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Compliance standards play a pivotal role in establishing trust and integrity in the world of fintech. Recent allegations against Binance by the SEC have sparked a discussion about the evolution of these standards, including the use of geolocation anonymization detection technology.
While anti-money laundering (AML) and know-your-customer (KYC) regulations are essential in protecting users and upholding credibility of the financial system, industry progression demands new, innovative solutions.
Why IP Detection is Not Enough
Relying solely on IP addresses for location compliance is no longer adequate to meet evolving standards. IP addresses are easily manipulated using tools like VPNs, proxies, and fake location apps. The SEC’s action against Binance simply highlights in vivid detail what many experts in geolocation already knew: IP Address-based controls allow users to bypass compliance requirements.
To address this limitation, advanced and multi-signal geolocation detection technology is crucial. Geolocation detection products that use data sources such as Wi-Fi routers, cell towers, and GPS can determine a device’s true location in ways that IP addresses cannot. When it comes to fintech, this means being able to block potentially fraudulent users or introduce additional controls as required to have greater confidence in the integrity of end users.
Embracing Geolocation Compliance: Sports Betting Industry
The U.S. sports betting industry is a prime example of how geolocation technology can fuel fairness, regulator acceptance, and revenue growth. When a Supreme Court ruling in 2018 returned sports betting authority to individual states, it became mandatory that operators must use strong geolocation controls within their platforms.
Having successfully addressed those critical compliance concerns with geolocation detection technology, the sports betting industry has since transformed into a mainstream economic engine. Advanced geolocation instilled confidence in regulators, policymakers, and consumers, resulting in widespread acceptance and success of sports betting platforms.
The Future of Fintech and Geolocation
As fintech and crypto industries continue to evolve, robust compliance standards are essential for fostering trust, protecting users, and ensuring the legitimacy of digital assets. By leveraging modern geolocation processes and standards, platforms can strengthen compliance, foster fairness, and protect all participants. This can close loopholes and establish a fintech system that prioritizes compliance and the protection of all stakeholders.
Embracing innovative geolocation technologies and solutions demonstrates commitment to compliance, ethics, and a trustworthy financial system.
To learn more about how geolocation can enhance your financial services, book a demo and talk to an expert about what GeoComply products can help your business become more resilient.