Such rapid growth, however, brings challenges, but we can help you navigate these areas. Our expertise is directly transferable to this field and we have assembled a team that brings deep knowledge of cryptoassets, which is essential to understanding crypto business models and help these firms navigate the regulatory landscape, while also helping traditional finance firms develop their knowledge of this industry, make informed decisions about their crypto strategy and thus seize the emerging opportunities of the emerging digital economy.
Current Industry Challenges
Rapidly evolving regulatory context
Crypto opens many questions about how to craft regulation that preserves the capacity to innovate while still protecting consumers and economies. However, we can already see some contours, in the shape of Financial Crime Compliance requirements and nascent registration / licensing frameworks
Lack of SMEs and expertise
The lack of familiarity with such a rapidly-changing industry can generate a too-rigid monolithic view of the industry that misses opportunities. Getting familiar with the new concepts introduced by crypto is key to articulating a crypto strategy and devising an effective risk management framework
Different risk management tools
The public nature of blockchains greatly facilitates the exploitation of a wealth of on-chain data for risk management. As a result, a rich vendor landscape has emerged with solutions that leverage this, and players need to get acquainted with these new tools at their disposal.
Advisory and Transformation
Our advisory and transformation services are delivered using proprietary tool kits and methodologies that have been developed and tested over multiple engagements, and reflect industry regulations, guidance and best practice.
Provide advice on regulatory obligations applicable to crypto firms and deliver training with regards to regulatory expectations and effective risk management
Understand when and how your business needs to be registered / licensed and prepare and manage your application
Subscription tools to assist on risk-country ratings (Compass) and client risk rating (ClientSight)
Conduct an independent assessment or audit of your AML and crypto risk management framework
Develop and deliver crypto training and awareness activities to all staff and/or top decision-makers
Assess the financial crime risks associated with the crypto business models, use cases and propositions
Assist in the development of a crypto strategy, and in conducting risk assessments to implement them
Advise on current and emerging regulatory frameworks and how to adapt your crypto strategy to these
Provide guidance on Crypto Risk Management Solutions and assist with selection and implementation
Develop and implement policies, procedures, systems and controls tailored to crypto-related activities
Programme/project management support and implementation
Preparation for regulatory reviews and support with response plans
Crypto Risk Management Solutions
Cryptoasset risks must be managed across the customer lifecyle to comply with regulatory requirements and obligations. We have established relationships with a number of crypto risk management solution providers to assist you in the choice and implementation of the solutions that best fit your business model and needs
ILLUSTRATIVE EXPOSURE BY RISK THEME
- Risk Appetite
- Policies and Procedures
- Initial Customer Risk Rating
- VASP Due Diligence
- Customer Screening
- Policies and Procedures
- Determine Source of Funds and Wealth
- Final Customer Risk Rating
- Ongoing Customer Screening (Sanctions and PEPs)
- Detect High-Risk Crypto Transactions
- Trace Source and Destination of Funds
- Ongoing Customer Risk Rating & KYC
- Conduct Trade Surveillance
- Investigate User Activity
- SAR Reporting
The above is a non-exhaustive list of vendors and is only provided for informative purposes.
AN EXAMPLE OF HOW WE CAN HELP
Crypto Firm FCA Registration
We have an in-depth understanding of the FCA’s registration process for crypto firms – specifically, we can help with the following:
We can assist in the risk assessment phase and in identifying risk mitigation measures, as well as in the drafting of the applications to evidence that the proposal has been carefully thought through and that risks have been considered.
We can provide advice and training to key individuals to ensure they are aware of applicable legal requirements and their responsibilities.
We can develop and implement the required policies, procedures, systems and controls, in a manner that is appropriate and proportionate to your business model
We can assist in carrying out the required AML/CTF risk assessments, and in the preparation and delivery of staff training and its material