Identitymind Launches Low-Cost Compliance Services for Bitcoin Startups

The California-based company Identitymind that helps prevent fraudulent transactions is offering low-cost regulatory compliance services to bitcoin startups.

Identitymind's IGNITE allows new bitcoin businesses to get up and running with compliance quickly. Neal Reiter, product manager for Identitymind, said in a statement:

"Our goal is to provide start-ups the compliance help they need to focus on growing their business, not AML [anti-money laundering]”.

What IGNITE does

The $150 monthly fee lasts the first six months. Startups using IGNITE will get monitoring for up to 5,000 transactions for compliance as part of the package.

"Transaction monitoring can be three different things: it can be bank account to wallet, wallet to wallet, and wallet back to bank," Reitner told CoinDesk.

IGNITE will also offer the company's know your customer (KYC) service as well, which makes it a complete compliance-as-a-service package for startups – something the bitcoin industry needs in order to gain legitimacy with customers, banks and venture capital investors.

11/ Compliance-as-a-service is a fantastic area to build a startup because it's amenable to pure software and solves obvious, real problems.





— Balaji S. Srinivasan (@balajis) March 31, 2014

Banks and bitcoin exchanges

Identitymind already has experience helping banks and bitcoin firms in compliance as customers. This gives it a lot of credibility in the cryptocurrency industry, which it desperately needs in order to get the banking industry on board with bitcoin.

The majority of banks still will not accept bitcoin businesses as clients, at least not yet.

Identitymind says that it already works with some of the largest bitcoin exchanges by volume right now. Said Reiter:

"We reduce risk for banks. We work with banks right now, to give them visibility into their bitcoin exchanges' clients, so they can see the transactions."

And while companies like BlockScore offer incredibly simple ID verification for a range of companies, Reiter told CoinDesk that Identitymind takes compliance further by being a complete service offering. "We do what they [BlockScore] are doing, plus about twelve other things," he said.

About Identitymind

Identitymind has raised capital, but did not wish to disclose any specific funding for this story. The company has over 30 employees.

Anti-fraud has been its core focus since it was founded in 2009. However, its premise at the time of inception was preventing gaming cheats on the social platform Zynga, not on fraud issues related to virtual currency.

But trying to catch poker cheats on Zynga helped the company at its early stages. Identitymind was able to build something that it now calls a "fraud engine," a system that scans through transactions tracking reputation and looking for suspicious events that might be illegal, such as money laundering.

Bitcoin startups

Identitymind says that IGNITE's low cost and simple signup process reduces the number of regulatory issues that startups have to deal with when getting off the ground. The company's long-haul plan is to ease the task of building a bitcoin business. Said Reiter:

"We’ve got a full team of people here. Now it’s just growing bigger and helping the [bitcoin] ecosystem grow as a whole."

Startup accelerators such as Plug and Play and 500 Startups in Silicon Valley are beginning to incubate cryptocurrency-related businesses. Boost VC, the first accelerator to accept bitcoin companies, plans to incubate 100 new bitcoin companies over the next three years.

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