From Bitcoin's inception, industry professionals have been adamant about its status as a legitimate currency. As such, related companies are viable financial institutions. However, when it comes to AML compliance, these institutions might do well to look to the early example set by a company that occupies a radically different space: Skype.
From the beginning, Skype sought to define itself as a software vendor rather than a telecommunications company. While the company acknowledged that there were many similarities between the product it offered and the telecommunications sector, the fundamental difference — that the infrastructure was built organically by users rather than centrally by the company — meant that Skype sought to pursue a very different paradigm.
Bitcoin finds itself in a similar situation. As a crypto-currency, not backed by any centralized government, it finds itself in an unusual position. However, in order for it to have any value, it has to seamlessly interface with existing financial institutions: just as Skype had to with telecommunications companies.
And with these interactions come significant regulations, and all the same AML compliance and KYC requirements that those institutions adhere to. Any financial institution that does business in Bitcoin should be fully aware of the implications of this relationship. In an article on Coin Desk, erstwhile Skype Chief Operating Officer Michael Jackson described this symbiosis.
"In any world, these partners are worried too," Jackson wrote. "The first companies that connected Skype to the phone network took risks. These partners need clear arguments around why they are safe and why the service they provide is in compliance with the rules. These arguments need to be clear and based on fact and legal opinions. Rhetoric has no place. Banking institutions, burnt by the financial crisis and subsequent AML (anti-money laundering) and KYC (know your customer) fines need solid facts, not lofty ambitions."
In an increasingly sophisticated financial landscape, those assurances should be based on the best possible information.