Digital currency exchange Atlas ATS strengthens KYC compliance with Strevus
24 June 2014 | 2206 views | 0
Strevus Inc., a provider of compliance lifecycle management solutions for financial service institutions, today announced that Atlas ATS, the New-York-based cryptocurrency exchange, is the first trading exchange to deploy the Strevus compliance solution to its exchange members offering them enhanced due diligence for high value transactions.
The Strevus hosted solution will help Atlas's institutional customers achieve Know Your Customer (KYC) and Anti-Money Laundering (AML) regulatory compliance and better communicate with counterparties.
"The single biggest barrier to the institutional adoption of cryptocurrency is the conflict between the pseudonymous nature of the transacting counterparties and the regulatory requirements," said Shawn Sloves, CEO Atlas ATS. "Using Strevus's solution, our members will be able to easily manage the onboarding process, collect information for KYC and AML reporting, and monitor and analyze the data required to ensure ongoing compliance. In the future, we plan to leverage Strevus's compliance technology for multiple private markets."
In January 2014, the Treasury Department's Financial Crimes Enforcement Network (FinCEN) ruled that all U.S.-based virtual currency users and their counterparties fall under the Bank Secrecy Act's definition of a money services business. Consequently, Bitcoin and other cryptocurrency exchanges must comply with registration, reporting and recordkeeping requirements. In response, Strevus recently extended its existing institutional-level compliance lifecycle management technology to support Bitcoin and other cryptocurrencies. In addition to providing enterprise-quality regulatory coverage, scalability and security for KYC and AML, the solution provides a convenient mechanism to share compliance information and notify the relevant counterparties about any important change in their compliance status.
The penalties for compliance violations are stiff. In January, the CEO of a now defunct Bitcoin exchange was arrested and charged with violating the Bank Secrecy Act. Allegedly, the CEO sold Bitcoin currency to an underground website that allowed people to anonymously buy and sell illegal drugs. In addition to money laundering, he was also charged with failing to file any suspicious activity report regarding illegal transactions, which the Department of Justice said is in violation of the Bank Secrecy Act.
In the wake of this debacle, Ken Hoang, CEO and founder of Strevus, commented, "It's clear that cryptocurrency exchanges and their members are under pressure to meet the enhanced due diligence requirements needed to maintain compliance. Strevus, recognizing this need, is providing a solution for the initial onboarding and KYC checks as well as ongoing due diligence. Our solution follows industry best practices and cuts the time to onboard new customers while dramatically reducing costs."