VC firms investing in crypto startups must perform due diligence that extends beyond the typical business vetting. This includes assessing the startup’s AML compliance framework and screening the founders’ and project’s wallets for any links to illicit activity. Investing in a project that later faces regulatory action for AML failures can lead to significant financial and reputational loss. Therefore, technical and compliance due diligence are equally important in the crypto investment world. Smart VCs have integrated wallet screening into their process. They always check crypto wallet aml history before writing a check.
