AML/KYC Policy
BYDFi’s AML/KYC Policies and Procedures
This Policy relates to BYDFi’s anti-money laundering and countering the financing of terrorism (“AML/KYC”) policies and procedures. This Policy is solely for the purpose providing general information and is not, in any way, legally binding either on BYDFi and/or on any other person(s) (natural or otherwise).
A. Principles and Methods of BYDFi AML/KYC Measures
BYDFi is committed to supporting AML/KYC efforts, our key commitments include:Due Diligence: Exercising due diligence when engaging with our customers and any individuals appointed to act on their behalf.
Ethical Conduct: Conducting business in accordance with high ethical standards and, to the greatest extent possible, preventing the establishment of any business relationship that is related to or could contribute to money laundering or terrorism financing.
Cooperation with Authorities: Assisting and cooperating fully with relevant law enforcement authorities to prevent and combat the threats of money laundering and terrorism financing.
B. BYDFi’s Approach to Risk Assessment and Risk Mitigation
We anticipate that the majority of our customers will be retail customers. As of the date of this policy, we are operating primarily in the United States.
a. Document and/or collect documentation regarding:The identities of our customers;The countries or jurisdictions our customers are from or reside in;b. Ensure, to the best of our knowledge, skill, and ability, that our customers, connected persons, natural persons appointed to act on behalf of customers, and beneficial owners will be assessed and screened using the List of Designated Individuals and Entities. This list includes categories such as(but not limited to):
Afghanistan;Belarus;Bulgaria;Burkina Faso;Cameroon;Central African Republic;Croatia;Cuba;Democratic Republic of the Congo;Ethiopia;Haiti;Hong Kong;Iran;Iraq;Jamaica;Kenya;Lebanon;Libya;Mali;Mozambique;Myanmar;Namibia;Nicaragua;Nigeria;North Korea;Philippines;Russia;Senegal;Somalia;South Africa;South Sudan;Sudan;Syria;Tanzania;Türkiye;Ukraine;Venezuela;Vietnam;Yemen.
Risk MitigationIf identified, we will refrain from engaging with any individuals or entities listed in the List of Designated Individuals and Entities.C. Our Approach to New Products, Practices and Technologies
We shall provide appropriate notice on the identification and assessment of money laundering and terrorist financing risks that may arise in the following areas:The development of new products and business practices, including new delivery mechanisms.The use of new or developing technologies for both new and existing products.
We will pay special attention to new products, business practices, and technologies that favor anonymity, such as digital tokens (whether security, payment, and/or utility tokens).
D. Our Approach to Customer Due Diligence (“CDD”)
We do not open, maintain, or accept anonymous or pseudonymous accounts.
We shall not enter into a business relationship with or execute trades for customers when we have reasonable grounds to suspect that their assets or funds are the proceeds of drug dealing or other criminal behavior. We shall file an STR for such transactions and provide a copy to the relevant FIU.
We shall perform customer due diligence in the following situations:
When we enter into a business relationship with any customer.
When we execute transactions for any customer with whom we do not have an established business relationship.
When we receive cryptocurrency transfers for customers with whom we do not have a business relationship.
When we suspect money laundering or terrorism financing.
When we doubt the truth or adequacy of any information.
When we suspect that two or more transactions are or may be related or connected or that an otherwise single transaction has been intentionally reorganized into smaller transactions in order to evade Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) measures, we shall treat the transaction as a single transaction and aggregate its value in order to comply with the AML/CFT principles.
Customer Verification
We shall verify the identity of all of our customers. In order to verify our customers, we need to know at least:
Their full names, including any aliases.
Their unique identification number (e.g., identity card number, birth certificate number, or passport number or, where the customer is not a natural person, their business registration number).
Their registered address, or their registered business address (if applicable), or their principal place of business if the registered and business addresses are different.
Their date of birth, establishment, or registration.
Their nationality or place of registration.
If the customer is a legal person, we shall, in addition to obtaining the relevant information outlined above, identify their legal entity type, their statutes, and the powers that regulate and bind them as a legal person. We shall also identify their related parties (e.g., directors, partners, and/or persons with executive powers) by obtaining, at a minimum, the following information for each:
Their full names, including any aliases.
