AML Policy

International Recommendations & Authorities

FATF Recommendations (February 2012)
• UN Security Council Resolutions 1267 (1999), 1373 (2001) and 1390 (2002) EU Directives
• Fifth Money Laundering Directive 2018/843 EU Regulations
• EC Regulation 2580/2001
• EC Regulation 847/2015 (the Wire Transfer Regulation)

Anti-Money Laundering (AML) Policy

Introduction:
Coins Trade Hub is committed to upholding the highest standards of anti-money laundering (AML) compliance. Our policy is designed to detect, deter, and report money laundering and terrorist financing activities in compliance with applicable laws and regulations.

Policy Overview:
To achieve these objectives, the following principles shall be adhered to:

Individual Responsibility: Every member of Coins Trade Hub must fulfil their AML
obligations according to their role and responsibilities within the organization.
No Commercial Exceptions: Commercial interests will never override Coins Trade Hub’s commitment to AML compliance.
AML Leadership: Coins Trade Hub has a dedicated Money Laundering Reporting Officer (MLRO) and a deputy to act in their absence. Both shall receive full cooperation and support from all members of the organization in executing their duties.
Advisory Board Oversight: The Coins Trade Hub Advisory Board will maintain relevant
expertise at the board level to ensure the highest standards of AML compliance are upheld.

Client Identification (Know Your Customer)Coins Trade Hub is committed to thorough customer due diligence (CDD) in all interactions.

The CDD process will include, but is not limited to:

Client Identity Verification: Identifying and verifying the client’s identity using reliable and independent documents, data, or information
Beneficial Owner Verification: Identifying and taking reasonable measures to verify the beneficial owner’s identity.

In cases involving trusts, companies, foundations, or similar legal structures, efforts will be made to understand the ownership and control structure.

Business Relationship Assessment: Evaluating and obtaining information on the purpose and intended nature of the business relationship with the client.
Ongoing Monitoring: Regular scrutiny of client transactions will be conducted to ensure consistency with Coins Trade Hub’s knowledge of the client, their business, and risk profile.
Monitoring will include examining the source of funds and ensuring the data held on clients is updated regularly.

Coins Trade Hub will apply a risk-sensitive approach when determining the extent of customer due-diligence measures. The organization will be able to demonstrate to relevant authorities that the applied measures align with the risks of money laundering and terrorist financing that have been identified.

KYC Process:
Coins Trade Hub employs a structured Know Your Customer (KYC) process to ensure the platform’s integrity and security. The steps are as follows:

Account Creation:

Users are permitted to create anonymous accounts initially, using only an email address. The email will be verified using a one-time code, and users will be required to set a secure password.

Anonymous Account Restrictions:

Anonymous accounts will be restricted from engaging in the buying or selling of cryptocurrency using fiat currency and will have limited transaction values for cryptocurrency.

User Verification: To enable cryptocurrency purchases with fiat, Coins Trade Hub will fully identify users through a country-specific workflow that includes:

Verifying the user’s identity using reliable and independent documents, data, or information.
Confirming the user is not a sanctioned individual or operating from a sanctioned country.
Ensuring the user is not a Politically Exposed Person (PEP).
Screening for adverse media that could indicate an unacceptable risk.
Gathering information on the user’s intended use of the platform.
Collecting data on the user’s predicted spending patterns on the platform.
Third-Party Tools

Coins Trade Hub will use third-party services to facilitate its KYC processes:

Sum Sub for collecting user KYC data.
Comply Advantage for screening against PEP lists, sanctions, and adverse media
databases.

Coins Trade Hub is committed to maintaining rigorous AML standards to ensure the integrity of its operations and compliance with global regulations. All personnel, clients, and stakeholders must adhere to this policy to safeguard the platform from money laundering and terrorist financing risks.

Risk Scoring Framework Coins Trade Hub employs a comprehensive risk scoring system to evaluate the potential risk posed by its clients. The system assesses various factors such as country of residence, age, reason for purchasing cryptocurrency, and planned spending behaviour. This enables Coins Trade Hub to assign an overall risk score to each client, which informs the appropriate level of due diligence and monitoring.

