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KYC and AML Compliance for Crypto Exchanges. Guide 2020

Foreword

If you think we decided to write this article based on this directive alone, you are mistaken. February 2020 began with good news for the team. EXMO has been rated top-tier in the latest CryptoCompare Exchange Benchmark.

We are going to tell you about our experience, the number of requirements, and how many hours our AML-officer sleeps.

Glossary:

AML - ANTI MONEY LAUNDERING CTF - COUNTER-TERRORISM FINANCING KYC - KNOW YOUR CUSTOMER FCA - FINANCIAL CONDUCT AUTHORITY FATF - FINANCIAL ACTION TASK FORCE JMLSG - JOINT MONEY LAUNDERING STEERING GROUP HM - HER MAJESTY PEP - POLITICALLY EXPOSED PERSONS GDPR - GENERAL DATA PROTECTION REGULATION MLRO - MONEY LAUNDERING REPORTING OFFICER Legal name and jurisdiction of operation

We were not looking for a simple solution to enable us to meet the 5th AML Directive and from the very beginning, we approached the issue seriously. EXMO operates within the legal jurisdiction of the UK. It goes without saying that the UK is a strict but transparent legal field with well-developed regulatory tools. Also, the UK was among the first to implement cryptocurrency legislation.

Therefore, if you suddenly decide to open your exchange, be sure to pay attention to the legislative framework of the country where the exchange is launched.

Registration/Licensing where appropriate and applicable

Currently, there are only a few countries that issue licenses for cryptocurrency activities. At the beginning of the year, EXMO received Estonian licenses.

Concerning AML compliance, we are currently in the process of issuing the AML registration from FCA — The Financial Conduct Authority.

Implementing strict KYC and AML procedures

During January 2020, we’ve launched the mandatory verification on the platform. It was the necessary part of KYC and AML compliance, a crucial component for security. Now it’s easier for us to know the client, understand if we can trust them, and prevent possi...

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