Building Trust in a Trustless Ecosystem: unFederalReserve’s Anti-Money Laundering Policy

As you may or may not know, one of our core values at unFederalReserve is Safety. This value includes compliance. Building the future of financial services on the blockchain is not easy, and with that goal comes meeting the many challenges and U.S. financial regulations in the DeFi space.

In today’s article, we’d like to give you a deep dive 🤿 into our AML (Anti-Money Laundering) policies that keep our safe harbor free of scary sharks and pirates by combining world-class customer due-diligence, Know Your Customer (KYC), transaction monitoring (Know Your Transactions or KYT), suspicious transaction alerts (commonly referred to as Suspicious Activity Reports [SARS reporting]), and more. 👇

*for any questions regarding our policies, please visit our forum*

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Residual Token, Inc.

Bank Secrecy Act (“BSA”)

Anti-Money Laundering (“AML”) Policy:

Compliance and Supervisory Procedures adopted by unFederalReserve BSA/AML Compliance Committee.

Contents

I. COMPANY POLICY

II. BSA/AML COMPLIANCE SPECIALIST DESIGNATION AND DUTIES

III. GIVING AML INFORMATION TO FEDERAL LAW ENFORCEMENT

1. FinCEN Requests Under USA PATRIOT Act Section 314(a)

2. National Security Letters

3. Grand Jury Subpoenas

IV. KNOW YOUR CUSTOMER (“KYC”)

1. Use of a Vendor for KYC process

2. Required Customer Information

3. Customers Who Refuse to Provide Information

4. Verifying Information

5. Lack of Verification

6. Recordkeeping

7. Comparison with Government-Provided Lists of Terrorists

V. CUSTOMER DUE DILIGENCE RULE

1. Identification and Verification of Beneficial Owners

2. Understanding the Nature and Purpose of Customer Relationships

3. Sanction Screening and Checking OFAC SDN List

VI. TRANSACTION MONITORING

1. FinCEN’S issuance of Special Measures

2. Emergency Notification to Law Enforcement by Telephone

3. Transaction Monitoring for Suspicious Activity

VII. SUSPICIOUS TRANSACTIONS AND BSA REPORTING

1. Filing a SAR

2. Currency Transaction Reports

3. Safe Harbor Laws for Suspicious Activity Reporting

VIII. RECORDKEEPING AND RETENTION

1. Responsibility for Required AML Records and SAR Filing

2. SAR Maintenance and Confidentiality

IX. TRAINING PROGRAMS

X. TEST OF AML PROGRAM

XI. CONFIDENTIAL REPORTING OF AML NON-COMPLIANCE

XII. SENIOR MANAGEMENT APPROVAL

I. COMPANY POLICY

It is the policy of Residual Token, Inc. (d/b/a unFederalReserve) to prohibit and actively prevent money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities by complying with all applicable requirements under the Bank Secrecy Act (BSA) and its implementing regulations.

Money laundering is generally defined as engaging in acts designed to conceal or disguise the true origins of criminally derived proceeds so that the proceeds appear to have derived from legitimate origins or constitute legitimate assets. Generally, money laundering occurs in three stages. Cash first enters the financial system at the “placement” stage, where the cash generated from criminal activities is converted into monetary instruments, such as money orders or traveler’s checks, or deposited into accounts at financial institutions. At the “layering” stage, the funds are transferred or moved into other accounts or other financial institutions to further separate the money from its criminal origin. At the “integration” stage, the funds are reintroduced into the economy and used to purchase legitimate assets or to fund other criminal activities or legitimate businesses.

Terrorist financing may not involve the proceeds of criminal conduct, but rather an attempt to conceal either the origin of the funds or their intended use, which could be for criminal purposes. Legitimate sources of funds are a key difference between terrorist financiers and traditional criminal organizations. In addition to charitable donations, legitimate sources include foreign government sponsors, business ownership and personal employment. Although the motivation differs between traditional money launderers and terrorist financiers, the actual methods used to fund terrorist operations can be the same as or similar to methods used by other criminals to launder funds. Funding for terrorist attacks does not always require large sums of money and the associated transactions may not be complex.

unFederalReserve’s AML policies, procedures and internal controls are designed to ensure compliance with all applicable BSA regulations and will be reviewed and updated on a regular basis to ensure appropriate policies, procedures and internal controls are in place to account for both changes in regulations and changes in our business.

