POLICIES AND MEASURES FOR THE PREVENTION OF MONEY LAUNDERING AND THE FINANCING OF TERRORISM
Bitcoin Store is a brand of the company Digital Assets d.o.o. (hereinafter: Digital Assets, we, us, ours), which advocates the highest level of prevention of money laundering and the financing of terrorism (hereinafter: AML/CFT). We follow the laws of the Republic of Croatia and the EU and actively prevent all actions that aim at or facilitate the process of legalization of illegal funds.
With this Policy, the company Digital Assets prescribes the measures, actions, and procedures we undertake in our regular business activities in order to prevent the illegal use of services of our Bitcoin Store platform.
We reserve the right to suspend the service to the user if there is any suspicion that the funds have been obtained illegally.
The term money laundering (hereinafter: ML) implies the process of converting funds from illegal activities (such as fraud, corruption, drug trafficking, tax evasion, terrorism etc.) into other funds or investments that appear legitimate for the purposes of concealing the real source of funds.
Financing of terrorism (hereinafter: FT) is the enabling or raising of funds with the intent to be used to commit a terrorist offense (such as training for terrorism, endangering the safety of persons under international protection, disrupting the security of international air traffic etc.).
Terrorism may be financed from the proceeds of legal activities, which further complicates detection, unlike ML, which is always preceded by an illegal action.
Transaction – any receipt, expenditure, transfer from one account to another, exchange, safekeeping, disposal, and other type of money handling within the Bitcoin Store platform.
User identification – a procedure that involves establishing the actual identity of the user based on credible sources, primarily personal documents.
Suspicious transaction – any attempted or executed transaction for which we estimate that there are grounds for suspicion of ML or FT, i.e. that the transaction includes funds from illegal activities
INTERNAL MEASURES FOR THE PREVENTION OF ML AND FT
Digital Assets implements the AML/CFT procedure with the following measures:
- due diligence assessment of users with measures of simplified and enhanced due diligence assessment,
- user risk assessment,
- anticipating the purpose of concluding a business relationship,
- constant monitoring of activities and suspicious transactions of users,
- internal controls, audits and procedures, and
- keeping records.
With the “Know your customer” procedure (KYC) and “Customer Due Diligence” (CDD), we take measures by which we establish the identity of our customer and assess the risk associated with that customer.
We verify and establish the identity of natural persons by analyzing the collected personal data with the data on a valid identification document that has been submitted (identity card, driver’s license, or passport).
Every user who is a natural person provides the following personal data: name and surname, residence, date and year of birth, personal identification number (PIN), title and number of the identification document, country of issuance of the identification document, and citizenship.
For complete user verification, we use e-identification, i.e. a selfie from a mobile device or personal computer.
In case the user is a legal person, it is necessary to submit an excerpt from the Commercial Register, as well as the names and addresses of the director, and the name and address of the person authorized to represent the company.
The person authorized to represent the company is obliged to submit the same type of personal data and identification document as the natural person, including e-identification.
We consider the ML/FT risk to be a risk that the user will misuse our Bitcoin Store platform for the purposes of ML/FT. Accordingly, we implement a Risk-Based Approach which helps us to apply FATF international standards and the provisions of the Fifth EU Anti-Money Laundering and Countering the Financing of Terrorism Directive.
Digital Assets categorizes users, business relationships, and transactions according to the estimated level of risk of ML/FT.
When identifying the risk of ML/FT, we consider the following:
- risk factors of the user – in this case we observe the behavior of the user and their business activity, and predict the purpose of concluding a business relationship,
- risk factors of geographical areas – since we do not conclude business relationships with third countries or high-risk countries, we pay attention to similar geographical data,
- transaction risk factors – we take into account unusual transactions and assess whether there are grounds to suspect ML or FT.
Following said factors, we classify our users into three risk categories: high risk, medium risk and low risk. In accordance with the implemented categorization, we are implementing further measures for AML/CFT.
Purpose of concluding a business relationship
Digital Assets applies simplified due diligence user assessment measures if we find that the user risk is low.
If we determine that our user is a politically exposed person (hereinafter: PEP) who is on one of the UN, EU and OFAC sanctions lists or to be a high-risk user, we are closely monitoring the business relationship with such a user.
A PEP is any natural person who acts or has acted in a prominent public office in an EU Member State or a third country in the past 12 months, including members of their immediate family, and persons known to be close associates of the PEP.
PEP’s family members: spouse or cohabiting partner, children and their spouses or cohabiting partners, PEP’s parents.
Close associate of a PEP: a natural person who has joint real ownership over a legal entity or legal regime, or any other close business relationship with a PEP, a natural person who is the sole beneficial owner of a legal entity or legal regime known to be established for the benefit of the PEP.
Monitoring user activity
In addition to data collection, Digital Assets continues to monitor the activities of every user in order to identify and prevent suspicious transactions.
Digital Assets has implemented a system for monitoring said transactions (both automated and manual) in order to prevent the use of the company’s services for the purposes of ML/FT.
All payments and withdrawals of any user’s funds must meet the following conditions:
- when transferring funds, the name and surname indicated during registration must correspond to the name of the account holder,
- in any case, no deposit or payment to third parties is allowed.
Digital Assets has no obligation to inform users that law enforcement authorities are informed of their activities.
Monitoring and enforcement of compliance
Digital Assets conducts internal controls, audits, procedures, and training for AML/CFT, and regularly updates lists of indicators to identify users, suspicious transactions, and assets for which there are grounds to suspect ML/FT.
We keep data on users and their transactions, documentation, and all of the reports related to the business relationship between users and Digital Assets in accordance with the applicable legal regulations of the Republic of Croatia and the EU.
Digital Assets reserves the right to change the AML/CFT Policies at any time in order to maintain the highest level of compliance with the AML/CFT Act.
This abbreviated version of the AML/CFT Policy shall enter into force on March 1, 2022, and replace any other AML/CFT policy that has been applicable prior to that date.