AI KYC and AML for regulated VASPs

Tarth’s fit inside a virtual asset business is specific: institutional and HNW counterparty CDD. Retail user onboarding at a regulated crypto exchange — the high-volume, light-KYC consumer flow — is a different product category, served well by tools built for it. Tarth is built for the deep individual-subject CDD VASPs apply to institutional clients, HNW counterparties, OTC desk customers, and the natural persons connected to corporate counterparties. That’s where the compliance file actually has to hold up under regulator scrutiny.

ADGM-regulated VASPs under the FSRA Virtual Assets Regulatory Framework, DFSA-regulated firms conducting investment token activity, MAS-licensed Digital Payment Token Service providers under MAS Notice PSN02, and Cayman VASPs registered under the Virtual Asset (Service Providers) Act all face the same expectation when an institutional or HNW counterparty onboards: a documented CRA with cited evidence, source-of-wealth verification, PEP and sanctions screening, and ongoing monitoring across the relationship life. Tarth produces that file in around 10 minutes per natural person.

Where Tarth fits in a VASP compliance program

VASPs typically run a tiered compliance model. Retail tier uses high-throughput consumer KYC tooling. The institutional and HNW tier — OTC counterparties, structured product clients, prime brokerage relationships, treasury accounts, market-maker counterparties — needs the depth a retail KYC tool doesn’t provide. Tarth is the second tier.

For each institutional or HNW counterparty, Tarth runs the full screening suite: identity verification (Onfido), PEP and sanctions screening with cited list entries, adverse media with linked sources, source-of-wealth assessment with evidence collection, proof of address, net worth qualification where applicable, and ongoing continuous monitoring. The CRA captures the reasoning and the evidence. The CAF stores the supporting documentation pack. Both are inspection-ready when the regulator asks.

How Tarth handles VASP institutional CDD

• Per-counterparty screening at production speed. Each natural person — the OTC client, the institutional signatory, the treasury account beneficial owner — completes in around 10 minutes once documents are submitted.
• Cited evidence for every finding. Adverse media, sanctions hits, PEP matches, and source-of-wealth documentation are cited inline so the compliance team can review the source without reconstructing the trail.
• Continuous Monitoring across the counterparty base. Active counterparties are re-screened against PEP and sanctions lists. New designations or adverse media trigger alerts in the bell notifications and email.
• Per-Group structure for institutional desks. OTC, institutional sales, treasury, and prime brokerage desks can be set up as separate Groups inside the VASP’s Tarth tenant. Configurations and audit trails are isolated per desk.
• Source-of-wealth for HNW counterparties. HNW individual counterparties — often with crypto-native wealth from early holdings or token launches — require source-of-wealth evidence. Tarth’s source-of-wealth workflow handles digital asset wealth narratives alongside traditional sources, with documented corroboration.

Regulatory framework — what VASP institutional CDD has to look like

For ADGM VASPs, the FSRA Virtual Assets Regulatory Framework requires the firm to apply the FSRA AML Rulebook’s CDD standard to its customer relationships. Institutional and HNW counterparty CDD has to meet the same evidentiary standard the FSRA expects from any other authorised firm. The CRA has to show the reasoning behind the risk rating, the evidence supporting the source-of-wealth assertion, and the screening results with cited sources.

For MAS Digital Payment Token Service providers under the Payment Services Act and MAS Notice PSN02, the same AML/CFT standard applies as to other MAS-licensed financial institutions — risk-based CDD, EDD for higher-risk customers, ongoing monitoring, and STR readiness via STRO.

For DIFC firms conducting investment token activity under the DFSA’s regime, the DFSA AML Module CDD requirements apply. For Cayman VASPs under the Virtual Asset (Service Providers) Act, the AMLR 2023 Revision applies in addition to the VASP-specific framework.

In every jurisdiction, the institutional counterparty CDD obligation is identical in structure to the obligation on traditional financial institutions. Tarth’s output is calibrated to satisfy that standard.

VASP compliance officer and MLRO function

VASPs licensed in the major jurisdictions appoint a compliance officer and (where required) a registered MLRO. For early-stage and emerging VASPs, the MLRO is often a fractional outsourced practitioner holding the role across multiple licensed firms. For larger VASPs, the role is held by an in-house head of compliance. Tarth supports both models with cited CRA output, audit trail per Group, and continuous monitoring across the institutional counterparty base.

What this looks like compared to a generic retail KYC tool or a manual program

Frequently asked questions about VASP institutional CDD

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