AML/KYC Policy

Definitions

• Money Laundering (ML): The process by which criminals attempt to conceal the origin and/or illegitimate ownership of property and assets that are the proceeds of criminal activities, as defined under the Money Laundering Control Act.
• Terrorist Financing (TF): The provision or collection of funds with the intention that they be used to support terrorist acts or organizations, often characterized by the concealment of the origin or intended criminal use of assets.
• Know Your Customer (KYC): The process of obtaining and verifying a user's identity, preserving records, and ensuring mandatory disclosure of suspicious activities to authorized US statutory bodies.
• Financial Crimes Enforcement Network (FinCEN): The bureau of the U.S. Department of the Treasury that collects and analyzes information about financial transactions to combat domestic and international money laundering and terrorist financing.
• Office of Foreign Assets Control (OFAC): The agency responsible for administering and enforcing US economic and trade sanctions based on US foreign policy and national security goals.
• Politically Exposed Persons (PEPs): Individuals who are or have been entrusted with prominent public functions (e.g., government officials, senior executives of state-owned enterprises). PEPs present a higher risk for potential involvement in bribery and corruption.
• Enterprise Risk Management (ERM): The methods and processes used by Walletix to identify, assess, and manage risks related to financial crimes and operational security.
• Client/User: Any individual or legal entity that establishes a business relationship with Walletix for the purpose of utilizing our managed vault infrastructure.

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Policy Mandate

This policy is an integral part of the Walletix Anti-Money Laundering (AML), Know Your Customer (KYC), and Counter-Terrorist Financing (CTF) Program. It establishes the guidelines for Walletix Inc.’s compliance with obligations under the Bank Secrecy Act (BSA), as amended by the USA PATRIOT Act, and subsequent FinCEN regulatory directives. Walletix is committed to preventing its custodial services from being used to facilitate criminal activities. We cooperate fully with US federal regulators and law enforcement agencies to detect and deter financial crimes.

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Policy Description

Money laundering and terrorist financing are severe financial crimes that threaten the integrity of the US financial system. This policy aims to promote stability and security within the digital asset market. The purpose of this Policy is:

• To establish the standards of conduct that Walletix must follow in implementing FinCEN and BSA regulations.
• To protect Walletix and its users against fraud, reputational harm, and financial market risks.
• To minimize the risk of the Platform being used for the transmission of proceeds of crime.
• To establish ERM systems that monitor the Company’s exposure to financial crime and ensure the safety of managed private keys.

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Compliance with Policy

Walletix shall comply with the following US standards:

• Implement internal controls and Customer Identification Programs (CIP) that deter the use of our vault services for illicit purposes.
• Maintain a designated Compliance Officer (or MLRO) with the relevant authority and independence to oversee the AML/KYC program.
• Comply with Suspicious Activity Report (SAR) filing requirements, reporting any suspicious transactions exceeding $5,000 (or the current federal threshold) to FinCEN.
• Conduct regular Independent Testing (audits) of the AML program to ensure effectiveness.
• Perform real-time OFAC Sanctions Screening against the Specially Designated Nationals (SDN) list for all onboarding and outgoing transactions.
• Effectively communicate and provide ongoing AML/KYC training to all Walletix personnel.

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Know Your Client (KYC) & Due Diligence

KYC is the mandatory due diligence Walletix performs to identify users before granting access to our managed vault. In accordance with Customer Due Diligence (CDD) rules, Walletix shall:

• Verify the identity of every user using reliable, independent source documents (e.g., US Driver’s License, Passport, or State-issued ID) and verify the user's Social Security Number (SSN) or Taxpayer Identification Number (TIN).
• Utilize Biometric Verification (liveness checks) to match the user to their provided identification.
• Implement Enhanced Due Diligence (EDD) for high-risk users, including PEPs and individuals from high-risk jurisdictions identified by the FATF.
• Refuse to provide services to "shell banks" or unlicensed money transmitters.
• Conduct ongoing monitoring of account activity to detect patterns inconsistent with a user's known risk profile.

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Record Keeping and Reporting

In compliance with US federal law, Walletix shall retain all records of customer identification and transaction history for at least five (5) years after the closure of the account or the termination of the business relationship. Upon a valid request by a US regulatory or law enforcement agency (e.g., via subpoena), Walletix shall make these records available in a timely manner. If Walletix identifies a suspicious transaction, it shall:

• File a Suspicious Activity Report (SAR) with FinCEN via the BSA E-Filing System.
• Maintain the strict confidentiality of the SAR filing, as prohibited by federal law from disclosing the filing to the subject of the report.
• Take appropriate action, including account restriction or closure, to mitigate further risk.