Did you just pick up a big DGC customer online and you are wondering about his background? How about that $2.7 million he just wired in from a very poor African country…Could he be a Politically Exposed Person (PEP) or an international terrorist???  Hmmm.

If you are GoldMoney or Webmoney I’m sure that you would have identified the scoundrel right away.  However, since most new & smaller online digital currency companies can’t afford a proper KYC program, access to an OFAC database or just don’t give a shit, here is a very good alternative.

Our friends at KYC360 http://portal.kyc360.com/ offer this item in their Members’ Free Tools section, it’s called “RiskScreen” and it securely screens client names for PEP status, sanctions and other key risks.

I’ve long advocated a simple background check for ALL clients doing business online. A very simple private name and address search for any new customer may help your digital currency company block fraud transactions, recognize seriously bad people BEFORE doing business with them and prevent you from having to appear in court as a happy or reluctant witness after the fact. (That is just my opinion and I’m sure I’ll now get plenty of email on where to stuff my opinion.)

Last December I wrote a popular article on digital currency and KYC. It published in newspapers and blogs. I say popular because the article only stayed online a few weeks before I removed it, but during that time it garnered the attention of the U.S. State Dept, the Israeli gov and about a dozen other global government and law enforcement organizations. I can only assume the names used set off alerts in multiple search programs. It was not written to make a joke. I thought it was an interesting topic and an important point to make, the gov. folks didn’t see it that way.

What I did was visit the FBI’s most wanted web site and copied 5-6 of the world’s worst criminals. You know – terrorists, money launderers, child pornographers etc. These were/are really really bad people as you might expect to find on the FBI’s list. I then went to 4 small digital currency systems, Liberty Reserve, Numox, PerfectMoney & ECUmoney. For each of these companies I opened an online account for a known FBI most wanted person. I correctly spelled name and the basic information as it was required by the account.  All of these companies were happy to open the account, most of them sent out a simple verification email which received a response and ALL of them welcomed these lawless individuals as new customers.

“Hallelujah, more new clients, more fees!!  Give us more referrals please!!”

Hmmm….what’s wrong with this picture?

Well you would think that the 5th most wanted terrorist alive in the world, using his full name would be quickly identified and blocked by any semi conscious financial company doing business online.

Nope not the case with these fast and loose companies.

My position for years now has been to create a simple private DGC industry database so companies can check and filter client’s as they deem proper. If I was accepting online funds in the millions, I would sure want to know in advance if my new customer was having dinner with Bin Laden between emails.

KYC360, offers a VERY nice free solution. Plug in your customer and see if that name is in the ‘bad guy’ database. If you customer is a PEP or most wanted you may want to think twice before permitting that account to go ‘active’.

Oh, and for those companies that did not pass the test back in December, you may want to start using KYC360 and perhaps at some future date you will not be listed on the State Department’s hot list. Of course in the big time world of today with crooks like Bernie Madoff and the massive mortgage fraud investigations who has time for the little fish?

Finally if you are unhappy with this article, well you can just forward your hate mail, death threats and stuff to me at editor@dgcmagazine.com and I’ll put them on the pile.

Try out the KYC360 free tool and have a nice day.