The Secretariat of Prizes and Betting (SPA) of the Ministry of Finance released Ordinance SPA/MF No. 1143, which establishes detailed guidelines for policies, procedures and internal controls to prevent money laundering (PLD), terrorist financing (FT) and proliferation of weapons of mass destruction (PADM), for fixed-odds betting operators ('Bets', as operators are called in Brazil).
The new guidelines represent a significant regulatory milestone for fixed-odds betting operators in Brazil, establishing a comprehensive set of obligations and procedures aimed at preventing money laundering, terrorist financing and other related crimes.
Chilean entrepreneurs Gonzalo Restini, Cristián Neely, Pedro Feres and Cristobal Concha saw this as a significant opportunity. The four are founders of Regcheq, a startup opened in 2021 in Santiago to help companies prevent crimes.
Regcheq's platform uses artificial intelligence to automate processes associated with money laundering controls, such as preparing reports on a company's financial activities and sending this information to authorities such as the Securities and Exchange Commission.
Much of the idea for the business came from Restini, who has three decades of experience in the Chilean financial market, having worked at brokerages, banks and assets in Santiago, Chile.
"Compliance has become very important for companies in Latin America in the last decade. Many of the bureaucracies that currently prevent faster progress in compliance should be resolved with artificial intelligence," says Restini.
Investments in startups in 2024
In just over three years, Regcheq has raised capital from Latin American investors such as Taram Capital, a Chilean fund based in Miami, Consorcio Venture Capital and Grupo Sable, as well as several notable angel investors in Latin America such as Daniel Undurraga (from the delivery app Cornershop), Jaime Arrieta (from the Chilean HRTech Buk), and Benjamín Labra (from the Chilean proptech Houm).
The Chilean compliance platform is the first non-Brazilian company to receive investment from BTG Pactual, in the context of Bootslab, its Venture Capital program in Brazil. The tech company was selected from over 700 startups to be part of a select group of 4 companies chosen to receive support in 2024.
Through the program, the company received an initial investment of R$1 million (US$182,000) and will receive mentoring from BTG executives, in addition to having the opportunity to do business with the bank and partners.
Regcheq has offices in Brazil, Chile and Mexico, providing compliance services to over 300 companies in the region. Previously, the company received investments from Taram Capital, a Chilean fund based in Miami, Consorcio Venture Capital and Grupo Sable, in addition to several well-known angel investors such as Daniel Undurraga (Cornershop), Jaime Arrieta (Buk), and Benjamín Labra (Houm).
“It is truly extraordinary to have BTG as a partner. Their support in the Brazilian market will be a great boost for Regcheq. Their specific weight is gigantic in this country. We hope that this step will allow us to penetrate the financial industry, the online betting market, Fintech and the real estate market, all sectors required to comply with money laundering regulations,” says Cristóbal Concha, its CEO.
Regcheq is a platform that automates and digitizes all processes associated with Money Laundering controls, in addition to other functionalities for crime prevention in companies.
“Compliance spending in Latin America is growing at rates of 35% per year and is already estimated at around US$20bn per year. Logically, Brazil is by far the largest market and BTG is by far the best partner to have in Brazil,” said Concha.
Gonzalo Restini, co-founder, states: “Regcheq has extraordinary potential in Brazil. We are very happy to have been selected as the first foreign company to participate in Boostlab. BTG saw in us a very large scalability potential, and a unique and different value proposition. We are certain that by working together we will achieve extraordinary success in Brazil.”
Global business
Money laundering is a billion-dollar business — and it’s growing. Worldwide, it is estimated that there is an annual volume of 4 trillion dollars involved in activities whose purpose involves, to a greater or lesser extent, the evasion of foreign currency.
It is no wonder that the technology market for companies willing to strengthen their compliance structures and, thus, minimize the risk of being involved in money laundering is growing rapidly.
This market moves almost US$270bn annually worldwide. One of the places where compliance tools are growing the most is Latin America, a region rich in financial scandals such as those revealed by Operation Lava Jato.
Here, this market moves close to US$20bn and is expected to grow 35% per year in this decade, according to the report "True Cost of Financial Compliance 2023" by the consultancy Forrester Research.
Source: GMB
