Hire cryptocurrency compliance lawyers with a specialty in AML blockchain issues. We've got an experienced AML Blockchain and Cryptocurrency Compliance legal team.
AML (Anti-Money Laundering) Legal Compliance Team
You need legal experts advising you on AML matters if you have a crypto or blockchain business or plan to start one. Contact the leading AML Blockchain lawyers' team at Blockchain Lawyer.
Since most cryptocurrency transactions are anonymous, they come with money-laundering risks. Some crypto exchanges also facilitate anonymity making it impossible for KYC (Know-Your-Customer) and AML checks to be done. This explains why criminals love cryptocurrency transactions. It is possible to hide one's true identity or use a fake identity and still transact with crypto.
There are serious risks behind transactions whose origins and beneficiaries can't be traced. This is why federal investigations on cryptocurrencies have increased. You must be proactive in protecting yourself and your business by implementing AML and KYC policies and procedures in all your crypto transactions as well as business operations involving cryptocurrency.
At Blockchain Lawyer, we guide our customers through all the steps required to enhance or establish AML compliance programs.
We have former FBI agents, former DOJ trial lawyers, former DOJ officials, and federal prosecutors with insider knowledge of how the federal system handles cryptocurrency matters, including AML compliance. We are therefore best placed to offer comprehensive advice.
Don't wait for federal action or investigations. Put Blockchain Lawyer at the forefront of your compliance strategy if you handle cryptocurrency transactions for business.
What Is the Purpose of AML Policies for Blockchain & Cryptocurrency Companies?
Cryptocurrencies have dominated the financial world in the past several years. What initially seemed like a fad isn't showing signs of going anywhere. ICO (or Initial Coin Offerings), which are simply IPOs for cryptocurrency as well as cryptocurrency exchanges, are now mainstream financial instruments.
However, the popularity of cryptocurrency has come with a fair share of challenges. While curious investors, financial innovators, and other parties rally to enjoy the benefits of crypto, cybercriminals haven't been left behind. Most love crypto and cryptocurrency exchanges since they offer anonymity – which cybercriminals thrive on when engaging in their illegal activity. The fact that crypto can be transferred anonymously globally is a huge advantage that cybercriminals exploit.
Besides sending and receiving money anonymously, cybercriminals are thriving on the regulatory gaps on cryptocurrency and blockchain to launch scams. The American public has been a target for these crypto scams. America's opioid crisis, coupled with the coronavirus pandemic, has exposed innocent ordinary Americans to fraudulent cryptocurrency scams.
There's also the fact that cryptocurrency transaction anonymity has and continues being used to commit crimes like terrorist financing and money laundering. There is a new form of money laundering exclusive to the cryptocurrency world, where the true source of cryptocurrency is mixed up with crypto from many other wallets and “cleaned" in the process before being moved to new wallets.
Such practices and many others make it impossible to trace transactions to the original source. The importance of AML compliance for businesses can't, therefore, be overlooked. Federal agencies understand the regulatory gap and know the risks associated with new ICOs, tokens, and coins being used by companies and individuals for illegal purposes.
Individuals and companies which transact or accept cryptocurrencies are constant targets for federal agencies. When you consider the amount that exchanges hold and the risk investors face, it's easy to see why federal agencies are constantly on alert.
In 2019, for instance, crypto exchanges were subjected to multiple hacks that saw $292+ million stolen and 500,000+ customers' data stolen. Companies that deal with crypto can safeguard their dealing from terrorist financing and money laundering risks linked to crypto by establishing and maintaining comprehensive AML compliance. Besides implementing a compliance program, another defense is ensuring the programs are actually working effectively.
AML Compliance Requirements for Businesses Dealing with Cryptocurrencies
Federal agencies have robust compliance program demands for cryptocurrencies as they increase in popularity. The agencies focus is on AML/KYC. Agencies like finCEN require cryptocurrency companies that can qualify as financial institutions to have and implement AML/KYC compliance programs and ensure those programs work effectively. Cryptocurrency companies are also expected to be compliant with the 2020 Anti-Money Laundering and Bank Secrecy Acts.
Since most crypto companies like exchanges handle a significant amount of client funds, they can be treated as money service businesses that are subjected to various AML rules on taking customers through due diligence procedures as well as reporting suspicious activity.
Other rules apply to reporting and disclosure. For instance, since cryptocurrency is considered a security, some SEC rules may apply as well as rules unique to dealers and brokers, financial derivatives, and commodities markets. Failing to follow applicable federal requirements (especially AML compliance measures) can result in hefty penalties.
A perfect example was in 2020 when Coin Ninja and Helix cryptocurrency exchanges were ordered to pay $60 million in fines for acting as “tumblers" or “mixers" for virtual currencies. The offense involved accepting and sending cryptocurrencies in ways that hindered tracing of such funds to the origin. The exchanges were also guilty of failing to do proper customer due diligence and implementing effective AML programs.
How Can a Law Firm Help in AML Matters?
If you retain a law firm with experience in AML matters, you stand to enjoy notable benefits. Legal expertise is critical since cryptocurrencies cross borders in seconds. What's more, cryptocurrency offerings (ICOs) attract investors globally. The importance of an AML compliance attorney who understands the legal ramifications of such transactions across jurisdictions can't be overlooked.
Blockchain Lawyer assists businesses on all AML compliance matters below:
- Reviewing KYC (customer identification & Verification) procedures
- Establishing and implementing AML programs customized to a business's unique needs and industry
- Monitoring risky transactions
- Implementing mitigation procedures on probable AML risks
- Risk assessment on the compliance, regulatory, and legal environment
- Advisory on applicable US laws for specific crypto businesses
- Drafting KYC & AML policies and procedures
- Guiding on implementation and usefulness of risk-based systems
- Advisory on customer due diligence, account monitoring, and reporting suspicious activities
- Media & marketing screening to identify compliance weaknesses
- Assessing public information/records for beneficial ownership
- Facilitating effective training programs for employees
These are just some of the few AML measures our AML compliance team will help your business with. For questions or more information, don't hesitate to call.
Advice on Cryptocurrency AML and Blockchain Issues
Anonymous cryptocurrency transactions pose money laundering risks. It's also difficult to verify customer information and monitor transactions. The US regulatory landscape is also inconsistent with numerous gaps that can be exploited by unscrupulous individuals and cyber criminals.
Federal agencies know this and are increasingly interested in persons and businesses that deal with cryptocurrencies and blockchain. Many investigations have been launched on companies that don't have strong AML measures and allow fraud and other crimes to occur via or within their businesses. Federal agencies have fined many companies and individuals in the process.
The importance of a proactive approach to AML matters can't be overlooked. Businesses must stay ahead of regulators on crypto and blockchain-related matters.
AML compliance attorneys at Blockchain Lawyer can help you do just that. We have attorneys and consultants who work with our clients to develop and establish custom AML compliance programs/procedures unique to their businesses.
We know what federal regulators are doing at any given time in regard to cryptocurrencies and firms utilizing blockchain technology. Don't wait to be subjected to federal investigations and charges related to insufficient AML measures when we can help you get compliant.
Contact us today. Claim a free-confidential AML compliance consultation and safeguard your business.