AML & KYC Policy

1. Regulatory Framework

Our AML/KYC program is designed to comply with:

• Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) — Canada's primary AML/CTF legislation
• FINTRAC guidelines — As a registered MSB, we adhere to all reporting obligations and compliance requirements
• Criminal Code of Canada — Provisions related to proceeds of crime and terrorist financing
• United Nations Suppression of Terrorism Regulations — Sanctions and designated persons screening
• Special Economic Measures Act (SEMA) — Canadian sanctions compliance
• Financial Action Task Force (FATF) Recommendations — International AML/CTF standards

2. Know Your Customer (KYC) Requirements

2.1 Identity Verification

Before you can send or receive funds through coynitt, you must complete identity verification. We require:

• Government-Issued Photo ID: A valid, unexpired passport, driver's licence, or national identity card
• Selfie Verification: A live selfie matched against your photo ID using biometric facial recognition technology
• Proof of Address: A recent utility bill, bank statement, or government correspondence dated within the last 90 days
• Personal Information: Full legal name, date of birth, residential address, nationality, and occupation

2.2 Verification Levels

We use a tiered verification approach based on transaction volume and risk:

• Basic Verification: Government ID + selfie — enables transactions up to $1,000 CAD per day
• Enhanced Verification: Basic + proof of address + source of funds declaration — enables transactions up to $10,000 CAD per day
• Premium Verification: Enhanced + additional due diligence for high-volume users — custom limits based on risk assessment

2.3 Third-Party Verification

We use Sumsub, a leading identity verification provider, to conduct KYC checks. Sumsub uses AI-powered document verification, biometric matching, and liveness detection to verify your identity in real-time. Your verification data is processed securely in accordance with our Privacy Policy.

2.4 Ongoing Monitoring

KYC is not a one-time event. We continuously monitor accounts through:

• Periodic re-verification of user identity (at least annually for high-risk users)
• Transaction pattern analysis for unusual or suspicious activity
• Automated risk scoring on every transaction
• Sanctions list screening against updated Canadian and international lists

3. Anti-Money Laundering Program

3.1 Risk-Based Approach

We employ a risk-based approach to AML compliance, meaning we allocate our compliance resources proportionally to the level of risk associated with each customer and transaction. Risk factors include:

• Customer Risk: Country of origin, politically exposed person (PEP) status, occupation, source of wealth
• Geographic Risk: Jurisdictions involved in the transaction, high-risk country lists
• Transaction Risk: Amount, frequency, pattern, destination, blockchain network used
• Product Risk: Type of service used (remittance, community savings, business API)

3.2 Transaction Monitoring

Every transaction processed through coynitt is subject to automated monitoring that checks for:

• Transactions exceeding $10,000 CAD (or equivalent in foreign currency)
• Multiple transactions that collectively exceed $10,000 CAD within a 24-hour period
• Unusual transaction patterns inconsistent with a customer's profile
• Transactions involving high-risk jurisdictions
• Rapid movement of funds (layering indicators)
• Blockchain-specific indicators such as interaction with flagged wallet addresses

3.3 Enhanced Due Diligence (EDD)

We conduct enhanced due diligence when:

• A customer is identified as a Politically Exposed Person (PEP) or a family member or close associate of a PEP
• Transactions involve high-risk countries as identified by FATF or Canadian sanctions lists
• Transaction patterns trigger elevated risk scores
• A customer's source of funds cannot be readily verified
• Third-party information raises concerns about the customer

4. Reporting Obligations

As a FINTRAC-registered MSB, we are required to file the following reports:

4.1 Suspicious Transaction Reports (STRs)

We file an STR with FINTRAC when we have reasonable grounds to suspect that a transaction is related to money laundering or terrorist financing. We are prohibited by law from disclosing to any person (including the customer) that an STR has been filed.

4.2 Large Cash Transaction Reports (LCTRs)

We report all cash transactions of $10,000 CAD or more (or equivalent in foreign currency) to FINTRAC within 15 calendar days.

4.3 Electronic Funds Transfer Reports (EFTRs)

We report all electronic funds transfers of $10,000 CAD or more (incoming and outgoing) to FINTRAC within 5 business days.

4.4 Terrorist Property Reports

If we determine that we are in possession or control of property owned or controlled by a listed terrorist entity, we immediately report to FINTRAC and the RCMP.

4.5 Sanctions Compliance

We screen all customers and transactions against Canadian sanctions lists (under SEMA and the United Nations Act), OFAC SDN lists, and EU sanctions lists. Any match results in immediate freezing of the transaction and reporting to the relevant authorities.

5. Blockchain-Specific AML Measures

Given that coynitt operates on blockchain technology, we implement additional measures specific to digital assets:

• Wallet Screening: We screen wallet addresses against known illicit address databases before processing transactions
• On-Chain Analytics: We use blockchain analytics to trace the source and destination of funds
• Travel Rule Compliance: For transactions above the FATF-recommended threshold, we collect and transmit originator and beneficiary information
• Smart Contract Monitoring: Our Rounds (community savings) smart contracts include built-in compliance controls
• Multi-Chain Oversight: We monitor transactions across all supported blockchains (Base, Polygon, Solana, Stellar)

6. Record Keeping

In accordance with FINTRAC requirements, we maintain records for a minimum of 5 years following the date of the last business transaction, including:

• Customer identification records and KYC documentation
• Transaction records (amounts, dates, parties involved, blockchain transaction hashes)
• Copies of all reports filed with FINTRAC
• Risk assessment documentation
• Compliance officer correspondence and internal reports
• Training records for all employees and agents

7. Compliance Officer

coynitt has appointed a Chief Compliance Officer responsible for overseeing the implementation and effectiveness of our AML/KYC program. The Compliance Officer:

• Has full authority to implement and enforce compliance policies
• Reports directly to the Board of Directors
• Conducts periodic reviews of the compliance program's effectiveness
• Ensures all employees receive appropriate AML/CTF training
• Acts as the primary point of contact with FINTRAC and law enforcement

8. Employee Training

All coynitt employees and contractors receive AML/CTF training that covers:

• Canadian AML/CTF laws and regulations
• Our internal policies and procedures
• How to identify and report suspicious activity
• Blockchain-specific money laundering typologies
• Sanctions compliance requirements
• Consequences of non-compliance

Training is provided upon hiring and refreshed annually, with additional training when regulations change.

9. Customer Obligations

By using coynitt's services, you agree to:

• Provide accurate and truthful identity information
• Promptly update your information if it changes
• Not use coynitt for any illegal purpose, including money laundering or terrorist financing
• Not attempt to circumvent our KYC or AML controls
• Cooperate with any additional verification requests
• Not use coynitt on behalf of any third party without disclosure

10. Account Restrictions and Termination

We reserve the right to:

• Refuse to open an account or process a transaction if KYC requirements are not met
• Temporarily suspend an account pending completion of enhanced due diligence
• Permanently close an account if we suspect involvement in money laundering, terrorist financing, or other financial crime
• Report suspicious activity to FINTRAC and law enforcement without prior notice to the customer
• Freeze funds as required by law or court order

11. Contact Information

For questions about our AML/KYC policies or to report suspicious activity: