Anti-Money Laundering and Know Your Customer Policy

Introduction

Praxon, operated by Future Horizons EOOD, a company registered at Sofia 1797, Studentski District, 91B Metodi Andonov str., entr. A, ap. 14, Bulgaria, email: support@praxon.io.  (hereinafter referred to as “Praxon”), is committed to ensuring the highest level of security and compliance with applicable laws and regulations, including those governing Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT). This Anti-Money Laundering and Know Your Customer Policy (the “AML/KYC Policy”) is designed to prevent and mitigate potential risks associated with illegal activities.

Regulatory Compliance

Praxon, in compliance with the legal requirements of the Government of Bulgaria, and international regulations, has implemented and actively enforces the following policies:

Know Your Customer (KYC) Policy: Praxon has established procedures for identifying and verifying customers to ensure that the identity of each customer is properly verified and documented.

Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT): Praxon adheres to AML and CFT procedures, as financial institutions require, to prevent money laundering, terrorist financing, and other illegal activities.

Purpose

The primary purpose of this AML/KYC Policy is to:

Prevent Illegal Activity: Praxon is committed to preventing and mitigating the risks associated with money laundering, terrorist financing, drug, and human trafficking, the proliferation of weapons of mass destruction, corruption, bribery, and other unlawful behaviour.

Identification of Suspicious Activity: Praxon is dedicated to identifying and reporting any form of suspicious activity conducted by its users, including transactions aimed at concealing the illicit origin of funds or supporting illegal activities.

Confidentiality

The specific provisions and procedures outlined in our AML/KYC Policy are confidential and intended for internal use only. This confidentiality is maintained to prevent dishonest or fraudulent users from avoiding detection or circumventing the established compliance measures.

General Rules and Stipulations

Praxon’s AML/KYC Policy encompasses a set of general rules and stipulations, a few of which are outlined below:

  • Customer Identification: Praxon employs strict customer identification procedures to verify and document the identity of all customers.
  • Transaction Monitoring: Praxon actively monitors transactions for suspicious activity and reserves the right to investigate, suspend, or report any suspicious transactions to the relevant authorities.

Business User’s Identification (Companies)

Company Verification

For legal entities, specifically companies, our identification procedures are more rigorous and are customised to accommodate variations in company structures and the legal frameworks of different countries. The primary objectives of this process are to determine the company’s ownership, authorised representatives, location, and business activities.

Due to the diverse regulatory standards and governmental documentation requirements for legal entities worldwide, the verification of such users is conducted manually. This process may be more time-consuming, but is essential for maintaining the highest level of compliance and security.

Transaction Monitoring

Praxon employs proprietary software to monitor and continually monitor transactions on our exchange. Our Anti-Money Laundering (AML) specialists analyse these transactions to identify suspicious or unusual behaviour. They assess whether these transactions pose significant AML/CTF risks and, if necessary, will cease the transaction and seek clarification from the user.

Restricted Industries

Praxon strictly adheres to policies prohibiting services to specific industries due to their inherent high-risk nature. These industries include but are not limited to:

  • Shell banks
  • Bearer share companies
  • Weapons
  • Drugs (legal or illegal)
  • Precious goods, including metals, stones, and other precious materials, including raw materials and natural resources
  • Alcohol, alcoholic beverages, spirits
  • Tobacco, e-cigarettes, and similar products
  • Pharmaceutical goods and services
  • Other high-risk industries

User’s Identification

This identification is a part of Business User Identification procedures. 

Identification Process

Praxon places utmost importance on verifying the identity of individuals engaging in transactions on our exchange. We employ rigorous identity verification procedures to ensure the highest level of security and regulatory compliance. These procedures are designed to confirm the identity of all users beyond a reasonable doubt. The primary methods we utilise for user identification include:

  • ID Scans: Users must provide scanned copies of their government-issued identification documents (such as passports or driver’s licences). The authenticity of these documents is meticulously verified through specialised software provided by professional external providers.
  • Automated Identity Check: Praxon conducts automated identity checks or verifies ID documents to prevent the misuse of documents by unauthorised individuals.
  • Photo Verification: We employ advanced software and manual review by our customer support services to ensure the user’s likeness to the photo on their provided identification document. This verification process adds an extra layer of security to our identification procedures.

