Implementation of a Compliance and Licensing Program
Objective
Implemented a Compliance and Licensing Maintenance Program across all US jurisdictions for a Global P2P Crypto Company.
Background
Our client was a prominent early-stage company offering the first global peer-to-peer payments app and a bitcoin-native financial experience, widely reported as one of the most significant crypto developments in 2021.
This crypto transfer company supports fiat transfers, conversions into bitcoin, fiat-to-fiat, and crypto-to-crypto transactions for a large and global user base based on a high-volume transactions model that exposes it to relevant compliance risks, including money laundering and fraud. The company also needed to build its new U.S. compliance program from the ground up.
See also:
Challenges
Crypto exchanges are regulated entities subject to multiple regulators, spanning many compliance areas including AML, cybersecurity, fraud, KYC, and business continuity. Because regulatory risk frameworks and requirements differ across each regulator, monitoring and reporting is complex.
Moreover, it is challenging to design and implement large-scope solutions in a nascent industry. There are few established industry best practices or clearly leading tools. Therefore, current and unique knowledge is needed to select tools and apply new forms of compliance expertise.
In addition, for this growing organization, the sheer number of transactions and complexity of compliance created cost and scale challenges.
InnReg's Solution
InnReg was hired to establish the company’s custom compliance program to meet all ongoing requirements by both state and federal regulators – including AML processes, suspicious activity monitoring, vendor management, employee compliance, license maintenance and reporting requirements.
InnReg’s automated tools and outsourced compliance team enabled the client to effectively manage all escalations and provided experienced critical operational personnel to review suspicious transactions.
Specifically, InnReg:
Implemented a custom compliance program
Provided additional expert perspectives and advice
Created ad-hoc procedures based on merchant (B2B) and customer (B2C) risk profiles
Created a customized algorithm for suspicious activities that is now used by the client
Customized a proprietary dashboard to track requirements for license maintenance
Client Results
As it grew, the client built an internal team for ongoing operations. InnReg transitioned the responsibilities and knowledge so that the company could manage its custom-built technology and processes.
Specifically, InnReg:
Collaborated with the internal team to transfer program ownership and regtech management;
Contributed expertise and know-how from exposure to similar situations and successfully leveraged it for the client's benefit; and
Enabled the client to launch a global mobile payment crypto capability, widely reported as one of the most significant crypto developments in 2021.
