AML & KYC Policy

In compliance with safety standards for our users and the legal obligations of Canada, the European Union, the United States, and other relevant jurisdictions, PRIVATEPAY LIMITED. has developed and implemented KYC (Know Your Customer) and AML/CTF (Anti-Money Laundering and Counter-Terrorism Financing) procedures, as required by FINTRAC (Financial Transactions and Reports Analysis Centre of Canada).

The goal of these policies is to effectively prevent money laundering and terrorist financing (AML/CTF). By verifying the identities of users and closely tracking transactions, we aim to detect and prevent actions primarily intended to obscure the origins of illicit funds, fund illegal activities, or engage in unlawful behaviors through the purchase or sale of cryptocurrency.

Certain parts of our policies are kept confidential for internal use to prevent abuse by fraudulent users. However, we will outline some general guidelines relevant to users and impacting the services we provide.

User Identification

We are required to verify, with a high degree of certainty, the identity of individuals performing transactions on our platform. To achieve this, we collect ID scans, which are authenticated through specialized software from professional third-party providers.

We may also request a “selfie” or video with your ID document to prevent misuse by unauthorized persons. Verification of your likeness to the ID photo is performed using advanced software from external providers or, in cases of doubt, manually by our customer support team.

If any concerns arise, our customer support team will contact you to address these issues. In situations where we cannot confirm with certainty the authenticity of your documentation, we will be unable to facilitate your transactions.

Know Your Customer (KYC) Questionnaire

Why do we collect personal information?

Clients expect their financial institutions to provide secure and high-quality services. To meet these expectations, financial institutions globally adhere to the “Know Your Customer” standard, and we are no exception. Following this standard, we periodically ask clients for information about their financial activities and request regular updates on personal details in our system. This process applies universally to all clients and is not indicative of any suspicion. By gathering this information, we help protect against financial fraud and identity theft, safeguarding your funds and interests.

Upon registration, you may receive a KYC Questionnaire sent to your registered email. Please carefully respond to the questions and return the completed form to aml@privatepay.io. Each form is completed individually, and responses will vary depending on your occupation, income, and other factors.

Guidelines for Completing the KYC Form:

1. Sources of Funds  
   Select the origin of your funds. Multiple options may be applicable. For example, if your income includes both a salary and self-employment earnings, choose both. If selecting options like “self-employment” or “other,” please specify the details of these sources.

2. Planned Monthly Turnover  
   Indicate your anticipated monthly turnover. For instance, if your monthly income is around 800 EUR without other sources, select “up to 1,000 EUR.”

3. Political Involvement  
   Specify if you hold a position in politics, such as in parliament or with a political party. Select "yes" if you have engaged in political activities within the past year.

4. Close Associates  
   Indicate if any of your close associates have held significant political positions within the last 12 months.

5. Ultimate Beneficiary  
   The account holder is the ultimate beneficiary and the owner of the funds in the account. Please note that you may open an account for personal use only.

Frequency of Data Requests

We may ask for information:

- During registration;
- Annually to update data;
- In cases of unusual or large transactions. Additional questions may be asked about the transaction's purpose, source of funds, etc.

Consequences of Non-Submission

If required information is not provided promptly, certain financial services may become inaccessible. Accurate and timely responses help us to process transfers, lift restrictions, and grant full access to PRIVATEPAY  services.

Data Access

Your data is securely stored and used solely for security purposes. However, we work with law enforcement authorities who may request customer financial activity information from payment service providers.

Data Collection

We may request various information, such as contact details or specific transaction information. This information is not used for marketing or other purposes.

Regulatory Compliance

All information gathering aligns with laws governing financial institutions and serves to prevent money laundering and terrorism financing.

Company User Identification

For legal entities, the AML/KYC process is more stringent and considers the company’s structure, jurisdiction, and nature of activities. This includes identifying ultimate beneficial owners, requiring verification of shareholders, partners, and holding structures if relevant, and examining documents to ensure regulatory compliance.