Country Risk
Coins Trade Hub assesses the country of a client’s residence based on a combination of global risk indicators. These include the Financial Action Task Force (FATF) lists, the Transparency International Corruption Perceptions Index, and the Office of Foreign Assets Control (OFAC) sanctions list.

Parameters:

FATF Lists: Determines whether the country is under increased monitoring or high-risk jurisdictions.
Transparency International Corruption Perceptions Index: Ranks countries based on perceived levels of public sector corruption.
OFAC Sanctions: Identifies countries and entities subject to U.S. government sanctions.

Scoring:

High Risk: Countries flagged as high-risk by the FATF, with low rankings on the Corruption Perception Index, or subject to OFAC sanctions receive a score of 10.
Medium Risk: Countries with moderate FATF ratings and medium corruption rankings receive a score of 5.
Low Risk: Countries not flagged by FATF and with low corruption levels receive a score of 1.
Age Risk
Age is considered a risk factor due to its potential influence on susceptibility to financial crime or fraud. Younger individuals may be more vulnerable due to lack of experience, while older individuals may pose a lower risk.

Parameters:
Age of the client at the time of account registration.

Scoring:

High Risk: Clients aged below 25 are assigned a score of 10
Medium Risk: Clients aged between 25 and 60 are given a score of 5.
Low Risk: Clients aged above 60 are considered low risk and assigned a score of 3.

Reason for Buying Cryptocurrency The reason provided by the client for purchasing cryptocurrency is another important factor in determining risk. The purpose may indicate different levels of exposure to financial crimes like money laundering or fraud.

Parameters:

The stated purpose of cryptocurrency purchases (investment, payment, speculation).

Scoring:

High Risk: Clients purchasing cryptocurrency for speculation are assigned a score of 8.
Medium Risk: Clients purchasing cryptocurrency for investment purposes receive a score of 5.
Low Risk: Clients purchasing cryptocurrency for payments or day-to-day transactions receive a score of 3.

Planned Spend:

Planned transaction volume and frequency can indicate the potential for misuse of the platform for money laundering or terrorist financing. Higher transaction volumes may signal greater risks.

Parameters:
The estimated monthly volume and frequency of transactions.
Scoring:

High Risk: Clients with a planned transaction volume of above EUR 10,000 per month are assigned a score of 10.
Medium Risk: Clients with a transaction volume of EUR 2,000 to EUR 10,000 per month are assigned a score of 5.
Low Risk: Clients with a transaction volume of up to EUR 2,000 per month are assigned a score of 1.

Calculation of Overall Risk Score The overall risk score for each client is calculated by summing the individual scores from the Country Risk, Age Risk, Reason for Buying Cryptocurrency, and Planned Spend categories.

Risk Classifications:

High Risk: Clients with an overall score above 20.
Medium Risk: Clients with an overall score between 10 and 20.
Low Risk: Clients with an overall score below 10.

Coins Trade Hub will apply enhanced due diligence (EDD) measures for clients classified as High Risk, including more frequent transaction monitoring and reporting. Clients classified as Low Risk will be subject to standard due diligence measures.
This risk scoring system enables Coins Trade Hub to efficiently allocate resources and focus on the highest risk clients, thereby ensuring compliance with AML regulations while minimizing exposure to money laundering and terrorist financing risks.

Risk Mitigation Strategies Coins Trade Hub applies tailored risk mitigation strategies based on the customer’s risk score. These strategies ensure that due diligence is appropriately aligned with the level of risk presented by each client.

High-Risk Clients

Enhanced Due Diligence (EDD): High-risk clients undergo rigorous verification processes, including additional document requests, in-depth scrutiny of the source of funds, and heightened transaction monitoring.
Frequent Transaction Monitoring: All transactions are closely monitored with enhanced scrutiny for irregular patterns or high-risk behaviours.
Senior Management Approval: Any high-value transactions initiated by high-risk clients require mandatory approval from senior management.

