Who is a company’s Ultimate Beneficial Owner?
A UBO or ‘Ultimate Beneficial Owner’ is a natural person or persons with direct control over a registered business entity.
Who is a company’s Ultimate Beneficial Owner?
- Individuals that possess a minimum capital stake of 25% stake in the legal entity
- Individuals that possess a minimum voting right of 25%
- Individuals that are beneficiaries of a minimum of 25% of the income generated by the entity
Why is UBO important in compliance?
Knowing who a UBO is for crypto compliance is important as it enables private parties and governments to understand if the individual they are dealing with has a higher risk profile. Examples of individuals with high risk profiles including Specially Designated Nationals (SDNs), Politically Exposed Persons (PEPs) or other compliance exposure risks.
UBO identification is especially important in relation to sanctions screening of persons operating on behalf of nations (SDNs) under sanctions regime such as Iran and North Korea.
UBOs present a risk of money laundering (ML) as the vehicles that they control can be used for all the basic traditional aspects of ML; placement, layering and integration of funds.
As the cryptoasset industry has grown to become worth trillions, the intersection of the asset class and the traditional economy has become more pronounced. A growing concern for the Financial Action Task Force – the global AML watchdog – in regards to the ML risk that UBOs present is that of trade-based money laundering, of which the popularity of stablecoin use will increasingly be used.
