AML/KYC Policy

This policy explains how Obmenkin prevents the service from being used for money laundering, terrorist financing and sanctions evasion. We follow FATF recommendations and regulatory requirements and review this policy when the rules change. This policy forms part of the Exchange Rules.

1. 1.Principles

   1. 1.1We apply a risk-based approach: the depth of a check depends on the risk of the transaction.
   2. 1.2Every transaction is checked automatically and in real time, using AML analytics, data from AML providers, open sources and information from third parties.
   3. 1.3We block illicit funds and protect victims of hacks, ransomware and malware.
   4. 1.4An AML officer is responsible for this policy: they implement the procedures, monitor compliance with them and keep them up to date. Send questions about this policy to @adm_obmenkin.
   5. 1.5By creating an order, you agree that your transactions may be subject to AML/KYC checks.

2. 2.What we check

   1. 2.1The source of funds of the incoming deposit: which addresses and services the coins are linked to and what share of them comes from risky sources.
   2. 2.2The receiving address: whether it is linked to fraud, sanctions or other illegal activity.
   3. 2.3Signs of suspicious activity: transactions that are atypical for normal activity, use of mixers, matches with sanctions and criminal lists.
   4. 2.4Each risk category is assessed separately, by its own percentage share. The shares of different categories are not added up.

3. 3.Risk levels and our actions

   1. 3.1Low risk: the exchange is completed automatically.
   2. 3.2Medium risk: gambling (threshold 25–30%), sanctions (4–5%), adult services (40%), OTC brokers (30–40%), high-risk exchanges (20–25%). If a category's share is above its threshold, we refund the funds. If it is below, the exchange proceeds as usual, but an additional check may follow.
   3. 3.3High risk: a share above 1% in at least one of these categories: darknet markets, illegal and criminal activity, mixers and anonymization services, malware and ransomware, stolen funds and hacks, drainer wallets, blackmail and sextortion, Ponzi schemes and HYIPs. The order is suspended (AML Hold), and we either request verification and proof of the source of funds or process a refund.
   4. 3.4Very high risk: any share (above 0%) in these categories: funds subject to law enforcement measures (Enforcement Action), fraudulent exchangers, terrorist financing, child abuse and human trafficking. The order is blocked and goes to enhanced review with mandatory verification.
   5. 3.5For high and very high risk, you have 7 business days to send documents and prove the source of funds.
   6. 3.6If you send no documents or they do not confirm the source, the order goes to an additional compliance review of up to 30 business days.
   7. 3.7Based on the outcome, we either refund the funds (section 5) or, if we see signs of illegal activity, pass the information to the competent authorities.

4. 4.Verification on request (KYC)

   1. 4.1A regular exchange does not require verification. We request it only if our scoring system flags a transaction as suspicious or the law requires it.
   2. 4.2From individuals: full name, date of birth, residential address and a valid photo ID, such as a passport or driving licence.
   3. 4.3From companies: registration documents (articles of association, a licence or another supporting document) and the business address.
   4. 4.4We may also request documents on the source of funds. The information must be accurate, complete and up to date. If it raises doubts, we will ask you to correct or supplement it.
   5. 4.5We verify that documents are genuine, screen the data against sanctions and criminal lists, and record the course and outcome of the check.
   6. 4.6You must send the documents within 7 business days of the request. We review them within a reasonable time that depends on the risk level. If an additional check is needed, the period is extended to up to 30 business days and the order remains suspended.
   7. 4.7If you have already been verified on an exchange or trading platform, we may take that into consideration where reasonable, and we will tell you if we do.
   8. 4.8If we detect signs of money laundering or terrorist financing, we may file a suspicious activity report (SAR/STR) with the competent authority.

5. 5.Suspension and refunds

   1. 5.1We hold the funds while the AML check or verification is in progress and, if a medium-risk threshold is exceeded, until the refund is processed.
   2. 5.2We refund funds to the sender's original address or to details you have confirmed, if our risk management system allows it.
   3. 5.3The refund fee is up to 5% of the amount but no more than 100 USD. If you have passed verification and no link between the funds and money laundering has been proven, we withhold only the network fee.
   4. 5.4Refunds are made within 3 business days of the decision, usually within 1 business day.
   5. 5.5We may refuse to serve you if you have not passed verification, have provided false information, or your funds are linked to illegal activity.

6. 6.Monitoring and data retention

   1. 6.1We monitor transactions continuously to tell normal activity from suspicious activity.
   2. 6.2For each order, we keep information about the sender and the recipient: addresses, transaction hashes and amounts, AML check results and, if verification took place, the documents and the record of the check.
   3. 6.3Verification data is stored encrypted on servers protected to the standard required by the GDPR.
   4. 6.4We keep this data for as long as applicable AML laws require, counting from the date the order is completed.

7. 7.Cooperation with authorities

   1. 7.1We disclose data only in response to an official, lawful request from a competent authority.
   2. 7.2We may provide the records of our checks to such an authority at its request.
   3. 7.3Without a request, we disclose information only in a suspicious activity report, where the law requires it.
   4. 7.4How to submit a request is described in the “For Competent Authorities” document on obmenkin.com.