The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

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

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.”

Related content


Recorded Webinar: Managing LIBOR transition

The clock is ticking on the decommissioning of LIBOR towards the end of this year, leaving financial institutions with little time to identify where LIBOR is embedded in their processes, assess alternative benchmarks and reference rates, and ensure a smooth transition. Some will be ahead of others, but the challenges are significant for all as...


China Merchants Bank Selects Appway for Onboarding and KYC Compliance Checks

China Merchants Bank – Singapore branch (CMB SG) has selected Appway to provide client lifecycle management solutions and domain expertise to accelerate the branch’s compliance agility and efficiencies. Appway’s Singapore office will lead the implementation of its Onboarding for Wealth and KYC Review solutions, as well as its Digital Binder product for front to back...


Data Management Summit USA Virtual

Now in its 11th year, the Data Management Summit USA Virtual explores the shift to the new world where data is redefining the operating model and firms are seeking to unlock value via data transformation projects for enterprise gain and competitive edge.


ESG Handbook 2021

A-Team Group’s ESG Handbook 2021 is a ‘must read’ for all capital markets participants, data vendors and solutions providers involved in Environmental, Social and Governance (ESG) investing and product development. It includes extensive coverage of all elements of ESG, from an initial definition and why ESG is important, to existing and emerging regulations, data challenges...