Securities Commissions Targets OTC and Virtual Asset Trading Platform BitPrime
What Happened?
February 20, 2020: The BCSC identified that due to an inadequate KYC & AML program, Bitprime Ltd was onboarding clients they were not allowed to serve. BitPrime operates a platform that offers the retail trading of cryptocurrency assets.
Source: https://www.bcsc.bc.ca/Enforcement/Investment_Caution_List/Bitprime_Ltd__dba_Bitprimeprofx/
Who Is Impacted?
Fintech platforms, wealth managers, VASPs, and financial service providers who are serving users, clients, or investors in more than one jurisdiction.
Why This Matters?
Many online financial services businesses who have acquired licensing in a single jurisdiction believe that their license means they can serve the world.
This regulatory action shows that the BCSC, along with other IOSC (International Organization of Securities Commissions) members – which includes the U.S., the EU, Canada, Australia, and others – have a very different opinion on the matter.
The reality is, you can only serve the jurisdictions where you have both a license to operate in and a compliance program in place capable of meeting the local regulations of your user.
What’s Next?
BitPrime’s actions have placed the company on several international watchlists and adverse media lists. Companies and virtual asset traders who do business with BitPrime may now be subject to increased regulatory scrutiny, and they are likely to start showing up in the more sophisticated blockchain forensics tools.
To avoid this situation, BitPrime could have used a digital onboarding tool that had the capability to identify the prospective user’s jurisdiction, preventing those user accounts from being created.
While this is a relatively simple gap to close, most fintech platforms do not understand how vital it is to screen for this type of risk.
In order to avoid these regulatory actions, fintech platforms should test their compliance systems to ensure their onboarding tools can reject a user based on jurisdiction. Furthermore, these tools should be smart enough to identify and reject these users without incurring the full cost of KYC.
Executives should ensure their compliance teams are saving time and money by not wasting resources through onboarding and screening clients that the business is not able to serve.
learn more
Is your AML compliance too expensive, time-consuming, or ineffective?
iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience.
Request a demo today.
Centralized Digital Identity and ID “Phone Home” Privacy Alarms
As digital ID systems expand globally, centralised platforms like One Login and Aadhaar raise major concerns about privacy, data security, and surveillance. This article explores the risks of identity systems that phone home and how iComply’s decentralised identity verification solution offers a more secure and compliant path forward.
How to Do a KYC Refresh the Right Way
KYC refresh is a critical part of ongoing due diligence. This guide explains how to build an efficient, risk-based KYC refresh strategy using identity verification tools to improve compliance, customer experience, and operational performance.
Accelerating Ultimate Beneficial Ownership Discovery with KYB Compliance Software
Beneficial ownership discovery doesn’t need to be slow or manual. This article explores how firms can use advanced KYB software to comply with UBO requirements from AUSTRAC, FCA, FinCEN, and the EU AMLA – while improving customer satisfaction and operational efficiency.
