Anti-Money Laundering Policy
1. Money Laundering Definition
Money laundering is defined as the process of moving illegally obtained capital through financial systems so that it appears to come from a legitimate source. Money laundering offences are a criminal activity and include the transfer, disguise and exchange of illegally obtained property (POCA 2002). Engaging in the arrangement or knowledge of suspicious acquisitions, use and control of criminal property by or on behalf of persons using or possessing criminal assets (POCA 2002).
Additional offences incorporate: The failure to disclose knowledge or suspicion of money laundering to necessary parties such as a Money Laundering Reporting Officer. The failure of a MLRO to report suspicious activities to the National Crime Agency and the “tipping off” of any such party suspected of engaging in Money Laundering Offences in such a way as to reduce the likelihood of them being investigated or prejudicing an investigation.
The United Kingdom passed Proceeds of Crime Act 2002 legislation to prevent and combat money laundering. This legislation together with regulations, rules and industry guidance form the foundation of Anti-Money Laundering and Counter Terrorism Financing obligations outlined for UK firms.
2. BC Bitcoinsell
BC Bitcoinsell’s business activities including the facilitation of the trading and broking of Cryptocurrencies, is currently not a regulated industry under the Financial Services and Markets Act 2000. In addition, Bitcoin and Cryptocurrency is not currently defined or classified within the current UK AML/CTF legislation, though this is subject to change and review under UK laws as new Money Laundering Directives are implemented alongside further regulation.
BC Bitcoinsell has chosen to comply with all mentioned legislative agendas and procedures to fully comply with UK AML legislation for a regulated industry. This approach reflects BC Bitcoin’s predisposition that its services should not facilitate or engage in any kind of Money Laundering activities and not to be used by criminals to launder proceeds of crime.
This policy outlines by what method BC Bitcoinsell employees should raise concerns, by informing the managing director’s if money laundering is suspected. Employees actively investigate discrepancies and suspected money laundering activities, raising concerns throughout the organisation and reporting to the necessary AML Authorities.
3. Controls and Procedures
BC Bitcoin is committed to establishing and maintaining policies, controls and procedures that mitigate the risks of money laundering. These policies are reviewed frequently and cover the following measures:
Know Your Customer Verifications and when required enhanced customer due diligence.
Internal controls in relation to its senior management and staff members.
The keeping of records over an indefinite period.
Monitoring compliance to its policies, control and procedures.
Risk Management practices.
4. Money Laundering Reporting Officer
BC Bitcoinsell will appoint a MLRO to be responsible for Anti-money laundering efforts and reviewing all disclosures about potential money laundering activity.
The MLRO will ensure that suitable training and awareness is provided to new and existing staff and that this is reviewed and updated as required.
5. Risk Assessment and Risk Management Practices
Regulation 18 (1) of the UK 2017 Regulations Act require firms to take measures when identifying and assess the risks of Money Laundering and Terrorist Financing. BC Bitcoin considers the risks associated with the following demographics: Countries or Geographical areas, Products or Services required, Nature of Transactions and Delivery Channels, Willingness to comply when prompted for additional information.
6. Record Keeping
Regulation 40 of the UK 2017 Regulations Act requires firms to hold copies of all documentation obtained from a customer. Documentation will be retained for at least 5 years and will be; reviewed, updated, achieved & securely deleted when necessary.
Personal data is only to be used by BC Bitcoinsell for verifying customers and for the prevention of money laundering, fraud or terrorist financing.
7. Communication of Policies to Staff and Compliance Monitoring
This policy is available for review by all staff. Each staff member must read it and become familiar with its contents. Updates to the policy will be communicated to staff as they become available. Staff compliance with this policy will be monitored on a regular basis to ensure that BC Bitcoin remains compliant with UK AML law and regulation.
8. Politically Exposed Persons
Politically Exposed Persons or PEP are defined in Regulation 35 of the 2017 Regulations. PEPs are defined as individuals entrusted with prominent public functions, such as heads of state, members of government, members of government bodies and ambassadors as well as members of their close family. PEPs are classified to carry higher risks of Money Laundering so enhanced due diligence is required at both the on boarding process and on an ongoing basis.
Where BC Bitcoinsell identifies a prospective customer as a PEP or of political exposure, the individual cannot be on boarded without the consent from the managing director. In addition, the prospective customer will be required, at the on boarding stage to provide information, with supporting evidence of their source of wealth.
