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Cryptocurrency Companies to Raise the Compliance Bar in 2022

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  • Financial Services

Next-Generation Geotechnology Elevates OFAC & FinCEN Compliance

2021 saw a slew of negative compliance stories around cryptocurrency, from huge fines to strict prohibition in multiple markets. Indeed, the number of countries that placed an absolute or implicit ban on crypto doubled in only three years.

However, 2022 is set to see a turning of the tide with several leading crypto exchanges launching next-gen geolocation security services from GeoComply – the global market-leader in geolocation compliance.

By tapping into device-based geolocation data signals, such as GPS and WiFi triangulation, these exchanges will materially raise the compliance standards within the virtual asset world. Not only that, they’ll leap-frog crypto platforms ahead of online banks’ legacy systems, which still rely on the ‘90s tech of IP addresses for geolocation.

These older systems can’t even geolocate you well enough to let you use your credit card while traveling and can’t spot VPN usage. Nobody wants tomorrow’s digital payment systems to be handicapped by the same flaws.

As the U.S. Treasury guidance in late 2021 made clear, the time has come to move to a geolocation system which is fit for purpose, and today’s cryptocurrency companies are already gearing up to meet the challenge.

Advanced location signaling provides another critical data point that gives insight into the legitimacy and validity of transactions.

“Virtual currency companies with strong sanctions compliance programs should be able to use geolocation tools to identify and prevent IP addresses that originate in sanctioned jurisdictions from accessing a company’s website and services for activity that is prohibited by OFAC’s regulations.”

– Source: Sanctions Compliance Guidance for the Virtual Currency Industry, U.S. Department of the Treasury | Office of Foreign Assets Control (OFAC), Oct. 2021

Geolocation You Can Bank on for OFAC and FinCEN Compliance

We built our business to solve the problem of how easy it is to fake location on the internet. As the world embraces virtual assets, we are happy to support our clients who demonstrate that technical and financial innovation can also raise the compliance bar!

That’s where GeoComply comes in. By using our highly accurate, compliance-grade geolocation solutions, virtual asset companies demonstrate to regulators that compliance is not a standard checklist most financial institutions follow.

Rather, they prove that compliance is a commitment to empowering the future of digital trust by making the internet a safe and secure place to do business.

Backed by Blackstone, the world’s largest private equity firm, GeoComply offers a trusted and accurate solution, processing more than 9 billion transactions a year and is installed on more than 400 million devices worldwide.

Since launching in the highly regulated U.S. gaming market in 2013, GeoComply has honed its technology using device-based data (accurate to within 35 yards on average).

GeoComply uses zero-friction geolocation security to deliver this pinpoint accuracy to the largest brands in highly regulated markets – such as DraftKings, MGM, FanDuel, Caesars and others. GeoComply’s software can be easily integrated via an API and is available on AWS and Akamai Marketplaces, and the NICE Actimize X-Sight Marketplace.

Globe made of dots
  • 9 billion+

    analyzed transactions per year, and growing

  • 400 million+

    installed devices worldwide

  • 350+

    checks run on every transaction

GeoComply Strengthens KYC/AML & OFAC Sanctions Compliance

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Cost of Noncompliance

Regulatory impact
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Cost of Noncompliance

Regulatory impact

  • checkmark Monetary penalties (1)
  • checkmark Loss of operating license
  • checkmark Increased scrutiny from regulators
  • checkmark Possible criminal action

    How GeoComply Helps

  • checkmark Geofence sanctioned or high-risk jurisdictions using trusted, verified location data from multiple sources.
  • checkmark Identify the use of high-risk VPNs, fraudulent IP addresses and other location spoofing methods.
  • Benefit

  • checkmark Block high-risk users or users from sanctioned jurisdictions.
  • checkmark Determine the legitimacy of an IP address potentially associated with criminal activity.
  • checkmark Eliminate risk of sanctions violations.
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Cost of Noncompliance

Reputational harm
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Cost of Noncompliance

Reputational harm

  • checkmark Churn due to loss of consumer confidence
  • checkmark Greater scrutiny from banking & payments partners (“de-risking”) (2)

    How GeoComply Helps

  • checkmark Improve location assurance by collecting and verifying location data from multiple sources.
  • checkmark Verify a customer’s true location as part of their digital identity – from onboarding to updating user credentials.
  • Benefit

  • checkmark Onboard more legitimate customers while stopping bad actors.
  • checkmark Strengthen customer and partner trust using geolocation tools aligned with OFAC “best practices.”

1 An enterprise application software company was fined more than $2 million for violating Iranian transactions and sanctions violations. OFAC noted the company “did not…implement adequate controls in a timely manner (e.g., instituting geo-location IP address screening for…software delivered from the United States).” (source)

2 Banks and payment processors are liable for transactions they perform on behalf of customers – they increase their regulatory risks serving a virtual asset company with substandard compliance. OFAC fined a money services business nearly $1.4 million for processing more than 2,200 illegal transactions for corporate customers and card-issuing financial institutions. (source)