There are several factors that determine when an entity is categorized as a “High Risk Exchange”. These factors include, but are not limited to, the following: they are known bad actors, intentionally try to circumvent AML and/or KYC measures, are known to regularly fail to cooperate with law enforcement and regulators, etc.
Read moreA Hosted wallet is an online service where a user’s bitcoins are stored by a third party (e.g., a cryptocurrency exchange.) In their Interpretive Letter #1172, the Office of the Comptroller of the Currency (OCC) defines a hosted wallet as “an account-based software program for storing cryptographic keys controlled by an identifiable third party. These…
Read moreA high-yield investment program (HYIP) is a type of Ponzi scheme, an investment scam that promises unsustainably high return on investment by paying previous investors with the money invested by new investors. Most of these scams work from anonymous offshore bases which make them difficult to track down.
Read moreAllows you to deposit fiat via a third-party intermediary for purposes of funding an account; makes it easier for criminals and others to exchange cash for crypto, increasing the likelihood of use for money laundering and other nefarious purposes.
Read moreAn “interest bearing” smart contract is indicative of Lending protocols. Interest bearing smart contracts are ERC-20 contracts at their core. The interest bearing derivative token is pegged to the value of the corresponding deposited asset and can be stored, transferred, and traded just like any other ERC-20 token. All interest collected by the token’s reserves…
Read moreISO 20022 is an International Organization for Standardization (ISO) standard for exchanging electronic messages on payments data between financial institutions, including internationally. Cryptocurrencies that are ISO 20022 compliant or in the process of becoming compliant include Ripple (XRP), Xinfin Network (XDC), Algorand (ALGO), Stellar Lumens (XLM), and IOTA.
Read moreThe know your customer or know your client (KYC) guidelines in financial services require that professionals make an effort to verify the identity, suitability, and risks involved with maintaining a business relationship. Essentially, it means that financial service organizations need to know their customer to ensure the customer is not engaging in criminal activity. The…
Read moreKnow Your Transaction or KYT is a commonly used financial industry term that refers to the process of examining financial transactions for fraudulent or suspicious activities including money laundering.
Read moreThe name of the organization as reflected by legal incorporation papers. This can help identify an organization’s involvement in legal proceedings.
Read moreA “lending pool” smart contract allows a lender to deposit funds into a pool which pool participants can then borrow. Similar to Liquidity Pools, Lenders receive “IOU” tokens to track balance and rewards. Borrowers take out over collateralized debt positions and pay fees to the lending pool which are distributed to the lenders.
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