All buyers holding crypto-currency must undergo regular KYC (Know Your Customer) and ALM (Anti Money Laundering) verification.
In the US, Bitcoin exchanges are considered MSB's (Money Service Business). FinCEN (Financial Crimes Enforcement Network) a a bureau of the U.S. Department of the Treasury, issued a guidance regarding Persons Administering, Exchanging, or Using Virtual Currencies: “In addition, a person is an exchanger and a money transmitter if the person accepts such decentralized convertible virtual currency from one person and transmits it to another person as part of the acceptance and transfer of currency, funds, or other value that substitutes for currency.”
As a “financial institution”, MSBs are required to comply with Bank Secrecy Act laws and regulations, including AML (Anti-Money Laundering) requirements. They also need to comply with KYC (Know Your Customer) rules.
As the licensing of these is done a state by state level, the complexity is a substantial issue for startups. Recently though, the OCC (Office of the Comptroller of the Currency) announced they will start allowing fintech firms to apply for a national charter. This will allow one national license to cover all the states, without requiring the burden of a full bank license.
For other roles in the cryptocurrency space, Peter Van Valkenburgh, notes in a Coin Center Report , “Subsequent administrative rulings clarified several remaining ambiguities: cryptocurrency miners are not money transmitters, neither are investors or software developers.”
Our KYC Process
Know Your Customer rules are automatically enforced and validated with an 18-question procedure if coming from the list of US-Approved Countries listed here: https://www.irs.gov/businesses/international-businesses/list-of-approved-kyc-rules.
If the country is not in that list, customers must create an account and get verified by our KYC partner Civic (civic.com).
- Phone verification
- Email verification
- Valid State / Country Issued Id Card
Our ALM Process
Firms must comply with the Bank Secrecy Act and its implementing regulations ("Anti-Money Laundering rules"). The purpose of the AML rules is to help detect and report suspicious activity including the predicate offenses to money laundering and terrorist financing, such as securities fraud and market manipulation. More details HERE.
Anti-Money Laundering rules are enforced by FINRA. Realdax, Intelerit Corporation and its subsidiaries are not registered MSB(s). Instead we facilitate the software, tools and services necessary (as a software developer) to facilitate the transfer of crypto from individuals to MSBs for the purposes of transacting Real Estate.
The Realdax Payments team will work with the Escrow Officer representing the transaction to facilitate the setup of such systems, and the compliance necessary by the MSB.