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Home » Identity Verification: Only Half the Battle in the War On Money Laundering

Identity Verification: Only Half the Battle in the War On Money Laundering

There’s a common misconception — reinforced by many well known identity verification providers — that simply verifying a customer’s identity and scanning them against a sanction list satisfies the US anti-money laundering regulations. That’s not quite true.

In 2018, FinCEN added an extra layer of requirements applicable to certain “covered financial institutions” such as banks, mutual funds, brokers or dealers in securities, futures commission merchants and introducing brokers in commodities. The new requirements, called the Customer Due Diligence (“CDD”) Rule, significantly increase a covered financial institution’s due diligence obligations, especially when it comes to identifying ultimate controllers and beneficial owners of legal entity customers. Plus, certain states (e.g., NY’s BitLicense law) implemented similar requirements for certain types of firms operating in their states. Download the below report to learn more about when identity verification just isn’t enough.

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