Anti Money Laundering
CoinX, Inc. believes that compliance is foundational to a legitimate digital currency exchange business model. Strong compliance features enable CoinX, Inc. to acquire proprietary state money transmission licenses and establish strong banking relationships which are foundational to a legitimate, secure and successful digital currency exchange business model.
CoinX, Inc. is passionately committed to securing customer accounts and protecting customer privacy. However, as with any U.S. financial service and digital currency exchange, compliance with applicable laws and regulations regarding anti-money laundering and identity verification require CoinX, Inc. to record information about customers and transactions, and sometimes disclose it to law enforcement.
In the interest of transparency, this section is written to give customers a broad sense of CoinX, Inc.’s obligations and policies regarding monitoring, record keeping, and reporting information about users and transactions.
Overview of AML
In 1970, Congress passed the Bank Secrecy Act of 1970 (the “BSA”)–legislation enacted to assist the US government in detecting and preventing money laundering, terrorist financing, and other financial crimes.
The BSA requires US financial institutions to maintain records and file certain reports involving currency transactions and the financial institutions’ customer relationships, which may be used by law enforcement agencies to detect and prevent money laundering.
The BSA applies to all “financial institutions” defined as “any agent, agency, branch or office within the United States of any person doing business…including as a money services business.”
In March 2013, the Financial Crimes Enforcement Network (“FinCEN”), a bureau of the U.S. Department of Treasury, issued interpretive guidance to clarify that the BSA requirements for financial institutions extend to “persons creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies.”
CoinX, Inc., as a virtual currency exchanger, is considered an MSB under FinCEN’s regulations–specifically a money transmitter. Thus, CoinX, Inc. is required to comply with the registration, reporting, record keeping, and other regulations applicable to money transmitters.
Broadly, the BSA requires “money services businesses” (including virtual currency exchanges) to (1) create a system of policies, procedures and controls to assure compliance with the BSA, (2) designate a Compliance Office responsible for day-to-day compliance with the BSA, (3) provide training to compliance and other appropriate personnel, and (4) provide for independent review to monitor and maintain an adequate program.
CoinX Anti Money Laundering Measures
Practically speaking, what this means for CoinX, Inc. customers is that CoinX, Inc. has established risk assessment, record-keeping and reporting policies in the following categories, in order to comply with applicable laws and regulations:
- Customer, employee, and business partner identification verification, and continuing due diligence
- Compliance with Office of Foreign Assets Control (“OFAC”) regulations (which seek to administer and enforce economic and trade sanctions based on US foreign policy and national security goals)
- Identification and investigation of unusual activity, and suspicious activity reporting
- Currency transaction reports and other reporting requirements triggered by transaction volumes and specified activity patterns as articulated in the BSA
- Compliance with BSA record keeping requirements
- Compliance with lawful requests for information from law enforcement with the authority to make such requests