The Anti-Money Laundering and Know Your Customer Policy (the “AML/KYC Policy”) of Zillion Bits Limited and its affiliates (“ZBX” “we”, “our” or “us”) is established to prevent and mitigate possible risks of ZBX being involved in illegal or illicit activities and to enable ZBX to meet its legal and regulatory obligations in this area (if and as applicable). This AML/KYC Policy is subject to changes and updates by ZBX from time to time to ensure compliance with any applicable legislation and global AML/KYC practices.
- “Beneficial Owner” means any natural person or persons who ultimately own or control the User and, or the natural person or persons on whose behalf a transaction or activity is being conducted, and
- a) in the case of a body corporate or a body of persons, the beneficial owner shall consist of any natural person or persons who ultimately own or control that body corporate or body of persons through direct or indirect ownership of twenty-five per centum (25%) plus one (1) or more of the shares or more than twenty-five per centum (25%) of the voting rights or an ownership interest of more than twenty-five per centum (25%) in that body corporate or body of persons, including through bearer share holdings, or through control via other means, other than a company that is listed on a regulated market which is subject to disclosure requirements consistent with European Union law or equivalent international standards which ensure adequate transparency of ownership information:
Provided that a shareholding of twenty-five per centum (25%) plus one (1) share or more, or the holding of an ownership interest or voting rights of more than twenty-five per centum (25%) in the customer shall be an indication of direct ownership when held directly by a natural person, and of indirect ownership when held by one or more bodies corporate or body of persons or through a trust or a similar legal arrangement, or a combination thereof:
Provided further that if, after having exhausted all possible means and provided there are no grounds of suspicion, no beneficial owner in terms of this paragraph has been identified, subject persons shall consider the natural person or persons who hold the position of senior managing official or officials to be the beneficial owners, and shall keep a record of the actions taken to identify the beneficial owner in terms of this paragraph.
- b) in the case of trusts the beneficial owner shall consist of:
- the settlor;
- the trustee or trustees;
iii. the protector, where applicable;
- the beneficiaries or the class of beneficiaries as may be applicable; and
- any other natural person exercising ultimate control over the trust by means of direct or indirect ownership or by other means;
- c) in the case of legal entities such as foundations, and legal arrangements similar to trusts, the beneficial owner shall consist of the natural person or persons holding equivalent or similar positions to those referred to in paragraph (b).
“High Risk Jurisdiction” means the jurisdictions designated by ZBX as high risk jurisdictions in respect of any Service from time to time.
“Politically Exposed Person” means a natural person who is or has been entrusted with prominent public functions, other than middle ranking or more junior officials. For the purposes of this definition, the term "natural persons who are or have been entrusted with prominent public functions" includes the following:
- a) Heads of State, Heads of Government, Ministers, Deputy or Assistant Ministers, and Parliamentary Secretaries;
- b) Members of Parliament or similar legislative bodies;
- c) Members of the governing bodies of political parties;
- d) Members of superior, supreme, and constitutional courts or of other high-level judicial bodies whose decisions are not subject to further appeal, except in exceptional circumstances;
- e) Members of courts of auditors or of the boards of central banks;
- f) Ambassadors, charges d’affaires and high ranking officers in the armed forces;
- g) Members of the administrative, management or supervisory boards of State-owned enterprises;
- h) Anyone exercising a function equivalent to those set out in paragraphs (a) to (f) within an institution of the European Union or any other international body,
Furthermore, Politically Exposed Person also includes family members or persons known to be close associates of any individual identified in (a) – (g) above.
The term “family members” includes:
- the spouse, or a person considered to be equivalent to a spouse;
- the children and their spouses, or persons considered to be equivalent to a spouse; and
- the parents.
“Persons known to be close associates” means:
- a natural person known to have joint beneficial ownership of a body corporate or any other form of legal arrangement, or any other close business relations, with that politically exposed person; or
- a natural person who has sole beneficial ownership of a body corporate or any other form of legal arrangement that is known to have been established for the benefit of that politically exposed person.
