Introduction
DIGITAL REALM SRL Anti-Money Laundering and Know Your Customer Policy (hereinafter – the “AML/KYC Policy”) is designated to prevent and mitigate possible risks of DIGITAL REALM SRL being involved in any kind of illegal activity.
Both international and local regulations require DIGITAL REALM SRL to implement effective internal procedures and mechanisms to prevent money laundering, terrorist financing, drug and human trafficking, proliferation of weapons of mass destruction, corruption and bribery and to take action in case of any form of suspicious activity from its Users.
AML/KYC Policy covers the following matters:
1. Verification procedures
2. Compliance Officer
3. Monitoring Transactions
4. Risk Assessment
1. Verification procedures
One of the international standards for preventing illegal activity is customer due diligence (“CDD”). According to CDD, DIGITAL REALM SRL establishes its verification procedures within the standards of anti-money laundering and “Know Your Customer” frameworks via Internal and Third-party operated solutions.
1.1. Identity verification
DIGITAL REALM SRL’s identity verification procedure requires the User to provide DIGITAL REALM SRL with reliable, independent source documents, data or information (e.g., national ID, international passport, bank statement, utility bill). For such purposes
DIGITAL REALM SRL reserves the right to collect User’s identification information for the AML/KYC Policy
purposes and share it with the relevant third-parties.
DIGITAL REALM SRL will take steps to confirm the authenticity of documents and information provided by the Users. All legal methods for double-checking identification information will be used and DIGITAL REALM SRL reserves the right to investigate certain Users who have been determined to be risky or suspicious.
DIGITAL REALM SRL reserves the right to verify User’s identity in an on-going basis, especially when their identification information has been changed or their activity seemed to be suspicious (unusual for the particular User). In addition, DIGITAL REALM SRL reserves the right to request up-to-date documents from the Users, even though they have passed identity
verification in the past.
User’s identification information will be collected, stored, shared and protected strictly in accordance with the DIGITAL REALM SRL’s Privacy Policy and related regulations.
Once the User’s identity has been verified, DIGITAL REALM SRL is able to remove itself from potential legal liability in a situation where its Services are used to conduct illegal activity.
2. Compliance Officer
The Compliance Officer is the person, duly authorized by DIGITAL REALM SRL, whose duty is to ensure the effective implementation and enforcement of the AML/KYC Policy. It is the Compliance Officer’s responsibility to supervise all aspects of DIGITAL REALM SRL’s anti-money laundering and counter-terrorist financing, including but not limited to:
a. Collecting Users’ identification information.
b. Establishing and updating internal policies and procedures for the completion, review, submission and retention of all reports and records required under the applicable laws and regulations.
c. Monitoring transactions and investigating any significant deviations from normal activity.
d. Implementing a records management system for appropriate storage and retrieval of documents, files, forms and logs.
e. Updating risk assessment regularly.
f. Providing law enforcement with information as required under the applicable laws and regulations.
The Compliance Officer is entitled to interact with law enforcement, which are involved in prevention
of money laundering, terrorist financing and other illegal activity.
3. Monitoring Transactions
The Users are known not only by verifying their identity (who they are) but, more importantly, by analyzing their transactional patterns (what they do). Therefore, DIGITAL REALM SRL relies on data analysis as a risk-assessment and suspicion detection tool. Asset DIGITAL REALM SRL performs a variety of compliance-related tasks, including capturing data, filtering, record-keeping, investigation management, and reporting. System functionalities include:
1) Regular check of Users against recognized “black lists” (e.g. OFAC), aggregating transfers by multiple data points, placing Users on watch and service denial lists, opening cases for investigation where needed, sending internal communications and filling out statutory reports, if applicable;
2) Case and document management.
With regard to the AML/KYC Policy, DIGITAL REALM SRL will monitor all transactions and it reserves the right to:
● ensure that transactions of suspicious nature are reported to the proper law enforcement through the Compliance Officer;
● request the User to provide any additional information and documents in case of suspicious transactions;
● suspend or terminate User’s Account when DIGITAL REALM SRL has reasonably suspicion that such User engaged in illegal activity.
The above list is not exhaustive and the Compliance Officer will monitor Users’ transactions on a day-to-day basis in order to define whether such transactions are to be reported and treated as suspicious or are to be treated as bona fide.
3.1. Source of Wealth Verifications
DIGITAL REALM SRL conducts mandatory checks of the source of wealth for all cryptocurrency deposits exceeding the aggregated threshold of €10,000. Customers are obliged to complete the Questionnaire Form and provide Proof of claimed Source of Wealth. To verify the source of wealth/source of funds of individual customers, DIGITAL REALM SRL will:
a. Rely on the sending bank verification process if the funds sent via bank transfer. DIGITAL REALM SRL does not allow any third-party transactions.
b. In case of cryptocurrency transfer, DIGITAL REALM SRL will use the blockchain analysis tools to analyse the source of incoming funds. The analysis will show if the coins coming from mining (up to two transactions from the origin (mining) transactions or if the
transaction goes from the address of the mining pool. Mining reports might be requested for verification purposes.
c. If the analysis shows that the transaction is coming from a regulated (fiat-enabled) exchange, DIGITAL REALM SRL may request the statement from this exchange confirming purchase of the cryptocurrency for fiat currency.
d. If there is no possibility to determine the origin of the cryptocurrency, DIGITAL REALM SRL will request one of the following documents:
a. Bank statement
b. Tax return
c. Accountant letter
d. Other documents confirming the source of wealth
Until the verification of the Source of Wealth is completed DIGITAL REALM SRL reserves the right to suspend the account and block all incoming and outgoing transactions of the User.
After the Verification is successfully completed DIGITAL REALM SRL will increase the account limits proportionately to the verified transaction volume.
4. Risk Assessment
DIGITAL REALM SRL, in line with the international requirements, has adopted a risk-based approach to combating money laundering and terrorist financing. By adopting a risk-based approach, DIGITAL REALM SRL is able to ensure that measures to prevent or mitigate money laundering and terrorist financing are commensurate to the identified risks. This will allow resources to be allocated in the most efficient ways. The principle is that resources should be directed in accordance with priorities so that the greatest risks receive the highest attention.
