Blockchain Due Diligence: KYC/AML, Forensics

“Know Your Customer” (KYC) and Anti-Money Laundering (AML) compliance, which is often interwoven with blockchain forensics investigations, are integral parts of blockchain legal due diligence.  

Absolute necessity of blockchain due diligence is often overlooked by clients due to the the decentralized and trustless nature of blockchain technology. Yet, blockchain transactions may require certain legal and practical precautions when it comes to KYC/AML compliance of a blockchain business, accepting a large amount of cryptocurrency or, for example, demonstrating a lawful source of cryptocurrency funds to a private counterparty or the U.S. government.

Lawyers at KSTechLaw with the support of our forensics experts offer comprehensive services to blockchain businesses and cryptocurrency investors in relation to KYC/AML compliance and blockchain forensics.

United States KYC/AML Laws Apply to Blockchain

US laws and those of other countries require blockchain businesses to implement KYC/AML policies to combat money laundering and its underlying crimes (such as drug or human trafficking, illegal arms sales, corruption and terrorism).

KSTechLaw offers expert guidance to clients who may be subject to the relevant KYC/AML laws and regulations, including the Bank Secrecy Act and USA PATRIOT Act.

We provide a comprehensive suite of AML/KYC services, including:

  • Evaluating business models, token offerings or specific transactions on a blockchain for KYC/AML compliance;
  • Advising on blockchain forensic investigations as a part of KYC/AML measures (as described below);
  • Educating clients about their KYC/AML obligations, such as developing an effective policy, hiring compliance officers, training personnel and reporting certain activities, including by filing suspicious activity reports (SARs);
  • Evaluating clients’ existing KYC/AML measures and developing new or improved risk-based KYC/AML procedures and internal controls in accordance with the crypto industry’s best practices;
  • Guiding clients through their KYC/AML polices’ implementation stage, reporting to and cooperation with the regulators, such as of the Office of Foreign Assets Control (OFAC), Financial Crimes Enforcement Network (FinCEN), New York State Department of Financial Services (NYDFS) and similar government agencies; and
  • Helping clients resolve legal, practical, and other issues that arise in the course of conducting KYC/AML screening.

Forensics Legal Opinions, Reports and Investigations

As a part of blockchain legal due diligence, we advise on legality and traceability of blockchain assets. Doing so, we utilize our own experience in the digital-asset legal compliance, as well as the services within our vast network of experts, which include blockchain investigators, major cryptocurrency and digital security exchanges, trusts, traders and broker-dealers.

We employ the most reputable blockchain investigators to track every bit of information available on a blockchain. Our blockchain investigative partners also consult FBI fighting cybercrimes in the blockchain space.

Upon completion of our legal due diligence and independent investigation, we may issue legal opinions and blockchain forensic investigative reports, so that our clients or governmental agencies have a complete understanding of the issue.

Our blockchain forensics legal expert opinions and investigative reports may contain:

  • detailed account of a client’s or counterparty’s flow of cryptocurrency or other digital assets on a blockchain;
  • assessment of sufficiency of cryptographic private keys, public records and other factors establishing ownership of cryptocurrency or other digital asset on a blockchain;
  • KYC/AML compliance measures taken at each point of the funds’ journey by clients and third parties, including exchanges and OTC traders;
  • legal opinion on adoption, traceability, exchangeability and legality of a particular kind of digital asset existing on a blockchain;
  • regulatory framework for cryptocurrencies and other blockchain assets in the U.S., etc.

Our blockchain forensics legal expert opinions and investigative reports are an effective tool, which may be essential in, for example:

  • conducting due diligence of a cryptocurrency transaction, background check or KYC/AML compliance;
  • investing into digital securities;
  • making a purchase, sale or investment using cryptocurrency or other digital assets;
  • demonstrating legality of your digital-asset holdings to the USCIS, IRS or other governmental agency.

Contact Us to Learn More About Our Blockchain Forensics Expert services.


Provided expert legal opinion letter and investigative report to an early cryptocurrency adopter for the use by the USCIS in relation to the client’s EB-5 investment funded by Bitcoin

Provided expert legal opinion and report demonstrating traceability and legality of a client’s Bitcoin and Ethereum holdings in connection with an EB-5 investment

Advised digital asset issuers on sufficiency of KYC/AML compliance for their blockchain-based assets

Advised digital asset issuer on traceability of their digital securities and tracking their cap table on the blockchain

Advised a real estate investor on the due diligence and mechanics of structuring a real estate transaction using Bitcoin, including blockchain forensics due diligence

Advised a digital securities buyer on the issues of tracking his assets and receiving refund in cryptocurrency

Advised a cryptocurrency fraud victim on the issues of blockchain forensics

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