“Prohibited Jurisdiction” means the jurisdictions designated by ZBX as a prohibited jurisdiction in respect of any Service from time to time.
“Sanctioned Jurisdiction” means any country or territory to the extent that such country or territory is the subject of any sanction issued by the United Nations, United States and/or the European Union.
“Sanctioned Person” means any individual or entity: (a) identified on a sanctions list issued by the United Nations, United States and/or the European Union; (b) organised, domiciled or resident in a Sanctioned Jurisdiction; or (c) otherwise the subject or target of any sanctions, including by reason of ownership or control by one or more individuals or entities described in clauses (a) or (b).
“Services” means the: (i) exchange services in respect of virtual financial assets provided by ZBX; (ii) custody services in respect of such virtual financial assets; and/or (iii) other services provided by ZBX from time to time.
“User” means a person using the Services, with or without prior registration and authorisation of ZBX, including for the purchase and sale of virtual financial assets on ZBX’s platform.
3. Initial and Ongoing Screening
ZBX will screen a User prior to providing any Service to such User, and will continue to screen such User on an ongoing basis, to ensure that such User is not a Sanctioned Person, from a Sanctioned Jurisdiction and/or a person from a Prohibited Jurisdiction. If a User is a Sanctioned Person, from a Sanctioned Jurisdiction and/or a person from a Prohibited Jurisdiction, ZBX will refuse to provide Services to such User or discontinue provision of Services. In carrying out this screening ZBX shall ensure to adopt software to enable comprehensive screening to be carried out and which captures all sanctions that ZBX is bound to follow.
4. KYC/AML Identification Procedures
ZBX adopts a risk-based approach to combating money laundering and terrorist financing. By adopting a risk-based approach, ZBX is able to ensure that measures to prevent or mitigate money laundering and terrorist financing are commensurate to the identified risks.
Prior to providing any Service to a User, ZBX will:
- a) identify the User and verify the User’s identity on the basis of documents, data or information based on a reliable and independent source;
- b) if there is a Beneficial Owner in relation to the User, identify the beneficial owner and take reasonable measures to verify the beneficial owner’s identity;
- c) obtain information on the purpose and intended nature of the business relationship with the User, unless the purpose and intended nature are clearly stipulated in the relevant documentation between ZBX and the User; and
- d) if a person purports to act on behalf of the User: (i) identify the person and take reasonable measures to verify the person’s identity on the basis of documents, data or information based on a reliable and independent source; and (ii) verify the person’s authority to act on behalf of the User.
To identify a User who is an individual, ZBX will collect information from the User such as his full name, date of birth, place of birth, nationality, place of residence, email address, and the identity document type. ZBX will, verify the identity of the User with documents such as his national identity, passport and/or driver’s licence and utility bill.
To identify a User who is a legal entity, ZBX will collect information from the User such as its full legal name, registration number, date of incorporation / registration, country of incorporation / registration and lists of directors (as applicable to the entity). ZBX will verify the User with documents such as Memorandum and Articles of Association (or equivalent), additional beneficial ownership information and documents, and a detailed corporate chart (as applicable to the entity).
If the User is not physically present for identification purposes, ZBX may adopt more stringent standards to verify the identity of the User.
5. Ongoing Monitoring
ZBX will continuously monitor the business relationship with a User by:
- a) reviewing from time to time any documents, data and information relating to the User that have been obtained by ZBX and ensuring that they are up-to-date and accurate;
- b) conducting appropriate scrutiny of transactions carried out for the User to ensure that they are consistent with ZBX’s knowledge of the User and the User’s business and risk profile, and with ZBX’s knowledge of the source of the customer’s funds and source of wealth; and
- c) identifying transactions that are complex, unusually large in amount or of an unusual pattern and have no apparent economic or lawful purpose.