Review Frequency: High-risk clients are reviewed every 6 months to ensure continued compliance with regulatory requirements and to update any necessary information.

Medium-Risk Clients

Standard Due Diligence (SDD): Clients classified as medium risk are subject to regular due diligence processes, including identity verification and transaction reviews.
Regular Monitoring: Transactions are routinely monitored to identify unusual activity or trends that may require further investigation.
Occasional Compliance Reviews: The compliance team periodically reviews client profiles and transactions.

Review Frequency: Medium-risk clients are reviewed annually to ensure their risk profile is current and any changes are appropriately managed.

Low-Risk Clients

Simplified Due Diligence (SDD): Low-risk clients undergo a simplified process that reduces the level of scrutiny but remains compliant with regulatory requirements.
Periodic Monitoring: Transactions are monitored periodically, with fewer triggers for review unless abnormal activity is detected.

Review Frequency: Low-risk clients are reviewed every 3 years to update information and reassess their risk profile.

Continuous Monitoring
Coins Trade Hub employs automated systems for ongoing monitoring of user accounts, ensuring that changes in risk status are promptly identified and addressed.

The system continuously checks for the following:

Identity and Address Documentation: Ensures that identity documents and proof of address remain valid and current.
PEP/Sanctions/Adverse Media Updates: Detects any newly identified Politically Exposed Persons (PEPs), sanctions, or negative media reports associated with the user.
When significant changes in any of these areas occur, the system will automatically trigger actions, including Immediate Account Suspension: If necessary, user access may be blocked pending a review by the compliance team.
To ensure that transactions remain compliant, Coins Trade Hub undertakes ongoing checks on the source of funds for high-risk users and other flagged transactions.
This source of funds check will be performed by analysing the blockchain using Chainalysis where every crypto wallet has been rated by proximity and interaction with known blacklists of crypto wallets published by US and European Authorities.

As part of the second line of defence the Money Laundering Reporting Officer (MLRO) plays a critical role in ensuring that monitoring processes are effective:

Regular Audits: The MLRO conducts regular checks to ensure that continuous
monitoring systems are functioning correctly and that any suspicious or irregular activities are promptly escalated for investigation.
Escalation Procedures: Any detected irregularities or high-risk transactions are escalated for further review and action by the compliance team, ensuring timely intervention.

Risk scores are reviewed on an annual basis or upon any of the following triggers:

Significant Transactions: Large or unusual transactions may trigger a reassessment of the client’s risk profile.
Changes in Customer Activity: A shift in transaction patterns, such as a sudden increase in volume or frequency, will prompt a review.

Geopolitical Events: Changes in the geopolitical landscape, particularly affecting country risk (e.g., new sanctions or FATF updates), will result in a reassessment of risk scores for affected clients.

Documents:
Coins Trade Hub requires that all documents submitted for identity verification are of high quality to ensure there is no suspicion of forgery, alteration, or impersonation. All identity documents must be valid, clear, and authentic to prevent misuse of the platform.

Sanctions, PEP, and Adverse Media:
Coins Trade Hub Center will use Comply Advantage to perform sanction, PEP, and adverse media checks. This service is used because it is both swift and reliable, ensuring compliance with the requirements of the Money Laundering Regulations 2017.

Customer Due Diligence:

To prevent money laundering and counter-terrorism financing (AML/CTF), Coins Trade Hub will implement thorough customer due diligence (CDD) processes across its operations. These processes are designed to comply with the requirements of the Money Laundering Regulations, ensuring appropriate identification and verification of customers at different stages:

At the commencement of a new business relationship (including company formation),
At relevant points during the customer relationship,
For occasional transactions where no ongoing business relationship exists.

