EZCoin is committed to the highest standards of the Anti-Money Laundering (AML) compliance
and Anti-Terrorist Financing and requires the management, and employees to follow the named
standards.
Scope
This Policy outlines the minimum general unified standards of internal AML control which
would be adhered to by the company in order to mitigate the legal, regulatory, reputational,
operational, and as a consequence financial risk.
Objectives
The objective of the guidelines is to prevent the company from being used, intentionally or
unintentionally, by criminal elements for money laundering or terrorist financing activities. The
Policy also enables the company to know / understand status of its Investors / users and their
financial dealings better, to manage risks including reputation.
Overview
EZCoin, like most companies providing services in the crypto market, adheres to the principles
of Anti-Money Laundering and actively prevents any actions that aim or facilitate the process of
legalizing of illegally gained funds. AML policy means preventing the use of the company’s
services by criminals, with the aim of money laundering, terrorist financing or other criminal
activity.
For this purpose, a strict policy on the detection, prevention and warning of the corresponding
bodies of any suspicious activities was introduced by the company. Moreover, EZCoin has no
right to report users that the law enforcement bodies are informed on their activity. A complex
electronic system for identifying every company’s user and conducting a detailed history of all
operations was introduced as well.
Money laundering is generally defined as engaging in acts designed to conceal or disguise the
true origins of criminally derived proceeds so that the proceeds appear to have derived from
legitimate origins or constitute legitimate assets. Terrorist financing is an attempt to conceal
either the origin of the funds or their intended use, which could be for criminal purposes.
The process of money laundering can be divided into three sequential stages:
Placement. At this stage funds are converted into financial instruments, such as checks, bank
accounts, and money transfers, or can be used for purchasing high-value goods that can be
resold. They can also be physically deposited into banks and non-bank institutions (e.g., currency
exchangers). To avoid suspicion by the company, the launderer may as well make several
deposits instead of depositing the whole sum at once, this form of placement is called smurfing.
Layering. Funds are transferred or moved to other accounts and other financial instruments. It is
performed to disguise the origin and disrupt the indication of the entity that made the multiple
financial transactions. Moving funds around and changing in their form makes it complicated to
trace the money being laundered.
Integration. Funds get back into circulation as legitimate to purchase goods and services.
In response to the scale and effect of money laundering, the United States of America and the
European Union has passed Laws and Directives designed to combat money laundering and
terrorism. These Acts, together with other regulations, rules and industry guidance, form the
cornerstone of our AML/KYC obligations and outline the offenses and penalties for failing to
comply.
Whilst EZCoin’s business domain is currently relatively unregulated and does not fall within the
scope of the AML/KYC obligations, our management has decided to implement systems and
procedures that meet the standards set forth by the United States of America and the European
Union. This decision reflects the management’s desire to prevent money laundering and not be
used by criminals to launder proceeds of crime.
ANTI-MONEY LAUNDERING POLICY
EZCoin has developed and will currently implement on a case-by-case basis a risk-based anti-money
laundering program comprising of:
-Written Anti-Money Laundering Policies
-Customer Identification Procedures
-Anti-Fraud Procedures
-Record-Keeping Requirements
-Customer Risk Assessment Procedures
-Sanction Lists Procedures
-EZCoin Employees Training Procedures
-On-going Customers’ activity procedures
The EZCoin AML Policy is designed to prevent money laundering by meeting the worldwide
standards on combating money laundering and terrorism financing, including the need to have
adequate systems and controls in place to mitigate the risk of the firm being used to facilitate
financial crime. This AML Policy sets out the minimum standards which must be complied with
and includes:
Establishing and maintaining a Risk-Based Approach (RBA) to the assessment and
management of money laundering and terrorist financing risks faced by the firm;
Establishing and maintaining risk-based Customer Due Diligence (CDD), identification,
verification and Know Your Customer procedures, including enhanced due diligence for
customers presenting a higher risk, such as Politically Exposed Persons (PEPs);
Establishing and maintaining risk-based systems and procedures for the monitoring of
on-going customer activity;
Establishing procedures for reporting suspicious activity internally and to the relevant
law enforcement authorities as appropriate;
Maintaining appropriate records for the minimum prescribed periods;
Providing training for and raising awareness among all relevant employees.
Because of the company’s commitment to the AML and KYC policies, each user of the company
has to finish a verification procedure. Before EZCoin starts a specific relationship with the user,
the company may have to ensures that satisfactory evidence is produced or such other measures
that will produce satisfactory evidence of the identity of any customer or counterparty are taken.
The company as well may apply heightened scrutiny to users who are residents of other
countries, identified by credible sources as countries, having inadequate AML standards or that
may represent a high risk for crime and corruption and to beneficial owners who resides in and
whose funds are sourced from named countries.
