Anti Money Laundering Policy

Last Updated: June 18, 2021

Under the rules of the BVI Financial Services Commission, the purpose of this policy is to set the KriptopayLimited’s (hereinafter referred to as “Kriptopay”, “the Company”, “we”, “our” or “us”) internal practice, measures, procedures and controls relevant to the prevention of Anti-Money Laundering and Terrorist Financing and Know-Your-Customer principles.

The policy on Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), and Know-Your-Customer (KYC) is developed and updated by the Money Laundering Reporting Officer (hereinafter the “MLRO” or “reporting officer”) who is at the same time the compliance officer of the Company. The policy is applicable and shall be communicated by the reporting officer to all the employees of the Company.

The Policy has been prepared to comply with the provisions of the Regulatory Code, 2009 and Anti-money Laundering and Terrorist Financing Code of Practice, 2008 of the British Virgin Islands, and other relevant legislation.

The Financial Investigation Agency (“FIA”) is the institution where money laundering and financing of terrorism activities are observed and reported within it. The Financial Investigation Agency Act, 2003 came into force on 1st April 2004.

The MLRO plays a very significant role in the monitoring and implementation of the Company’s AML/CFT regime, including monitoring adherence to the Company’s internal control systems to ensure full compliance with all enactments relating to AML/CFT.

The employees and professionals of the Company are obliged to report suspicious activity or transactions to the MLRO in the form established by the Company. The Reporting Officer will make a report to the BVI Financial Investigation Agency (the “FIA”) of every suspicious customer or transaction relating to the Company in accordance with Section 17 of the Anti-money Laundering and Terrorist Financing Code of Practice, 2008.

01. Risk Management

Kriptopay Limited has adopted and enforced policies, procedures, and controls with the objective of detecting and deterring the occurrence of money laundering, terrorist financing, and other illegal activities. Before accepting a potential customer, KYC and due diligence procedures are applied, by examining position, linked accounts, business activities, or other risk indicators.

The Reporting Officer is responsible for coordinating and monitoring the Company’s AML/CFT Program as well as maintaining the Company’s compliance with applicable rules and regulations.

02. KYC Requirements

We have the responsibility against regulators regarding global anti-money laundering and financing terrorism regulations. For this reason, we have strict rules to know our customers and they are required to submit proof of their identity. For each customer the following controls and measures are taken by Kriptopay Limited:

• identification and verification of the valid identity and address details of (potential) customers, acceptable to the legal authorities, before performing a transaction and during the course of a continuous business relation;
• consistency of the income levels of customers and the financial services they perform/request with their business, the general course of action and sources of income of the customer type, in which they are included; and
• the possibility of the customers being included on national/international sanctions lists.

The following documents shall be provided by the individual customers (natural person):

1. The Copy of Passport with the photograph, full name, nationality, date and place of birth, date of issue and the term of validity, number, country of issuance and signature. In case the Copy of Passport cannot be provided, the Clients shall provide the Copy of ID or driving license that contains all the information mentioned above. All copies of these documents should be certified. The certification should state that this is a true copy of the original.
2. A public utility bill (electricity, gas, water etc.) or bank statement with the date indication (not later than the last three months), name, permanent place of residence and postal address.

The following documents shall be provided by the legal entities:

1. The Copy of the Company Registration
2. The Copy of Memorandum of Association and/or Articles of Association of the Company
3. The Copy of Certificate that confirms legal authorities of the Company’s shareholders and directors with the indication of their names
4. The Document with the address of the Company registered office.
5. The Copies of Passports of all of the Company’s Shareholders and Directors.
6. The Documents that confirm the permanent place of residence of the Company’s shareholders and directors.

All these documents shall be provided by the customers via uploading them into the customers’ personal account. The Company has the right to demand all necessary documents from the Customers at any time at its discretion by way of sending the requests via e-mail. If the customers fail to submit the identity verification documents to the Company with, the Company will have the right to reject any of the Customers’ requests.

The AML Reporting Officer may specifically check and verify the application of KYC procedures and comment on the lapses observed in this regard.

