I’ve been asked the question enough times that I probably should have blogged about it a year ago, but the kicker for me was coming across an article that seemed to have no purpose but to question why an AML consulting firm would speak at the Bitcoin Expo. The truth is that a few years ago, I may have approached the situation with the same type of skepticism. In those years, I’ve worked with excellent companies that are working hard to manage their risk (some of them in the absence of any law that would compel them to do so). I’ve not only come to believe that working with companies in the digital currency space is well-aligned with Outlier’s core mission (helping Canadian businesses to succeed), I’ve become enthusiastic about digital currency in general.
The First Bit
A longtime friend and client approached me about the digital currency aspects of his business. While I won’t go into great detail about the specifics (client confidentiality is important to me – and my clients), I will admit that my understanding of the space was rudimentary at best. If the request had come from someone that I knew and trusted less I may have taken a different approach to learning, but given the circumstances I wanted to know as much as I could as quickly as I could. I thought that the best way to learn would be to ask to be paid in bitcoin. This meant that I had to figure out how to set up a wallet, secure it, receive bitcoin and of course spend the bitcoin. What became clear to me very quickly were the advantages: bitcoin transactions were fast, cheap, traceable (by way of the blockchain’s public ledger) and irreversible.
Being a self-proclaimed AML nerd, I was surprised to see that I didn’t need to provide personal information to set up a wallet, though it was also clear to me that the idea of complete anonymity wasn’t accurate either. I hadn’t worked with any digital currency exchanges or brokerages yet, and I wasn’t quite sure what to do with my bitcoin, so I held it in my wallet and checked the price every few days. I was lucky at the time, the price shot up. I started exploring reputable vendors that accepted bitcoin (the list was a lot smaller at the time), settling on a tablet for my husband from a UK-based vendor as my first bitcoin purchase.
The transaction was fast, efficient, and reminded me that bitcoin was not as anonymous as the headlines would have had me believe. The vendor required relatively comprehensive information in order to deliver the tablet, and noted on the site that identification would be required by the delivery company in order to release the package. The cost of the tablet was less than the cost of the bitcoin that I received, but I decided to hold off on looking for things to spend it on right away. From that point, I’ve always held bitcoin (and later on a few other alt coins as well).
Brokerages, Exchanges and BTMs
Since that first transaction, I’ve worked with bitcoin exchanges, brokerages and BTM companies (as well as a few other wonderfully innovative business models that I can’t describe here) in Canada and in the United States. What I’ve experienced with these companies has been remarkably similar to traditional financial companies in many ways.
There is a real desire to understand the legislation and to do what’s needful.
There is a real desire to implement compliance without stifling innovation (especially when it comes to the customer’s experience).
There is a real desire to be part of the conversation with the people that write the laws, and the regulators that enforce it.
While I’ll admit that my sample is very biased (criminals are unlikely to hire a firm like mine), my experience in the digital currency community has been overwhelmingly positive.
Our Bit
I see the role of Outlier, and other professionals like us, as threefold. Our first task is to understand. Our next task is to provide valuable services and our final task is to act as advocates. These are sequential – the final two tasks cannot be done with any degree of competency without the first. Recently I’ve been approached by a number of very large firms asking how they can provide services to digital currency companies. I ask them the same question that 100% of the bitcoiners that I’ve worked with have asked me “Do you have bitcoin?” There is no teaching tool like experience, and right now digital currency is something that almost anyone with a computer and Internet access can experience.
This understanding translates into being able to truly add value for digital currency companies, but a point in time understanding won’t be enough. There are incredible innovations developing every day. I wasn’t involved deeply in the evolution of the Internet in the 1990s, but I imagine that it must have felt something like working in digital currency today. Ideas that add value for digital currency companies must support business innovation while teaching the traditions of compliance and sound risk management practices. As an AML professional, there is nothing more rewarding than working with clients that are pushing the boundaries of the possible, and helping them to do that without ending up on the wrong side of the law. The projects are exciting and more often than not, the aim is to benefit society as a whole.
It’s that excitement and those lofty goals that will make you an advocate. For Outlier, and for me personally, advocacy and education have been a labour of love. We speak at conferences, to merchants and traditional financial institutions, and we do what we can to connect policy makers to experts. We do all of this free of charge, because we believe that digital currency has great potential to do good. Like anything with value, it can be used to launder money, even though it’s not nearly as anonymous as some may believe it to be. We’re not ignoring this, nor do we believe that it’s the whole story. Digital currencies like bitcoin can also be used to transfer funds quickly, efficiently (and in many cases without fees) to the people that need it most and to allow individuals more complete control over their funds in oppressive and corrupt regimes.
The Last Bit
Since that first payment, Outlier has always accepted payment in bitcoin, but conversations are always free. If you have questions, please feel free to contact us.
 Tipping QR Code |
