AML

1. Introduction

CRYPTOCHANGENOW Z.O.O. (hereinafter – the company) is committed to maintaining the highest standards of anti-money laundering (AML) compliance. This commitment extends to our employees, directors, consultants, and other associated parties. We are dedicated to preventing our platform from being used for money laundering or terrorist financing activities and adhere strictly to the legal and regulatory requirements in this regard.

2. Legal Framework

This AML Policy has been prepared in accordance with the following relevant legislation, requirements, and recommendations (including but not limited to):

●  The Act of 1 March 2018 on counteracting money laundering and terrorist financing (Poland)
●  Financial Action Task Force (FATF) Recommendations
●  Kodeks karny (Criminal and penal law, Poland)
●  Anti-Money Laundering Directives (EU)

3. Definition of Money Laundering and Terrorist Financing

Money laundering is the process by which criminals disguise the original ownership and control of the proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source. The process typically occurs in three stages:

1. Placement: This is the initial stage where the proceeds of criminal activities are introduced into the financial system. This can be done through various means such as depositing cash into bank accounts, purchasing assets, or investing in businesses.
2. Layering: In this stage, the objective is to separate the illicit money from its source through complex layers of financial transactions. This can involve transferring funds between multiple accounts, changing currencies, or investing in various financial instruments to obscure the trail of the original funds.
3. Integration: The final stage involves integrating the now-laundered money into the legitimate economy. This is done by making the funds appear to have come from a legitimate source. It can involve purchasing real estate, luxury goods, or other high-value assets, as well as investing in legitimate businesses.

Terrorist financing involves the provision of funds or financial services with the intent to support terrorist activities. This process can overlap with money laundering techniques but often includes:

• Collecting funds from both legal and illegal sources
• Transferring funds through a network of intermediaries and front companies
• Using funds to finance activities that support terrorist operations

Understanding these definitions and stages helps us in identifying and mitigating the risks associated with these illegal activities. By recognizing the patterns and methods used in money laundering and terrorist financing, we can better implement measures to detect, prevent, and report suspicious activities. This proactive approach is crucial in maintaining the integrity of our financial platform and supporting global efforts to combat financial crimes.

4. Risk Assessment and Risk-Based Approach

We employ a comprehensive risk-based approach to identify and manage any risks associated with money laundering and terrorist financing. This approach is integral to our AML compliance program and involves the following processes:

Primary Risk Assessment: During the registration process, a primary risk assessment is conducted based on the details provided by the customer. This initial evaluation helps us to identify the inherent risk associated with each customer at the outset.

Continuous Risk Monitoring and Updating: Risk assessments are regularly updated and revised when new data becomes available. This ongoing process ensures that we remain vigilant and responsive to emerging threats and changing circumstances.

Thorough Assessment Criteria: Our risk assessment process includes evaluating customer risk, geographical risk, product risk, and delivery channel risk.

Risk Classification: We classify customers into low, medium, or high-risk groups based on the risk assessment results.

Application of Appropriate Controls: Based on the risk classification, we apply appropriate controls to mitigate identified risks. These controls may include:

• Enhanced Due Diligence (EDD) for high-risk customers
• Ongoing transaction monitoring
• Regular review and updating of customer profiles
• Limitations on high-risk transactions

By employing this comprehensive risk-based approach, we effectively identify, manage, and mitigate the risks associated with money laundering and terrorist financing.

5. Compliance Officer

The Compliance Officer is the main person responsible for ensuring compliance with AML/CFT laws and regulations within the Company. Appointed by the Management Board, the Compliance Officer plays a crucial role in safeguarding the integrity of our financial operations. The responsibilities of the Compliance Officer include overseeing the implementation and maintenance of the AML program, ensuring that all employees are aware of their obligations under this policy, reporting suspicious activities to the relevant authorities, and keeping abreast of developments in AML legislation to update the company’s policies and procedures accordingly.

6. AML Principles

Our AML principles are designed to ensure comprehensive and robust measures to prevent money laundering and terrorist financing, reflecting our commitment to maintaining the integrity and security of our financial platform. These principles include:

• Assuming that most customers are not money launderers while remaining vigilant
• Using a risk-based approach to identify customers
• Monitoring all transactions and activities
• Continuously monitoring customers and risks
• Ensuring that all employees are adequately trained in AML procedures

7. Due Diligence Measures

The Company applies due diligence measures to gain a comprehensive understanding of the business relationships with our customers, ensuring compliance with AML and CFT regulations.

We differentiate between simplified, standard, and enhanced due diligence procedures, tailored to the risk profile of each customer. Collaboration from the customer is essential in fulfilling these procedures. If due diligence cannot be performed, the Company will neither initiate nor maintain the business relationship, and transactions will be refused. Additionally, we will assess the need to submit a Suspicious Activity Report (SAR).

The Company implements standard customer due diligence (CDD) measures upon customer registration. The CDD process involves two key components:

• Identification: Acquiring necessary information from the customer to establish their identity.
• Verification: Confirming the customer’s claimed identity by procuring and validating documents or information from a reliable, independent source.

In accordance with these requirements, the Company collects the following information for identification and verification to prevent money laundering and terrorist financing:

• Last name(s)
• First name(s)
• Date of birth
• Address (street, number, ZIP code, city)

Simplified Due Diligence (SDD) may be utilized when a risk assessment based on our internal policies indicates that the risk of money laundering or terrorist financing is lower than average for certain economic activities, fields, or circumstances. Before implementing SDD measures, a company representative must confirm that the business relationship or transaction is of lower risk. SDD measures can only be applied if we can maintain sufficient monitoring of transactions, activities, and business relationships to identify irregularities and report suspicious activities in line with our internal procedures.

