What is Money Laundering?
Money laundering is the illegal process of making large amounts of money generated by criminal activity, such as drug trafficking, corruption, or terrorist funding, appear to have come from a legitimate source.
The money obtained from illegal activities is colloquially called 'dirty', so the money laundering process 'cleans' it, i.e., makes it legitimate.
How do we prevent Money Laundering?
Anti-money laundering (AML) refers to the laws, regulations, and procedures intended to prevent criminals from disguising illegally obtained funds as legitimate income.
International organizations and governments have put measures into place in order to prevent and stop money laundering. The measures put in place are applicable to all organizations in certain sectors, such as the financial sector, and, they have the obligations to ensure that they follow and apply anti-money laundering laws in their business operations as well as perform KYC standards.
The laws are applicable to both fiat and virtual transactions, such as crypto assets.
What is KYC “Know Your Client”?
KYC is the process of identification and verification of the identity of a client in which a series of controls are applied to avoid having commercial relations with people related to terrorism, corruption or money laundering, among others. The process aims to verify that the client is actually who they say they are, and also that the funds they transact with on the platform are from legitimate sources and consistent with the client's financial background.
What is YouHodler’s role?
As a regulated entity, Youhodler has the obligation to comply with anti-money laundering laws and regulations when onboarding clients and during business relationships. The identification and verification are based on a risk-based approach as recommended by international standards.
What to expect?
1. When signing up on the platform as a new client, the following will be required from you:
Sign a beneficial ownership form, which confirms that the funds you are using on the platform belong to you and not to third parties;
Upload a proof of address, which aims to ensure that you are not from a sanctioned country;
Upload copies of identity document, which aims to verify your identity.
The above is applicable to all clients on the platform, and should any of the above documents be missing, they shall be requested during the course of the business relationship.
2. During the course of the business relationship and depending on the overall total amount of deposits the client has transacted on the platform, you might receive an additional request from the compliance team requiring the below:
Sign a KYC form, which confirms your personal information as well as additional information regarding economic background;
Provide document confirming source of funds/income, which is required to verify the legitimacy of the clients transactions and to ensure the client transactions are aligned with the clients economic profile;
Conduct a Video Identification, which aims to confirm that the identity document provided does in fact belong to that specific client and to exclude the case of identity theft or coercion.
All information required is requested by our compliance department, through the email address the client signed up on the platform with. Do always remember to check your mail, including spam, just in case there is a request for you.
What if we do not comply? What then?
Failure for YouHodler to comply with the regulations could be very damaging to the company as it could expose the company to fines, loss of license, and thus a cessation or suspension of the operational activity as well as reputational damage and so much more.
Our Company may in certain cases when a client misses some verification steps to restrict his access to some of our services until the deficiencies are resolved. It is important to mention that even if the client wants to close the account, we are still obliged to fulfill this legal obligation first; since it is designed to stop criminals, the legislator presupposed that ordinary clients will comply with the request.
It should be noted that in a case of non-compliance, clients may be subject to regulatory reporting.
Lastly
All the above is indicated in our AML policy, Service Level Agreement, and Terms of Conditions, should you wish to read further on it. And yes, all information collected is processed and stored in accordance with GDPR requirements and more information can be found on our data privacy policy on the website as well.