Their unique identification number, such as an identity card number, birth certificate number, or passport number.
Customer Identity Verification
We shall use reliable and independent data, documents, or information to verify the identity of our customers. If our customer is a legal person or legal arrangement, we shall use reliable and independent data, documents, or information to verify their legal entity type, proof of existence, statutes, and the powers that regulate and bind them.
Customer Representative Identity Verification
If a customer appoints one or more natural persons to represent them in their business relationship with us, or if the customer is not a natural person, we shall:
Identify each natural person acting on behalf of the customer or appointed to act on behalf of the customer by obtaining the following information:
Their full names.Their unique identification number.Their residential address.Their date of birth.Their nationality.Data and documents from reliable and independent sources that can be used to verify the identity of such natural persons.
We shall also verify the proper authority of each natural person designated to act on behalf of our customer by obtaining the following information:
Appropriate written evidence authorizing the appointment of such natural persons as our customer's representatives.The specimen signature of each natural person.
If the customer claims to be a government entity, we shall obtain only such information as may be necessary to confirm the customer's claimed identity.
Identification and Verification of Beneficial Owners
We shall inquire the existence of any beneficial owners associated with the customer. If the customer has one or more beneficial owners, we shall identify the beneficial owner(s) and take reasonable steps to verify the identity of the beneficial owner(s) using relevant information or data obtained from reliable and independent sources.
If the customer is a legal person, we shall:
Identify the natural persons (whether acting independently or in concert) with ultimate ownership over the legal person.
If there is doubt as to whether the natural persons with ultimate ownership over the legal person are the beneficial owners, or if no natural persons have ultimate ownership over the legal person, determine the natural persons with ultimate beneficial ownership over the legal person.
If no such natural person is identified, identify a natural person with enforcement rights over the legal person.
If the customer is a legal arrangement, we shall:
In the case of a trust, identify the settlor, trustee, protector (if applicable), beneficiaries, any natural person exercising ultimate ownership, ultimate control, or ultimate effective control over the trust.
For other types of legal arrangements, identify those in equivalent positions.
If the customer is not a natural person, we shall determine the nature, ownership, and control structure of the customer's business.
We are required to verify the identity of the beneficial owners of the following customers:
Entities listed on stock exchanges.
Entities listed on stock exchanges subject to regulatory disclosure requirements and full transparency requirements in relation to their beneficial owners.
Financial institutions.
Financial institutions supervised for compliance with the AML/CFT requirements outlined by the FATF.
Investment vehicles where the manager is a financial institution or is subject to the AML/CFT requirements outlined by the FATF.
The above shall apply unless we doubt the veracity of the CDD information or suspect that our customers have engaged in business relationships or transactions related to money laundering or terrorism financing. We shall also document the basis for our determination.
E. Our Approach to Enhanced Customer Due Diligence
Politically Exposed Persons
We will take all reasonable measures to determine if a customer, any natural person appointed to act on behalf of a customer, any connected party, or any beneficial owner of the customer is a politically exposed person (PEP), or a family member or close associate of a PEP.
In addition to performing standard Customer Due Diligence (CDD) measures, we will apply the following enhanced due diligence measures if a customer or any beneficial owner is identified as a PEP, or a family member or close associate of a PEP:
Obtain approval from senior management to establish and continue business relations with the customer;
Establish, through reasonable means, the source of wealth and the source of funds of the customer and any beneficial owner;
Conduct enhanced monitoring of the business relationship with the customer, increasing the degree and nature of monitoring for any transactions that appear unusual.
Higher Risk Categories
We recognize that certain circumstances may present a higher risk for money laundering or terrorism financing. These include, but are not limited to:
Customers from High-Risk Jurisdictions: If a customer or any beneficial owner is from or in a country or jurisdiction that the Financial Action Task Force (FATF) has identified for countermeasures, we will treat any business relations with or transactions for such customers as high-risk.
