Illuminating adverse information, regulatory actions, and litigation in complex jurisdictions is vital for companies operating internationally. Yet English language media, regulatory, and litigation checks conducted by ill-equipped investigators often fail to provide a comprehensive understanding of the risks potentially inherent in engaging with individuals who have lived or worked abroad. Vcheck Global’s many experienced researchers incorporate diverse jurisdictional knowledge and language skills when conducting investigative due diligence worldwide, delivering critical information to help your company mitigate risk.
The necessity of properly staffed international investigations is illustrated by a recent Vcheck Global engagement into the principals of a newly formed Special Purpose Acquisition Company (“SPAC”) operating in the cryptocurrency space. This unique project required research on several principals operating within both a SPAC company—a company type which may be rife with potential regulatory and reputational pitfalls—as well as the cryptocurrency space. The nascent regulatory stages of cryptocurrency continues to trigger investor alerts concerning potential regulatory dangers due to the opportunities for bad actors to operate within the sector. Gregory Markou, co-founder and CTO of Toronto-based blockchain company ChainSafe Systems, highlights the importance of due diligence in the cryptocurrency space. Markou explains, “traditionally most well-funded startups are comprised of proven track records. With crypto, the borders broaden; teams are made up of individuals from around the world—some of whom have never met. It’s important that Investors thoroughly research the teams, not just the product.”
The first red flag of this project was raised by preliminary searches; one subject was identified as having been previously affiliated with unsavory characters. These relationships posed potential criminal and reputational risks to Vcheck Global’s client. In response to the preliminary findings, the investigation’s scope quickly expanded past the U.S. jurisdiction initially requested into Spanish source research. Vcheck Global’s subsequent targeted research in both Spanish and English revealed concerning records pertaining to both litigation and media coverage. These findings illuminated the subject’s professional affiliation with individuals who committed serious crimes as well as having masterminded a massive cryptocurrency scam which defrauded its investors. The ability of Vcheck Global’s researchers to quickly pivot by expanding the project’s geographic scope, while conducting in-house foreign language research, ensured a comprehensive analysis of the reputational risks associated with the client’s proposed engagement.
In addition to the aforementioned adverse findings identified through Spanish source research, Vcheck Global’s investigation identified Hebrew language records involving another subject associated with the SPAC. Notably, this individual, whose name was not included on politically exposed persons watchlists, was identified through in-house Hebrew research as having ties to politicians in Israel. These findings alerted Vcheck Global’s client to the potential political risks of conducting business with the additional subject.
This project highlights common challenges posed by subjects with global footprint. Successful navigation of international engagements requires a research team possessing high-level linguistic and geopolitical expertise. Notably, had this engagement been restricted to standard public records research, the resulting report would have contained minimal coverage of the political ties and business affiliations which ultimately affected the client’s decision making. These pain points were exposed by Vcheck Global’s comprehensive research across multiple jurisdictions, including the research teams’ ability to navigate complex and high-risk industries in several languages.
To infuse your next international engagement with the regional and linguistic knowledge of experienced international diligence experts, contact Vcheck Global.
Guy Talmor is an Associate at Vcheck Global.