Last updated: January 23rd, 2021

Anti-Money Laundering & Sanctions Policy

Without the proper anti-money laundering (AML) compliance procedures, companies are in danger of inadvertently facilitating drug trafficking, terrorism financing and other crimes. While not subject to MSB/Financial Instruction requirements, Solidity Finance LLC is committed to combating money laundering and all other crime to the maximum extent possible. We comply with all AML regulations as required by applicable U.S. law; and this internal AML policy.

This Policy also assures our compliance with the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) laws and regulations regarding economic and trade sanctions in jurisdictions where Principal does business. Economic and trade sanctions are based on foreign policy and national security goals.

Money Laundering - Defined

The firm has two definitions for money laundering:
  • It is the introduction of illegally obtained currency into the banking system.
  • It is using the banking system to illegally hide currency that was lawfully obtained.

  • When companies knowingly accept the cash deposits of criminals, they legitimize (or launder) the proceeds. Accordingly, the company must be diligent in detecting, preventing, and reporting suspicious activity when applicable.

    Suspicious Activity - Defined

    It is impossible for the directorate to define all activity that would qualify as suspicious. However, the following guidelines quantify the types of suspicious activities that will monitor for:
  • Payments for services with a value at the time of payment of over $10,000 USD.
  • Payments with a value at the time of payment of over $5,000 USD that are clearly funded from anonymous sources (Monero and Tornado.cash are key examples).
  • Multiple payments totaling over $10,000 USD in value (at the time received) from a customer within one week.
  • Enhanced Due Diligence for Customers with Suspicious Activity

    If any of the above suspicious activity definitions are met, or the company determines it would like to collect this information for any other reason, the company shall request the following information from the customer:
    If a company:
  • Articles of Incorporation
  • Assumed Name Filing, if account is to be opened in a name other than that shown on the Articles of Incorporation
  • Board resolution authorizing the purchase (if above $5,000 USD in value).
  • Recent bank statement or utility bill in the company’s name and address.

  • If an individual:
  • One of the following forms of identification with a picture:
  • U. S. drivers license.
  • Passport.
  • Alien registration card.
  • If none of these forms of identification is available, the account can still be opened if the customer can supply two (2) of the following forms of ID:
  • Employer identification card.
  • Major credit card.
  • Two (2) current utility bills/bank statements with the customer’s current address.

  • Customers that place an order with a value of $10,000 or more will be asked to substantiate the legitimacy of the funds. If the customer can’t provide sufficient proof, the order will not be accepted.
    Management will actively search for suspicious transactions. When one is discovered, a company officer will review it and request the above information from the client be provided within 10 days. If the information is not provided, the order will be denied and the incident documented. If the information is provided, it will be maintained for a minimum of five (5) years, and will be securely stored.

    Country Sanctions

    The U.S. government administers and enforces economic and trade sanctions against targeted foreign countries and programs (“Embargo List”). Conducting business of any kind with or within a country or program on the Embargo List is greatly restricted and requires either authorization by the U.S. government or a license from the Office of Foreign Asset Control (“OFAC”). As of January 22, 2021, the following are listed by OFAC as countries and other sanction programs on the Embargo List: Balkans, Belarus, Burma, Cote D'Ivoire (Ivory Coast), Cuba, Democratic Republic of Congo, Iran, Iraq, Liberia, North Korea, Sudan, Syria, and Zimbabwe.

    The company does not intend to obtain any license from OFAC to operate in or with any of these countries. As such, we will not conduct business with any person or entity domiciled in the above countries.

    Individual and Organization Sanctions

    The U.S. government also prohibits transactions with persons and entities designated as Specially Designated Nationals (“SDN”) that are included on an SDN list maintained by OFAC. The company is prohibited from employing, receiving funds from, engaging in any transaction with, or facilitating, aiding or otherwise supporting any activities of an individual, entity or organization on the SDN List. The SDN List is updated regularly and is found on OFAC’s website at: http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx

    Charitable Organization Sanctions

    The President of the United States has issued Executive Order 13224 and Executive Order 12947 (“Executive Orders”) creating a list of charitable organizations that aid foreign terrorist organizations. The University is prohibited from accepting payments from or making donations to any organization on this list. The list of these organizations can be found on OFAC’s website: http://www.treasury.gov/resource-center/terrorist-illicit-finance/Pages/protecting-index.aspx

    Exposure to Sanctions

    Although the company primarily engages in activities within the United States, the following are examples of company transactions which must be evaluated for the impact of sanctions imposed by OFAC:
  • Accepting payments for services from an individual or organization.
  • Hiring an employee, or entering into an agreement with a contractor.
  • Collaborating on research projects with third-party persons or entities.

  • The company will also not conduct business with any company which has been subject to any material investigation, subpoena, and/or penalty by the US CFTC, OFAC, FinCEN, the SEC, the IRS or any other US federal or state regulatory body. If any of these transactions appear to be impacted by sanctions imposed by OFAC, Executive Order, or a pertinent investigation/penalty; those transactions will be immediate rejected.

    Exposure to Sanctions

    In order to ensure compliance, the company will perform the following actions:
    • Before entering into any transaction, determine whether a person or entity involved in the contemplated transaction is from a country or involves a program on the Embargo List.
    • If the country or program is on the Embargo List, consult OFAC’s website to determine if the sanctions prohibit the proposed activity, and whether an application for a license must be submitted; and
    • Before entering into any transaction, check the names of the persons and entities involved against the SDN list and Executive Orders (either manually using the list published or list search engine on OFAC’s website); and
    • If there is a valid or potentially valid match between the name of an individual or organization and a name on the SDN List, Embargo List or Executive Order, the company will immediately stop the transaction and report the match to OFAC as required by applicable law.
    • After entering into any transaction, periodically screen person(s) and entities to determine if they or their country have been placed on the Embargo List, SDN List and Executive Orders.
    • All customers must additionally certify that their country is not on the Embargo List and that they and their company is not on the SDN List or any applicable Executive Orders. In addition, customers will certify that they and their company is not subject to any material investigation, subpoena, and/or penalty by the US CFTC, OFAC, FinCEN, the SEC, the IRS or any other US federal or state regulatory body.

    • If any of these transactions appear to be impacted by the above; those transactions will be immediately rejected.

    Adoption

    This policy was formally adopted January 23rd, 2021.

    Contact Us

    In there are any questions regarding this policy, please contact us at legal@solidity.finance