AML Policy

1. Definition of Money Laundering in the Cryptocurrency Sector

In the context of cryptocurrency, money laundering refers to the process of concealing the origins of illegally obtained funds by making them appear as though they stem from legitimate sources within the digital asset space. This typically involves complex transactions across multiple cryptocurrency platforms, designed to obscure the transaction path, complicating efforts to trace funds back to their illicit sources. The misuse of cryptocurrencies in money laundering poses significant risks, often linked to organized crime and terrorism, and has potential ramifications for the integrity of the global financial system.

2. Regulatory Framework in the Czech Republic

Entities operating within the cryptocurrency sector in the Czech Republic are governed by stringent anti-money laundering regulations. Key compliance measures include:

  • ●  AML and KYC Procedures: Implementation of rigorous AML and KYC protocols to ensure due diligence in client identification, thorough transaction monitoring, and prompt reporting of suspicious activities.
    ●  Adherence to Local Law: Full compliance with Czech regulatory standards established for Virtual Asset Service Providers (VASPs).
    ●  Data Protection: Compliance with data protection laws to ensure the security and confidentiality of client information.
    ●  Regular Updates: Regular review and adaptation of AML and KYC policies to align with new legal requirements and regulatory guidance.
    ●  Collaboration with Regulatory Authorities: Active cooperation with Czech regulatory bodies, such as the Czech National Bank, to stay updated on regulatory changes.
    ●  Risk-Based Approach: Implementation of a risk-based approach to assess and mitigate potential money laundering risks.

3. AML and CTF Policy

Very Fast Exchange s.r.o. establishes and enforces an Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) Policy in line with Czech law to mitigate the risk of money laundering and terrorist financing.

4. Key Elements of the AML Policy

4.1 Client Due Diligence (CDD)

  • ●  Verification: Verify the identity of clients and beneficial owners through reliable sources.
    ●  Risk Assessment: Collect and verify client identification data and assess the risk posed by each client.

4.2 Enhanced Due Diligence (EDD)

For higher-risk clients and transactions, conduct additional verification measures such as background checks and source of funds assessments.

4.3 Risk Assessment

Apply a risk-based approach to understand specific risks and allocate resources accordingly.

4.4 Periodic Review

Conduct periodic reviews of client activities, updating profiles to ensure accuracy and relevance.

4.5 Transaction Monitoring

Continuously monitor client transactions to ensure alignment with the client’s risk profile. Objectives include:

●  Identifying and flagging suspicious transactions.
●  Confirming the accuracy of client and beneficiary data.
●  Reassessing client risk levels as circumstances change.

4.6 Communication with Competent Authorities

Notify relevant authorities of suspected money laundering or terrorist financing and assist with investigations.

4.7 Suspicious Activity Reporting

Utilize advanced transaction monitoring systems and maintain a compliance team to detect suspicious transactions.

4.8 Record Keeping

Maintain detailed records for each client to ensure compliance and availability for potential investigations.

4.9 AML Training

Provide employee training programs to ensure understanding of AML compliance and identification of suspicious activities.

4.10 Assurance Testing

Conduct assurance testing to evaluate the effectiveness of AML policies:

  • ●  Internal Audits: Regular audits to assess compliance and identify areas for improvement.
    ●  External Audits: Engage third-party auditors for independent assessments.
    ●  Testing Frequency: Perform assurance testing at least annually, with additional reviews as necessary.
    ●  Reporting Findings: Document findings and implement corrective actions promptly.

4.11 Financial Sanctions

Ensure compliance with applicable financial sanctions and embargoes:

●  Screening: Conduct client and transaction screening against sanctions lists.
●  Risk Assessment: Assess risks associated with financial sanctions.
●  Reporting Obligations: Report any identified sanctions violations to relevant authorities.
●  Training and Awareness: Train employees on compliance with financial sanctions.

4.12 Geographic Risk Assessment

Assess geographical risk factors as part of the overall risk-based approach.

4.13 Customer Awareness

Communicate AML policies to clients and emphasize their role in reporting suspicious activities.

4.14 Technology and Tools

Leverage advanced technology for transaction monitoring and data protection.

4.15 Cross-Border Transactions

Monitor cross-border transactions closely to ensure compliance with relevant regulations.