Action Underscores Critical Importance of Integrating Virtual Currencies Analysis to Know Your Customer and Sanctions Screening Programs
PALO ALTO, CA., December 5, 2018 – IdentityMind, Digital Identities You Can Trust, today announced that in the wake of the recent U.S. Department of the Treasury’s Office of Foreign Assets (OFAC) action of adding two bitcoin addresses linked to sanctioned Iranians to the OFAC specially designated nationals (SDN) list, that it is uniquely positioned to help protect financial institutions (FIs) and others with its patented virtual currency risk assessment (VCRA) intelligence that is already built into its Version 2.0 platform.
“Having know your customer (KYC) and sanctions screening technology that can seamlessly integrate knowledge of virtual currencies and blockchain analysis is becoming essential for ensuring that the digital financial infrastructure isn’t being used for money laundering or terrorist financing,” said Jose Caldera, Chief Products and Marketing Officer, IdentityMind. “The step taken by OFAC is a reaffirmation of the importance of virtual currencies in the financial ecosystem. IdentityMind stands ready to help FIs, FinTechs, payment facilitators (PayFacs) and digital marketplaces comply with virtual currency BSA-FinCEN regulations.”
As context, on November 28, the U.S. Department of the Treasury’s Office of Foreign Assets (OFAC) added two bitcoin addresses controlled by two Iran-based individuals to the OFAC specially designated nationals (SDN) list. This action marks the first time OFAC, or other governmental regulatory body worldwide, publicly attributed digital currency addresses to designated individuals. Moreover, they’ve added the addresses in a way that allows them to add not just Bitcoin, but other virtual currencies as well. The two cited bitcoin addresses had received over 7,000 transactions — worth millions of dollars — from 40 exchangers, including some in the U.S.
“We are publishing digital-currency addresses to identify illicit actors operating in the digital-currency space,” said Sigal Mandelker, Treasury Under Secretary for Terrorism and Financial Intelligence, in the November 28 statement. “Treasury will aggressively pursue Iran and other rogue regimes attempting to exploit digital currencies and weaknesses in cyber and anti-money laundering/countering financing of terrorism safeguards to further their nefarious objectives.”
According to Caldera, IdentityMind’s VCRA provides fundamental intelligence to make sure individuals and business aren’t related to sanctioned virtual currency addresses via a three-part solution:
- Blacklisting the sanctioned addresses: This prevents customers from sending or receiving directly from sanctioned addresses.
- Using a blockchain explorer to monitor transaction history of different addresses: This alerts FIs if bitcoin moves from a sanctioned address to a non-sanctioned address that they do business with.
- Be able to relate bitcoin addresses to names: IdentityMind’s electronic DNA (eDNA) creates a digital identity for each customer. This identity contains every payment instrument a customer has been associated with, including bitcoin addresses. This enables FIs to know if an individual receives or sends funds from a blacklisted bitcoin address, even if the customer never tells the FI their address.
In addition to the virtual currency risk assessment on customers, FIs can monitor new or existing customers’ associations to digital identities with high virtual currency risk – which includes ransomware, stolen tokens, or darknet – or virtual currencies which might get reported by OFAC’s SDN list in the future, giving additional depth to the enhanced due diligence (EDD) procedures.
IdentityMind’s Trusted Digital Identities Network allows financial institutions to gain virtual currency risk insights on their customers’ digital identities to identify illicit actors and furthermore allow them to proactively meet their regulatory and moral obligations, ultimately protecting their platforms from being used as tools for money laundering or other nefarious objectives.
IdentityMind was recently named to the RegTech 100. Additionally, IdentityMind KYC, AML, and fraud prevention solutions have been recognized by a variety of leading market analysts, including Forrester’s “Vendor Landscape: Anti-Money Laundering Solutions,” April 2017; Representative Vendor in Gartner’s “Market Guide for Identity Proofing and Corroboration,” April 2018; Sample Vendor in Gartner’s “Hype Cycle for Identity and Access Management Technologies, July 2018; Sample RegTech Vendor in Gartner’s “Hype Cycle for Digital Banking Transformation, 2018,” July 2018; Leading AML Advanced Analytics Vendor in Aite Group’s “The AML of Tomorrow: Here Today,” July 2018; and IDC Innovator in International Data Corporation’s “IDC Innovators: Identity Proofing Solutions to Prevent New Account Fraud and Enhance KYC Compliance, 2018,” July 2018.
- Video: IdentityMind 2.0 Introduction Video
- Medium Article: Trusted Digital Identities – Creating a Common Framework for Proofing, Monitoring, and Trusting Digital Identities
- Guide: Digital Identity Evaluation Guide
- IdentityMind 2.0 Webinar: IdentityMind 2.0: How Our Clients Helped Us Shape Transaction Monitoring
IdentityMind, creator of Trusted Digital Identities (TDIs), offers a SaaS-based platform for online risk management and compliance automation. We help companies reduce client onboarding fraud and transaction fraud, and enhance AML compliance, sanctions screening, and KYC compliance. IdentityMind continuously builds, validates, and risk scores digital identities through electronic DNA (eDNA™) technology to ensure global business safety and compliance from customer onboarding and throughout the customer lifecycle. We securely track the entities involved in each transaction (e.g. consumers, merchants, cardholders, payment wallets, and alternative payment methods) to build payment identity reputations and allow companies to identify and reduce potential fraud, evaluate merchant account applications, onboard accounts, enable identity verification services, and identify potential money laundering. For more information, visit IdentityMind on Web, Twitter, LinkedIn, Facebook, Instagram, Blog, and Google My Business.
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Director of Corporate Communications
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