KYC/AML — Where is the money (from), Lebowski?
Emerging blockchain technologies are ushering in a new economic and social paradigm that will rival the invention of the monetary system.
The exponential growth in the crypto economy has increased the need for effective compliance services. Fraud, money laundering, online crime and identity theft are on the rise at unprecedented rates.
Regulators around the world recognize the disruptive potential and are evaluating control mechanisms to not only protect the public but also the very governments they represent. Such efforts range from simple guidelines for best practice to outright bans.
Cryptocurrencies have largely been developed outside of regular centralized channels and compliance measures have not been an integral part of the evolution. In fact, blockchain technology has been fueled by a healthy distrust for authority. Compliance in decentralized systems can be seen by some as undermining the freedom to control one’s own assets and defeating the very principles underpinning the crypto movement.
Finding a middle ground between these extremes helps the crypto evolution by allowing new disruptive technologies to thrive while following basic rules of compliance. This creates a win-win situation for all constituents and allows crypto to evolve, rather than inducing regulators to shut it down in its infancy. Integrating safety mechanisms such as KYC/AML will allow real, wide scaling across financial services and drive adoption to new heights.
Ocular’s main goal is to create the essential core building blocks that underly most modern financial services such as compliance through KYC/AML, authentication, identity services etc. Ocular empower other projects and help the crypto ecosystem at large. The native Ocular token OKYC will be necessary to access all the services provided by the Ocular system.
KYC(Know Your Customer) is the process of a business identifying and verifying the identity of its clients. The term is also used to refer to the bank and AML(Anti Money Laundering) regulations which governs these activities.
The Ocular KYC platform provides the following:
- Find a Person
- Instant ID Consumer Verification
- Instant ID Consumer with Red Flags
- Instant ID Consumer Verification with Fraud Point Score
- Instant ID Consumer Verification with Red Flags and Fraud Point Score
- Relationship Finder
- Lexis/Nexis Identity Report
- Fraud Point Score with Red Flags Rule Report
- SSA Verify
- Lexis/Nexis Phone Finder
- Phone Lookup
- OFAC & Other Watch Lists
- Statewide Public Records Person Search
- Driver Licenses
- Marriage & Divorce Records
- People At Work
- Business Executive & Political Biographies
- Professional Licenses
- Voter Registrations
- Email Address/Social Network Report
- Other Customized Search Options Available
Custom integration with external databases
- Black Lists
- White Lists
- Preferred Customer List
- Frequent Shoppers
- Transaction Histories
- Geographic Location Histories• Internal Data Mining
- User Defined Lists
More about AML
The cornerstone of a strong AML Compliance program is the adoption and implementation of comprehensive CDD (Customer Due Diligence) policies, procedures, and processes for all customers, particularly those that present a higher risk for money laundering and terrorist financing. The objective of CDD should be to enable the MSB(Money Services Business) to predict with relative certainty the types of transactions in which a customer is likely to engage. These processes assist the MSB in determining when transactions are potentially suspicious. The concept of CDD begins with verifying the customer’s identity and assessing the risks associated with that customer. Processes should also include enhanced CDD for higher-risk customers and ongoing due diligence of the customer base. Effective CDD policies, procedures, and processes provide the critical framework that enables an MSB to comply with regulatory requirements and to report suspicious activity.
Effective CDD policies, procedures, and processes are critical to an MSB because they can aid in:
- Detecting and reporting unusual or suspicious transactions that poten- tially expose the bank to financial loss, increased expenses, or reputational risk.
- Avoiding criminal exposure from persons who use or attempt to use the MSB’s products and services for illicit purposes.
An MSB’s AML guidelines should ensure that the company possesses suffi- cient customer information to implement an effective suspicious activity mon- itoring system, paying particular attention to high-risk customers. Under this approach, the MSB should obtain information at account opening sufficient to develop an understanding of normal and expected activity for the customer’s occupation or business operations. If there is indication of a potential change in the customer’s risk profile (large, abnormal transactions, change in employment or business operations), the customer’s risk rating should be reassessed at that time. CDD processes should include periodic risk-based monitoring of the cus- tomer relationship to determine whether there are substantive changes to the original CDD information (e.g., change in employment or business operations).
Once policies and procedures are in place to identify, research and report suspicious activities, ongoing monitoring can spot patterns of concern.
For example:
- An accountholder who anticipated $10,000 in weekly cash deposits when they opened the account, has been routinely taking in $100,000 a week.
- A personal account has business-type transactions occurring within it.
- A business that is making large routine payments to an unre- lated individual or business.
Ongoing scrutiny is particularly important in the case of customers that pose enough of a money-laundering or terrorist-financing risk to warrant enhanced due diligence. The MSB must clearly understand the anticipated transactions of such clients and use this information in its suspicious-activity monitoring of these customers.
Ocular’s AML technology has a track record of use with major financial institutions for several years already and is being redesigned to integrate the security and data privacy afforded by cryptocurrencies and the blockchain. Application of these procedures enhances the safety of our platform and clearly sets Ocular apart.
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