Bitcoin ATM space has been creating waves of excitement all over the United States of America for all the good reasons. The terminals of Bitcoin ATM can be seen in the entire United States as well as all over the world. As compared to last year, the number of own Bitcoin ATM has grown by 55%. Out of this growth, 20% has occurred in the first quarter of 2016. At an average, two new terminals are installed and made online every day in the world.
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The need for own Bitcoin ATM operators for consumers is inevitable. Consumers can enjoy a simple, user-friendly and familiar platform. These Bitcoin ATMs require flat paper currency, the sale of which can be completed within minutes. For consumers, these vending machines have become a popular alternative to Bitcoin exchanges. Customers now, do not need to wait in long queues, suffer longer processing times and strict controls and dull customer service because of Bitcoin ATMs.
The list of manufacturers of Bitcoin ATM manufacturers is available today. The models of ATMs may differ from each other in functionality, size, and price. There are some ATMs which only accept flat and dispense Bitcoins. While other machines allow to insert Bitcoins and get flat in return. Bitcoin ATMs have been providing the businesses with immense benefits. Ordering and taking the possession of the Bitcoin ATM should be the last priority and AML compliance should be the first one.
AML is the abbreviation of Anti-Money Laundering. By putting AML compliance in the first place, you ensure your investment is going to be productive. There are many cases where people take the delivery of Bitcoin ATMs first and they do not know about the AML compliance. It may sound strange but it is not. The terminal is not going to make you money but AML compliance does. If your Bitcoin ATM terminal is in compliance with the AML, you can also grow your business and make sure that you progress in the right way forward.
Below are four key elements which you need to focus on making your compliance strategy prior to launch.
Identify the Money Transmitter Requirements
In the state(s) where you want to operate your own terminal or terminals, you should identify and research the money transmitter requirements. There are some states which are friendlier to Bitcoin ATMs or Bitcoin in particular. States continue to change and amend their laws on Bitcoin and money transmission. There are several states where the legislation is pending regarding accommodate Bitcoin companies. In the first step, it is important to get familiar with the requirements of your state. This will help you run your business more efficiently and effectively. Also, the satisfaction of being within the prescribed law is an added benefit.
Register as MSB with FinCEN
It might sound strange but registering as a money service business (MSB) with the Financial Crimes Enforcement Network (FinCEN) is the easiest compliance task. This process can be completed within an hour because of the facility being made online for the convenience of the consumers. However, “great power comes great responsibility” also applies here. You don’t have to check all the boxes but work accordingly to ensure the anti-money laundering standards. You have to meet all the requirements of the AML program and report suspicious activities and transactions over $10,000 to the FinCEN immediately to ensure the safety standards. This might seem easy but there is a lot of responsibility coming with it.
Develop and Implement AML Program
The requirements of FinCEN also demands a written AML program. An effective AML program is designed in a way to keep your own Bitcoin ATM for being used in money laundering activities. Each AML program should be provided in writing and address the four following pillars.
- Incorporate procedures and policies, and the internal controls designed and put in place to ensure compliance with the Bank Secrecy Act (BSA)
- There should be a compliance officer responsible for day-to-day compliance with the BSA and AML program.
- Provide ongoing and targeted training to appropriate personnel concerning their responsibility under the AML program.
- Review or Audit of the AML program on an annual basis, at a minimum. This review or audit should be independent to ensure high levels of the customer as well as authoritative satisfaction.
Testing the AML Program
With all the procedures of AML compliance in place, it is time to test your AML program, customer and transactional records. You can start with trying some simple transactions from the Bitcoin terminal. Test with different thresholds to ensure that proper KYC (know your customer) requirements are stimulated. Also, test for customer record and transaction information is properly obtained and recorded. After you have checked all the AML program and the information, document and record your findings. You should also record any subsequent changes in the AML program as a result of this testing to make sure that own Bitcoin ATM terminal is operating properly.
This a simple procedure you should follow to make sure your own Bitcoin ATM terminal is according to the legislation and the laws. Following these 4 simple steps, you can make sure that your program runs effectively and live up to your expectations and complete all your business objectives.