Entire section Custom print Link Text Only Rich Text Print
  Versions

 

Transaction with Counterparties

40. Licensees must use appropriate technology and wherever appropriate third-party services to identify the situations referred to below, and other additional mitigating or preventive actions as necessary to mitigate the money laundering and terror financing risks involved:

(a) the use of proxies, any unverifiable or high-risk IP geographical locations, disposable email addresses or mobile numbers, or frequently changing the devices used to conduct transactions; and
(b) transactions involving tainted wallet addresses such as “darknet” marketplace transactions and those involving tumblers.
(c) where an applicant’s IP address is masked a licensee must take reasonable steps to unmask the IP address or decline to provide services to that applicant.

41. Licensees must establish and maintain adequate and effective systems and processes, including suspicious transaction indicators to monitor transactions with a client or counterparty involving crypto- assets and conduct appropriate enquiry and evaluation of potentially suspicious transactions identified. In particular:

(a) identify and prohibit transactions with wallet addresses or their equivalent which are compromised or tainted; and
(b) employ technology solutions which enable the tracking of crypto-assets through multiple transactions to more accurately identify the source and destination of these crypto-assets.
For the purposes of (b), a wallet address is compromised or tainted where there is reasonable suspicion that it is used for the purpose of conducting fraud, identity theft, extorting ransom or any other criminal activity.
A licensee should take reasonable measures to avoid transactions with another crypto-asset entity, infrastructure or service provider where the counterparty is unknown or anonymous (e.g., via certain peer to peer or decentralised exchanges) at any stage of its business process.
Added: January 2024