Tough new regulations for cryptocurrency projects have finally begun to make themselves felt, as INDX investors found out this week. After years of dealing with an ever changing regulatory landscape, INDX investors were finally able to undertake the final, and most searching, round of KYC/AML, with the new regulations clearly in evidence for the first time.
INDX Investors Feel Changing Landscape
INDX, a UK-based masternode and staking fund, held its STO mid-way through last year after suffering almost twelve months of delays due in principle to the changing regulatory framework at the time – as CEO Jonathan de Carteret told us at the time, there wasn’t even an issuance technology around when they began working on INDX in 2018.
A round of KYC/AML was done for STO contributors last year, which was nothing more or less than that required by regular ICOs at that time, but since then there have been major changes in how crypto projects raise money.
FATF and AMLD5 Get Involved
The STO was finally wrapped up in September, at which time the fund’s STO partner, Swarm, began to work with the INDX team with regard to completing KYC/AML requirements. Unfortunately this was right at the time when AMLD5 and FATF regulations were coming into effect, which required Swarm to find a way to integrate the new regulations into the existing framework they were developing with INDX, requiring INDX to hire a third-party KYC/AML solution provider, just to add further confusion.
New Regulations Bring Accredited Investor Headache
Finally, this week saw the launch of the final round of AML/KYC requirements, which brought a shock to some as they were asked to state (within ranges) their personal wealth and average household income, and also to show proof of how they got the funds to invest in INDX in the first place.
Fortunately the INDX team had done a good job of preparing investors for the level of questioning, and there was little dissent, except for those who suddenly found themselves at the level of accredited investor but not having the requisite income to back it up. There is hope however that these issues can be ironed out, and those who invested last year without having to register as accredited will still get to be part of the project.