Anti-money laundering and counter the financing of terrorism and know your client policy
Anti-money laundering and prevention of terrorism statement:
XDAT INTERNATIONAL LIMITED C87689, with its registered address at Ground Floor, Palace Court, Church Street, St. Julian’s STJ3049, Malta (the ‘Company’) will do its outmost in order to minimize the risk of Company’s services being abused for the purposes of laundering funds associated with criminal activity.
The Company will not commence or continue established relationships with those whose conduct gives rise to suspicion of involvement with illegal activities. The Company will seek to terminate any client relationship where the client’s conduct gives reasonable cause to believe or suspect involvement with illegal activities. Any such termination shall follow the reporting of the suspicion to the relevant authorities and thereafter shall be undertaken in conjunction with the relevant authorities and in accordance with the custom and practice to avoid any risk of committing a tipping-off offence.
The Company’s Procedures will be based upon the Guidance Notes issued by the Malta Financial Services Authority (MFSA) and/or the Financial Intelligence Analysis Unit (FIAU) as appropriate and they will be in line with the relevant laws of Malta which may be amended from time to time. At present there exists no specific guidance on AML/KYC requirements specifically for exchanges which allow for the trading of the Qualifying Assets or Cryptocurrency exchanges in general. However, pursuant to the Virtual Financial Assets Act, 2018, an exchange is a subject person in terms of applicable laws. This policy has therefor been prepared in terms of current AML provisions in place (4th AML Directive). This policy may therefore need to be updated upon the entry into force of the Virtual Financial Assets Act (VFAA), 2018 or any other regulations or guidelines issued by the MFSA or FIAU.
N.B. THE FIFTH ANTI-MONEY LAUNDERING DIRECTIVE, DIRECTIVE (EU) 2018/843 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL OF 30 MAY 2018 AMENDING DIRECTIVE (EU) 2015/849 ON THE PREVENTION OF THE USE OF THE FINANCIAL SYSTEM FOR THE PURPOSES OF MONEY LAUNDERING OR TERRORIST FINANCING, AND AMENDING DIRECTIVES 2009/138/EC AND 2013/36/EU, APPROVED ON THE 30TH OF MAY, 2018 SHALL BE IMPLEMENTED BY MEMBER STATES WITHIN 18 MONTHS. THE Company SHALL ENSURE THAT IT IS COMPLIANT WITH THE NEW LAW WHEN IT HAS BEEN TRANSPOSED DOMESTICALLY. THIS COULD AFFECT THE Company’S RELATIONSHIP WITH YOU AND AS SUCH YOU MAY BE REQUIRED TO PROVIDE ADDITIONAL INFORMATION IN RELATION TO SUCH CHANGES. SHOULD YOU NOT AGREE TO PROVIDE SUCH INFORMATION, OR SHOULD YOUR STATUS CHANGE AND YOU ARE NO LONGER ELIGIBLE TO MAKE USE OF SERVICES, THE Company SHALL SEVER ANY RELATIONSHIP IT MAY HAVE WITH YOU AND IF APPLICABLE, MAKE ANY REQUIRED REPORTS TO THE RELEVANT AUTHORITIES.
Anti-Money Laundering And Combating Funding Of Terrorism Procedures
Money laundering (the “ML’) is the process by which criminals attempt to conceal the true criminal origin and ownership of the proceeds of their criminal activities. It is the process by which the proceeds of crime are converted into assets which appear to have a legitimate origin. If undertaken successfully, it allows criminals to maintain control over and to enjoy these proceeds While consistent regulations on AML/CFT is lacking in the field of digital ledger technology assets, FATF have issued Guidance for a Risk Based Approach to Virtual Currencies (convertible virtual currencies exchangers) in June 2015, however no regulation is yet implemented in relation to this matter.
FT is the process by which terrorists (whether individuals or organisations) are funded in order to be able to carry out acts of terrorism. FT involves the receipt, collection or provision of funds whether originating from legitimate or illegitimate sources, for use by individuals or organizations engaged in terrorist activity. It does not require the funding of a specific terrorist act or that a terrorist act is actually committed and it includes also the funding of all activities of terrorists, including legitimate activities. The primary goal of individuals or entities involved in the financing of terrorism is therefore not to conceal the sources of the money but to support terrorist activity.
The primary goal of AML/CFT procedure and controls, when effectively implemented, mitigate the adverse effects of criminal economic activity and promote integrity and stability in financial markets.
In order to reduce the possibility that the Company’s operation is used as a medium to launder money or finance terrorism, the following steps shall be taken:
- Follow established parameters to identify any such activities.
- The monitoring of any requests from a client for irregular patterns.
- All transactions are checked to prevent MT/FT activity.
- The Company shall provide all the necessary training to its employees in AML/CFT
- The Company shall appoint an MLRO who will be responsible for developing necessary policies, procedures, training and education of the employees of the Company.
Individuals, companies and countries that are on prescribed sanctions lists. Company will therefore screen against Financial Action Task Force (FATF) and other prescribed sanctions list in all jurisdictions it operates.
Know Your Customer Procedures (KYC)
The standard KYC procedure shall be carried out at the acceptance stage. Due to the vulnerable nature of the business, the Company will ensure that particular care is taken before the receipt of virtual currency for the processing (amongst others) of the virtual assets of the Client in order to be able to take a decision whether to onboard him/her or not. Company may also ask for additional information in case enhanced verification or KYC is required.