03. AML/CFT Policy

Kriptopay Limited will introduce necessary policies and procedures to avoid the risk of possible money laundering or the financing of terrorist and related activities. The procedures set up by the Company for AML are as follows:

• To inquire about the source of the customer’s assets and income to determine whether the inflow and outflow of money and securities are consistent with the customer’s financial status.
• To gain an understanding of what the customer’s likely trading patterns will be to detect any deviations from the patterns at a later date.
• Employees responsible for final approval of new accounts will receive sufficient training to be able to identify additional accounts that may also require more than the minimal customer identification verification requirements.

04. Identification of Suspicious Financial Transactions

As stated above, Kriptopay Limited has designated the Compliance Officer as its AML Reporting Officer. In this capacity, the Reporting Officer will be responsible for coordinating and monitoring the Company’s AML Program as well as maintaining the Company’s compliance with applicable AML rules and regulations. The Reporting Officer will review any suspicious activity, which has been observed and reported by employees. The Reporting Officer will also report information related to cash and suspicious transactions if detected to the Directors.

Some of suspicious activities or transactions that will be scrutinized by the Reporting Officer and that may indicate money laundering activity can be listed as follows:

• Customers who wish to maintain a number of trustee of Customers accounts which do not appear consistent with their type of business, including transactions which involve nominee names.
• Customers who have numerous accounts and pay in amounts of cash to each of them in circumstances in which the total of credits would be a large amount.
• Any individual or company whose account shows virtually no normal personal banking or business-related activities, but is used to receive or disburse large sums which have no obvious purpose or relationship to the account holder and/or his business (e.g. a substantial increase in turnover on an account)
• Reluctance to provide normal information when opening an account, providing minimal or fictitious information or, when applying to open an account, providing information that is difficult or expensive for the Company to verify.
• Customers who appear to have accounts with several banks within the same locality, especially when the Company is aware of a regular consolidation process from such accounts prior to a request for onward transmission of the funds.
• Matching of payments out with credits paid in by cash on the same or previous day.
• Paying in large third-party cheques endorsed in favour of the customer.
• Large cash withdrawals from a previously inactive account, or from an account which has just received an unexpected large credit from abroad.
• Customers who together, and simultaneously, use separate tellers to conduct large cash transactions or foreign exchange transactions.
• Companies representatives avoiding personal contact with the Company.
• Substantial increases in deposits of cash or negotiable instruments by a professional firm or company, using customer’s accounts or an in-house company or trust accounts, especially if the deposits are promptly transferred to/from other customer’s or trust accounts.
• Customers who decline to provide information that in normal circumstances would make the Customer eligible for credit or for other banking services that would be regarded as valuable.
• A large number of individuals making payments into the same account without an adequate explanation.
• The customer introduced by an overseas branch or affiliate based in countries where the production of drugs or drug trafficking may be prevalent.
• Use of Letters of Credit and other methods of trade finance to move money between countries where such trade is not consistent with the customer‚s usual business.
• Customers who make regular and large payments, including wire transactions, that cannot be clearly identified as bona fide transactions to, or receive regular and large payments from countries which are commonly associated with the production, processing or marketing of drugs.
• Building up of large balances, not consistent with the known turnover of the customer‚s business, and subsequent transfer to the account(s) held overseas.
• Unexplained electronic fund transfers by customers on an in and out basis or without passing through an account.
• Frequent requests for digital currencies, foreign currency drafts or other negotiable instruments to be issued.
• Frequent paying in of digital currencies (if accepted), foreign currency drafts particularly if originating from overseas.
• Numerous wire transfers received in an account when each transfer is below the reporting requirement in the remitting country.
• Changes in the Company’s employees characteristics, e.g. lavish lifestyles.
• Any dealing with an agent where the identity of the ultimate beneficiary or counterparty is undisclosed, contrary to the normal procedure for the type of business concerned.

Kriptopay Limited ensures that the Reporting Officer has sufficient time to undertake and perform his or her duties; provides the Reporting Officer with sufficient resources, including financial and human resources as may be necessary, to enable him or her to properly and efficiently discharge his or her duties; affords the Reporting Officer direct access to the Company’s senior management with respect to matters concerning the prevention of money laundering and terrorist financing.