Communication with Customer Support

In cases where our verification procedures raise doubts or concerns, our dedicated customer support team will reach out to the user. This communication serves the purpose of clarifying any issues and resolving potential discrepancies in the identification process.

Transaction Limitations

Praxon’s commitment to the security of its users and regulatory compliance means that we reserve the right to restrict or prohibit any transactions in situations where we cannot determine, beyond a reasonable doubt, that the provided documents are genuine and belong to the user. This limitation is a crucial aspect of our efforts to maintain the integrity and security of our exchange.

Privacy and Data Security

Praxon places the highest importance on safeguarding the privacy and security of user data. All collected information is treated with the utmost confidentiality and is used solely for identity verification and compliance with AML/KYC regulations.

By adhering to these user identification procedures, Praxon aims to provide a secure and trustworthy environment for cryptocurrency transactions while ensuring compliance with relevant legal and regulatory requirements.

In the subsequent sections, we will elaborate on the additional aspects and procedures outlined in our AML/KYC Policy.

Additional Verification

Increased Exchange Volume

As your exchange volume on Praxon increases, our AML/CTF verification responsibilities also intensify. This escalation occurs in parallel with heightened exchange activity.

Suspicious Transactions

In cases where user transactions are flagged as suspicious or exhibit unusual patterns, we may request additional documentation to validate your identity further. This additional documentation may include proof of your precise residence, educational background, occupation, and the source of funds used on the exchange.

AML/CTF Risk Assessment

If our AML specialists determine that the information provided does not satisfactorily address our concerns or that the user poses a significant AML/CTF risk, we may be obligated to terminate our cooperation with the user or report their transactions to the relevant authorities.

By implementing these stringent verification procedures and adhering to industry-specific restrictions, Praxon aims to ensure the integrity of its platform and compliance with regulatory requirements while providing a secure environment for cryptocurrency transactions.

Basic AML/CTF Rules

At Praxon, we have established and strictly adhere to a set of Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) rules and regulations to ensure the security and integrity of our platform. These fundamental rules form the cornerstone of our commitment to preventing illicit activities within our cryptocurrency exchange.

Cash Deposits and Withdrawals

Praxon strictly prohibits cash deposits and cash withdrawals in all instances. We do not entertain any exceptions to this rule. All transactions on our platform must adhere to digital payment methods, ensuring traceability and transparency.

Third-Party Account Management

Praxon does not permit third parties to manage accounts and make deposits on behalf of users. We do not support account management by individuals other than the registered user, joint or shared accounts, or any such arrangements. Users are required to perform transactions independently and only on behalf of themselves.

Documentation Requirements

We maintain a stringent documentation policy that leaves no room for exceptions. All users are expected to comply fully with our documentation requirements, which may include identity verification, proof of address, and other relevant documents. Failure to provide complete and authentic documentation may result in the suspension or termination of services.

Right to Refuse Transactions

Praxon reserves the unequivocal right to refuse to process any user transaction at any given time if there is a reasonable suspicion of an AML/CTF risk associated with the transaction. This decision is made in alignment with our commitment to AML/CTF regulations and the safeguarding of our platform’s integrity.

Reporting Suspicious Behaviour

By international law and AML/CTF guidelines, we may be obligated to report user behaviours that are deemed suspicious to relevant authorities. Please note that we are not obligated, and in some cases, may be forbidden to inform our clients if we report their behaviours as suspicious to the authorities. This measure is in line with our responsibility to assist in preventing money laundering, terrorist financing, and other illegal activities.

By adhering to these fundamental AML/CTF rules, Praxon aims to maintain a secure, compliant, and transparent environment for cryptocurrency transactions while mitigating potential risks associated with illicit activities.

