Anti-Money Laundering (AML) and Know Your Customer (KYC) Policy
The purpose of the CROSS exchange Anti-Money Laundering and Know Your Customer Policy (hereinafter - the “AML/KYC Policy”) is to identify, prevent and mitigate possible risks of CROSS exchange being involved in any illegal activity.
In conformity with international and local regulations, CROSS exchange has implemented effective internal procedures to prevent money laundering, terrorist financing, drug and human trafficking, proliferation of weapons of mass destruction, corruption and bribery and to react correspondingly in case of any form of suspicious activity from its Users. These procedures were implemented before our private sale (during 2018) and are constantly updated and reviewed for optimal effectiveness. Our previous major AML/KYC Policy update was implemented as to the result of the 5th Anti-Money Laundering Directive headed by the EU.
These implemented controls are congruently compliant with the EU’s 5th Anti-Money Laundering Directive, which encompasses a key development in cryptocurrency regulation. Precautionary actions are taken to bring legitimacy and clarity to our operations, as well as to counter risks presented by misuse of blockchain technology and cryptocurrencies.
Our AML/KYC Policy includes Verification procedures, proof of Source of Funds, Sanctions Programs, Restricted Locations, Suspicious Activity/Currency Transaction Reports (“SARs”), Transaction Monitoring, a Compliance Officer, and Risk Assessment.
In furtherance of our AML Program, we have reserved the right for Users to provide us with additional information and/or require Users to undergo a background check prior to being authorized to use CROSS exchange, or at any point thereafter, in accordance with applicable EU laws and regulations.
Customer due diligence has become one of one of the international standards for preventing illegal activity. Thus, CROSS exchange has implemented its own verification procedures (in-house procedures) within the rigorous standards of anti-money laundering and “Know Your Customer” (KYC) procedures.
The CROSS exchange identification procedure requires the User to provide CROSS exchange with reliable, independent source documents, data or information (for example, a national ID card or an international passport). Specifically, we collect the User information and verify it with jurisdictional authorities, then proceed to determining we are not at risk of facilitating any potential criminal activity. For such purposes, CROSS exchange reserves the right to collect the User's identification information for the purposes of AML / KYC Policy compliance.
CROSS exchange takes in-house steps to confirm the authenticity of documents and information provided by Users. All legal methods for double verification of identification information are used, and CROSS exchange reserves the right to investigate the cases of certain Users whose identities have been identified as dangerous, suspicious, or potentially criminal.
CROSS exchange reserves the right to verify the identity of the User on an ongoing basis, especially when its identification information has been changed or its activities appear suspicious (unusual for a particular User). In addition, CROSS exchange reserves the right to request from the Users current documents, even if they have been authenticated in the past.
Source of Funds
CROSS exchange takes measures to ensure Users are not allowed to receive funds from senders other than themselves. Any funds Users receive from a sender other than themselves will be considered unauthorized. We reserve the right to investigate the source of any funds in User accounts and determine, in our sole discretion, how to handle their disposition. Following our review of any funds in question and the circumstances by which Users receive them, we may determine that a User is not the owner of such funds. If such a determination is made, we reserve the right to dispose of these funds in accordance with applicable Laws and Regulations of the Republic of Azerbaijan and the EU and in our sole discretion, which may include, returning them to the destination of their origin or to a charity of our choosing.
Pursuant to the economic sanctioned programs administered in the countries where we conduct business, including, but not limited to, the Republic of Azerbaijan (whereby the laws closely emulate those of the EU) and the EU, we are prohibited from providing services or entering into relationships with certain individuals and institutions. In the event that we are required to block funds associated with a User’s account in accordance with a sanctions program, or other similar government sanctions programs, we may:
- suspend the account;
- terminate the account;
- return the funds to the destination of their origin or to an account specified by authorities; or
- require a withdraw of the funds from the User’s account within a certain period of time.
CROSS exchange is not responsible for any losses, whether direct or indirect, that may be incurred as a result of our complying with applicable laws and regulations, the guidance or direction of any regulatory authority or government agency, or any writ of attachment, lien, levy, subpoena, warrant, or other legal order.
CROSS exchange does not provide services to Users who are a citizen or residents of the United States, the People’s Republic of China, Iran, North Korea, and or any Users from or domiciled in any trade or economic sanctions lists, such as the United Nations Security Council Sanctions List, or if a User is restricted or prohibited from engaging in any type of trading by the Republic of Azerbaijan, the EU, or the Office of Foreign Asset Control or any other administrative law enforcement agencies.
Suspicious Activity/Currency Transaction Reports
We file SARs if we know, suspect or have reason to suspect suspicious activities have occurred on CROSS exchange. A suspicious transaction is often one that is inconsistent with a customer’s known and legitimate business, personal activities or personal trading behavior. We leverage our compliance personnel, which performs transaction monitoring to help identify unusual patterns of customer activity. Our Compliance Officer reviews and investigates suspicious activity to determine if sufficient information has been collected to justify the filing of a SAR. SARs will be reported to local and authoritative bodies including the FIMSA of the Republic of Azerbaijan and the EU.
Our Compliance Officer maintains records and supporting documentation of all SARs that are filed.
The Users are known not only by verifying their identity, but by analyzing their transaction patterns. Therefore, CROSS exchange relies on data analysis as a risk-assessment and suspicion detection tool. CROSS exchange performs a variety of compliance-related tasks, including capturing data, filtering, record-keeping, investigation management, and reporting. System functionalities include:
- Daily check of Users against recognized “black lists” (e.g. OFAC), aggregating transfers by multiple data points, placing Users on watch and service denial lists, opening cases for investigation where needed, sending internal communications and filling out statutory reports, if applicable;
- Case and document management.
In connection with the AML/KYC Policy, CROSS exchange will monitor all transactions and it reserves the right to ensure that transactions of suspicious nature are reported to the proper law enforcement through the Compliance Officer; request the User to provide any additional information and documents in case of suspicious transactions; suspend or terminate User’s Account when CROSS exchange has suspicion that such User engaged in illegal activity.
However, the above list is not exhaustive and the Compliance Officer will monitor Users’ transactions on a regular basis in order to define whether such transactions are to be reported and treated as suspicious or are to be treated as legitimate.
The Compliance Officer is the person, duly authorized by CROSS exchange, whose duty is to ensure the effective implementation and enforcement of the AML/KYC Policy. It is the Compliance Officer’s responsibility to supervise all aspects of CROSS exchange’s anti-money laundering and counter-terrorist financing, in particular collecting Users’ identification information, 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, monitoring transactions and investigating any significant deviations from normal activity, implementing a records management system for appropriate storage and retrieval of documents, files, forms and logs, updating risk assessment regularly, providing law enforcement with information as required under the applicable laws and regulations.
The Compliance Officer is responsible for performing an audit of our AML Program bi-annually, and presenting the results to our CEO and Board Members. Our CEO oversees the performance of an independent test of our AML Program annually. The Compliance Officer is not responsible for the independent test, and the Compliance Officer’s performance is a subject of the test. Results are sent directly to the CEO and Board Members for review. The Compliance Officer is also entitled to interact with law enforcement, which are involved in prevention of money laundering, terrorist financing and other illegal activity.
CROSS exchange, in line with Azerbaijani, the EU, and international requirements, has adopted a risk-based approach to combating money laundering and terrorist financing. By adopting a risk-based approach, CROSS exchange is able to ensure that measures to prevent or mitigate money laundering and terrorist financing are commensurate to the identified risks.