This document appears to be a presentation on conducting Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance for digital currencies. It discusses the challenges of applying traditional KYC/AML processes to digital currencies and decentralized systems, and proposes a shared data network approach using portable identity certificates stored on the blockchain to enable reusable onboarding data and distributed compliance functions across organizations. It also promotes a company called Strevus that offers a single solution for digital currency KYC/AML compliance needs.

1. Presented
@
INSIDE
BITCOINS
Las
Vegas
-­‐
October
7,
2014
1
ConducBng
KYC
and
AML
Compliance
for
Digital
Currencies
OCTOBER,
2014

2. Presented
@
INSIDE
BITCOINS
Las
Vegas
-­‐
October
7,
2014
2
IntroducBons
Dmitri
Korablev
VP
Engineering,
Co-­‐Founder,
Strevus
@korabli
• Over
20
years
experience
in
SaaS,
enterprise
data
and
process
management,
and
financial
services
• Former
VP
and
GM
of
Product
InformaBon
Management
at
InformaBca
“Simple things should be
simple and complex things
should be possible.”
Alan Kay
Compliance
Made
Easy.

3. Presented
@
INSIDE
BITCOINS
Las
Vegas
-­‐
October
7,
2014
3

4. Presented
@
INSIDE
BITCOINS
Las
Vegas
-­‐
October
7,
2014
4
Are
the
tradi?onal
KYC
/
AML
processes
effec?ve?
Are
they
required?
How
can
Bitcoin
help
disrupt
the
status
quo
in
KYC
and
other
compliance
areas?
1
2
3

5. Monetary Policy
Courts Financial
Crime
Consumer Protection
Presented
@
INSIDE
BITCOINS
Las
Vegas
-­‐
October
7,
2014
5
Digital
RegulaBons
&
Government
Affairs
UNITED
KINGDOM
|
The
authority
now
says
it
wants
to
ensure
“posiBve
developments”
like
bitcoin
are
supported
by
the
naBon’s
regulatory
environment.
-­‐
UK
FCA
CEO,
Mar.n
Wheatley
CHINA
|
Consumers
and
businesses
should
take
note
of
the
broader
risks
that
dealing
in
virtual
currencies
entails
and
should
exercise
the
necessary
cauBon.
-­‐
MAS
Deputy
MD,
Ong
Chong
Tee
HONG
KONG
|
ExisBng
laws
in
Hong
Kong
already
cover
acts
of
fraud
and
money
laundering
involving
“virtual
commodiBes”
-­‐
Hong
Kong
Monetary
Authority
UNITED
STATES
|
Any
financial
insBtuBon
could
be
exploited
for
money
laundering
purposes.
Therefore,
all
financial
insBtuBons
must
put
controls
in
place
to
deal
with
these
threats.
-­‐
US
Department
of
Treasury,
David
S.
Cohen
PERMISSIVE
CONTENTIOUS
TAXATION
Innova?on
HOSTILE
UNKNOWN
Jobs
Poli?cal
Agendas
KYC ATF AML

6. REGULATORS
MARKET
WHEN:
Many
companies
are
implemenBng
the
policies
proacBvely
to
gain
compeBBve
advantage
Presented
@
INSIDE
BITCOINS
Las
Vegas
-­‐
October
7,
2014
6
WHAT:
Unstable
and
inconsistent
digital
currency
regulaBon
creates
confusion
on
processes
and
standard
Bitcoin
Compliance
Today
WHAT:
Deal
with
unique
challenges
of
the
Decentralized
and
Open
system
and
the
built-­‐in
privacy
mechanism
PROPRIETARY
AND
CONFIDENTIAL
WHO/WHEN:
Bmelines
and
regulatory
boundaries
HOW:
Unclear
implementaBon
Evaluate
Digital
Currencies
in
the
context
of
the
exisBng
legislaBon
HOW:
Allocate
budget,
implement
the
minimum
processes,
focus
on
automaBon
and
efficiency

7. • Define
CDD
and
EDD
• Automate
CDD
(consumer/retail)
-­‐
ID
verificaBon,
Screening
(PEP,
SancBons,
NegaBve
news)
• Define
Risk
levels
and
apply
Enhanced
DD
screening
• Set
up
periodic
reviews
Presented
@
INSIDE
BITCOINS
Las
Vegas
-­‐
October
7,
2014
7
• Owner
&
Responsible
Officer
&
Budget
• Documented
Processes
• Strong
Privacy
Policy
• 3rd
party
audits
• NegaBve
news
monitoring
• TransacBon
monitoring
• Define
and
monitor
“abnormal
use”
paferns
• Understand
the
SAR
process
ahead
of
Bme
• Engage
with
the
regulators
• Educate,
but
stay
grounded
in
reality
• Study
the
exisBng
law
and
offer
alternaBves
TradiBonal
KYC
Model
COMPLIANCE
ORGANIZATION
&
PROCESSES
KYC
PROGRAM
RISK
AND
MONITORING
ENGAGE
WITH
THE
REGULATORS
AND
COMMUNITY
1
2
3
4

8. Presented
@
INSIDE
BITCOINS
Las
Vegas
-­‐
October
7,
2014
8
Digital
Currency
Exchange
Ecosystem
FLAT
CUSTODIAN
• Exchange
conduct
KYC/
AML-­‐DD,
collaborate
with
the
Custodial
bank
• Traders
must
go
through
the
KYC/AML-­‐DD
process
at
all
exchanges
that
they
trade
at.
• Exchange
members
may
have
to
conduct
KYC/AML-­‐
DD
on
partners.

9. Presented
@
INSIDE
BITCOINS
Las
Vegas
-­‐
October
7,
2014
9
Distributed
eco
system
needs
distributed
idenBty
SHARED
DATA
NETWORK
Re-­‐usable
Onboarding
Compliance
Data
Portable
Profile
CerBficate
Crowd-­‐based
velng
Network
based
suspicious
acBvity
reporBng
Community
Based
Client
Risk
Profile
1
2
3
4
5

10. Presented
@
INSIDE
BITCOINS
Las
Vegas
-­‐
October
7,
2014
10
SHARING
is
controlled
by
clients
with
informaBon
and
enBtlements
stored
on
the
Blockchain
STRUCTURE
OF
DATA
and
documentaBon
can
be
customized
without
central
intervenBon
ENABLES
COMMUINTY
FEEDBACK,
greater
visibility
and
reputaBon
building
Enables
WIDER
COLLABORATION
across
and
within
organizaBonal
boundaries
P2P
Compliance
and
Digital
IdenBty

11. Presented
@
INSIDE
BITCOINS
Las
Vegas
-­‐
October
7,
2014
11
Want to learn more about how Strevus can help?
WILL
GROW
WITH
YOUR
ORGANIZATION
through
a
plamorm
that
supports
immediate
CDD
needs
today
and
can
adapt
to
support
EDD
needs
in
the
future
AFFORDABLE
to
purchase,
protects
against
future
costs
EASY
TO
INTEGRATE
Minimal
Demand
on
IT
and
Ops
Resources
Strevus
provides
a
SINGLE
SOLUTION
FOR
ONBOARDING
AND
COMPLIANCE
right-­‐sized
for
today’s
digital
currency
environment.
Visit
Strevus
at
Booth
#
207.
Follow
us
@Strevus