The AML/KYC system is an important element in maintaining a high level of security on digital finance services, including cryptocurrencies. The AML / KYC policy is aimed primarily at identifying and neutralizing violations and criminal acts in the field of finance, including money laundering. This security system is based on verifying the identity of users during registration, when making financial transactions and other activities on the site. The AML/KYC policy is coordinated with international sanctions lists, which allows violators to be quickly and accurately identified.

AML/KYC policy terminology

AML/KYC is a necessary control measure that allows to monitor internal financial transactions, prevent and detect violations. The AML / KYC policy includes a number of concepts and terms that are necessary for the correct understanding and implementation of procedures:

  • The company is an online service that specializes in digital and electronic currency exchange.
  • User – a person (private or legal) to whom the Company provides financial services in an online format.
  • Money laundering is deliberately false information about the source, location, purpose of funds, as well as the transfer of digital and electronic currency in the course of fraudulent activities to the territory of other states after the illegal receipt of funds.
  • Terrorist activity - financing and investing in illegal terrorist activities, violation of the articles of the current Criminal Code.
  • International sanctions are various restrictions initiated by international organizations and governments, including the EU and the UN. The purpose of sanctions is to resolve conflicts and maintain stable peaceful cooperation at the international level.
  • A person with political influence (PEP) is a person holding a significant political and public position and directly influencing the political situation (heads of state, ministers).
  • A Local Politically Influenced Person (PEP) is a person who takes part in significant government apparatuses in the state in which the service is registered.
  • The family of a person with political influence (PEP), as well as close circle - the next of kin, cohabitants, persons with close and business relations.
  • AML/KYC policy is a set of measures aimed at identifying facts of illegal declaration of income.

Key provisions of AML/KYC

The AML / KYC policy of the service is actively used to analyze and investigate internal situations and suspicious activities on the resource, and also complies with international sanctions laws. This strategy allows you to increase the level of security for the internal work of the company. A set of measures is directed to work with suspicious situations and transactions related to economic violations, money laundering. Also , various financial actions and transactions are subject to additional checks , which differ from the standard actions performed by users on the resource.

Key AML/KYC measures are based on current legislation. It is the legislative norms that guide the administration of the resource during scheduled and unscheduled checks in case of suspicious financial activity of users. The AML/KYC policy also takes into account legislative updates and additions, new laws related to the financial area.

The employees of the company are qualified specialists. Their competence includes compliance with the AML / KYC policy. Employees receive up-to-date instructions for effective work regarding the security of the service. The competence of the company"s employees is confirmed by a personal signature, which indicates that they have listened to the instructions and are aware of the current legislative norms.

Procedure for user identification and communication with customers

The digital and electronic currency exchange company is guided by the AML / KYC policy when working with users and monitoring transactions. The company works directly with users, thus, users are prohibited from conducting financial activities on the resource for third parties. To ensure the security of the resource, each client undergoes identification with the provision of personal data, which is confirmed by the relevant documentation.

To identify the user"s identity, the resource administration may request the following documents:

  • internal passport;
  • international passport;
  • driver"s license;
  • a bank card and a photo of the user with a card in his hand.

In addition to the above documents, the administration has the right to request the following data:

  • surname, name and patronymic;
  • tax number;
  • Date of Birth;
  • number of the identity document, as well as information about the authority that issued the document;
  • residential address;
  • registration address;
  • contact details (phone number, email address);
  • information about the functions of the PEP client, his family members and partners (if the user belongs to this category of persons).

There is also a number of additional documentation that the resource administration may request as part of the user identification procedure:

  • Residents of the state in which the company is located must provide an internal or foreign passport, driver"s license and proof of residence.
  • Non-residents must provide a passport, which has a mark of entry into the state.
  • A document with information about the place of registration and residence (utility payments, bank statements, other documents indicating the address). These documents are valid for three months.

Users who are legal entities can provide the following documents:

  • extract from the commercial register;
  • apostille for extract;
  • Name of the organization;
  • registration number;
  • date of registration;
  • address;
  • information about the representative and co-founders;
  • Contact details.