Key CDD Components:

Identifying the Customer: Coins Trade Hub will identify the customer and verify their identity using documents or other reliable and independent information.
Identifying Beneficial Owners: In cases where customers are entities, Coins Trade Hub will identify the beneficial owners and take reasonable steps to verify their identities. This is essential for understanding the ownership and control structure, especially for companies, trusts, and similar entities.
Understanding the Business Relationship: Coins Trade Hub will gather information regarding the intended purpose and nature of the business relationship, assessing any potential risks associated with it.
If any unusual or suspicious activity arises during the CDD process or customer engagement, it will be reported immediately to the designated Money Laundering Reporting Officer (MLRO) or Deputy MLRO for further review.

Coins Trade Hub will classify clients into different risk categories, such as low, normal, or high, based on their risk profile. These categories are determined using factors such as:

The client’s status as a Politically Exposed Person (PEP),
The jurisdiction they register from, and
The location where they intend to use the platform.

Coins Trade Hub acknowledges that clients from high-risk jurisdictions may be more susceptible to money laundering or terrorist financing risks. The CDD procedures will be designed to address the specific risks posed by such clients, particularly if they or their associates exhibit attributes frequently associated with financial crime.

Risk-Based Approach:
Coins Trade Hub will adopt a risk-based approach to determine the level of CDD required. The type of customer, nature of the business relationship, product, or transaction will all be considered. More emphasis will be placed on areas that pose a higher level of risk.

Elevated Risk Mitigation:
Where elevated risks are identified, such as a client being classified as a PEP or from a high-risk jurisdiction, the following actions will be taken:

Enhanced Due Diligence (EDD): Additional steps will be taken to verify the customer’s identity and assess the risk posed by the relationship.
Frequent Reviews: Regular and periodic reviews of the customer’s information and activity will be carried out more frequently.
Additional Controls: Limits on transaction volumes and spending may be applied to mitigate potential risks. CDD in Special Circumstances:

In compliance with regulations, Coins Trade Hub will conduct CDD when:

There is suspicion of money laundering or terrorist financing,
There are doubts about the accuracy or reliability of the identity verification information previously obtained. In such instances, Coins Trade Hub will reassess whether the CDD information on file is up to date and sufficient. Additionally, consideration will be given to filing a Suspicious Activity Report (SAR) with the National Crime Agency (NCA) if necessary. Ongoing Monitoring of the Client Relationship.

All client relationships established with Coins Trade Hub will be subject to continuous Customer Due Diligence (CDD) procedures throughout their duration. Ongoing monitoring will include the regular review of client activities, ensuring that they align with Coins Trade Hub’s knowledge and understanding of the client. This may involve scrutiny of transactions, including inquiries into the sources of funds, when necessary, to ensure consistency with the client’s risk profile.

Event-Driven Reviews
Coins Trade Hub will ensure that CDD documentation, data, and information are kept up to date. A review and update of the CDD information will be triggered by specific events, including but not limited to:

Changes in the client’s identity (e.g., name, personal details),
Changes in beneficial ownership or control of the client,
Changes in the services provided to the client,
Information that contradicts the Coins Trade Hub’s existing knowledge of the client,
Requests by the client to change their name (e.g., due to marriage),
Requests by the client to change their residential address. In addition, event-driven reviews may also be triggered by the following:
The identification or participation of a Politically Exposed Person (PEP),
Significant changes in the client’s activity (including transactions involving high-risk or prohibited jurisdictions),
Knowledge, suspicion, or concerns about the client’s actions or information provided. This includes cases where the accuracy of previous CDD information is doubted. If a Suspicious Activity Report (SAR) has been submitted, Coins Trade Hub will ensure that no disclosures are made that could be interpreted as “tipping off.”
Initiation of a card transaction may also prompt a review if it triggers concern based on the client’s risk profile or transaction patterns. Risk-Based Approach
Periodic Reviews.

Coins Trade Hub will conduct periodic reviews to update CDD information regularly. The frequency of these updates will be risk-based, reflecting the company’s knowledge of the client and any changes in circumstances or services used. Higher-risk clients will be reviewed more frequently, while lower-risk clients may undergo less frequent updates.
Ongoing Procedures Ongoing CDD may require less information than was necessary when first establishing the business relationship, as existing records and data can be updated. The procedures used for periodic or event-driven reviews will vary depending on the information already held, ensuring an efficient and tailored approach to ongoing CDD.