Inadequate AML/CFT Measures: If a customer or any beneficial owner is from or in a country or jurisdiction known to have inadequate Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) measures, as determined by us or as notified by the Authority or other foreign regulatory authorities, we will assess whether the customer presents a higher risk for money laundering or terrorism financing.
For customers identified as presenting a higher risk for money laundering or terrorism financing, or for any customer identified by the Authority as high-risk, we will perform enhanced Customer Due Diligence (CDD) measures.
F. Our Approach to Bearer Negotiable Instrument and Cash Payout Restrictions
We will adhere to the following policies regarding payments:
Bearer Negotiable Instruments: We will not issue payments in the form of bearer negotiable instruments under any circumstances.
Cash Payouts: We will not disburse cash in any amount during the course of our business operations.
G. Our Approach to Value Transfer (to be implemented when required)*
If we are the ordering institution, before effecting a value transfer, we will:
Identify the value transfer originator and take reasonable measures to verify their identity (if not already done);
Record adequate details of the value transfer, including the date, type, and value of the digital payment token transferred, as well as the value date.
For value transfers, we will include the following information in the message or payment instructions that accompany or relate to the transfer:
The name of the value transfer originator;
The value transfer originator’s account number (or unique transaction reference number, if applicable);
The name of the value transfer beneficiary;
The value transfer beneficiary’s account number (or unique transaction reference number, if applicable).
Value Transfers Exceeding a Particular Threshold
For value transfers exceeding a specific threshold, if we are the ordering institution, we will:
Identify the value transfer originator and verify their identity;
Include in the message or payment instructions the following additional information, as applicable:
We shall immediately and securely submit all value transfer originator and beneficiary information to the beneficiary institution and document this information thoroughly. If, as the ordering institution, we are unable to comply with these requirements, we will not execute the value transfer.
If we are the beneficiary institution, we will take reasonable measures to identify value transfers that lack the required value transfer originator or beneficiary information. For value transfers where we, as the beneficiary institution, pay out transferred digital payment tokens in cash or cash equivalents, we will identify and verify the identity of the value transfer beneficiary if it has not been previously verified.
Before executing a value transfer that lacks the required value transfer originator or beneficiary information, we will conduct a thorough review and document our follow-up actions.
As an intermediary institution, we will retain all information related to a value transfer. When effecting a value transfer to another intermediary institution or beneficiary institution, we will immediately and securely provide all accompanying information to the receiving institution.
If we are the receiving intermediary institution, we will keep a record of all information received from an ordering institution or another intermediary institution for at least five years.
We will take reasonable measures to identify value transfers that lack the required value transfer originator or beneficiary information during straight-through processing.
H. Record Keeping
We will maintain proper records for a minimum period of five years as required.
I. Personal Data
We will safeguard our customers' personal data in accordance with prescribed standards and regulations.
J. Suspicious Transaction Reporting (STR)
We will notify the relevant authorities and file Suspicious Transaction Reports (STR) as mandated by law. Additionally, we will retain all records and transactions related to such reports.
K. Our Policies on Compliance, Audit, and Training
We are committed to maintaining robust AML/CFT compliance by implementing the following measures:
Appoint an AML/CFT Compliance Officer at the management level.
Maintain an independent audit function.
Proactively provide regular AML/CFT training for our employees.
Enterprise-wide Money Laundering/Terrorism Financing Risk Assessment
We will conduct an enterprise-wide risk assessment for money laundering and terrorism financing in three phases:
Phase 1: Assessing Inherent Risk We will evaluate the inherent risks associated with:
Customers or Entities: Assess the risk profile of our customers and entities we interact with.
Products or Services: Evaluate the risks related to our cryptocurrency OTC services, considering who we serve.
Geographical Level: Exclude dealings with customers from the List of Designated Individuals and Entities.
Phase 2: Assessing Mitigating Controls We will evaluate our mitigating controls in relation to the identified risks. Any suspicious customers will be monitored closely, and enhanced due diligence will be exercised as necessary.
Phase 3: Assessing Residual Risk We will assess the residual risks after implementing our mitigating controls.
