Crypto Exchange Blockbid Deploys Bank-Grade KYC Tech

David Sapper, COO at BlockBid tells WatersTechnology that together with his team, they found that often cryptocurrency exchanges lacked transparency and accountability, and were working in a “gray” area.

He argues that what consumers require from the financial institutions of today has not been applied in the crypto markets. “We understood that there is a large gap for an exchange that wants to step forward and say that this is the bar that needs to be set for every single exchange,” he says.

The platforms provided by LNRS and ThreatMetrix allow users of Blockbid to use bank-grade technology, such as biometrics, data that merges physical and online identification to increase security on a daily basis.

“We can use a full enterprise solution to identify any fraudulent activity and this will attract institutional investors. These are investors that require the ‘T’s to be crossed, the ‘I’s to be dotted and all the boxes to be ticked before moving into a new market,” Sapper says.

Thomas Brown, senior vice president, US commercial markets, and global market development at LNRS adds that crypto exchanges are now utilizing technology that is considered to be a “gold standard” by professionals. “In the future, we will have an even tighter coupling of ThreatMetrix and WorldCompliance to help global enterprises identify and protect themselves against emerging fraud and other online risks by leveraging billions of observations in the digital network with best-in-class financial crime intelligence. The ability to mitigate risk in digital and physical is a great example of fintech innovation using world-class risk technology.”

Sapper adds that Blockbid, which was started by a group of traders from various industry backgrounds in late 2016, was formed with regulatory oversight in mind. This meant registering with the necessary government bodies that require accountability and transparency from the business side, and for consumers as well.

“Our vision is to allow users to trade confidently. As consumers we often look at particular boxes that need ticking, such as a secure connection, or PayPal if credit card details are needed, to have some level of comfort. All these are missing from the cryptocurrency market, so we decided to become a fully-regulated exchange with a license overlooked by Austrac (Australian Transaction Reports and Analysis Centre) in Australia,” he says.

This is to prove that cryptocurrency platforms can step into the light for regulatory oversight, which will allow usability and adoption rate to grow faster. While some may feel that KYC may be a hindrance, it also provides a sense of security, Sapper adds. It will also allow investors to understand the process and foundation of Blockbid building a secure platform that has itself, regulatory bodies, and consumers in mind. 

“Institutional investors do enter into the markets at various different points, and there have been many different entry points because there has been quite a bit of hype. But hype is not what sustains the market or what allows for the actual evolution of this technology to really grow,” he says.

Brown adds, “Every market is demanding more transparency. Regulations are moving well beyond the banks and there won’t be a slowing of that,” he says.

Blockbid has also partnered with Scott Winton Insurance Brokers to put together a multi-layered insurance program that will protect users against any potential cyber attacks or financial crimes. The exchange is currently in beta-testing phase and will be going live in August.