Risk Categorization and Assessment
Coins Trade Hub will categorize clients into risk levels based on their business activities and geographical location. The goal is to identify and manage potential ML/TF risks by applying appropriate controls. Higher-risk clients will be subject to enhanced due diligence (EDD) and more frequent monitoring. The organization will classify its clients as low, medium, or high risk, based on factors such as:

The type of business the client conducts,
The country in which the client operates (based on FATF evaluations, Transparency
International’s Corruption Perceptions Index, and other resources),
The client’s risk profile, including any history of suspicious activities or legal issues.

Prohibited Clients

Coins Trade Hub will not engage in business with the following categories of clients:

Individuals or entities listed on official sanctions lists (e.g., UK, EU, UN, or OFAC),
Persons suspected of involvement in criminal activities, based on available information,
Clients whose business activities or sources of funds cannot be reasonably verified,
Clients who refuse to provide the necessary information or documentation for CDD,
Entities with opaque ownership structures, where the ultimate beneficial owner(s) cannot be identified.

Annual Risk Assessment

Coins Trade Hub will conduct an annual risk assessment to identify and address new and emerging risks. This assessment will be informed by resources such as FATF mutual evaluations and Transparency International’s Corruption Perception Index. Additionally, if new risks are identified outside of the scheduled review, the company will reassess its policies and controls to ensure ongoing compliance and risk mitigation.
Risk Assessment and Management Senior management at Coins Trade Hub is responsible for overseeing and managing all risks, including those related to anti-money laundering (AML).

Risk Analysis: Senior managers will ensure that AML risks are thoroughly analyzed. They will identify and assess the nature and severity of these risks to create an accurate risk profile for the organization.
Risk Mitigation: Based on the risk profile, senior management will implement measures to mitigate the identified risks. The actions taken will be proportional to the severity of the threats.
Procedure Development: When a risk is identified, Coins Trade Hub will design and
implement appropriate procedures to manage and mitigate the risk effectively.
Documentation and Evidence: The appropriateness of these procedures will be supported by documented evidence, including plans for updating or creating new systems to monitor their effectiveness.
Conducting Risk Analysis: The Money Laundering Reporting Officer (MLRO) will conduct the risk analysis. This analysis will be reviewed and approved by senior management to ensure comprehensive oversight and alignment with the organization’s risk management strategies.

Enhanced Due Diligence
Coins Trade Hub will apply Enhanced Due Diligence (EDD) in situations that present a higher risk of money laundering or terrorist financing. The following scenarios will trigger

EDD measures:

High-Risk Situations: When there is a high risk of money laundering or terrorist financing,

EDD will be implemented.

High-Risk Jurisdictions: For transactions or business relationships with individuals or entities established in high-risk third countries.
Politically Exposed Persons (PEPs): When dealing with a customer or potential customer identified as a PEP, or a family member or close associate of a PEP.
False or Stolen Identification: If a customer has provided false or stolen identification documentation or information during the establishment of the relationship.
Complex or Large Transactions: For transactions that are unusually complex or large, or exhibit unusual patterns with no apparent economic or legal purpose.
Higher Risk Indicators: Any situation that, by its nature, presents a higher risk of money laundering or terrorist financing.

Additionally, Coins Trade Hub will consider guidance from the Fifth Money Laundering Directive (5MLD), which includes indicators of higher risk such as:

Cash-Intensive Businesses: Clients whose businesses are heavily reliant on cash transactions.
Unusual Ownership Structures: Client ownership structures that appear unusual or excessively complex relative to the nature of their business.
Unusual Circumstances: Business relationships conducted under unusual circumstances.
High-Risk Geographies: Clients residing in or operating from geographical areas with higher risk.
Anonymity: Clients requesting products or services that may facilitate anonymity.

