The cryptocurrency and digital asset market continues to drive remarkable year over year growth, showing no signs of slowing down. With unprecedented growth and market volatility comes the need for the study of potential risks and liabilities for companies issuing new digital currencies, investors speculating on them, and the financial institutions ultimately servicing them. Our well-established multidisciplinary team of cryptocurrency and digital asset experts from government, law enforcement, and the private sector can assist with due diligence, risk assessment, tracing and asset recovery, outsourced compliance functions and fraud investigations associated with the creation, development and deployment of a digital asset strategy and program. We provide a comprehensive approach in identifying critical business issues and providing effective solutions to help all types of digital asset market participants keep up with the latest developments occurring within the new value-transfer digital asset marketplace.
We can assist clients obtain licensing approval from the New York State Department of Financial Services for a BitLicense, register with the Securities Exchange Commission as a national securities exchange, or receive a limited purpose trust charter. Also, we can provide assistance in creating and implementing written Anti-Money Laundering (AML) compliance programs ahead of clients’ registering with the U.S. Department of the Treasury’s FinCEN as well as applicable state-level remittance licensing authorities.
We also help clients navigate and mitigate Bank Secrecy Act and Anti-Money Laundering (BSA/AML) compliance risks as they strive to establish new banking relationships and satisfy regulatory requirements domestically and internationally. We are also assisting clients as they update and implement new policies related to the European Union’s Fifth Anti-Money Laundering Directive, by helping to ensure that they have compliance programs in place that protect their customers and can withstand regulatory scrutiny.
We advise all types of financial institutions rationalize risk vs. reward in the cryptocurrency ecosystem, identify and authenticate digital identities to mitigate potential terrorist financing and economic sanctions risks, and design transaction monitoring and surveillance programs to detect potential fraud, illicit transactions and money laundering. We also offer bespoke advisory services to private banking clients, investment funds and family offices who seek to access or invest in the digital assets ecosystem.
Rapid growth tied to these new technologies have also made virtual currency exchanges themselves susceptible to cybersecurity intrusion incidents, hacking, financial frauds and malfeasance. As experts in AML, Know-Your-Customer (KYC), Anti-Bribery Corruption (ABC), Fraud Investigations, and Cybersecurity programs, we offer event-driven remediation and corrective action plans.
Cryptocurrency Outsourced Compliance
The recent surge in the global digital asset market has led to the need for regulatory compliance solutions to keep up with this growth. From verifying customer identities during the application stage to ensuring the source of funds are legitimate, digital assets must adopt policies and procedures to ensure that digital asset transactions are screened appropriately. K2 Intelligence is a premier provider in a wide array of compliance related services including developing or amending existing policies, training and business intelligence tools.
Tailored for the digital asset ecosystem, K2 Intelligence’s third-party Financial Intelligence Unit (FIU) is an outsourced business process and technology service platform that integrates anti-fraud and AML functions with leading process management systems and business intelligence tools that enable financial institutions to meet ever evolving regulatory requirements surrounding digital assets. Our FIU solution offers enhanced due diligence through periodic reviews and Know Your Customer (KYC) remediation that lets you leverage its capabilities in a way best suited to your company. For those clients requiring a more comprehensive approach, we can leverage our own best-in-class technology and our experienced professionals to act in the capacity of the financial institution’s FIU—and we see to it that the unusual activity alert generating rules are tailored, appropriate and are being applied correctly. Since our FIU platform is a scalable solution, we can offer interim and peak-volume assistance.
Cryptocurrency Licensing Approval
We have assisted digital asset exchanges in obtaining licensing approval enabling clients to open for trading. Our team of experts can craft AML and KYC policies and conduct Anti-Money Laundering/Combating Financing of Terrorism (AML/CFT) training for clients. K2 Intelligence’s teams have the expertise and the ability to get information from all around the globe, thus helping you mitigate your risk.
Cryptocurrency within Financial Institutions
Around the world, financial institutions are surveying the rapidly evolving digital asset ecosystem and as new technologies emerge, new sets of rules and regulations must be implemented. Due to the almost anonymous nature of digital currencies, many companies are left to grapple with the challenges of managing these risks along with the compliance requirements to know their customers’ identities, monitor their transactions and detect suspicious activity. When FinCEN declared administrators or exchanges of digital currency as money service businesses (MSBs), these entities were obligated to fulfill several requirements established by the Bank Secrecy Act (BSA) and the USA PATRIOT Act.
K2 Intelligence’s multifaceted team of former regulators, law enforcement, intelligence and compliance professionals have the expertise to assist these companies to meet regulatory requirements, create, implement and maintain an effective AML program, verify customer identities, monitor transactions for unusual activity, conduct customer due diligence and when needed, conduct enhanced due diligence. Implementing appropriate and tailored organizational compliance policies and procedures are integral in preventing a financial institution, including MSBs, from being used to facilitate money laundering or finance terrorist activities.
Our team has the expertise to assess, review, enhance, test and validate compliance programs and frequently conduct annual independent tests to ensure compliance with the Bank Secrecy Act (BSA), Anti-Money Laundering (AML) regulations and OFAC sanctions. Designed to monitor the adequacy of an institution’s anti-money laundering program, annual independent reviews determine whether the business is operating in compliance with both BSA and sanctions requirements and whether it is following its own established policies and procedures. We can review your customer base, perform periodic reviews updating all your due diligence, and help you know who your customer is and identify beneficial ownership. Our team of experts can create and implement regulator ready AML programs for your company designed to comply with U.S. standards.
Cryptocurrency Fraud Investigations and Financial Crimes
Cryptocurrencies designed with anonymity and lack of controls have proven to be attractive targets for criminal activity. The ambiguous nature of some types digital currency transactions makes them susceptible to money laundering, tax evasion and other types of financial fraud. K2 Intelligence can help mitigate risks that stem from such anonymity and assist digital asset companies with amending their existing policies and procedures. Our team can provide tailored solutions and guidance to virtual currency firms to accommodate the current regulatory framework.
Our talented professionals come from varied backgrounds that can help with tracking transactions, identifying fraud or fraudulent initial coin offerings (ICOs) and mitigate emerging risks. K2 Intelligence helps clients with fraud detection, investigative, and forensic services to minimize the possibility of fraudulent activities. We can advise businesses on how to protect their assets and avoid investment schemes, money laundering and other financial fraud. We diagnose and forensically analyze instances of embezzlement, procurement fraud, financial statement fraud, and other large-scale misappropriations from either inside or outside the client’s organization. We also provide asset tracing and recovery services. Our global asset tracing team, comprised of forensic accountants and skilled investigators, has a solid track record assisting clients with high profile and high value asset recovery investigations and are able to trace transactions on most digital asset blockchains to further aid in the recovery process.
K2 Intelligence combines a financial investigation and technical forensic accounting skill set with the ability to identify and obtain relevant external intelligence and information to produce uniquely informed results for our clients. Investigations into instances of fraud have the potential to lead to loss, regulatory censure, and reputational damage. Financial by their nature, these improprieties may include the making of illicit payments, embezzlement, procurement fraud, financial statement fraud, misappropriations from either inside or outside the client’s organization, or the manipulation of market metrics. By working closely with the client’s counsel, our diverse team of forensic accountants, legal experts, corporate intelligence professionals, and former regulators can determine how the wrongdoing arose, the impact on the business, and the means to resolution.