Customer Due Diligence & Virtual Currency

When it comes to crypto and/or other types of virtual currencies, what do financial institutions need to consider when it comes to customer due diligence (CDD)? First and foremost, is recognizing and understanding that any crypto/virtual currency activity is going to be inherently higher risk. Being higher risk; however, doesn’t necessarily mean the activity or the customer relationship is bad. It’s just higher risk than other types of activity or customer relationships you may have. But, before you get to doing any business with a customer that is in the crypto/virtual industry, you need to make sure that you've done your due diligence and understand what the customer is doing or their role. For example, are they just a user of virtual currency or are they a miner or an exchange? From there, you will need to likely look at some more enhanced due diligence efforts.

Kevin explains more in the video.

Video Highlights:

• Crypto and/or other virtual currencies are inherently higher risk.
• The level of risk may depend on whether a customer is an exchanger, administrator or just purchasing virtual currency as an investment.
• Exchangers and administrators might also be a Money Service Business, so further evaluation could be necessary.

Published
2023/12/14