Tag: compliance

12
Oct
2020
Posted in technology

Productivity Commission claims wide-spread regtech adoption will lift compliance

An information paper by the Productivity Commission has highlighted how there is scope for Australia to adopt regulatory technology (regtech) beyond the financial sector, with the belief it can improve regulatory outcomes and reduce the costs of administration and compliance.

In its regulatory technology information paper [PDF], the Productivity Commission noted how Australia is “well-placed” to develop regtech solutions given its “relatively stable and sophisticated” regulatory systems, but currently, extensive use of regtech remains relatively low.

“Low awareness can dampen both demand and supply responses — business need to see value in changing their software so that developers see value in investing in applications, which in turn deliver the value businesses need to see,” the paper stated.

It went on to suggest that Australia could extend its existing use of “low-tech” solutions, including digitised data, forms, registers, and transactions to streamline business and individual transactions with government, as well as reduce compliance costs, improve the efficiency of regulatory practices, and generate flow-on benefits to the community.

Some of the specific areas that the Productivity Commission believes regtech solutions could benefit from include where regulatory environments are particularly complex to navigate and monitor, explaining that there is scope to improve risk-based regulatory approaches; technology could enable better monitoring; and technology could safely unlock more uses of data for regulatory compliance.

While regtech could improve regulatory outcome, it should not be used as a substitute for regulatory reform, the Productivity Commission warned.

The paper also examined the costs, risks, and hurdles associated with the wider adoption of regtech. It pointed out that while regtech has the potential to deliver benefits, the wide-spread implementation of it could take some years, particularly when it comes to the adoption of “advanced” regtech, which requires specialised resources and longer development times.

See also: 3 ways to

07
Oct
2020
Posted in technology

Without Compliance, DeFi’s Napster Moment Is Doomed To Fail

When most people in the crypto universe imagine what a crypto trader looks like, they imagine a high-flying, government-fearing, algorithm-loving fanatic trading on a cutting edge DeFi platform. The trader wants to swap three ETH for some BAT to maximize investment yield based on an algorithm he believes is impervious to market trends. Unbeknownst to the trader, the major source of liquidity to the pool comes from the proceeds of the Mt. Gox hack, the sale of blood diamonds or heroin. Otherwise stated, the trader has accidentally stepped into a money laundering cesspool by accident.

Flash forward one year. The same trader, conducting the same transaction, has maximized his yield and now seeks to deposit his gains into a traditional bank that has started accepting crypto, or even, G-d forbid, a centralized exchange. Ultimately, the goal was always and continues to be to cash out into fiat. 

Sadly, the trader finds out that all of his accounts are frozen.

In this hypothetical scenario, law enforcement and regulatory authorities have collaborated and filed a lawsuit alleging money laundering. Exchanging crypto on the DeFi platform that the trader used for the transaction has been blacklisted, and all wallets that have interacted with it have been red-flagged.

A question for another day is whether a fully DeFi exchange (DEX) actually exists or whether – despite the name – all exchanges have some form of centralization. For this hypothetical, we’ll concede that a centralized exchange has a Board of Directors and/or responsible shareholders, while a DEX has users who purchase governance tokens, run nodes, and vote on protocol changes.

The example above is a potential road that might become a simple realty in the future. Or is it? The nature of both centralized and decentralized exchanges, or virtual asset

05
Oct
2020
Posted in technology

Madrona leads $3.9M seed round for cybersecurity compliance startup Strike Graph

Strike Graph co-founders Justin Beals and Brian Bero. (Strike Graph Photo)

Seattle startup Strike Graph raised a $3.9 million seed round led by Madrona Venture Group.

The company, founded less than a year ago and spun out of Madrona Venture Labs, helps companies prepare for the cybersecurity certification process.

Most B2B organizations need to pass cybersecurity audits to ensure their service meets security and privacy standards. Strike Graph says its customers can earn a SOC 2 Type 1 certification in 45 days and save $50,000 in consultant fees thanks to automation and customization features.

The 5-person startup is led by CEO Justin Beals, a veteran of NextStep, Koru, Roundbox Global, and other startups, along with Brian Bero, who previously co-founded Seattle tech stalwart Apptio and recently sold security startup Greytwist to SmartRIA.

The idea for Strike Graph came about after Beals struggled with the SOC 2 process as the CTO of an AI startup getting through procurement. The biggest roadblock to closing deals was the security review process that could take anywhere from six months to two years with one client.

Beals said Strike Graph competes against legacy compliance platforms that have “empty databases” and require outside consultants.

“Some new entrants into the market are overly prescriptive and don’t allow companies flexibility in their security practices,” he added. “Our platform carefully threads the difference so that companies can efficiently adjust Strike Graph to meet their current cybersecurity practices.”

GeekWire previously reported on the company in May. It launched just as the COVID-19 pandemic began in the U.S., though Beals said demand for Strike Graph’s initial pilot offering was high.

“This team is going after a large and significantly growing opportunity to serve a sharp pain point for B2B businesses,” Madrona wrote in a blog post. “Strike Graph defines what we