The start of 2020 was fairly disturbing for many cryptocurrency exchanges. On January 10, 2020, the fifth Anti Cash Laundering (AML) Directive took impact. Some platforms introduced their closure, whereas some threw all their energy into the battle to satisfy the brand new necessities. This text will let you know the best way to win this battle.
Should you assume we determined to jot down this text primarily based on this directive alone, you might be mistaken. February 2020 started with excellent news for the EXMO workforce. EXMO crypto platform has been rated top-tier within the newest CryptoCompare Trade Benchmark.
We’re going to let you know about our expertise, the variety of necessities, and what number of hours our AML-officer sleeps.
AML- ANTI MONEY LAUNDERING
CTF- COUNTER-TERRORISM FINANCING
KYC- KNOW YOUR CUSTOMER
FCA- FINANCIAL CONDUCT AUTHORITY
FATF- FINANCIAL ACTION TASK FORCE
JMLSG- JOINT MONEY LAUNDERING STEERING GROUP
HM- HER MAJESTY
PEP- POLITICALLY EXPOSED PERSONS
GDPR- GENERAL DATA PROTECTION REGULATION
MLRO- MONEY LAUNDERING REPORTING OFFICER
Authorized title and jurisdiction of operation
We weren’t in search of a easy resolution to allow us to satisfy the 5th AML Directive and from the very starting, we approached the problem severely. EXMO operates inside the authorized jurisdiction of the UK. It goes with out saying that the UK is a strict however clear authorized discipline with well-developed regulatory instruments. Additionally, the UK was among the many first to implement cryptocurrency laws.
Due to this fact, if you happen to all of a sudden determine to open your alternate, remember to take note of the legislative framework of the nation the place the alternate is launched.
Registration/Licensing the place acceptable and relevant
At present, there are only some international locations that subject licenses for cryptocurrency actions. Initially of the 12 months, EXMO acquired Estonian licenses.
Regarding AML compliance, we’re at the moment within the strategy of issuing the AML registration from FCA—The Monetary Conduct Authority.
Implementing strict KYC and AML procedures
Throughout January 2020, we’ve launched the necessary verification on the platform. It was the required a part of KYC and AML compliance, an important element for safety. Now it’s simpler for us to know the consumer, perceive if we are able to belief them, and forestall doable fraud.
One other measure we took was implementing the CipherTrace software program. It verifies that the consumer’s wallets usually are not blacklisted, linked with terrorism, or related to fraudulent exercise, and so on. With this software program, we hint transactions and monitor potential dangers.
We had discovered that some withdrawals have been being made to blacklisted wallets. Now we are able to forestall such transactions, monitor any fraud circumstances, and assure counteraction black market flows by following the anti-money laundering laws inside the framework of the platform.
The outcomes have been optimistic, and on February 4th 2020, we’re happy to say that CipherTrace awarded us a Inexperienced rank.
Nevertheless, simply utilizing tender instruments will not be sufficient. Our Compliance workforce works 24/7 and in addition conducts guide monitoring of any suspicious transactions. We’ve developed a lot of inner instruments and steering to observe Crypto and Fiat transactions. Along with tender instruments, we’re assured that no EXMO account can be inclined to falling sufferer to hackers.
Regional Illustration Compliance primarily based on FATF suggestions
You most likely heard about an inter-governmental physique FATF—The Monetary Motion Job Pressure. It was established in 1989 with 37 international locations turning into members. The FATF developed a sequence of suggestions for regulating cryptocurrencies and the actions of cryptocurrency providers operators.
Each three months, FATF updates an inventory of high-risk international locations. This checklist is decided by the energy of legal guidelines towards cash laundering in a selected nation, how a lot it cooperates in creating instruments to counter laundering, and in offering information. So subsequently, we don’t work with customers from blacklisted international locations and we thus enhance the safety and compliance of our platform much more.
Being a part of the Cryptocurrency Regulatory group and fulfilling relevant necessities
Legal guidelines are up to date constantly, and to adjust to them, fixed monitoring is important. We take part in crypto alliances, monitor FATF listings, and work together with FCA necessities teams. In fact, we don’t neglect in regards to the native British regulation, tracing the necessities of Her Majesty’s Treasury (HM Treasury).
General, the EXMO AML/CTF procedures are in step with the necessities of:
- The Proceeds of Crime Act 2002;
- Terrorism Act 2000 and 2001;
- Cash Laundering Laws 2017;
- Counter-Terrorism Act 2008;
- HM Treasury Sanction Notices;
- FCA Handbook;
- JMLSG Steering.
We assure the well timed implementation of legislative modifications. Any alternate wishing to remain afloat should comply.
Sanctions and PEP compliance assertion
PEP refers to Politically Uncovered Individuals. We monitor PEP lists to make sure our clients usually are not present or former politicians. We additionally monitor sanctions lists to make sure there aren’t any dangers of being concerned in cash laundering and terrorist financing actions. Ever vigilant to maintain a finger on the heart beat of those actions, we use Namescan.
Fixed ongoing transaction monitoring
Allow us to reiterate CipherTrace and the 24/7 compliance division.
If we be aware a suspicious transaction, it’s blocked to permit our platform to make sure there isn’t a fraudulent conduct. After a buyer has been permitted, EXMO performs a complete strategy of transaction monitoring. That is achieved with the EXMO system, developed to make the most of an internally developed automated fraud prevention and threat administration system.
Having an skilled Chief Compliance Officer
Having an skilled AML specialist is essential. This individual has entry to all our information and is liable for the event, implementation, and upkeep of a threat evaluation framework for anti-money laundering.
The CEO of the corporate can carry out this operate, however for us, it is important to have an skilled particular person with an unbiased outlook on the state of affairs and a working information of the corporate. We’ve simply such an individual who retains abreast of improvements in laws and implements them to the corporate.
An skilled AML and Antifraud Division
We’re very pleased with our monetary safety monitoring division and the antifraud system that has been developed and applied. It’s much like the scoring methods in banks and allows us to verify the standard of all of the transactions. These each enabled us to observe and block instantly the stolen funds from a number of exchanges together with the large movement from Bithumb (greater than 4M USD).
Common Employees Coaching procedures
Our workers constantly bear specialised coaching. We give attention to stopping dangers of cash laundering and terrorist financing, conserving abreast of related laws, and our due diligence to the obligations below that laws. Coaching is held by an EXMO nominated officer (MLRO) and teaches us the best way to acknowledge and take care of potential cash laundering or terrorist financing transactions or exercise.
Intruders into monetary methods are frequently evolving, we’re nevertheless all the time alert. Employees coaching on AML and counter-terrorist financing is carried out yearly for all employees and the small print recorded.
As well as, each three months the workforce passes a particular qualification examination not solely on countering hacking but additionally on AML information, CTF, guidelines updates, and obligations to stop cash laundering.
Safe File Maintaining
We all the time take critical measures to take care of strict confidentiality and the safety of any data acquired through the verification course of in accordance with our consumer settlement, privateness coverage, and GDPR necessities.
All consumer information is saved on encrypted servers accessible by the AML officer alone. And naturally, all saved paperwork are digitally imprinted with a protecting watermark.
Being a cryptocurrency alternate, we’re not simply liable for the financial property of our shoppers, we’re additionally very centered within the discipline of combating unlawful cash circulation. We take this very severely and utilise lots of sources, not solely to satisfy the necessities, but additionally to satisfy this vital mission with absolute integrity.
To take you again to the beginning, now you’ll be able to perceive why our AML officer doesn’t sleep very a lot!