To ensure BSA AML compliance, financial institutions, and vendors used by financial institutions, such as unFederalReserve, will maintain a risk-based BSA AML program that at a minimum:

  1. Includes a system of internal controls to assure ongoing compliance
  2. Designates an individual to assure day-to-day compliance
  3. Requires training for unFederalReserve stakeholders with Compliance exposure
  4. Requires annual internal and/or external Independent Testing for compliance
  5. Implements a Know Your Customer (“KYC”) Program inclusive of appropriate risk-based procedures for conducting ongoing customer due diligence, and
  6. Implements a Customer Identification Program (“CIP”).

UnFederalReserve maintains an ongoing anti-money laundering compliance program that identifies and mitigates the inherited risks and ensure that all required reports are completed in a timely fashion in order to deter illicit funds from passing through the unFederalReserve’s decentralized platforms.

All of unFederalReserve’s BSA AML compliance policies and procedures are approved by the Chief Executive Officer, or a designated unFederalReserve committee appointed by the CEO.

II: BSA/AML COMPLIANCE SPECIALIST DESIGNATION AND DUTIES

UnFederalReserve will designate a qualified individual as the (“BSA/AML Compliance Specialist”), with full responsibility for the unFederalReserve’s BSA AML program. The BSA/AML Compliance Specialist shall have a working knowledge of the BSA and its implementing regulations and will have qualified experience, knowledge and training, including prior experience in fraud related matters. The duties of the BSA/AML Compliance Specialist will include monitoring unFederalReserve’s compliance with AML obligations, overseeing communication and training for employees and ensuring proper controls are in place. The BSA/AML Compliance Specialist will also ensure that unFederalReserve maintains the required AML records and will ensure that Suspicious Activity Reports (“SARs”) are filed with the Financial Crimes Enforcement Network (“FinCEN”) when appropriate. UnFederalReserve’ BSA/AM Compliance Specialist is vested with full responsibility and authority to enforce unFederalReserve’s BSA/AML program.

III. GIVING AML INFORMATION TO FEDERAL LAW ENFORCEMENT

  1. FinCEN Requests Under USA PATRIOT Act Section 314(a)

UnFederalReserve will respond to a Financial Crimes Enforcement Network (“FinCEN”) request concerning accounts and transactions (a 314(a) Request) by immediately searching our records to determine whether unFederalReserve maintains or has maintained any account for, or have engaged in any transaction with, each individual, entity or organization named in the 314(a) Request as outlined in the Frequently Asked Questions (FAQ) located on FinCEN’s secure website. UnFederalReserve understands that it will have 14 days (unless otherwise specified by FinCEN) from the transmission date of the request to respond to a 314(a) Request.

UnFederalReserve’s BSA/AML Compliance Specialist is the point of contact (“POC”) for 314(a) Requests and will promptly update the POC information following any change in such information. Unless otherwise stated in the 314(a) Request or specified by FinCEN, unFederalReserve is required to search those documents outlined in FinCEN’s FAQ. If a match is found, the BSA/AML Compliance Specialist will report it to FinCEN via FinCEN’s Web-based 314(a) Secure Information Sharing System within 14 days or within the time requested by FinCEN in the request. If the search parameters differ from those mentioned above (for example, if FinCEN limits the search to a geographic location), the BSA/AML Compliance Specialist will structure the search accordingly.

If the BSA/AML Compliance Specialist searches our records and does not find a matching account or transaction, then the BSA/AML Compliance Specialist will not reply to the 314(a) Request. The BSA/AML Compliance Specialist will maintain documentation that evidences unFederalReserve has performed the required search.

