[CAIZSTABLE AML POLICY]
Effective Date: 1 January 2025
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1. Introduction
1.1 Overview of the AML Policy
This Anti-Money Laundering (AML) Policy outlines CaizStable’s approach to preventing and detecting money laundering, terrorist financing, and other financial crimes. The policy applies to all users and operations across our platforms, services, and jurisdictions.
1.2 Purpose and Scope
The purpose of this AML Policy is to establish guidelines and procedures for detecting and preventing financial crimes within our ecosystem, ensuring compliance with relevant regulations and international standards.
1.3 Legal and Regulatory Compliance
CaizStable complies with all applicable local and international laws, including those enforced by financial regulators, ensuring that our services are not used for illegal financial activities.
1.4 Applicability and Coverage
This policy applies to all customers, partners, employees, and third-party service providers using CaizStable’s platforms and services. It covers all transactions, whether conducted through digital or fiat currencies.
1.5 Relationship to Other Policies
This AML Policy is closely related to the CaizStable Privacy Policy and Terms of Use. All parties interacting with CaizStable’s services are also subject to these policies.
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2. Regulatory Framework and Compliance Obligations
2.1 Global AML/CFT Compliance Standards
CaizStable adheres to the global standards set by the Financial Action Task Force (FATF) to combat money laundering and terrorist financing (AML/CFT), ensuring a robust compliance framework.
2.2 Key International and National Regulations, Including:
a. FATF Recommendations: International guidelines on AML and counter-terrorism financing (CFT).
b. EU Anti-Money Laundering Directives (AMLD 5 & 6): European Union’s regulatory framework for AML compliance.
c. USA Bank Secrecy Act (BSA) & USA PATRIOT Act: U.S. regulations for monitoring suspicious activities.
d. FinCEN AML Regulations: Financial Crimes Enforcement Network’s regulations for the U.S. digital currency sector.
e. UK Proceeds of Crime Act (POCA) 2002 & UK Money Laundering Regulations 2017: UK legislation for AML.
f. Swiss Anti-Money Laundering Act (AMLA): Swiss regulations on financial crime prevention.
g. Other applicable local and global laws.
2.3 Compliance with Local Regulations Where CaizStable Operates
CaizStable complies with local AML regulations in every jurisdiction it operates, ensuring that all services and transactions are in line with regional and national laws.
2.4 Obligations Under Various Regulatory Bodies
CaizStable complies with obligations set forth by major regulators, such as the SEC, FINCEN, FCA, and others, to ensure full regulatory compliance in its operations.
2.5 Continuous Monitoring and Policy Updates
Our AML policy is regularly updated to reflect changes in global regulations and emerging financial crime risks. Continuous monitoring ensures our compliance program adapts to the evolving legal landscape.
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3. Key AML Concepts and Definitions
3.1 Money Laundering (Definition & Examples)
Money laundering is the process of concealing the origins of illegally obtained money, typically by means of transfers involving legal channels or businesses.
3.2 Terrorist Financing (Definition & Examples)
Terrorist financing refers to the provision of funds to support terrorist activities, often involving similar methods to money laundering.
3.3 Financial Crime Risks in Digital Assets and Virtual Currencies
The use of digital assets for illicit purposes presents significant risks, including money laundering and terrorist financing, due to their pseudonymous nature.
3.4 High-Risk Transactions and Red Flags
Certain transactions, such as rapid transfers or unverified users, are considered high-risk and will be flagged for further scrutiny.
3.5 Role of Compliance in Detecting and Preventing Financial Crimes
Compliance teams at CaizStable are responsible for identifying suspicious activities, ensuring proper screening, and monitoring transactions for red flags of financial crime.
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4. Risk-Based Approach (RBA) to AML Compliance
4.1 Risk Categorization:
– User Risk: Retail users, corporate clients, and institutional investors are assessed based on their risk profile.
– Geographical Risk: Transactions involving high-risk jurisdictions (e.g., FATF-blacklisted countries) are closely monitored.
– Product Risk: Digital assets and services such as peer-to-peer transactions and over-the-counter trades pose varying levels of risk.
– Delivery Channel Risk: Channels that allow anonymous transactions, such as anonymous wallets or remote onboarding, are monitored more stringently.
4.2 Customer Risk Profiling and Enhanced Due Diligence (EDD)
Higher-risk customers will undergo more thorough KYC/AML checks, including source-of-funds verification and periodic reviews.
4.3 Continuous Risk Assessment and Adaptation
We continuously evaluate and update our risk-based approach to ensure our policies and controls remain effective in mitigating AML risks.
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5. Know Your Customer (KYC) and Customer Due Diligence (CDD)
5.1 Mandatory KYC/Identity Verification for All Users
CaizStable requires all users to undergo KYC verification before accessing our services. This verification helps us ensure that users are not involved in illegal activities such as money laundering or terrorist financing.
5.2 Required KYC Documentation:
– Individual Users: Valid Government-issued ID, proof of address, and biometric verification (if required).
– Corporate Users: Certificate of incorporation, board resolutions, details of the ultimate beneficial owners (UBOs).
