraine, and the Prosecutor General’s Office of Ukraine, the FBI identified the culprits who provided services for those engaged in criminal activity such as ransomware and scams, and shut down their businesses.

The press release noted the non-compliance of these companies was due to the failure to implement adequate Anti-Money Laundering (AML) programs or collect sufficient (if any) Know Your Customer (KYC) information. Failure to abide by these regulations not only highlight the businesses as problematic but also makes them co-conspirators in criminal schemes.

KYC and AML measures exist to protect users from fraudulent actors or other illicit activities such as terrorism financing. Despite compliance with such regulations being legally required, many companies may lack sufficient solutions, or even any at all. In the early days of crypto some companies resorted to in-house KYC checking or scrambled to find solutions which could often be too slow or expensive for their needs.

Fortunately, Blockpass’ solutions were created with the crypto industry in mind and as such not only offer comprehensive regulatory solutions which comply with all current and upcoming regulations but also provide the fastest and most affordable means for users to on-board to new companies. 

Opponents of such regulations often cite their desire for privacy, but Blockpass also satisfies this need with the user being in control of their data and who they share it with, and with Blockpass developing privacy-preserving zero-knowledge solutions such as On-chain KYCⓇ and exploring other zero-knowledge options. 

The Blockpass platform is fully automated and hosted in the cloud, with no integration or setup fee. Businesses can sign up to the KYC Connect console in a matter of minutes, test out the service, and start conducting identity documents verification, KYC and AML checks. Take a look at Blockpass' groundbreaking crypto compliance solutions:

KYC CONNECT®

  • Built-for-Crypto, centralized off-chain KYC platform
  • Bank-grade KYC/AML
  • No integration necessary, no setup cost
  • Self-service and managed SaaS plans

Learn more…

ON-CHAIN KYC®

  • On-chain, zero-knowledge verification KYC platform
  • Customers complete KYCin an anonymous, data-free way
  • Verification results delivered by API KYC / ID data oracle across multiple blockchains

Learn more…

UNHOSTED WALLET KYC™

  • Only KYC solution for unhosted (or non-custodial) wallets in the market
  • Adheres to the Crypto Travel Rule laws being adopted, reduces regulatory risk of transactions
  • Verifies users own/control their crypto addresses

Learn more…

By Matthew Warner

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