As legal certainty and regulatory compliance become more crucial when dealing with cryptocurrencies, banks and private investors increasingly seek professional advice. The Austria-based crypto-forensic company Foreus mostly works with Liechtenstein-based clients.
Banks and crypto firms are increasingly stepping up their legal game. More and more crypto companies are bringing legal expertise onboard, and banks that venture into the blockchain sector need to do the same. That’s exactly the niche where legal tech firms such as Austria-based Foreus operate.
Liechtenstein is an attractive market for crypto service providers
Foreus mostly works with banks, lawyers, and private individuals. Although the company is based in Austria, most of its clients are in Liechtenstein. They also work with many lawyers from Germany, especially in the area of fraud. Austrian clients currently make up just 15 percent of their client portfolio.
That Liechtenstein makes a large chunk of the client base is less surprising if you consider the country’s importance in the crypto ecosystem. Since Liechtenstein introduced its Blockchain Act in 2020, companies are increasingly taking advantage of favorable regulations – and the fact that Liechtenstein is a member of the European Economic Area (EEA).
But legal and regulatory compliance is as challenging for businesses and individuals in Liechtenstein as elsewhere in the world. That’s what Foreus aims to help with.
Fraud prevention and origin of funds
The Austrian crypto-forensics start-up provides services in fraud prevention, where they act as an expert witness for courts and as an interface between victims and authorities. This includes crypto-forensics but also communication with the authorities and lawyers.
The company also helps identify the origin of funds and focuses on money laundering prevention and terrorism financing prevention for banks. All of these topics are highly relevant in the realm of cryptocurrencies.
For example, if a person wants to pay a large sum of money into their bank account, Foreus would process this transaction crypto-forensically. That means they determine the origin of the funds and whether the transaction is risky in the form of a risk assessment.
Minimizing compliance risks
According to co-founder and CEO Stefan Embacher, banks are becoming increasingly involved with cryptocurrencies. “In the last few years, banks still had a big problem weighing up risks,” he said in an interview with an Austrian news website. “However, our proof of funds minimizes this risk. Accordingly, more and more banks are opening up in this area. “
He also explained that about half of their banking sector clients focus on Bitcoin, whereas the other half are more broadly positioned.
When asked about business in Austria, Embacher says the country is very bad in terms of complexity. Communication with the authorities is sometimes extremely difficult, he says. One of the reasons is that there is still very little knowledge in the crypto area. But he also believes that will improve in the next few years.
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