August 24, 2016
IdentityMind Aims Compliance Technology at Bitcoin Market
Jan. 23, 2014
IdentityMind, a Palo Alto-based antifraud and risk-management technology provider, has released a new version of its flagship platform aimed specifically at Bitcoin exchanges. Bitcoin exchanges, like all other Money Services Businesses (MSBs), must comply with the anti-money laundering (AML) and know your customer (KYC) requirements of the Financial Crimes Enforcement Network (FinCEN). IdentityMind’s platform includes a strong AML and KYC component banks and other types of MSBs have been using to comply with the Bank Secrecy Act.
Jose Caldera, vice president of platform management for IdentityMind, told CardNotPresent.com the company initially was approached by a bank that wanted IdentityMind to apply its KYC and transaction monitoring technology to the bank’s Bitcoin exchange clients. That resulted, he said, in the bank and the exchanges having full visibility into their transactions. Given the perception of Bitcoin as perhaps a bit lawless, being able to demonstrate voluntary compliance with FinCEN regulations is very powerful. Caldera said that initial contact was enough to solidify the Bitcoin market as a very attractive target of IdentityMind and its risk-management platform. And, most companies dealing in Bitcoins are eager to show they are legitimate.
“Contrary to what a lot of people think, all these businesses are trying to be legit,” he said. “They are making their way just learning how to be compliant and how to do a better job of monitoring transactions.”
When integrated into a Bitcoin exchange’s system, the IdentityMind platform will alert the company when it detects suspicious activity related to funding Bitcoin wallets, transferring money between Bitcoin wallets, withdrawals from bank accounts or Bitcoin wallets and wiring money between bank accounts.
Caldera said IdentityMind has about 20 different Bitcoin companies in its pipeline. By the end of Q1 he expects IdentityMind technology to be monitoring about half of the Bitcoin transactions occurring in the U.S.