AML & KYC Policy
PROGRAM ON ANTI-MONEY LAUNDERING (AML) & KNOW YOUR CUSTOMER (KYC) POLICY
Actual date: November 30, 2022
INTRODUCTION
The rapid development and global nature of virtual assets have caused the development of an effective regulatory regime. The Financial Action Task Force (FATF) has issued the “Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers” to emerge best practices for regulatory issues arising in respect of money laundering and other risks associated with virtual assets. Compliance with these documents is essential to provide an effective application of international AML standards.
The Company actively participates in domestic and international efforts to combat money laundering, terrorist funding and other financial crimes. The Company complies with all applicable laws and regulations relating to such activities, and seeks all available means to prevent being utilized as a conduit for such illicit funds and mitigate possible risks of the Company being involved in any kind of illegal activity.
For such purpose, the Company has designated this Program on Anti-money laundering and Know Your Customer Policy (the “Program”). This Program complies with applicable legal regulations and will be reviewed and updated on a regular basis to ensure appropriate policies, procedures, and internal controls.
RISK ASSESSMENT
Pursuant to international requirements, the Company has adopted a risk-based approach towards assessing and managing the money laundering and terrorist financing risks. Therefore, we are able to ensure that measures to prevent or mitigate money laundering and terrorist financing are commensurate with the identified risks. The principle is that resources should be directed accordingly to priorities so that the greatest risks receive the highest attention.
USER IDENTIFICATION/VERIFICATION
The Company reserves the right to collect User’s identification information for AML/KYC Policy purposes. Users may be identified using a multi-level system.
The Company may, as a part of the registration and authorization process:
cross-check the names of users against compliance databases such as the OFAC Specially Designated Nationals list and other governmental watch lists;
require users to provide proof of identification; and
not permit any transactions to be made with incomplete registration and authorization process.
We will require sufficient information from each user when registering to enable the user to be identified; utilize risk-based measures to verify the identity of each user when registering; record the user’s identification information and the verification methods and results; and compare user identification information with government-provided lists of suspected terrorists, once such lists have been issued by the government.
Based on the risk, we will ensure that we have a reasonable belief that we know the true identity of our users by using risk-based procedures to verify and document the accuracy of the information we get about our users, but in any case, complying with the statutory requirements.
Identification for Individuals
Standard Level. Transactions up to 10 000 EUR (ten thousand euros) or their equivalent in fiat currency or cryptocurrency. Identification required: first name, last name, email, proof of identity (scanned version of the ID issued by the government, that is valid for at least 6 months as of uploading date: e.g., passport or national ID card, or driver license), and residential address.
Advanced Level. Transactions over 10 000 EUR (ten thousand euros) or their equivalent in fiat currency or cryptocurrency. Identification required: first name, last name, email, proof of identity (scanned version of the ID issued by the government, that is valid for at least 6 months as of uploading date: e.g., passport or national ID card, or driver license), and proof of a residential address (e.g., utility bill no more than 3 months old).
Identification for Businesses
Regardless of the transaction amount, identification required: registered address, proof of legal existence (e.g., state certified articles of incorporation or certificate of formation, or other comparable legal documents as applicable), proof of identity (e.g., driver’s license, passport or government-issued ID) for each individual beneficial owner that owns 25% or more, as well as all account signatories.
Please note:
Documents shall be provided in high resolution;
We reserve the right to reject any documents, which do not comply with the above-mentioned;
We maintain the right to require additional information if considered necessary;
We maintain the right to require additional information at any time to verify the user's identification.
We reserve the right to require information about the source of origin of funds anytime (regardless of the sum of transactions), if we consider it as necessary.
We reserve the right not to begin cooperation or suspend the working of the user account if the users fail to provide the required information or provide incomplete information.
Verification
Documents used to identify a user must be verified prior to the completion of registering process. Verification of identity requires multi-factor authentication, layered security, and other controls to ensure a meaningful user identity confirmation process based on transaction amount or other factors.
The Company may use various verification methods including, but not limited to:
obtaining proof of address, such as a copy of a utility bill, and/or confirmation photo (selfie);
obtaining additional references from financial institutions;
corroborating identity information received from the user, such as national identity number, with information in third party databases or other reliable sources;
tracing the user’s Internet Protocol (IP) address;
searching the Web for corroborating activity information consistent with the user’s transaction profile, provided that the data collection is in line with national privacy legislation;
obtaining a notarized copy of an individual’s birth certificate or a business’ certificate of incorporation sealed with an apostille for valid identification.
Lack of Verification
In case of user verification failure, we may take the appropriate measures: (1) refuse the registration of the user’s account; and (2) determine whether it is necessary to inform law enforcement authorities in accordance with applicable laws and regulations. In addition, the Company reserves the right to verify the user’s identity on an ongoing basis, especially when their identification information has been changed or their activity seemed to be suspicious (unusual for the particular user). The Company also reserves the right to request up-to-date documents from the users, even though they have passed identity verification in the past.
COMPLIANCE OFFICER
Compliance Officer is the person, duly authorized by the Company, and fully responsible for implementing and enforcing this Program. Company has designated Maksym Holovakhin as its Compliance Officer.
The duties of the Compliance Officer with respect to this Policy shall include, but are not limited to:
Establishing and updating internal policies and procedures for the completion, review, submission, and retention of all reports and records required under the applicable laws and regulations;
Maintaining necessary and appropriate records;
Monitoring transactions and determining any suspicious activity;
Providing the appropriate law enforcement authority with information as required under the applicable laws and regulations;
Ensuring the training of employees on the AML/KYC program.
Ensuring internal audits of the AML/KYC program.
