Who is Investing in your business?

KYC and KYB Managed Services
May 15, 2018
Why should an ICO carry out KYC checks?
August 28, 2018

Why is it important to know who is throwing money at your venture?
The serious ICOs vs the shady ones.

ICOs (initial coin offering) have become great ways to raise cash and to support fantastic ideas; it is true, other no so great ones, have also benefited from what some people may want to label as a frenzy to throw money at “blockchain stuff”. It is not our intention to question whether some businesses should be invested in or not, but to actually understand the issues around receiving funds from a third party you have not engaged with in the past.

Regulated business have, for many years learned to deal with the ghost of “third party funds”, where firms in certain sectors choose to simply ignore clients able to fully demonstrate how they have earned and made their money, where it is coming from and answer questions around the chain of events leading to funds being generated. Unfortunately, risk management decisions do not always reflect good operational practices, where at times, ignorance seems to be a fantastic tool to turn business down.

Other business should to operate complex and sophisticated automated tools to score every time they get a handshake from a prospect client….it is the Head of Spreadsheets, role to ensure tools are a positive and managed in a constructive manner. How does that work in an ICO? In our experience, it does not; businesses keen or in need of funds to start up “a great idea that will revolutionise the world” (does it sound familiar?), tend to overlook key aspects of basic and general financial crime rules.

Do you know if you are being used to launder funds? After all, you provide a great excuse for future financial entries to be registered as “more investment needed” or special shares being issued. Short term funding? Tick that box, even better to launder money. How about Emerging Market investors? A green field, agreed; however also a rather varied environment, without a great level of control or scrutiny, perfect to disguise Bribery and Corruption money.

You have built a great business, organise supply chains, the world not only understands your product/idea, but you are actually making money! Life could not get any better! Or at least you thought it could not; unfortunately, when one of your great investors is arrested over Sanction breaches, money laundering, fraud, bribery, corruption, insider dealing, market manipulation or ….well take your pick…your business becomes the primary focus of how they laundered money. After all, you are doing great and making money….so why exclude you from the chain of events affecting your principal investor.

QGEN can provide you with the certainty you need to ensure your due diligence will match the peace of mind, your long term business ambitions require. Contact us to discuss, how we can help you organise your ICO to ensure your diligence is what you need it to be.