Since 2018, the amount of funds raised from crypto token sales has come down significantly to a few hundred million per year but they are still a very viable crowdfunding method in the form of compliant initial exchange offerings (IEO) and security token offerings (STO). In response, governments have felt the need to formulate laws and regulations to ensure that these forms of fundraising are compliant and safer for investors.
Thus, compliant KYC procedures will not only establish the credibility of your project but also allow it to reach a global audience by expanding the number of jurisdictions in which it can take place. PwC China listed proper KYC and AML framework and procedures as one of the best practices of token sales.
Fenergo released its findings on financial institution fines that shows that global penalties total $36 billion for non-compliance with Anti-Money Laundering (AML), Know your Customer (KYC) and sanctions regulations. Fines related to AML, KYC and sanctions violations increased in the 15 months since the last Fenergo report by 160% as the ramifications from the global financial crisis bear a significant impact.
The increasing fines not only demonstrate the need for stricter KYC requirements among financial institutions, crowdfunded startups and fundraising projects, it also implies increasing difficulties for them to stay on top of these changing regulatory guidelines, rules and jurisdictions. Hence, it is important for token sales to have proper, industrial grade KYC even if not all the regulations currently are in place in all jurisdictions as they will all be implemented sooner rather than later.
It involves cost, time and labor to comply with the global standards. Thanks to technology, fundraisers can now rely on the latest technology to streamline the KYC processes and meet the global KYC requirements. In order to save cost, crowdfunders can rely on third parties to expedite and improve customer onboarding experience.
Project owners can use the following three steps below to identify a suitable third party solution for your project:
Ensure that the third party itself has the appropriate risk controls and governance in place. To do so, institutions are required to receive annual AML and customer identification program (CIP) certifications from third parties
Identify risk appetites of your project and confirm the third party solution service provider is able to meet your risk assessment needs.
Confirm the third party service provider is permitted in all major jurisdictions as regulations vary.
Once users create a Blockpass Identity Profile and upload their identity documents and required data, Blockpass will rapidly verify and authenticate information at the highest standard of regulatory compliance. Blockpass provides ongoing AML monitoring for better risk control, as well as the capability to connect with any database, sanctions or investors list and issue certificates against them. What’s more, you’ll gain access to the Blockpass ecosystem of pre-verified users, and promotional support to get the most out of your token offerings.
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More Info: https://cointelegraph.com/news/ico-market-2018-vs-2017-trends-capitalization-localization-industries-success-rate https://www.fenergo.com/news/aml-kyc-and-sanctions-fines-for-global-financial-institutions-top-$36-billion-since-financial-crisis.html
Blockpass provides identity verification that covers both KYC and AML regulatory compliance. Users fill out the relevant details and are checked against the required lists and criteria to ensure they are not associated with criminal activity. By having these checks performed through Blockpass, companies using Blockpass’ identity verification solutions do not have to worry about their personal liability in screening applicants, as Blockpass retains professional indemnity insurance.
With the Blockpass technology and approach, verification and onboarding happens almost instantaneously for pre-existing Blockpass users and is usually very rapid for new Blockpass users. In addition, as Blockpass puts users in control of their data and certifications, the solution can be offered at a reduced cost compared to traditional alternatives.
Blockpass offers a multi-product portfolio that allows merchants to choose the scale of solution that applies to each business and jurisdiction. Whether a business wants only Face Match certification, or if they also require KYC, AML or enhanced SLAs, Blockpass is able to offer a full range of identity verification solutions.
Rather than having to fill out the same KYC and AML forms over and over when transacting with other financial companies, users simply have to maintain one up-to-date profile, which is then shareable with anyone in the Blockpass ecosystem for instant onboarding, saving users from repeatedly re-doing and re-submitting the same forms, and saving companies the hassle of checking KYC and waiting on checks.