The Compliance Officer is entitled to interact with law enforcement authority, which is involved in the prevention of money laundering, terrorist financing, and other illegal activity.
RECORDKEEPING PROCEDURES
The Company reserves the right to keep all the identifying information provided by a user, the methods and results of verification, and the resolution of any discrepancies identified in the verification process.
We will keep records containing a description of any document that we relied on to verify a user’s identity, noting the type of document, any identification number contained in the document, the place of issuance, and if any, the date of issuance and expiration date.
Regarding non-documentary verification, we will retain information that describes the methods and the results of any measures we have taken to identify and verify a user. We will also keep records containing a description of the resolution of each substantive discrepancy discovered when identifying and verifying the information collected.
All transaction and identification records will be maintained for a minimum period of five years after the user account has been closed. All collected documentation is available to appropriate authorities upon request.
SUSPICIOUS ACTIVITY MONITORING AND REPORTING
The Company may monitor transactions to detect suspicious activity. For the purposes of this Program suspicious activity may be defined as the transaction which:
(1) involves funds derived from illegal activity or is intended or conducted to hide or disguise funds or assets derived from illegal activity;
(2) is designed, whether through structuring or otherwise, to avoid any recordkeeping or reporting requirements of the regulations;
(3) has no business or apparent lawful purpose; or
(4) facilitates criminal activity, including the use of KAIF Tokens in such actions.
Transactions that are unusual will be carefully reviewed to determine if it appears that they make no apparent sense or appear to be for an unlawful purpose. The Company reserves the right to request the user to provide any additional information and documents in case of suspicious transactions; and suspend or terminate user’s account when the Company has a reasonable suspicion that such user engaged in illegal activity.
The Compliance Officer shall decide whether a transaction is potentially suspicious and if considered necessary consult with the Company’s senior management to make the decision as to whether the transaction meets the definition of suspicious activity.
The Compliance Officer shall file a report, including supporting documentation, to notify the appropriate law enforcement authority in situations involving violations requiring an immediate attention, such as terrorist financing, continued money laundering schemes, or other financial crimes. And the Company also reserves the right to file a voluntary report for any suspicious transaction that we determined as a potential violation of any law or regulation but that is not required to be reported by us.
PROHIBITED JURISDICTIONS AND SANCTION POLICY
Prohibited Jurisdictions. KAIF Tokens are intended to be sold to participants only in those jurisdictions in and to those persons where and to whom they lawfully may be offered for sale. The Company may refuse from transactions with any person identified as a citizen or permanent resident of prohibited jurisdictions, unrecognized and/or partly recognized territories and/or states.
The prohibited jurisdictions shall include:
The United States of America, including its states and territories (American Samoa, Guam, Mariana Islands, Puerto Rico, as well as U.S. Virgin Islands).
The People's Republic of China.
Any territories temporally occupied by the russian federation (such as Crimea, Pridnestrovian Moldavian Republic (Transnistria), Donetsk People's Republic, Luhansk People's Republic, Abkhazia, South Ossetia, etc.).
Other countries and territories, including countries, where transactions related to digital assets are banned by the government or require registration and licensing by competent public authorities:
Afghanistan, Albania, Angola, Azerbaijan, Bosnia and Herzegovina, Bahamas, Barbados, Belarus, Botswana, Burkina Faso, Burma, Burundi, Cayman Islands, Cambodia, Cameroon, Chad, Congo, Cuba, Ethiopia, Eritrea, Fiji, Palau, Ghana, Guinea, Guinea-Bissau, Haiti, Iran, Iraq, Jamaica, Jordan, Lao people Democratic Republic, Liberia, Libya, Madagascar, Malia, Mozambique, Nicaragua, Nigeria, North Korea, Pakistan, Panama, Senegal, Somali, South Sudan, Sri Lanka, Sudan, Syria, Tajikistan, Trinidad and Tobago, Turkmenistan, Uganda, Uzbekistan, Vanuatu, Venezuela, Yemen, Zimbabwe.
Sanction Policy. The Company may refuse from transactions with any person (a) identified or acting on behalf of any person identified as a “Specially Designated National”; (b) established in, resident in, or otherwise operating from countries or territories subject to Sanctions lists, including United Nations, European Union, UK Treasury and US Office of Foreign Assets Control (OFAC) sanctions lists in all jurisdictions in which we operate.
EMPLOYEE COMPLIANCE GUIDE
Employees of the Company must comply with legal requirements designed to detect and prevent money laundering and terrorist financing activities. In addition, the Company expects all of its employees to observe the following compliance standards:
always conduct business in accordance with the highest ethical standards;
follow this Program, the recordkeeping and reporting requirements included in this Program;
always be alert to user’s transactions that may indicate money laundering or other criminal activity; and take proper steps to report and/or refuse such transactions;
cooperate with law enforcement authorities within the confines of applicable law, and report any suspicious activities to the Company’s Compliance Officer.;
refuse to conduct transactions if a user fails to provide sufficient identification or other required information. Depending on the circumstances may file a SAR (suspicious activity report) as a result.
Failure to follow this guide may violate the law, result in termination of employment of the Company’s employees, and even criminal prosecution.
TRAINING PROGRAMS
Training course organization and materials will be tailored to an employee’s specific responsibility or function to ensure that the employee has sufficient knowledge and information to effectively implement the Company’s AML/KYC policies and procedures. In addition, all trainings shall be provided and updated regularly to reflect current developments and changes to laws and regulations.
PROGRAM UPDATES AND REVIEW
This Program, including all policies and procedures, shall be reviewed and updated or revised on as-needed basis, but no less often than once a year. Updates or modifications to this Program shall be initiated by the Compliance Officer and/or by the Company’s director.
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