AML POLICY

Last updated: 8/26/2024, 8:01:00 AM

This Anti-Money Laundering Policy (hereinafter referred to as “AML Policy” or “Policy”) outlines the provisions and procedures by which Hydra Swap LLC (hereinafter referred to as “HydraSwap,” “We,” “Us,” or “Service”) proactively combats unlawful activities. Our primary objective is to safeguard our service from being exploited for laundering funds originating from illegal sources. This includes, but is not limited to, activities such as drug trafficking, terrorism financing, and other forms of financial crime.

To achieve this, Hydra Swap implements a comprehensive framework that ensures strict adherence to applicable laws and regulations related to Anti-Money Laundering (AML) and Know Your Customer (KYC). Our AML Policy is designed to:

1. Introduction

• Purpose: Outline the purpose of the AML policy, emphasizing the commitment to preventing money laundering and terrorist financing.

• Scope: Define the scope of the policy, including all digital swap operations and related activities.

2. Regulatory Framework

• Compliance with Laws: Ensure adherence to relevant AML laws and regulations, such as the Bank Secrecy Act (BSA), the USA PATRIOT Act, and international standards set by the Financial Action Task Force (FATF).

• Jurisdictional Considerations: Address the specific requirements of jurisdictions where the operation is active.

3. Customer Due Diligence (CDD)

• Know Your Customer (KYC): Implement robust KYC procedures to verify the identity of customers. This includes collecting and verifying personal information, such as name, address, date of birth, and identification documents.

• Enhanced Due Diligence (EDD): Apply EDD for high-risk customers, including politically exposed persons (PEPs) and customers from high-risk jurisdictions.

4. Transaction Monitoring

• Automated Systems: Use automated systems to monitor transactions for suspicious activity. This includes setting thresholds for transaction amounts and frequency.

• Manual Review: Conduct manual reviews of flagged transactions to determine if further investigation is needed.

5. Suspicious Activity Reporting (SAR)

• Reporting Procedures: Establish procedures for reporting suspicious activities to relevant authorities. This includes documenting the process for identifying, investigating, and reporting suspicious transactions.

• Record Keeping: Maintain records of all SARs and related documentation for a specified period, typically five years.

6. Risk Assessment

• Risk-Based Approach: Implement a risk-based approach to AML, assessing the risk levels of customers, transactions, and products. Adjust AML measures based on the assessed risk.

• Periodic Reviews: Conduct periodic reviews of the risk assessment to ensure it remains up-to-date and effective.

7. Training and Awareness

• Employee Training: Provide regular training to employees on AML policies, procedures, and regulatory requirements. Ensure employees understand their roles and responsibilities in preventing money laundering.

• Awareness Programs: Develop awareness programs to keep employees informed about emerging AML threats and trends.

8. Internal Controls and Audits

• Internal Controls: Establish internal controls to ensure compliance with AML policies. This includes segregation of duties, access controls, and regular audits.

• Independent Audits: Conduct independent audits of the AML program to assess its effectiveness and identify areas for improvement.

9. Data Privacy and Security

• Data Protection: Ensure the protection of customer data in compliance with data privacy laws, such as the General Data Protection Regulation (GDPR).

• Cybersecurity Measures: Implement robust cybersecurity measures to protect against data breaches and cyber threats.

10. Continuous Improvement

• Policy Updates: Regularly update the AML policy to reflect changes in regulations, industry best practices, and emerging threats.

• Feedback Mechanism: Establish a feedback mechanism to gather input from employees and stakeholders on the effectiveness of the AML program.

11. Acceptance Warranty

By using our Services, each user agrees to comply with the AML Procedures that may be implemented. As part of these procedures, Hydra Swap and our partnered mediating exchange service providers, if any, may request information and documents to identify the client, verify the source of funds, and ensure compliance with our Terms of Service (TOS), our partner’s TOS if applicable, and any relevant laws.

We reserve the right to conduct AML Procedures on an ongoing basis, especially in cases such as changes in identification documents or when user activity is deemed suspicious or high-risk. Suspicious activity may be identified through our AML System or at our sole discretion. We may request up-to-date documents from any user, even if they have previously passed an AML Procedure.

During the enforcement of AML Procedures, users may be required to provide the following:

• A high-quality photo of their ID and/or passport, valid in their country.

• A high-quality photo of the user to verify it matches the provided identification document.

• Liveness checks, which involve issuing random instructions to ensure the KYC process is conducted in real time and according to our requirements.

• Source of Funds documentation and any other necessary documents to confirm that the funds originate from legal sources and that the user complies with our TOS and applicable laws.

12. Reporting to Authorities

• Regulatory Reporting: Comply with all regulatory reporting requirements, including periodic reports to financial authorities and regulators.

• Cooperation with Law Enforcement: Cooperate with law enforcement agencies in investigations related to money laundering and terrorist financing.

This comprehensive AML policy framework aims to balance the decentralized nature of Web3 with the need for regulatory compliance and effective risk management. If you need more specific details or assistance with any section, feel free to ask!