5.3 Enhanced Due Diligence (EDD) for High-Risk Users
For high-risk individuals or entities, including those from high-risk jurisdictions, EDD will be conducted. This includes verifying the source of funds and monitoring the user’s transactions more closely.
5.4 Ongoing Monitoring and Periodic KYC Updates
CaizStable will continually monitor users’ activity for any suspicious transactions. KYC information will be updated periodically to ensure its accuracy, especially for higher-risk users.
5.5 Third-Party KYC/AML Service Providers and Compliance Requirements
CaizStable may use trusted third-party KYC/AML service providers to ensure that we are in compliance with global standards. These providers must meet strict compliance requirements to safeguard user information.
5.6 KYC Refusal and Account Termination
If a user refuses to complete the required KYC process, or if KYC information cannot be verified, CaizStable reserves the right to refuse services or terminate the user’s account.
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6. Politically Exposed Persons (PEPs) and Sanctions Compliance
6.1 Definition of Politically Exposed Persons (PEPs)
PEPs are individuals who hold prominent public positions, or have close ties to such individuals, and may pose a higher risk for money laundering or corruption.
6.2 Identification and Screening of PEPs
CaizStable screens users against PEP databases to identify any potential risks posed by such individuals. Enhanced due diligence is required for all identified PEPs.
6.3 Additional Scrutiny and Ongoing Monitoring of PEP Transactions
PEP transactions are subject to additional scrutiny, and any high-risk activities or anomalies will be reported and investigated further.
6.4 Sanctions Compliance and Screening Against:
– US OFAC Sanctions List
– EU and UK Sanctions List
– UN Sanctions List
– Swiss SECO Sanctions
– Other National and Regional Sanctions Lists
6.5 Prohibited Transactions and Restricted Jurisdictions
Transactions involving individuals or entities from sanctioned countries or those on restricted lists are prohibited. CaizStable actively monitors for such transactions.
6.6 Compliance Measures for International Money Transfers
International transfers are monitored to ensure compliance with sanctions and anti-money laundering regulations. These transfers will be subject to enhanced scrutiny if they involve high-risk jurisdictions or parties.
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7. Transaction Monitoring and Reporting of Suspicious Activities
7.1 Automated and Manual Transaction Monitoring Framework
CaizStable utilizes both automated systems and manual processes to monitor transactions for suspicious activity. These systems are designed to detect high-risk behaviors or patterns consistent with money laundering or terrorist financing.
7.2 Identification of Suspicious Transactions:
– Unusual high-value or rapid transactions
– Structuring or smurfing activities
– Transactions with no economic justification
– Rapid inflows and withdrawals in different currencies
– Use of privacy coins, mixers, or tumblers
7.3 Suspicious Activity Reports (SARs) and Regulatory Filings
Suspicious transactions will be reported to relevant regulatory authorities via SARs. Regulatory filings will be made in accordance with local and international obligations.
7.4 Currency Transaction Reports (CTRs) and Threshold-Based Reporting
Certain transactions exceeding specified thresholds will trigger reporting to authorities, including Currency Transaction Reports (CTRs) for large cash transactions.
7.5 Investigation and Internal Escalation Procedures
All flagged transactions will be investigated by our compliance team. If needed, the case will be escalated to senior management for further action.
7.6 Prohibition on “Tipping Off” and Confidentiality of Reports
It is prohibited to inform individuals or entities involved in suspicious activities that their transactions are under investigation. Confidentiality must be maintained throughout the reporting process.
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8. Record-Keeping and Retention Policy
8.1 User Identity and Transaction Record-Keeping Obligations
CaizStable is required to maintain detailed records of user identities and transaction history to comply with regulatory obligations.
8.2 Minimum Retention Periods for AML Records (5-10 years)
AML records, including KYC documentation and transaction logs, will be retained for a minimum of 5 to 10 years, depending on jurisdictional requirements.
8.3 Secure Storage of AML/KYC Data
All AML and KYC-related data will be securely stored in compliance with data protection regulations, ensuring confidentiality and integrity.
8.4 Confidentiality and Data Protection in Compliance with GDPR & CCPA
We ensure that all personal data is handled in accordance with global data protection standards, including GDPR (EU) and CCPA (California), to protect users’ privacy.
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9. AML Compliance Governance and Internal Controls
9.1 Appointment of a Designated AML Compliance Officer
CaizStable designates an AML Compliance Officer responsible for overseeing the implementation and adherence to AML policies and procedures. This individual ensures that all regulatory requirements are met and coordinates internal reporting and training.
9.2 AML Responsibilities of the Board of Directors and Senior Management
The Board and Senior Management are accountable for ensuring that CaizStable’s AML program is effective. They will review AML policies, risk assessments, and compliance efforts regularly.
9.3 Internal Audits and Independent Compliance Reviews
CaizStable will conduct regular internal audits to assess the effectiveness of its AML controls. Independent compliance reviews will be performed to ensure that we adhere to all regulatory and internal standards.
