Citigroup takes a fancy to blockchain compliance company Polycoin. Has compliance become a strategic focus for financial institutions?

As more and more financial institutions around the world become increasingly interested in Bitcoin blockchain technology, some financial institutions have begun to invest in startups in the blockchain industry or cooperate with these companies, believing that these companies can provide them with new opportunities.

One of these is the partnership between Barclays and bitcoin compliance firm Chainalysis, which the two companies announced in October to help Barclays’ financial crime unit better understand blockchain technology.

Now, there are signs that this type of partnership could become a strategic priority for banks as they begin to embrace blockchain technology. Recently, Israeli blockchain compliance company Polycoin was selected by Citigroup and Nordic Bank Group to enter the accelerator programs of these two financial giants.

Plycoin CEO Alfred Shaffir told CoinDesk he believes working with bitcoin (blockchain) compliance firms is the first step any bank must take if it wants to leverage blockchain technology.

“We feel that what banks need most at present is a compliance tool when exploring and utilizing blockchain technology.”

Polycoin is committed to building a complete blockchain compliance solution, and Shaffir said their goal is to become Bitcoin’s NICE Actimize, a digital financial crime prevention tool founded in the late 1990s.

In October, Polycoin was one of 10 startups selected from 170 applicants for the Nordic banking group’s accelerator program. The company is also participating in Citigroup’s Innovation Accelerator, the fourth accelerator program opened by Citigroup in Israel.

Business Transformation

Polycoin was founded in 2014 and initially served as a Bitcoin payment service. However, due to the overall downturn in Bitcoin payments this summer, Polycoin shifted its business.

“We realize there are still huge barriers to building an economy around Bitcoin.”

However, the experience of working in the Bitcoin payment business also provided some help for the company's business transformation later. Shaffir said that he realized that existing payment processing products were also part of the compliance needs. In addition to providing business tools similar to BitPay and Coinbase, Polycoin also allows compliance personnel to understand the source of Bitcoin funds received by retailers.

Shaffir explained:

“We decided to focus on the underlying technology of Bitcoin, blockchain technology, rather than Bitcoin itself. Blockchain technology is not a business tool for us, but a compliance tool for banks to use.”

Shaffir believes that Polycoin’s strengths lie in its focus on know-your-customer (KYC) principles rather than anti-money laundering (AML) regulations, as well as their potential protection against identity fraud.

Polycoin expects to graduate from Citi’s accelerator in December this year and from the Nordic Banking Group’s accelerator in February next year.

Original article: http://www.coindesk.com/citi-nordea-select-bitcoin-compliance-firm-for-accelerators/
By Pete Rizzo
Translator: printemps
Editor: printemps
Source (translation): Babbitt Information (http://www.8btc.com/citi-bitcoin-compliance)