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BitCheck: A Background Check for Cryptocurrency Companies

For anyone who knows about the cryptocurrency market, one of the most appealing aspects is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.


Legitimacy For Cryptocurrency Startups


However, its organic nature also makes it extremely vulnerable to fraud. Just consider some of these recent articles about cryptocurrency scams.

SEC Charges REcoin ICO Organizer With Fraud

Brazilian Police Take down ‘Digital Currency’ Pyramid Scheme

Switzerland Shuts Down ‘Fake’ Cryptocurrency Scheme “E-Coin”

SEC Files Charges Against Alleged ICO Scam PlexCoin

There’s even mock websites out there, like this one, that show people how easy it is to be scammed by a fraudulent cryptocurrency startup.

Prior to a token sale, also called an Initial Coin Offering or ICO, cryptocurrency companies will launch a website that features their software solution, usually in the form of a White Paper and/or explainer video, and the website features a brief biographical sketch on the company’s team members.

Until now, there has been no way to determine if these team members are real people who possess the credentials, professional achievements and capabilities claimed in their bios, and with news about scams sewing doubt in people’s minds, how can these startups establish true credibility in the market?

BitCheck, by SafestHires, is a background check product that aims to help cryptocurrency startups establish legitimacy by vetting founders and team members with a background check from an independent third-party consumer reporting agency. Each background check will include past employment verifications, education verifications, a bankruptcies search, a civil records search and a criminal records search (including name matching against lists of politically exposed persons) on the startup’s founders and team members. The cryptocurrency startup will pay a fee to cover the labor and researcher costs to compile their dossier.



What makes the BitCheck Dossier so beneficial is that it’s considered a Best Practice under “Know Your Customer” (KYC) procedures, which assess and monitor customer risk. KYC procedures refer to due diligence activities that financial institutions and other regulated companies must perform to ascertain relevant information from their clients for the purpose of doing business with them.

The idea is that knowing your customers – verifying identities, making sure they’re real, confirming they’re not on any prohibited lists, and assessing their risk factors – can keep money laundering, terrorism financing, and other fraud schemes at bay. 

The first component of KYC is the Customer Identification Program or CIP, which entails obtaining identifying information on a company’s founders and leadership team. Sources may include:

> Certified articles of incorporation

> Government-issued business license

> Partnership agreement

> Financial references

> Information from a consumer reporting agency

> A financial statement

SafestHires is a Consumer Reporting Agency, which makes the information contained in the BitCheck Dossier compliant with KYC procedures.

In the coming weeks, SafestHires will host a page that features which cryotocurrency startups have a BitCheck Dossier on file and the cryptocurrency startups can feature their BitCheck Dossier as a downloadable file on their websites. 

Click here to view a sample BitCheck Dossier.

Cryptocurrency startups that wish to engage SafestHires for compiling their BitCheck Dossier can contact us here.


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