‘In-kind’ or ‘in-species’ subscriptions into investment funds is commonplace (at least for traditional asset classes).
However, cryptocurrencies are somewhat different. Typically, they have been viewed as high risk – with many funds questioning whether satisfactory AML and compliance is possible.
Here at IFINA, we specialise in the formation and administration of crypto funds. As such, we are constantly being asked by prospective clients whether a crypto fund can accept ‘in-kind’ or ‘in-species’ subscriptions.
The reason for the question is that many of our crypto fund managers have potential investors who already hold cryptocurrencies such as Bitcoin.
These investors want to subscribe to the managers fund – but to do so would involve having to liquidate the crypto assets into a fiat currency to invest. To liquidate the crypto asset is a costly exercise.
We can now offer a solution to this ‘in-kind’ or ’in-species’ problem.
IFINA now has a technological solution that provides a Crypto AML and compliance tool to enable our client crypto funds to accept ‘in-kind’ or ’in-species’ investor subscriptions.
We utilise CipherTrace technology. It works in three simple steps:
Step One: If your investor wants to subscribe in cryptos, we can now risk assess the transaction history of their crypto coins.
Step Two: CipherTrace algorithms calculate risk levels based on suspicious addresses and wallets.
CipherTrace also profiles hundreds of global exchanges, ATMs, mixers, money laundering systems, gambling services and known criminal addresses to score transactions and assess risk.
Step Three: CipherTrace then assigns risk levels to transactions based on activity related to suspicious addresses and wallets.
- No Risk: Transactions with no apparent risk are flagged to proceed.
- Low & Moderate Risk: These transactions trigger an automated deep search for compliance reporting.
- High Risk: These transactions should be rejected.
Do you need a crypto AML solution? We should have a Skype call. Just email me back and we can book a time that’s convenient to you.