This week, we hear from Marcus Low who is currently working on the Virtual Asset Monitor (VAM) project.
What is a Virtual Asset Monitor (VAM)?
VAM is a compliance product for financial institutions to perform their Anti-Money Laundering (AML) duties for cryptocurrencies.
Anti-money laundering (AML) refers to the laws, regulations, and procedures intended to prevent criminals from disguising illegally obtained funds as legitimate income. Though anti-money laundering laws cover a limited range of transactions and criminal behaviour, their implications are far-reaching. For example, AML regulations require banks and other financial institutions that issue credit or accept customer deposits to follow rules that ensure they are not aiding money-laundering.
It’s been 7 months since the beginning of the NTUitive venture building program, where I was attached to the Virtual Asset Monitor team to build a compliance product for financial institutions to perform their AML duties for cryptocurrencies.
Potential AML risk with up and rising cryptocurrencies
Cryptocurrencies have always been a favorite medium of exchange for criminals on the dark web, given its pseudo-anonymity properties. Furthermore, given the resurgence of cryptocurrencies as an alternative form of investment predominantly due to Bitcoin’s explosive increase in price, it seemed the perfect time for the team to tackle this problem.
Second mover disadvantage
Marcus shares with us that while doing VAM’s competitor analysis, the team researched on the current incumbents in the cryptocurrency AML space, aand soon realised that the headstart the first movers had on top of the funding they have on hand would make it almost impossible to compete with them. The team had to find a way to differentiate itself from the other players in the market.
Therefore, the team decided to work with the authorities to show them that VAM has the technology for them to implement newer and more comprehensive regulations for the cryptocurrency scene.
We had to find a way to stand out from the competition. We soon realized that the regulations for cryptocurrencies were always trying to play catchup with the new technologies that were being introduced into the scene.
We had our first “Singapore-Netherlands cryptocurrency and digital assets” round-table in March, with several regulators and public prosecutors in attendance. The event was well received, and we look forward to hosting the next one.
Up next for VAM: building their prototype
While the team is looking forward to building VAM’s prototype, they face the problem of being unable to attract software developers to join the team.The short term solution to this would be to hire a third party development team from one of our neighbouring countries, but that would not be a sustainable long term solution.
The most probable solution would be to first attain external funding, which would then give the team enough gunpowder in their arsenal to attract top software developers.
Marcus shares with us that the NTUitive venture-building programme has been tough thus far, but he is determined to overcome the challenges.
The journey has just begun, and I am glad to have been given the opportunity to join the NTUitive VB program. The program has been challenging so far, and hopefully I will be rewarded in the future.
Marcus’s full account of his journey thus far can be found here.
Next week, we will continue our feature of VB18 teams and their individual project journeys and discoveries. Until then, stay safe!