Given jurisdictional differences, legal entities are often manually verified to meet specific country requirements, involving documents such as:

- Certificate of Incorporation;
- Founding documents (Articles of Association or Incorporation Agreement);
- Identification for directors and authorized representatives;
- Shareholder agreements or partnership contracts;
- Proof of registered address;
- Financial statements or bank references.

Enhanced due diligence (EDD) may be conducted for high-risk jurisdictions, high-risk industries, or flagged activities.

Transaction Monitoring and Review

Using proprietary software, we monitor all transactions on our platform for suspicious or unusual activity. These flagged transactions are reviewed by our AML specialists, who assess potential AML/CTF risks.

Additional Verification

With increasing trade volume, AML/CTF obligations intensify. This may require extra documentation, such as proof of residence or information on the source of funds. If AML specialists find that provided information is inadequate, we may have to terminate the relationship and report the transaction to authorities.

Basic AML/CTF Rules

Our rules include:

- Identifying each client under the KYC standard;
- No acceptance of cash deposits or withdrawals;
- No exceptions to required documentation;
- The right to halt transactions if AML/CTF risks are suspected;
- Non-disclosure of reports to authorities regarding suspicious activity.

Sanctioned Countries

In compliance with our internal policies and Canadian legislation, PRIVATEPAY LIMITED does not engage in trade or process transactions for individuals residing in or visiting jurisdictions subject to international sanctions, as well as regions identified as high-risk for Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) compliance.

Transactions are restricted in regions based on various established criteria, which include, but are not limited to:

International Sanctions: Canada follows the United Nations Act, the Special Economic Measures Act (SEMA), and other legal frameworks to enforce sanctions. These sanctions may restrict or prohibit financial transactions involving countries or entities involved in human rights violations, terrorism, or security threats. We adhere to these regulations and ensure that transactions originating from or destined for sanctioned countries are not processed.

AML/CTF Risk Assessments: In addition to sanctioned nations, we restrict activities in jurisdictions designated as high-risk by various authorities:

Transparency International’s Corruption Perceptions Index: High levels of corruption correlate with money laundering risks. Countries with consistently poor ratings are therefore flagged.
Financial Action Task Force (FATF) Warnings: FATF issues advisories on jurisdictions with weak anti-money laundering and counter-terrorism financing measures. These "high-risk" or "non-cooperative" jurisdictions are subject to heightened scrutiny and limitations.
European Commission AML Blacklists: The European Commission regularly evaluates and updates a list of non-cooperative jurisdictions with deficient AML and CTF frameworks, which we also consider in our compliance.
Additional High-Risk Indicators: Based on PRIVATEPAY LIMITED internal AML team assessments, countries may be restricted due to specific factors such as political instability, lack of regulatory oversight, and involvement in financing terrorism or organized crime. Other indicators include geographic proximity to conflict zones or ongoing regional conflicts.

By following these guidelines, PRIVATEPAY LIMITED ensures that we operate within the requirements of Canadian law and international standards, while minimizing exposure to AML/CTF risks. Our policies and sanctions list are reviewed regularly and updated to reflect new regulatory requirements and international developments.

Currently, these countries are:

Afghanistan, American Samoa, Angola, Bahamas, Botswana, Burundi, Cambodia, Central African Republic, Chad, Congo, Cuba, Democratic Republic of Congo, Equatorial Guinea, Eritrea, Ethiopia, Ghana, Guam, Guinea Bissau, Iran, Iraq, North Korea, Lebanon, Libya, Mali, Nigeria, Pakistan, Panama, Puerto Rico, Samoa, Saudi Arabia, Sierra Leone, Somalia, South Sudan, Sri Lanka, Sudan, Syria, Trinidad and Tobago, Tunisia, Venezuela, Yemen, Zimbabwe, USA (some states), Russian Federation, Belarus.

KYC Verification Levels

Clients on https://privatepay.io must complete KYC-AML verification through our AML provider, https://sumsub.com, accessible via a link in their account. With increasing trade volume, AML/CTF risks also rise, requiring a three-tier verification model that adjusts with regulatory changes and audit findings. Any changes to procedures will be communicated promptly.

Date: November 10, 2024