9.4 Whistleblower Protection and Confidentiality Measures
CaizStable provides a secure and confidential reporting system for employees and stakeholders to report suspected money laundering activities. Whistleblower protection is in place to prevent retaliation for good faith reporting.
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10. Employee Training and Awareness
10.1 Mandatory AML Training for Employees and Agents
All employees and agents will undergo mandatory AML training upon hire and periodically thereafter. This training will cover the identification of suspicious activities, KYC procedures, and reporting requirements.
10.2 Periodic Refresher Training and Updates
Employees will receive periodic refresher training on AML practices, legal obligations, and updates to relevant regulations.
10.3 Employee Obligations to Report Suspicious Activity
Employees are required to report any suspicious activities or transactions to the designated AML officer. Failure to report may result in disciplinary action.
10.4 Consequences for Non-Compliance by Employees
Non-compliance with AML policies by employees can result in disciplinary action, including termination, as well as potential legal consequences.
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11. AML Measures for Third-Party Vendors and Business Partners
11.1 Due Diligence on Third-Party Service Providers
CaizStable will conduct thorough due diligence on third-party service providers and vendors to ensure that they comply with AML standards and do not pose a money laundering risk.
11.2 AML Compliance Requirements for Partnerships and Affiliates
All business partners, affiliates, and service providers must adhere to CaizStable’s AML policies. This includes ongoing monitoring and reporting obligations.
11.3 Ongoing Monitoring of Third-Party Transactions
CaizStable will continuously monitor transactions involving third-party vendors and partners to ensure compliance with our AML policies and detect any suspicious activities.
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12. Consequences of Non-Compliance and Penalties
12.1 Internal Disciplinary Measures for Employees and Users
CaizStable will impose internal disciplinary actions for any employees or users who violate AML policies, including account suspension, termination, and reporting to authorities.
12.2 Legal Consequences for Money Laundering and Financial Crimes
CaizStable adheres to all applicable legal regulations, and any employee or user found involved in money laundering or financial crimes may face legal prosecution.
12.3 Fines, Sanctions, and Regulatory Penalties for Non-Compliance
Non-compliance with AML regulations may result in fines, sanctions, and penalties imposed by relevant authorities, which CaizStable will take action to prevent.
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13. Prohibited Transactions and Termination of Services
13.1 Prohibition on Anonymous or Unverified Transactions
CaizStable prohibits transactions that involve anonymous or unverified identities. All users must complete the necessary KYC procedures before engaging in any financial transactions on the platform.
13.2 Restrictions on Transactions Involving High-Risk Countries
Transactions originating from or involving countries subject to international sanctions, as well as jurisdictions with high money laundering risks, will be restricted. CaizStable complies with global sanctions and ensures adherence to FATF recommendations.
13.3 Immediate Account Suspension for AML Violations
CaizStable reserves the right to suspend accounts immediately upon suspicion of involvement in money laundering activities or violations of AML regulations. Accounts under investigation may be frozen pending resolution.
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14. AML Policy Updates and Amendments
14.1 Periodic Review and Updates to AML Policy
CaizStable’s AML Policy will be reviewed and updated regularly to reflect changes in regulatory requirements, industry practices, and emerging risks. Any updates will be communicated to relevant stakeholders.
14.2 Communication of AML Policy Changes to Users and Employees
Users and employees will be notified of any changes to the AML Policy. CaizStable will ensure that all individuals impacted by policy updates are aware and have access to the updated policy.
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15. Contact and Compliance Reporting
15.1 Reporting Suspicious Activities to the Compliance Team
Users and employees must report any suspicious activity immediately to CaizStable’s designated compliance team for further investigation.
15.2 Contact Details of the AML Compliance Officer
For inquiries or reports related to AML compliance, users and employees can contact the AML Compliance Officer at [insert contact details].
15.3 Anonymous Reporting Channels for Employees and Users
CaizStable provides anonymous channels for employees and users to report suspicious activity or violations without fear of retaliation.
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16. Governing Law and Jurisdiction
16.1 Applicable Laws Governing AML Compliance
This AML Policy is governed by the laws of Turkey, and the local courts of Turkey shall have exclusive jurisdiction over all disputes emanating from this AML Policy.
16.2 Dispute Resolution
In the event of failure by the Parties to resolve any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity, or termination, in the manner set out above within 15 (fifteen) days from the date when the dispute arose, such dispute shall be referred to and finally resolved by arbitration administered in accordance with the Dubai International Arbitration Centre Rules (“Rules”), for the time being in force, which rules are deemed to be incorporated by reference in this Clause. The tribunal shall consist of a neutral and suitably qualified sole arbitrator to be appointed by the Parties mutually or in case of disagreement in accordance with the Rules. The seat and venue of arbitration shall be Dubai. The language of the arbitration shall be English. The arbitrator/arbitral tribunal shall also decide on the costs of the arbitration proceedings. Each Party shall equally share the cost of the arbitrator unless the award provides otherwise. The arbitral tribunal’s award shall be final, and binding on the Parties and enforceable in any competent court of law.
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[END OF AML POLICY]