By applying these enhanced due diligence measures, Coins Trade Hub aims to mitigate risks associated with higher-risk situations and ensure compliance with AML regulations.

Politically Exposed Persons (PEP)
For the purposes of this policy, a Politically Exposed Person (PEP) is defined as any individual who holds or has held a prominent public function, including:

Senior Political Figures: High-ranking officials in government, including heads of state,
ministers, and senior members of the executive or legislative branches.
Immediate Family Members: Family members of senior political figures, including spouses, children, and parents.
Close Associates: Individuals who are closely associated with senior political figures, either personally or professionally. Identification and Risk Assessment
E-KYC Process: During the electronic Know Your Customer (E-KYC) process, if an individual is identified as a PEP, a risk-based approach will be applied to assess and categorize the PEP as either “High” or “Low”
Further Searches: Additional searches will be conducted to verify the source of wealth and the source of funds involved. This ensures that adequate measures are taken to understand and manage the risk associated with the PEP.
Enhanced Monitoring: Coins Trade Hub will apply enhanced ongoing monitoring to the account transactions of identified PEPs to ensure that the account activity aligns with expectations and does not present any undue risk.

Senior Management Involvement

Decision-Making: Senior management will be involved in the decision to accept an account from a PEP. Management will assess the associated risks and determine appropriate actions to mitigate these risks.
Ongoing Monitoring: Continuous monitoring of PEP accounts will be conducted to ensure that these accounts are used in a manner consistent with the expected purpose and regulatory requirements.

Duration of PEP Status

Post-Termination Status: Coins Trade Hub will treat individuals as PEPs for at least 12 months after they no longer meet the regulatory criteria for being a PEP.
Extended Consideration: For risk management and reputational reasons, Coins Trade Hub may continue to treat individuals as PEPs for more than 12 months after they no longer meet regulatory criteria. This extended treatment may also apply to family members and known close associates of the PEP.

Sanctions Lists

Financial sanctions orders prohibit Coins Trade Hub from conducting transactions with designated individuals, entities, or countries (referred to as “sanctioned targets”). In some cases, these orders may also restrict the provision of any financial services to the targeted party. Sanctions measures can range in severity, including:

Comprehensive Sanctions: These may prohibit any transfer of funds to sanctioned countries and freeze the assets of the government, corporations, and residents of those countries.
Targeted Sanctions: These may impose asset freezes on specific individuals or entities.

Failure to comply with financial sanctions is a criminal offense unless Coins Trade Hub obtains a license or specific authorization from the Office of Financial Sanctions Implementation (OFSI) or other relevant authorities.

The Office of Foreign Assets Control (OFAC) provides up-to-date information on financial sanctions, including a consolidated list of individuals, entities, and countries subject to asset freezes and sanctions under UK law.

Coins Trade Hub must ensure that no client or transaction is connected to a sanctioned party. This is achieved through an online sanctions screening, conducted as part of the onboarding process via Global, our online identity verification provider. If a potential match is identified during the screening, the client’s account will be blocked, pending a decision from the Money Laundering Reporting Officer (MLRO).

Lines of Defence
Coins Trade Hub’s AML strategy is based on a three-tiered defense model to effectively manage and mitigate risks. First Line: Employee Vigilance

Employee Training: Employees are the first line of defence against money laundering and terrorism financing. They will receive regular training programs to recognize AML risks, understand regulatory requirements, and identify suspicious activities. This will help foster a culture of compliance and vigilance across the organization.

Second Line: Compliance Department

Oversight and Enforcement: The Compliance Department is responsible for overseeing the implementation of AML policies, conducting internal audits, and ensuring regulatory requirements are met. This department will act as the primary liaison between Coins Trade Hub and regulatory bodies, reporting suspicious activities and ensuring policy updates reflect current legal obligations.

Third Line: External Audit

Independent Review: Independent auditors will be engaged periodically to review Coins Trade Hub’s compliance with AML standards. Their audits will assess the effectiveness of the current policies, identify gaps, and provide recommendations for improvement, ensuring that the organization remains in full compliance with regulatory standards.

