Last year, IdentityMind Global's banking partners began asking the anti-fraud and risk management provider to build an anti-money laundering system for the Bitcoin startups among the bank's clients.
IdentityMind Global has now completed development on this AML technology, which handles know your customer and transaction monitoring.
"A big part of the current difficulty for Bitcoin businesses to get to market is to establish a banking relationship," says Jose Caldera, vice president of marketing and products for IdentityMind Global. But if banks "noticed that [the businesses] had proof that they've pursued an AML program and pursued a technology provider to establish that banks see that as positive," he says.
When the Financial Crimes Enforcement Network issued guidance on virtual currency, many traditional financial institutions began dropping Bitcoin business' bank accounts, seeing the startups as too risky. While banks are warming up to Bitcoin, many of these startups have had to pitch their business model to dozens of banks before being accepted.
IdentityMind Global's technology checks that the person creating an account is not using stolen information and is not on any blacklists, such as the list provided by the Office of Foreign Assets Control agency. IdentityMind Global alerts its clients to any suspicious activity.
In an effort to attract more Bitcoin startups, IdentityMind Global is announcing its Ignite accelerator program, cutting the costs of using its technology to help startups get to market faster. Two Bitcoin businesses are already signed up for the program, Caldera says.
Startups that are part of the program will pay $150 per month for the first six months for the AML technology, Caldera says. The price for the technology is typically several hundred dollars per month to several thousand dollars per month, based on the size and volume of the business, he says.
Startups will also receive $100 to spend on technology from IdentityMind Global's 15 partners, including Jumio Inc., an identity verification provider, and MaxMind, a geolocation technology provider.
To qualify for the Ignite program, startups must be pre-launch or must have launched within the past three months. The startup has three months to opt out of the program for no fee.
IdentityMind Global, which launched its anti-fraud platform in 2009, is currently working with nearly a dozen Bitcoin startups, including exchanges and wallet providers, some of which have not gone to market yet, Caldera says. But all of the companies are considered money transmitters or regulated by Fincen in some way, he says.
"There's an added benefit [of] garnering data from all our anti-fraud partners," says Caldera. "If a user is associated with fraud within those partners database of identities and reputation, then we inform our clients."