AML & KYC POLICIES
Nicholas Levenstein & Company (“NLC” or “The Company”) is committed to the highest standards of the compliance and Anti-Terrorist Financing and requires the management, and employees to follow the below standards.
NLC administers the https://www.chicagobitcoinexchange.org (“CBEX”) website, which customers can buy or sell cryptocurrency and buy other products with cryptocurrency. Therefore, it is necessary for NLC to adhere to an Anti-Money Laundering (“AML”) policy.
Money laundering is the process of converting funds, received from illegal activities (such as fraud, corruption, terrorism, etc.), into other funds or investments that look legitimate to hide or distort the real source of funds.
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.
NLC, like most companies providing services on financial markets, 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. NLC has no right to report to clients that the law enforcement bodies are informed on their activity. The Company reserves the right to suspend any client’s operation, which can be regarded as illegal or, may be related to money laundering in the opinion of the staff.
NLC will make sure that it is dealing with a real person or legal entity. NLC also performs all the required measures in accordance with applicable law and regulations, issued by monetary authorities. The AML policy is being fulfilled within NLC by means of the following:
· know your customer policy and due diligence
· monitoring of client activity
· record keeping
· cross-references with government-published databases
Know Your Customer and Due Diligence
Because of The Company’s commitment to the AML and KYC policies, each client of The Company has to finish a verification procedure. Before NLC starts any cooperation with the client, The Company 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 applies heightened scrutiny to clients, 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.
During the process of registration, each client provides personal information, specifically: full name; date of birth; origin; complete address, including phone number and city code. A client sends 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 passport, where the photo and the signature are clearly seen, OR another official ID with the same requirements. The indicated documents must be valid at least 6 months from the filing date.
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 NLC, the official provides the following documents because of the requirements of KYC:
· a high-resolution copy of the certificate of incorporation/certificate OR means to prove the existence of the company: e.g. company name and registration number for verifying the ownership on the company registry);
This procedure is performed to establish the identity of the client and to help NLC know/understand the clients and their financial dealings to be able to provide the best services of The Company.
Monitoring of client activity
In addition to gathering information from the clients, NLC continues to monitor the activity of every client to identify and prevent any suspicious transactions. A suspicious transaction is known as a transaction that is inconsistent with the client’s legitimate business or the usual client’s transaction history known from client activity monitoring. NLC has implemented the system of monitoring the named transactions (both automatic and, if needed, manual) to prevent using The Company’s services by criminals.
Deposit and withdrawal requirements
All the clients’ operations to deposit and withdraw funds have the following requirements:
· In case of bank transfer or transfer from a bank card, the name, indicated during the registration must match the name of the owner of the account/bank card.
· Withdrawing funds from the holder account via the method, which is different from the depositing method, is possible solely after withdrawing the sum, which is equal to the sum of client’s deposits via the method and to the same account used for depositing.
· If the account was credited in the way that cannot be used for funds withdrawal, the funds may be withdrawn to a bank account of the client or any other way may be used, as agreed with the Company with the help of which the Company is able to prove the identity of the account owner.
· If the account has been credited with funds through various payment systems, funds withdrawal shall be made on a pro rata basis commensurate to the size of each deposit.
· In case of depositing via Visa/MasterCard, Wire Transfer, ePayments, the withdrawal of funds, which exceed the sum of the client’s deposits, is possible via any of the following methods: Visa/MasterCard, Wire Transfer, ePayments. In case of depositing via another method, the withdrawal of funds that exceed the sum of the client’s deposits, is possible via any available method, by the client’s choice.