Individuals cooperating with a legal entity are also required to provide identification documents.

Forecasting and risk analysis

Digital activities aimed at the exchange of currency and crypto-currencies are associated with certain risks. One of the most significant risks is money laundering, as well as the possibility of investing in terrorist organizations.

In order to control risks, the company"s specialists analyze the following parameters:

  • geographical data;
  • the risk associated with cooperation with the user;
  • user transactions, financial transactions and other activities.

Geographic risks are specific. When analyzing geographic risks, the company"s specialists pay close attention to the following areas:

  • the sphere of influence of the UN and the EU, as well as the areas on which these associations impose sanctions;
  • countries that do not exercise adequate control over financial violations and money laundering;
  • states that are seen in support of terrorist organizations;
  • states with a high level of corruption.

A high level of risk posed by the user can be recognized when it comes to:

  • a user who is considered a person of the PEP;
  • family members of a PEP person;
  • persons close to PEP and partners;
  • a person included in the "black list" of the UN, the EU or other significant international organizations;
  • a person involved in economic offences.

When making financial transactions on the service, the following cases are considered risks:

  • financial actions of third parties from the client"s account;
  • lack of substantiation of financial activities;
  • deliberate concealment of participants in the transaction;
  • receipt of funds to one account from various sources and accounts;
  • receipt of the amount to the client"s account and financial transfers in a non-standard amount.

In the event that the administration of the resource discovers facts of such non-standard activities, this will be the reason for additional checks.

The company for the exchange of electronic and digital currencies has the right to refuse to provide services to persons who are related to countries with a recognized high level of risk. Also, access to services may be denied to a person who is included in the registers of international sanctions, especially if the imposed restrictions have financial reasons. The administration of the resource pays special attention to persons who are PEPs, as well as their family members and business partners. In the event that the user is suspected of being involved in money laundering or sponsoring terrorist organizations, the administration also refuses to provide access to the resource"s services.

Digital risks

Digital risks are risks that are related to computer technology and the IT industry. Digital risks include:

  • data transfer;
  • intentionally providing incorrect information;
  • distribution of malware;
  • carrying out hacker attacks.

In order to reduce the likelihood of digital risks, the company"s specialists use only licensed software in their work. The work uses equipment that is not equipped with tools for integration with external media, which prevents the risk of third parties recording information from media owned by the company.

To reduce the risk of receiving deliberately false data from users, personal information undergoes a multi-stage verification. The user provides a number of documents with photos in good quality for reliable identification of the person.

The resource systems are also protected from cyber attacks. To do this, the company"s specialists regularly monitor transactions in order to identify suspicious transactions. Additionally, the software is updated. In the correct mode of operation, anti-virus programs are supported. Employees receive additional training.

Legal checks

In order to prevent and detect violations, facts of money laundering and sponsoring of terrorism, the administration of carries out legal checks of the provided personal information about the client. The received personal data is not made public and is not transferred to third parties. In case of detection of a violation, the administration has the right to transfer the user"s personal data to law enforcement agencies after the relevant court order.

Legal checks also include checks:

  • documents;
  • beneficiary;
  • business connections and relationships;
  • financial transactions and transactions;
  • sources of obtaining financial resources.

Legal verification implies facts that the user can confirm with relevant documents. In the event that there are doubts about the reliability of the data provided, the original documentation is studied.

A feature of the AML / KYC policy is the verification of the user"s identity before the start of cooperation. In the event that the user fails to confirm the identification of the person as a result of errors or inadequate quality of the provided copies of documents, cooperation will be refused. In the event that a client with criminal intent provides deliberately false data, the information is transferred by the resource to law enforcement agencies.

By agreeing to these rules and the AML / KYC policy, the user gets access to the services of the resource and the possibility of making electronic and digital financial transactions. The AML/KYC policy is aimed at preventing and detecting financial violations, money laundering and sponsoring terrorist organizations. Identification of users at the time of registration, as well as scheduled and unscheduled checks of customer activity, transaction control ensure the stability and security of using the resource.