05. Monitoring, Record Keeping and Notification

For all accounts, Kriptopay Limited has systems in place to detect the unusual or suspicious patterns of activity. Certain types of transactions alert to the possibility that the customer is conducting unusual or suspicious activities. There are also intensified monitoring for the accounts with a higher risk. The Company will set key indicators for such accounts, taking into consideration the background of the customer, such as the country of origin and source of funds, the type of transactions involved, and other risk factors. Kriptopaydetermines the list of high-risk third countries, presenting a money laundering/terrorist financing risk.

Kriptopay Limited maintains records on a current and accurate basis which are subject to periodic regulatory examination. The Company’s filing system for records, whether stored in files or electronic media, is designed to meet the Company’s policy, business needs, and regulatory requirements are as follows:

• Arranging for easy location, access, and retrieval.
• Having available the means to provide legible true and complete copies.
• For records stored on electronic media, back-up files are made and such records stored separately.
• Reasonably safeguarding all files, including electronic media, from loss, alteration or destruction.
• Limiting access by authorized persons to Kriptopay Limited’s records, and ensuring that any non-electronic records that are electronically reproduced and stored are accurate reproductions.
• The Company will maintain all required records on-site for the first two years and then offsite for the next three in an easily accessible location.

Kriptopay Limited will keep the following customer records:

• Copies of the evidential material of the customer identity.
• Relevant evidential material and details of all business relations and transactions including documents for recording transactions in the accounting books.
• Relevant documents of correspondence with the customers and other persons with whom they keep a business relation.
• Daily customer records containing the funds in the account (net of any commissions and fees); open trade equity (the net profits and losses on open trades); and account balance (funds in the account plus or minus open trade equity).

The reporting form for suspicious activities or transactions is created by Kriptopay Limited which complies with the requirements of section 55 of the Anti-money Laundering and Terrorist Financing Code of Practice, 2008. In case a suspicious activity or transaction is detected, The Financial Investigation Agency of BVI will be notified immediately with the supportive documents

06. Staff Training

Kriptopay Limited will maintain an ongoing employee-training program so that the staff will adequately be trained in KYC procedures. The timing and content of training for various sectors of staff are made compatible by the company for its own needs. Training requirements should have a different focus for new staff, front-line staff, compliance staff or staff dealing with new customers; training in a manner that covers:

• particulars about the AML Compliance Officer of the Company, and the channels for reporting the suspicious transactions;
• the concepts of laundering of proceeds of crime and financing of terrorism;
• stages, methods of and sample cases for laundering of proceeds of crime;
• applicable laws and regulations with respect to prevention of laundering of proceeds of crime and financing of terrorism;
• corporate policy and procedures of the Company,
• suspicious transaction types and reporting methods;
• obligation to provide information and documents; and
• sanctions to be applied in case of any failure to observe and fulfil the obligations.

Directors, Executives and Compliance Officer shall undertake more in-depth training, including regular refresher pieces of training, particularly when new anti-money laundering laws are enacted, or existing legislation is amended in the BVI.

New staff should be educated on the importance of KYC Policies and the basic requirements at the organisation. Staff members who deal directly with the customers should be trained to verify the identity of new customers, to exercise due diligence in handling accounts of existing customers on an ongoing basis and to detect patterns of suspicious activity.

It is crucial that all relevant staff fully understand the need for and implement KYC Policies consistently. A culture within services that promotes such understanding is the key to a successful implementation.

07. Conclusion

Money laundering and terrorist financing present a severe threat to society and to the reliability of the international financial system. Battling these threats requires a coordinated and co-operative approach. Facilitating a financial transaction while willingly or recklessly disregarding the source of a customer‚s funds or the nature of a customer‚ s transaction can give rise to criminal and/or civil liability for the employee and/or the Company. Kriptopay Limited is committed to support the fight of BVI authorities, against Money laundering and Financing of Terrorism.