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Fintech Case Study

An innovative fintech firm, shaping the future in how cryptocurrencies can be adopted into mainstream spending, is establishing an exchange whereby cryptocurrencies can be exchanged for fiat which is then spendable via a prepaid card.

The Brief

As cryptocurrencies have not yet been considered a ‘specified investment’ by the FCA, the firm is not subject to the full regulatory landscape, particularly in relation to financial crime and disclosures – although captured to a certain extent.

However, the firm wanted to develop procedures which would give their customers the fairest and efficient service possible, whilst also future-proofing their operations, considering the regulatory uncertainty in the crypto market.

As such, they sought Thistle Initiatives’ assistance in developing AML & KYC policies and procedures in line with regulatory requirements, as if cryptocurrencies were considered a regulated specified investment.

Furthermore, they wanted to ensure that appropriate disclosures and risk warnings were made available to investors so they can more easily understand the inherent risks with such an investment.

What We Did

Thistle had a face to face meeting with the client, gathering information through discussions and document sharing, specifically around their model, current operations and key milestones, followed by a gap analysis of the information and documentation provided. The focus was on their current AML & KYC processes, as well as their customer journey.

Following the gap analysis, we issued a report highlighting our initial findings and where improvements could be made, setting out expectations, as well as proposing a project plan with implementation dates.

Using the information gathered and the targets agreed post our report, financial crime policies and KYC due diligence procedural documents were produced, with feedback on where development was needed and the likely time forecast as part of the implementation. This also included a risk assessment which the firm is now able to maintain internally, updating it with any changes in model or process. Thistle also assisted the client make relevant disclosures on their website to ensure investors understand the risks associated.

The Result

Thistle identified that the client needed to build out certain elements that were identified through meetings, on-going discussions, fact-finding and ultimately fully understanding their business model.

We worked with the client to develop and implement compliant AML and KYC policies and procedures, that would match the standards of an FCA regulated firm.

They are now trading, fully understand their AML and KYC responsibilities and have a thorough vetting process in place before formalising a business relationship with each potential customer.

The client now also highlights some of the risks associated with investing in cryptocurrencies so that investors can more readily understand the risks.

Visit our Fintech page for more information on our services.