Sanctioned Countries

Praxon is committed to adhering to international sanctions and legal regulations to maintain the integrity of our platform. As part of our Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) measures, we do not open accounts or process transactions for businesses that are registered or operating in countries where international sanctions prohibit transactions, their internal law regulations or other criteria outlined by our AML team.

The criteria for designating high AML/CTF risk countries may include factors such as the Corruption Perceptions Index by Transparency International, warnings issued by the Financial Action Task Force (FATF), and countries with weak anti-money laundering and terrorist financing regimes as determined by the European Commission, among others.

As of the latest update to our AML/KYC Policy, business customers from the following countries are not eligible to open accounts or conduct transactions on Praxon due to their designation as high AML/CTF risk countries:

  • Afghanistan
  • American Samoa
  • Angola
  • Bahamas
  • Botswana
  • Burundi
  • Cambodia
  • Central African Republic
  • Chad
  • Congo
  • Cuba
  • Democratic Republic of Congo
  • Equatorial Guinea
  • Eritrea
  • Ethiopia
  • Ghana
  • Guam
  • Guinea Bissau
  • Iran
  • Iraq
  • North Korea
  • Lebanon
  • Libya
  • Mali
  • Nigeria
  • Pakistan
  • Panama
  • Puerto Rico
  • Russia
  • Samoa
  • Saudi Arabia
  • Sierra Leone
  • Somalia
  • South Sudan
  • Sri Lanka
  • Sudan
  • Syria
  • Trinidad and Tobago
  • Tunisia
  • Venezuela
  • Yemen
  • Zimbabwe
  • USA (in specific states, as outlined in our policy)

Praxon remains vigilant in monitoring and updating the list of sanctioned countries as required by international regulations and our internal risk assessment procedures. Users are responsible for ensuring compliance with their respective country’s regulations and sanctions.

Tiers of KYC Verification

At Praxon, we have implemented a multi-tiered Know Your Customer (KYC) verification system to ensure compliance with Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) regulations. Our KYC tiers are designed to align with the principle that increased financial transactions and account activity require more extensive identity verification. 

These tiers result from the collective experience and expertise of our AML team, and they may be subject to adjustments based on evolving legal requirements, audits, and ongoing enhancements to our risk mitigation procedures.

Our KYC verification is categorised into the following tiers:

Tier 1 – Basic Verification:

  • Applicable to users with lower exchange volumes and transaction limits.
  • Requires the submission of basic identification and contact information, such as company registration documents, proof of business address, business ownership information, ultimate beneficial ownership, and business activity description. 
  • Users in this tier have access to basic features of the platform but may be subject to transaction limits.

Tier 2 – Enhanced Verification:

  • Aimed at users engaging in higher exchange volumes and seeking increased transaction limits.
  • Requires submitting additional documents and information such as the source of funds and transactions, financial documents, AML/CFT compliance program.
  • Users in this tier enjoy higher transaction limits and access to advanced platform functionalities.

Please be aware that each tier’s specific requirements and transition limits may change over time due to regulatory updates, periodic audits, or improvements to our verification procedures. Our commitment is to maintain a robust and dynamic KYC system that adapts to the evolving landscape of AML/CTF regulations.

We will inform you of any changes that may impact your user status or experience on our platform.

Ineligible Countries for Account Opening and Transactions

In compliance with international regulations and our internal risk assessment procedures, Praxon does not permit businesses from the following countries and regions to open accounts or conduct transactions on our exchange due to their designation as high Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) risk areas:

  • Belarus
  • Crimea
  • Luhansk (LPR)
  • Donetsk (DPR) regions of Ukraine

These regions are subject to specific sanctions and legal restrictions that prohibit financial transactions by international AML/CTF laws. Praxon is committed to ensuring a secure and compliant platform by adhering to these requirements, and we reserve the right to update this list in line with evolving regulations.

Contact Us

If you have questions about this Privacy Policy, please mail us at Sofia 1797, Studentski District, 91B Metodi Andonov str., entr. A, ap. 14, Bulgaria.

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