ZBX shall undertake ongoing monitoring of each account opened by a User in order to ensure that a User depositing more than €10,000 (or its equivalent in any other currency) shall be subject to enhanced due diligence in relation to the source of funds and source of wealth of the funds used to transact through ZBX.
To continuously monitor the business relationship with a User, ZBX shall on a periodic basis according to the risk rating of the User, carry out a file review to ensure that information held about the User is up-to-date and that identification documents held are still valid. In addition, on more frequent basis, ZBX shall monitor transactional activity to identify any red-flags or ‘out of the norm’ activity.
As part of the second line of defense, the Money Laundering Reporting Officer will carry out checks to ensure that regular and effective on-going monitoring is being effected and ensure that irregular or suspicious transactions are effectively escalated.
6. Sanctioned Jurisdictions, Prohibited Jurisdictions and High Risk Jurisdictions
ZBX shall establish and maintain the following lists of jurisdictions: (i) Sanctioned Jurisdictions, (ii) Prohibited Jurisdictions, and (iii) High Risk Jurisdictions. In determining the list of Sanctioned Jurisdictions, Prohibited Jurisdictions and High Risk Jurisdictions, ZBX shall take into account the lists issued by the Financial Action Task Force, the Financial Intelligence Analysis Unit and other organisations issuing guidelines and lists relating to the adequacy of legislative measures adopted by jurisdictions in relation to money laundering, funding of terrorism and transparency.
Users which are: (i) resident or domiciled in; or (ii) have their source of wealth or source of funds linked to a Sanctioned Jurisdiction and/or a Prohibited Jurisdiction, shall not be accepted as clients of the ZBX. Users which are: (i) resident or domiciled in; or (ii) have their source of wealth or source of funds linked to High Risk Jurisdictions, shall be subject to additional checks and measures by the ZBX.
7. High Risk Situations
In certain circumstances, the risk may be higher and ZBX will need to take additional checks. This includes, for example, situations where the User is from a High Risk Jurisdiction, where the User is a politically exposed person, or the User’s behavior and activities raises other red flags.
In a high risk situation, ZBX will:
- a) where a business relationship has not yet been established, obtain approval from senior management to establish the business relationship and take reasonable measures to verify the User’s or beneficial owner’s source of wealth and source of funds that will be involved in the business relationship; and
- b) where a business relationship has been established, obtain approval from senior management to continue the business relationship, take reasonable measures to verify the beneficial owner’s identity, and take reasonable measures to verify the User’s or beneficial owner’s source of wealth and source of funds that will be involved in the business relationship.
ZBX will keep: (a) transaction records, for a period of ten (10) years from the date on which a transaction is completed; and (b) thereafter, for the following periods: (i) an initial period of five (5) years from the date on which the business relationship with the User end; and (ii) where extended by the Financial Intelligence Analysis Unit, relevant supervisory authorities or law enforcement agencies, for a maximum period of ten (10) years.
All of our employees and officers receive ongoing AML/KYC training that is undertaken at least once every year to ensure they are familiar with our AML/LYC Policy and all applicable laws and regulations. New employees receive training within thirty (30) days of their first day of employment. All documentation related to compliance training including materials, tests, results, attendance and date are maintained. In addition, our compliance training program is updated as necessary to reflect current laws and regulations.
10. Money Laundering Reporting Officer
The Money Laundering Reporting Officer is the person, duly authorised by ZBX, whose duty is to ensure the effective implementation and enforcement of the AML/KYC Policy. It is the Money Laundering Reporting Officer’s responsibility to supervise all aspects of ZBX’s anti-money laundering and counter-terrorist financing. All our employees will report any suspicious behavior or activities to the Money Laundering Reporting Officer.
Where ZBX suspects that the User is involved in any money laundering, terrorist financing or other illegal activities, it will report any relevant knowledge or suspicion to governmental and regulatory authorities. ZBX has no obligation to notify a User of any such suspicious transaction report which, on the other hand, ZBX and its employees can be held liable for tipping off. This is criminal offence punishable by a fine and/or imprisonment.