MLRO Duties
Coins Trade Hub ensures compliance with relevant AML/CTF legislation and regulations by appointing a Money Laundering Reporting Officer (MLRO). The MLRO is responsible for ensuring that Coins Trade Hub and any appointed representatives meet their legal obligations.

Key duties of the MLRO include:

Receiving and Reporting: Handling internal reports from staff or AML investigators and making external reports regarding any suspicious activity to the relevant authorities.
Policy Development: Establishing and maintaining effective AML policies and procedures, ensuring they align with current legislation and industry standards.
Risk Monitoring: Setting and tracking key risk indicators (KRIs) and key performance
indicators (KPIs) to assess the effectiveness of AML procedures.
Regulatory Guidance: Providing accurate and proactive advice on AML laws, regulations, and official guidance, ensuring relevant staff are well-informed on compliance matters.
Regulator Relations: Maintaining constructive relationships with regulators and law
enforcement agencies, ensuring timely responses to regulatory requests and court orders.
Staff Training: Implementing comprehensive AML and KYC training programs for all staff to ensure adherence to AML policies.
Monitoring and Reporting: Overseeing the effectiveness of AML monitoring systems and ensuring robust suspicious activity reporting procedures.

The MLRO has access to all business information necessary for fulfilling these duties, including financial, transactional, and personal data held by Coins Trade Hub.

Record Keeping
Coins Trade Hub adheres to legislative requirements for record retention to ensure compliance with AML/CTF regulations. The following records will be maintained:

Customer and Merchant Identity Records: Information and documents regarding the
identity of all customers and merchants will be kept for at least ten (10) years after the
termination of the business relationship.
Financial Transaction Records: Details of all financial transactions with customers or merchants will also be retained for at least ten (10) years.
Local Regulation Compliance: Where required by local laws, these retention periods may be extended but will never be shortened.

Additional records will be kept for ten (10) years from the date they are created, including:

Suspicious Activity Reports (SARs): All internal SARs and those reviewed by the MLRO.
MLRO Investigations: Any investigation undertaken by the MLRO related to a SAR.

If records are part of an ongoing investigation, they will be retained until no longer required by the investigating authorities.

AML and CTF Training Records: Staff training records and all related reports or actions taken will be kept for five (5) years.

The name of the deputy MLRO, who will act in the absence of the MLRO, will be documented in the governance records and communicated to all staff.

Suspicious Activity Reporting
Coins Trade Hub follows a three-stage process to handle suspicious transactions:

Internal Reporting: Staff report any suspicious transactions or events to the
AML-Investigation Team.
MLRO Evaluation: The MLRO evaluates the report and determines if there is reasonable suspicion of money laundering.
External Reporting: If necessary, the MLRO discloses the information to relevant
enforcement agencies.

Internal Reporting

Staff must report suspicious transactions or events to the AML-Investigation Team as soon as practicable, using the relevant template.
Failure to report could result in internal disciplinary action or legal prosecution for “Failure to Report.”
The AML-Investigation Team conducts a detailed review before escalating the report to the MLRO.

MLRO Evaluation and Record Keeping

The MLRO will assess the report and decide whether it warrants further action.
A register will be maintained by the MLRO for all received and submitted reports to the relevant Financial Investigation Unit (FIU).
Internal inquiries are conducted by the MLRO to verify reasonable grounds for suspicion before filing an external report.

External Reporting

Suspicious Activity Reports (SARs) are filed with the Polish Financial Supervision Authority (KNB), following local regulatory requirements.

Suspicious Activity
All Fraud- and AML Investigators must report any suspicious activity that they identify in the course of their duties to the MLRO. All such reports must be documented by the member of staff making the report. The reporting of a suspicion does not remove the need to report further suspicions that arise subsequently in respect of the same client or account. Where this does occur, further reports must be made to the MLRO as further suspicions arise.

