The giant accounting firm PriceWaterhouse Coopers (PWC) is testing an ICO analytics tool that would allow issuers to trace ICO tokens after they launch. The blockchain analytics tool has been built to help reduce the risks of tokens being used illicitly. Particularly for money laundering, financing terrorism and buying illegal goods on dark net markets.
The Chinese PWC office has teamed up with Eric Young – a Hong Kong based forensic services firm – to create the first tool of its kind within the industry. Eric Young has said their 80 strong ‘emerging technology’ team are the ones creating the analytics tool. It is unclear if the tool will be applicable to ICOs on blockchains besides Ethereum, which is the platform which lists the vast majority of ICOs.
Eric Young stated:
“While on the blockchain ledger one could track the amount of transactions that have been done using the cryptocurrencies, there is still no way for an issuer of an ICO to trace its coins and know how these coins are being used,”
It is hoped that the tool will help ICO issuers to avoid violating AML and KYC laws. The tool uses AI to predict which jurisdictions the token is likely to end up in and based on the local laws how risky said jurisdiction would be for the issuers.
“With artificial intelligence built into our back engine, our solutions would enable clients to better predict which jurisdictions the digital token could potentially be circulated to. Depending on the type of company and the type of business it is engaged in, it could then apply a high-risk score to that particular jurisdiction,”
PWC has been working with various ICO teams to help structure their governance, AML & KYC procedures as well as their accounting standards to ensure each ICO model is compliant with the relevant jurisdiction. PWC was famously the first large accounting firm to accept bitcoin for its services.
ICOs and cryptocurrencies are borderless by nature and until now no tools have existed to mitigate against the risks entailed with the transfers of borderless security assets such as ICOs. It is unclear how accurate this tool will be, however, it is certainly a step in the right direction.