Individual users
Whenever necessary for the provision of any of the company’s permanent or temporary services,
during any required process of registration, each user may have to provide any or all of the
following personal information: full name; date of birth; origin; complete address, including
phone number and city code. For the avoidance of doubt: EZCoin does not require any or all of
the documents hereinafter detailed for the provision of all the services, instead such requirements
will be issued on a case-by-case basis, specifically whenever the law or the regulation applicable
to any specifically provided service may require us to do so.
A user may have to send the following documents (in case the documents are written in non-Latin
characters: to avoid any delays in the verification process, it is necessary to provide a
notarized translation of the document in English) because of the requirements of KYC and to
confirm the indicated information:
a high-resolution copy of the first page of local or international ID or passport, where the
photo and the signature are clearly seen, or a copy of driver’s license with the same
requirements. The indicated documents must be valid at least 6 months from the filing
date.
a high-resolution copy of a receipt of utility services payment or bank statement,
containing the full user’s name and the actual place of residence. These documents should
not be older than 3 months from the date of filing.
Required Information
Upon registration, users go through an automated verification process where they submit:
Full name;
Date of birth;
A unique photo of them holding their government-issued photo ID.
All submitted user information is manually reviewed. For users who cannot be verified through
automated means (geolocation, algorithmic face detection, sanctions list check), enhanced due
diligence is requested as described below.
Government-issued ID
Verification of identity is required by obtaining a high-resolution, non-expired copy of the user’s
government-issued ID (passport, national identity card, or a driver’s license). The submitted
imaged requirements include:
Full color image. Black and white, watermarked, etc. are not accepted;
Legible. All information on the ID must be completely clear and readable. EZCoin does not
accept IDs that are torn or worn out; and
Background. The edges of the ID document must be clearly visible on a contrasting
background.
Proof of residence
Verification of residence is required by obtaining a copy of an acceptable address proof
document issued in the 3 months prior to establishing an account. The document must carry the
user’s name and address.
A valid proof of residence document can be:
bank statement;
debit or credit card statement;
utility bill (water, electricity, gas, internet, phone);
payroll statement or official salary document from employer;
insurance statement;
tax document; or
residence certificate.
Proof of residence documents must contain the user’s name, address, and be dated less than 3
months ago.
Unique photo of user
Further verification is requested from users by submitting a unique photo of themselves holding
their government-issued ID as well as a unique handwritten note. In the photo, the user must be
visibly smiling. This allows EZCoin to easily prove that the user’s picture was not stolen or
photoshopped, and is being used exclusively for EZCoin.
The ID the user holds in their hand:
must be the same government-issued ID the user submitted previously; and
must be fully clear and readable.
The note the user holds in their hand:
must be handwritten (not typed);
must be in English;
must contain today’s date;
must contain the sentence: For trading at wcex.com only; and
must contain the user’s signature.
Verification
Based on the risk, and to the extent reasonable and practicable, we ensure that we have a
reasonable belief that we know the true identity of our customers by using risk-based procedures
to verify and document the accuracy of the information we get about users. Our AML
Compliance Officer analyzes the information we obtain to determine whether the information is
sufficient to form a reasonable belief that we know the true identity of the customer.
We may decide to use the following non-documentary methods of verifying identity:
Independently verifying the customer’s identity through the comparison of
information provided by the customer with information obtained from a consumer
reporting agency, public database or other source;
Checking references with other financial institutions;
Analyzing whether there is logical consistency between the identifying
information provided, such as the users’ name, street address, postal code, and
date of birth;
Utilizing complex device identification (such as “digital fingerprints” or IP
geolocation checks); and
Obtaining a notarized or certified true copy of an individual’s birth certificate or
government-issued ID for valid identification.
Corporate users
In case the applicant company is listed on a recognized or approved stock exchange or when
there is independent evidence to show that the applicant is a wholly owned subsidiary or a
subsidiary under the control of such a company, no further steps to verify identity will normally
be required. In case the company is unquoted and none of the principal directors or shareholders
already has an account with EZCoin, the official provides the following documents:
a high-resolution copy of the certificate of incorporation/certificate;
an extract from the Commercial Register, or equivalent document, evidencing the
registration of corporate acts and amendments;
names and addresses of all officers, directors and beneficial owners of the corporate
entity;
a high-resolution copy of Memorandum and Articles of Association or equivalent
documents duly recorded with the competent registry;
evidence of the company’s registered address and the list of shareholders and directors;
description and nature of business (including the date of commencement of the business,
products or services provided; and the location of principal business).
This procedure is performed to establish the identity of the user and to help EZCoin know /
understand the users and their financial dealings to be able to provide the best services of online
trading.
