When designing their AML program, crypto asset service providers need to consider the following:
👉 Collect Adequate information:
The crypto asset provider must collect sufficient information from its customers.
This is necessary to effectively understand the money laundering and terrorist financing (ML/TF) risks associated with the potential business relationship and create the customer’s economic profile.
👉 Customer experience:
The onboarding process must be designed in a way that is efficient and provide a pleasant customer experience while at the same time satisfies AML requirements.
If the onboarding takes too long, the customer may get frustrated and will probably stop the registration process.
Finding an appropriate KYC tool that can quickly onboard, including performing verification and screening of the client is essential for a successful onboarding procedure.
👉 Compliant with regulatory requirements:
The information collected must be sufficient to comply with AML, MiFID II, PSD2, CRS, FATCA and other applicable regulations in a specific jurisdiction.
Additionally, the information obtained must fulfil the requirements of regulators in various jurisdictions which often differ.
👉 Automation:
Crypto asset service providers must use other technological systems to comply with AML and other rules other than the onboarding of clients i.e. monitoring transactions.
Automation can improve customer experience, accelerate customer onboarding while at the same time reducing fraud incidents and costs.
👉 Security:
The crypto provider must implement high security measures like traditional banks do.
Biometric facial recognition and two-factor or multi-factor authentication during onboarding can further eliminate fraud risks.