9. Sanctions Compliance
The US Office of Foreign Assets of Control (OFAC) of the US Department of the Treasury publishes lists of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotic traffickers designated under programs that are not country-specific.
The European External Action Service publishes a consolidated list of EU financial sanctions and consolidated list of persons, groups and entities subject to EU financial sanctions.
BC Bitcoinsell will not engage in any business activity with any individual, group or entity found to be on either the US or EU sanctions lists.
10. Customer Due Diligence (CDD)
A). Know Your Customer Requirements (KYC)
Customer due diligence is required under Regulation 27(1) of the 2017 Regulations when BC Bitcoinsell is establishing a business relationship with a customer.
BC Bitcoinsell will not engage in business activity with those who have not complied with the policy set out hereafter or staff suspect of potential Money Laundering.
– Photographed documentation showing full name which corresponds to the name in which the customer account is being opened. Acceptable documentation included:
Driving license (if contains photograph of individual)
National ID Card (if contains photograph of individual)
All Identity documents should comply with the following standards:
The document is valid and shows the issue and expiry dates.
The photograph is clear, and all features are visible.
The page showing signature is included.
The place of issue and passport number details are included and are clearly legible.
Nationality details are included.
All documentation must be from a recognised or verifiable provider. In addition, BC Bitcoinsell reserves the right to request additional professional references for KYC purposes at its absolute discretion.
Companies and Corporate Entities;
In addition to passing the "Individuals" KYC requirements, when receiving a payment from a business or corporate account BC Bitcoinsell requires additional documentation including but not limited to each of the following:
- Certificate of incorporation and memorandum and articles of association
- Latest statutory report and accounts
- Current shareholder and director registers
B) Retention of Customer Due Diligence Documentation
In accordance with 2017 Regulation (40), BC Bitcoinsell will retain copies of all provided documentation in regards to on boarding and verifying a customer. BC Bitcoinsell will retain such copies indefinitely for a period of time from the first initial contact and exchange with the customer. Such documentation and personal data will only be used for internal compliance purposes.
Refreshed Customer Due Diligence
BC Bitcoinsell will request new KYC documentation to be provided by the customer in the following circumstances:
Every 3 years following the initial verification of the customer
A New KYC policy is implemented, BC Bitcoinsell may ask customer reverify through new policy procedures.
Documentation previously supplied has since expired.
C) Ongoing Customer Due Diligence
Regulation 27(8) of the 2017 Regulation states that where appropriate BC Bitcoinsell must conduct ongoing Customer Due Diligence on existing customers. BC Bitcoinsell operates a risk-based approach and uses all available qualitative or quantitative data available when reviewing customer activity and will be required where:
The known circumstances of an existing customer which are relevant to an assessment of the risk of Money Laundering or Terrorist Financing have changed.
A customer requesting transactions that are not consistent with BC Bitcoinsells knowledge or experience of that customer.
The purpose or intended nature of BC Bitcoinsells relationship with the client has changed for any reason.
A client engages in unusual patterns of trading inconsistent with historic trading patterns.
Anything which raises suspicions in relation to a customer should be reported to the managing director immediately.
Potential issues to be aware of include but are not limited to:
Where the identity of the holding bank account from which funds are sent from to BC Bitcoin does not match the name of the customer which BC Bitcoinsell has on file. Where such funds are received, no trade will take place and BC Bitcoinsell will immediately request information from the customer regarding the transfer and any information referred to the managing director.
Where money is suspected to be involved in Money Laundering or Terrorist Financing, money should not be immediately returned to the customer as it may alert the customer that Anti-Money Laundering is suspected thus exposing BC Bitcoin and its staff to criminal liability under the “tipping off” offence under POCA.
Where BC Bitcoinsell is being asked to accept Cash to trade with. BC Bitcoinsell operates under a strict no cash policy.
D) Source of Funds Requests
Trades exceeding the AML threshold will require additional documentation as to the source of funds before transactions can be made.
Any trade from a PEP customer.
Any trade from a Non-PEP customer with a fiat value in excess of £20,000.
Customers are required to provide confirmation of source of funds and should provide the following:
An explanation of where the funds for the trade in question have originated from (savings, salary, inheritance, sale of assets)
Documentary evidence to back up the customer’s specific claim such as; Copy of bank statements, investment account records, solicitor or accountants letter confirming source of funds.
The managing director should be consulted in each source of funds request, following receipt of relevant documentation, his/her consent must be obtained before any trade may take place.