Requesting a Defence
If an individual suspects that property is criminal or terrorist-related, they can submit a Suspicious Activity Report (SAR) to the Secretariat before engaging in an activity that may lead to committing a money laundering or terrorist financing offence. In doing so, they may request a criminal defence from the Secretariat.

Money Laundering Defence: Submitting an authorised disclosure and receiving “appropriate consent” prevents the individual from committing a principal money laundering offence.
Terrorist Financing Defence: Submitting a disclosure and obtaining “prior consent” protects against committing a terrorist financing offence.

When Coins Trade Hub receives a granted letter, it provides a defence but does not discharge other legal or regulatory obligations. The granted letter should not be interpreted as permission to proceed with any actions.

How to Report
All reports must be thoroughly documented and must include the following details:
Information on the Entities Involved:

Full name, date of birth, and addresses (including postcode) of the subject.
Known details such as National Insurance number, vehicle registration, driving
license, passport number, phone numbers, and email addresses.

Occupation or employer of the subject.

Details of any associated subjects (including full details of professionals involved, if applicable).

For companies, provide the full legal name, designation (e.g., Ltd, LLP, GmbH, SARL), registration number, tax reference/VAT numbers, country of incorporation, and details of beneficial ownership (if available).

Financial Details:

Any known financial information, such as account numbers and details of associates.
Reason for Suspicion:
Clearly outline why the investigator suspects any wrongdoing.
It is essential that the fact a report has been made and its contents remain strictly confidential.

Employees must only communicate with the Money Laundering Reporting Officer (MLRO) and no one else. Additionally, any actions or communication that could “tip off” someone that a report has been made or prejudice an investigation is a criminal offence after a disclosure to the nominated officer or a relevant enforcement agency.

Ongoing Transaction Monitoring Provisions
All transactions conducted within the system will undergo automated AML rule checks. These rules are continuously maintained and updated through a user-friendly interface that enables the creation of new rules within minutes.

Access to the AML dashboard is restricted to authorized personnel, who will use it to:

Review transactions flagged by the system,
Monitor for patterns indicating suspicious activity,
Place accounts on hold if any suspicious activity is detected.
Suspicion The concept of suspicion is inherently subjective. It involves a mental state that is more concrete than mere speculation but lacks the certainty of evidence-based knowledge.

Key aspects of suspicion include:

A definitive sense of concern or apprehension, rather than just idle wondering.
A positive feeling of mistrust or unease.
A tentative opinion lacking sufficient evidence.

Suspicious activity reporting (SAR) is mandated when there are “reasonable grounds” to know or suspect. This standard is objective, reflecting the expected behaviour of a reasonable person in a similar situation. Claims of ignorance or naivety are not acceptable defences.

Ongoing Staff Training
Coins Trade Hub will proactively ensure that all employees are well-informed about their responsibilities regarding:

Monitoring and analysing customer transactions.
The Know Your Customer (KYC) process for customer accounts.
Interactions with financial partners, such as banks, acquirers, and service providers.
Adequate training for merchants and other business partners.

All employees will be educated on their individual and the firm’s obligations under this policy, as well as relevant Money Laundering regulations and legislation. Training will cover:

Coins Trade Hub’s responsibilities under all applicable Money Laundering regulations and legislation, including Client Identification and Suspicious Transactions.

Reporting requirements.

The potential criminal liability of employees for any violations related to Money Laundering legislation.
The roles and responsibilities of the Money Laundering Reporting Officers (MLROs) and their deputies.
The potential impact on the firm, its employees, and clients of any breaches of Money Laundering regulations and legislation.

Staff members within the Risk & Compliance department are required to achieve accreditation in Money Laundering training. This will be accomplished through a written examination at the end of the training program, with accreditation renewed every 24 months.

Failure to Comply
Failure to comply with any requirement of this AML policy by employees who have received training and awareness will be treated as a serious issue. In addition to potential criminal or regulatory actions that authorities may pursue, disciplinary measures will also be considered. Senior management at Coins Trade Hub will review the circumstances of any non-compliance, including negligence or deliberate disregard of the policy, and may impose disciplinary actions as appropriate.