About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Institutional Crypto Exchange Archax Partners Custom House for KYC, AML Checks

Subscribe to our newsletter

By Uri Inspector, Staff Reporter

Archax, an institutional-grade cryptocurrency exchange planning to launch in 2019, has tapped fund administrator Custom House Global Fund Services to conduct Know Your Customer (KYC) and Anti-Money Laundering (AML) checks on all future exchange participants. Custom House will ensure that all firms or professional investors wishing to join the Archax exchange will first undergo legal entity checks, beneficial ownership/controlling persons identifications and terrorist/political screening.

Checks will also be performed on all entities wishing to participate in Archax’s upcoming Security Token Offering (STO) funding round, with all those applying required to answer a list of questions to ensure suitability. Once pre-approved, all applicants will be sent to Customs House for a decision on their final approval or rejection from the programme.

As for the onboarding process for the Archax exchange, documents on each participant will be delivered to the independent fund administration specialist – for which the deal marks a first move into the crypto space – for the same selection process.

Archax’s founders opted for Custom House to provide the KYC/AML checks as they had used the fund administrator as a transfer agent at their previous employer Omni Partners, a role that included performing checks on subscription documents, suitability, public registers and declarations for any investor in one of their funds.

With institutions looking for a degree of transparency and control that is largely absent from crypto exchanges in the retail space, Archax has prioritised the adoption of best practice regulatory, compliance and operational principles.

Archax CEO Graham Rodford says: “There are good controls, checks and processes in the traditional investment world that shouldn’t be disregarded. They can be just as useful for, and can enhance, the digital asset space.” He adds: “Most of the exchanges out there do have AML and KYC checks, although some still don’t. They usually do it by identity verification on the actual exchange itself, asking a trader a few key questions before they can trade. But these processes are not on the same level as we are used to in the traditional world.”

Archax’s separation of AML and KYC checks from the exchange will allow it to offer to both clients and regulators assurances that the checks have been conducted by an independent party. Rodford says: “This will make it easier for institutions to work with us. They are likely to assess any counterparty and the more check points they have, the better.”

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: How to automate entity data management and due diligence to ensure efficiency, accuracy and compliance

Requesting, gathering, analysing and monitoring customer, vendor and partner entity data is time consuming, and often a tedious manual process. This can slow down customer relationships and expose financial institutions to risk from inaccurate, incomplete or outdated data – but there are solutions to these problems. This webinar will consider the challenges of sourcing and...

BLOG

An Integrated Approach to Combating Financial Crime

Digital transformation in the capital markets sector has given rise to a dramatic increase in the volume of transactions and data, particularly in highly liquid markets. This increase coupled with complexities in cross-border and cross-product trading activity and innovations in financial assets (crypto, digital assets) has created a fertile ground for criminal exploitation. Financial crime...

EVENT

TradingTech Briefing New York

Our TradingTech Briefing in New York is aimed at senior-level decision makers in trading technology, electronic execution, trading architecture and offers a day packed with insight from practitioners and from innovative suppliers happy to share their experiences in dealing with the enterprise challenges facing our marketplace.

GUIDE

Regulatory Data Handbook – Third Edition

Need to know all the essentials about the regulations impacting data management? Welcome to the third edition of our A-Team Regulatory Data Handbook which provides all the essentials about regulations impacting data management. A-Team’s series of Regulatory Data Handbooks are a great way to see at-a-glance: All the regulations that are impacting data management today...