Beneficial owner (UBO)

A beneficial owner - often called the ultimate beneficial owner, or UBO - is the real, flesh-and-blood person who ultimately owns or controls a company, even when the company is owned on paper by other companies. Finding the UBO is a central goal of anti-money-laundering work, because shell entities are a classic way to hide who is really behind the money.

Under FinCEN's customer due diligence rule, financial institutions have generally had to identify, for a legal-entity customer, both:

• an ownership prong - each individual who owns 25% or more of the entity, and
• a control prong - at least one individual with significant control (such as a senior executive or managing member).

Identifying beneficial owners is the point of KYB, and the UBOs you find then get run through KYC-style identity checks and sanctions screening.

There is also a separate reporting regime: the Corporate Transparency Act began requiring many US entities to report their beneficial owners to FinCEN, but its scope for domestic US companies was significantly narrowed by rulemaking in 2025. Because this area has shifted repeatedly, treat the exact reporting obligations as something to verify against current FinCEN guidance.

For RWA deals, identifying the UBO behind an investing entity is how a platform avoids unknowingly onboarding a sanctioned or prohibited person hiding behind a corporate wrapper. Thresholds and specifics are fact- and jurisdiction-dependent.

Source: FinCEN (fincen.gov), as of 2026.