AML and KYC Requirements
In order to manage buying and selling of private company stock, financial institutions need to make sure their processes are secure, transparent, and comply with global financial regulations that govern the movement of money. At the core of these efforts are anti-money laundering (AML) and know-your-customer (KYC) requirements, which are designed to stop crime and maintain confidence in the financial system.
When you sign on to Mirai Capital as an investor, you’ll be asked a series of questions to make sure any trades follow these regulations. The Mirai Capital investor interface makes the compliance journey quick and simple, both if you’re looking to invest into a company directly or through a fund on Mirai Capital.
What Is Money Laundering?
Money laundering is the illegal process of making money from criminal activity — such as fraud, drug dealing, or terrorism — appear to come from a legitimate source. This process typically involves complex financial transactions to obscure the trail, with the goal of using the illicit funds freely without drawing suspicion from authorities. Money laundering undermines the integrity of the financial system.
What Is Anti-Money Laundering?
Anti-money laundering — also known as AML — refers to a comprehensive set of laws, regulations, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income.
In the U.S., these efforts are primarily rooted in the Bank Secrecy Act (BSA), which mandates that financial institutions — and increasingly other businesses — keep records, file summaries on large cash transactions, and report any suspicious activities to the authorities. The Financial Crimes Enforcement Network (FinCEN) is the lead agency responsible for administering and enforcing the BSA.
Internationally, FinCEN works with the Financial Action Task Force (FATF), which develops and promotes global standards known as the FATF Recommendations. These are comprehensive guidelines that outline the measures countries should take to effectively combat money laundering and terrorist financing.
Know Your Customer
“Know your customer,” usually abbreviated to KYC, is the process that financial institutions and certain other businesses use to verify the identity of their clients and assess their risk. It’s a regulatory requirement designed to ensure that these organizations understand who they are doing business with, and it prevents individuals or entities from using fake identities in order to transact. KYC is a specific process within AML, and is required to comply with anti-money laundering regulations.
What to Expect as Part of Mirai Capital’s KYC Process
When You Sign Up
When you sign up for Mirai Capital as an individual — where you’ll buy and sell private stock on your own behalf — you’ll be asked for your name, date of birth, address, and a few questions to confirm how you qualify as an accredited investor. Mirai Capital also requires a photo of a government ID to verify your identity.
If you sign up as an institution — where you’ll transact on behalf of a firm, fund, or entity — you’ll be asked your company name and where your firm, fund, or entity is located, and how it qualifies as an accredited investor.
For all investor types, the signup process takes less than a couple of minutes to complete.
When You’re Ready to Transact
If your buy indication generates an offer or if you want to be admitted into a fund listed on Mirai Capital, you’ll need to provide additional information as part of Mirai Capital’s KYC process. What you’ll be asked for varies depending on whether you’re investing as an individual, entity, or trust, and the jurisdiction where your transacting party is based. For entities, Mirai Capital will request additional information about the institution, including control persons and beneficial ownership, and supporting documents. The transaction will not be permitted to close without your participation in the KYC process and its successful completion.
Anonymity on Mirai Capital
An investor is able to browse anonymously on the Mirai Capital platform until they connect with a seller through an inquiry. If a seller accepts your inquiry, they’ll be able to see your identity. Until then, only Mirai Capital will know who each of the parties are, as part of its KYC requirements. This balance allows for initial market exploration without full disclosure, while ensuring all actual transactions are fully compliant and transparent post-agreement.