Crypto exchange addresses critical KYC and AML issues with fund admin partnership

Archax partners with Custom House Global Fund Services to address KYC and AML requirements for forthcoming security token offering.

Cryptocurrency exchange Archax is seeking to address one of the largest barriers facing institutional investors looking at trading digital assets by partnering with a fund administrator for Know Your Customer (KYC) and Anti Money Laundering (AML) checks.

The trading venue will team up with Custom House Global Fund Services to perform the checks on all entities wishing to participate in Archax’s forthcoming security token offering.

Regulators expect sufficient screening to have been completed and weak KYC is a common complaint. KYC is a long and thorough process in the financial industry and is usually undertaken by dedicated teams.

Addressing these issues is a vital part in building trust and security within an industry which has previously been compared to the ‘Wild West’.

“Coming from the hedge fund industry, we realise how important it is for institutions and their clients to know exactly who their trading counterparties are, as well as exactly where funds have come from,” said Graham Rodford, CEO and a founder of Archax.

“Regulations are very strict in this area and the existing crypto space simply doesn’t operate in the way that these firms both need and expect. We are very pleased to be working with such a strong partner as Custom House, as I know it will give firms the comfort they need that checks being performed are of the highest institutional standard.”

The activities that Custom House will perform for the Archax exchange will include legal entity checks, identifying beneficial owners/controlling persons and terrorist/political screening.

“Performing KYC and AML checks, as well as many other fund administration, compliance and regulatory tasks, is the lifeblood of what we do for our clients operating in traditional markets all over the world,” said David Barry, COO of Custom House.

“We have been looking at ways to broaden our services, and the crypto space is of interest to us as it presents a unique and exciting opportunity. Working with Archax, who know the crypto and traditional investment spaces well, and understand how institutions need to operate, gives us precisely the route and partner we need to expand into this new market.”