RISK-BASED APPROACH
EZCoin adopts and maintains a Risk-Based Approach (“RBA”) towards assessing and
containing the money laundering and terrorist financing risks arising from any transactions it has
with users. The guidelines are as follows:
Before entering into any transaction or proposed transaction, necessary checks shall be
conducted in line with the RBA so as to ensure that the identity of the users does not
match with any person with known criminal background or with banned entities such as
individual terrorists or terrorist organizations;
For the purpose of risk categorization of the users, the relevant information shall be
obtained from the users at or before the time of entering into a transaction;
The risk categorization process for different types of users may take into account the
background of the users, country of origin, sources of funds, volume of turnover or
deposits, as well as social and financial background;
The outcome of the risk categorization process shall be decided based on the relevant
information provided by the users at the time of commencement of business relationship;
Enhanced due diligence would be required for higher-risk users, especially those for
whom the sources of funds are not clear, or for transactions of higher value and
frequency, which shall be determined by EZCoin at its sole and absolute discretion; and
EZCoin must be able to satisfy the competent authorities that due diligence was observed
based on the risk profile of the EZCoin in compliance with the relevant legislations in
place.
MONITORING OF CLIENT ACTIVITY
In addition to gathering information from the users, EZCoin may have to continue to monitor the
activity of every user to identify and prevent any suspicious transactions. A suspicious
transaction is known as a transaction that is inconsistent with the user’s legitimate business or
the usual user’s transaction history known from user activity monitoring. EZCoin has implemented
the system of monitoring the named transactions (both automatic and, if needed, manual) to prevent
using the company’s services by criminals.
The company reserves the right to suspend any user’s operation, which can be regarded as illegal
or, may be related to money laundering in the opinion of the staff.
INTERNAL CONTROLS
EZCoin implements and maintains internal controls for the purpose of ensuring that all of its
operations comply with AML legal requirements and that all required reports are made on a
timely basis.
MONITORING AND REPORTING
EZCoin may have to diligently monitor transactions for suspicious activity. Transactions that are
unusual are carefully reviewed to determine if it appears that they make no apparent sense or
appear to be for an unlawful purpose. When such suspicious activity is detected, the Compliance
Officer will determine whether a filing with any law enforcement authority is necessary.
Suspicious activity can include more than just suspected money laundering attempts. Activity
may be suspicious, and EZCoin may wish to make a filing with a law enforcement authority,
even if no money is lost as a result of the transaction.
We will initially make the decision of whether a transaction is potentially suspicious. Once we
have finished his review of the transaction details, we make the decision as to whether the
transaction meets the definition of suspicious transaction or activity and whether any filings with
law enforcement authorities should be made.
For the purpose of the Policies, a “Suspicious Transaction” means a transaction or attempted
transaction, which to a person acting in good faith,
gives rise to a reasonable ground of suspicion that it may involve proceeds of
criminal or other illicit activity, regardless of the value involved;
appears to be made in circumstances of unusual or unjustified complexity;
appears to have no economic rationale or bona fide purpose; and
gives rise to a reasonable ground of suspicion that it may involve financing of the
activities relating to terrorism.
RECORD-KEEPING
We make sure that AML records are maintained properly.
We document our verification, including all identifying information provided by a user, the
methods used and results of verification, and the resolution of any discrepancies identified in the
verification process. We keep records containing a description of any document that we relied on
to verify a user’s identity, noting the type of document, any identification number contained in
the document, the place of issuance, and if any, the date of issuance and expiration date. With
respect to non-documentary verification, we retain documents that describe the methods and the
results of any measures we took to verify the identity of a user.
We also keep records containing a description of the resolution of each substantive discrepancy
discovered when verifying the identifying information obtained. We retain records of all
identification information for seven years after the account has been closed, or as long as
reasonably necessary to comply with applicable regulations; we retain records made about
verification of the customer’s identity for seven years after the record is made, or as long as
reasonably necessary to comply with applicable regulations.
TRAINING
New employees may receive anti-money laundering training as part of the new-hire training
program. All applicable employees are also required to complete AML training annually.
Participation in additional targeted training programs is required for all employees with
day-to-day AML and KYC responsibilities.
Our training includes, at a minimum: (1) how to identify red flags and signs of money laundering
that arise during the course of the employees’ duties; (2) what to do once the risk is identified
(including how, when and to whom to escalate unusual customer activity or other red flags (3)
what employees’ roles are in EZCoin’s compliance efforts and how to perform them; (4)
EZCoin’s record retention policy; and (5) the disciplinary consequences (including civil and
criminal penalties) for non-compliance.
Our operations are regularly reviewed to check whether certain employees require specialized
additional training. Written procedures are updated to reflect any such changes.
SANCTIONS POLICY
EZCoin is prohibited from transacting with individuals, companies and countries that are on
prescribed sanctions lists. EZCoin will therefore screen against United Nations, European Union,
UK Treasury and US Office of Foreign Assets Control (OFAC) sanctions lists in all jurisdictions
in which will operate.