The Chief Compliance Officer (CCO) of Daxchain, upon delegation of the Board of Directors, adopts this AML/CFT Policy and Program covering Daxchain. The structure of the document is commensurate with risk associated with the technical requirements of the applicable laws and regulations and, in particular to the implementation of a CIP program.
It is the CCO responsibility to develop and implement the procedure relevant to this policy document.
This policy applies to activities operated by Daxchain OU in all countries in which it is authorized to perform its activities.
The Compliance Team works under direct supervision of the CCO and is responsible for:
Monitoring any exceptions for aging and completion, and reporting changes or impending expiration to the Daxchain’s MLRO;
Reporting all cases where customer identification verification cannot be completed to the Daxchain MLRO;
Assessing whether a certain customer may be a PEP, and would therefore be subject to enhanced due diligence requirements and escalated to the MLRO; and
Reporting any potentially suspicious activity detected as a result of the verification of customer identification or enhanced due diligence processes to the Daxchain’s MLRO.
All Daxchain employees, affiliates, or third-party service providers are required to comply with Daxchain’s KYC policies and procedures and report any potentially suspicious activity they would detect, suspect or have any reason to believe it is likely to happen or has previously occurred.
The law requires regulated crypto exchange platforms to perform a Customer Identification Program (hereafter « CIP »).
Daxchain has adopted effective Anti-Money Laundering / Combating the Financing of Terrorism (“AML / CFT”) Policy and Procedures by acting within the letter and spirit of the applicable laws and regulations.
This means that the company must gather information on the identity of its customers and verify those documents before applicants to Daxchain services are accepted as customers.
Daxchain has established a comprehensive KYC framework, including:
CIP Performs key functions such as the ones listed below:
Simplified Due Diligence: the measures of diligence can be reduced in specific circumstances. There is a regulatory framework to apply Simplified Due Diligence on certain industries but Daxchain has made the policy decision not to apply Simplified Due Diligence measures.
CIP is broken out into 2 key areas:
Standard Due Diligence - Applicable for all accounts which enter into a business relationship with Daxchain.
Enhanced Due Diligence – carried out when the customer is deemed a higher risk to Money Laundering or Terrorist financing.
Strong risk-based CDD forms are an essential control against money laundering. Daxchain maintains a risk- based Know Your Customer.
Daxchain has developed and implemented a CIP that establishes procedures for identifying and verifying the identity of each customer that opens a new account.
In order for Daxchain to form a reasonable belief that it knows the true identity of its customers, specific identification information must be obtained in order to adhere to the requirements of the CIP. The following minimum identification information must be obtained from each customer, and recorded as part of the customer on- boarding process.
Daxchain prohibits certain customers from opening an account due to the high risk they pose for money laundering and terrorist financing.
Specifically, it is Daxchain policy not to open or maintain accounts for:
In addition, the CCO or his deputy must be notified whenever a customer is unwilling to provide the required CIP or EDD information. This applies to both new and existing customers. The CCO will review the facts and circumstances and determine whether:
Identification: For Personal Customers, DAXCHAIN (i) collects the following information on-line before allowing the customer to deposit funds or conduct transactions and (ii) verifies it using documentation means or non-documentation means:
Verification: Daxchain may use documentary methods, non-documentary methods, or a combination of both to verify customer identity. Generally, it is necessary to verify the identity of the customer using the customer identifying information obtained above, such as the customer name, identification number, and address.
Applicants are not physically present during the identification process, therefore DAXCHAIN has adopted additional layers of security to mitigate the increased level of risk that originates form that situation.
Daxchain systematically uses an advanced electronic solution engineered by a third party to verify the genuineness of passports, ID cards or Driving licenses.
Daxchain requires the proof of residence to strengthen the identification of customer.
Example of proofs are: bills (electricity, gas, telephone...), bank statements containing address of the applicant.
Exceptions are forwarded to Compliance Team for manual validation or additional investigations to validate the document of identity.
Documentary means of verification refer to methods that rely on the customer presenting documentation that shows existence of the individual or entity. Documentary evidence includes items such as certified copies of articles of incorporation or a government-issued driver’s license.
In situations where the ID document is considered not genuine, Daxchain will use the ‘One plus One approach’. If the ID document cannot be verified electronically, and is not readable by the CIP team, Daxchain requires the customer to submit two photo ID’s to identify the customer.
Daxchain will accept high resolution/quality scan/image of the following documents to verify proof of address/residency, dated within six months of submission:
Daxchain only accepts scans of paper documents and rejects any printouts and screenshots of online documents.
Non-documentary means of verification refer to methods that do not involve viewing or receiving original documents from the customer directly. Non-documentary methods may be used when documentary means of verification are not available, or it is impractical to rely on such documents.
Daxchain will accept the following non-documentary methods for verifying the identity of a corporate customer:
As a matter of principle, Daxchain only relies on independent and reliable sources. The MLRO must approve each non-documentary method prior to Daxchain using it to verify customers.
One plus One approach
Daxchain may use the ‘One plus One’ approach when identifying its customers, if the documentary approach outlined above is not available. The One plus One approach allows for the identification of the customer using two items of documentation; one item that is a photographic ID (to verify name and date of birth) and one item that is a non-photographic ID (to verify address). Depending on the risk rating of the customer, additional verification may be required.
Additional KYC Measures
When performing CDD Daxchain also screens the customer against sanctions, and PEP lists.
Additionally, ID checks the customer IP addresses against TOR Project IP lists [and lists of IP addresses associated with previous suspicious or fraudulent activity] and will not open accounts that use IP addresses that appear on those lists.
Harju maakond, Tallinn, Lasnamäe linnaosa, Väike-Paala tn 2, 11415
Registration number: 14660094
Virtual Currency service license: FVT000045
KYC Policy effective 4th January, 2021.