Enhanced Due Diligence (EDD) is employed in situations where the risk of money laundering and terrorist financing is higher than typical. EDD measures are always applied when (included but not limited):

• Suspicious activity is detected in the customer’s transactions or behavior that may indicate potential money laundering or terrorist financing activities.
• There are doubts regarding the authenticity of the provided information or documents during the identification process, or when identifying the beneficial owner.
• The customer is from or resides in a high-risk third country.
• The customer is from a country or territory deemed to have inadequate AML/CTF systems according to credible sources such as mutual evaluations or published follow-up reports, or is considered a low tax rate territory.
• The customer is a politically exposed person (PEP), their family member, or a close associate.

8. Documents Acceptance

For identification and verification purposes, the Company requires the submission of specific documents to ensure compliance with AML and CFT regulations. These documents are critical for establishing the identity and address of our customers, and they must meet key criteria for validity, authenticity, and relevance.

Proof of Identity: The Company requires government-issued identification documents that contain a photograph and the customer’s personal details. Acceptable forms of identification include, but are not limited to:

• Passport
• National identity card
• Driver’s license

These documents must be valid and unexpired, clearly displaying the customer’s full name, date of birth, photograph, and signature.

Proof of Address: To verify the customer’s residential address, the Company requires documents that clearly state the customer’s name and current address. Acceptable forms of proof of address include, but are not limited to:

• Utility bill (e.g., electricity, water, gas)
• Bank statement
• Tax bill
• Lease agreement

These documents should be recent, typically issued within the last three months, and must clearly display the customer’s full name, address, and the issuing entity’s name and logo.

9. PEP and Sanctions Screening

Politically Exposed Persons (PEPs) are individuals who are or have been entrusted with prominent public functions. Due to their positions and influence, PEPs are considered higher-risk customers, especially concerning potential involvement in bribery, corruption, and other financial crimes. A PEP can be:

• Domestic PEPs: Individuals holding prominent public positions within their home country.
• Foreign PEPs: Individuals holding prominent public positions in a foreign country.
• International PEPs: Officials of international organizations.

PEPs also include immediate family members and close associates. Immediate family members include:

• Parents
• Siblings
• Spouse or partner
• Children and their spouses or partners

Close associates are individuals closely connected to a PEP, either socially or professionally, such as business partners or advisors.

Sanctions Screening Process

The Company implements a rigorous sanctions screening process to ensure compliance with international sanctions regulations and to prevent transactions involving sanctioned entities or individuals. This process involves screening customers, transactions, and counterparties against various sanctions lists to identify and mitigate risks associated with sanctioned entities. We adhere to the following sanctions lists:

• United Nations (UN) Sanctions List
• European Union (EU) Sanctions List
• Office of Financial Sanctions Implementation (OFSI-UK) Sanctions List
• Office of Foreign Assets Control (OFAC-US) Sanctions List
• Sanctions under the International Sanction Act

The sanctions screening process is conducted as follows:

1. Initial Screening: Upon customer registration, their details are screened against the aforementioned sanctions lists to identify any potential matches.
2. Ongoing Monitoring: Customers and their transactions are continuously monitored against updated sanctions lists to detect any changes in their status.

Any true matches identified during the screening process are immediately escalated to the Compliance Officer for further assessment and action. The Compliance Officer’s responsibilities in this context include:

• Conducting a detailed investigation to confirm the match.
• Evaluating the risk associated with the identified entity or individual.
• Determining the appropriate course of action, including reporting to relevant authorities if necessary.
• Implementing enhanced due diligence measures as required.

10. Suspicious Activity Monitoring and Reporting

The Company is committed to the continuous monitoring of all transactions and activities to detect and prevent suspicious behavior that may indicate money laundering or terrorist financing. Our process for monitoring and reporting suspicious activities involves several key components to ensure thorough and effective oversight:

Transaction Monitoring: All transactions are monitored in real-time to identify unusual patterns or activities that may signify suspicious behavior.

Behavioral Analysis: We analyze customer behavior over time to identify any deviations from typical patterns.

Red Flags: We have established specific indicators to help identify potentially suspicious activities.

Suspicious Activity Reports (SARs): When suspicious activity is detected, it is promptly escalated to the Compliance Officer. The Compliance Officer is responsible for conducting an investigation and, if necessary, filing a Suspicious Activity Report (SAR) to the FIU.

11. Data Retention

The Company retains all necessary records related to customer identification, transactions, and due diligence measures for a minimum period of five years after the end of the business relationship. This retention period is in accordance with legal and regulatory requirements to ensure that we can provide evidence of compliance with AML and CFT regulations if required.

All records are stored securely and confidentially, with strict access controls to protect the information from unauthorized access, alteration, or disclosure.

12. Training

The Company is dedicated to ensuring that all employees receive thorough and comprehensive training on Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) laws, regulations, and internal policies. This training program is designed not only to equip employees with the skills to recognize and report suspicious activities but also to ensure they fully understand their legal obligations and can effectively implement the Company’s AML/CFT policies.

13. Active Cooperation with Authorities

The Company is committed to actively cooperating with law enforcement and regulatory authorities in their efforts to combat money laundering and terrorist financing.

14. Ongoing Policy Review and Updates

The Company is dedicated to maintaining a dynamic and effective AML/CFT compliance program through the regular review and updating of our policies and procedures. This ongoing commitment ensures that our controls remain robust and responsive to evolving risks and regulatory requirements. This includes regular policy reviews, adapting to regulatory changes, updating risk assessments, incorporating feedback for continuous improvement, and leveraging the latest technology and innovation to enhance our AML/CFT capabilities.