UnFederalReserve will not disclose the fact that FinCEN has requested or obtained information, except to the extent necessary to comply with the information request. The BSA/AML Compliance Specialist will review, maintain and implement procedures to protect the security and confidentiality of requests from FinCEN similar to those procedures established to satisfy the requirements of Section 501 of the Gramm-Leach-Bliley Act with regard to the protection of customers’ nonpublic information.

UnFederalReserve will direct any questions it has about the 314(a) Request to the requesting federal law enforcement agency as designated in the request.

Unless otherwise stated in the 314(a) Request, unFederalReserve will not be required to treat the information request as continuing in nature, and unFederalReserve will not be required to treat the periodic 314(a) Requests as a government provided list of suspected terrorists for purposes of the customer identification and verification requirements.

2. National Security Letters

National Security Letters (“NSLs”) are written investigative demands that may be issued by the local Federal Bureau of Investigation (“FBI”) and other federal government authorities conducting counterintelligence and counterterrorism investigations to obtain, among other things, financial records of broker-dealers. UnFederalReserve understands that the receipt of a National Security Letter (NSL) is highly confidential. UnFederalReserve understands that none of our officers, employees or agents may directly or indirectly disclose to any person that the FBI or other federal government authority has sought or obtained access to any of our records. UnFederalReserve will maintain confidentiality of any NSL request received. If unFederalReserve files a SAR after receiving an NSL, the SAR will not contain any reference to the receipt or existence of the NSL. The SAR will only contain detailed information about the facts and circumstances of the detected suspicious activity.

3. Grand Jury Subpoenas

UnFederalReserve understands that the receipt of a grand jury subpoena concerning a customer does not in itself require that unFederalReserve files a Suspicious Activity Report (“SAR”). When unFederalReserve receives a grand jury subpoena, it will conduct a risk assessment of the customer subject to the subpoena as well as review the customer’s account activity. If unFederalReserve uncovers suspicious activity during our risk assessment and review, unFederalReserve will elevate that customer’s risk assessment and file a SAR in accordance with the SAR filing requirements. UnFederalReserve understands that none of our officers, employees or agents may directly or indirectly disclose to the person who is the subject of the subpoena its existence, its contents or the information unFederalReserve used to respond to it. To maintain the confidentiality of any grand jury subpoena unFederalReserve receives, it will process and maintain the subpoena by storing it in a secure location on unFederalReserve’s shared drive. If unFederalReserve files a SAR after receiving a grand jury subpoena, the SAR will not contain any reference to the receipt or existence of the subpoena. The SAR will only contain detailed information about the facts and circumstances of the detected suspicious activity.

IV. KNOW YOUR CUSTOMER (“KYC”)

UnFederalReserve will maintain comprehensive procedures regarding unFederalReserve’s onboarding process and due diligence reviews. UnFederalReserve, or a designee, will collect customer identification information prior to onboarding and utilize risk-based measures to verify the identity of each customer. UnFederalReserve, or a designee, will record customer identification information and the verification methods and results; provide the required adequate CIP notice to customers that unFederalReserve will seek identification information to verify their identities; and compare customer identification information with government-provided lists of suspected terrorists, once such lists have been issued by the government.

In the instances where unFederalReserve does not open or maintain customer accounts where unFederalReserve does not establish formal relationships with “customers”, unFederalReserve may not perform CIP. If in the future unFederalReserve elects to open customer accounts or to establish formal relationships with customers for the purpose of effecting transactions, unFederalReserve will first establish, document and ensure the implementation of appropriate CIP procedures.

  1. Use of a Vendor for KYC process

As a Fintech SaaS company utilizing the blockchain technology, unFederalReserce engaged a third-party vendor, Securitize (https://securitize.io) to perform the KYC/CIP and CDD reviews.

2. Required Customer Information

Prior to opening a corporate account, unFederalReserve or a selected vendor (i.e. Securitize), will collect on a best efforts’ basis the following information prior to establishing a relationship:

(1) the name

(2) date of birth (for an individual)

(3) an address, and

(4) an identification number, which will be a taxpayer identification number (for U.S. persons), or one or more of the following: a taxpayer identification number, passport number and country of issuance, alien identification card number, or number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or other similar safeguard (for non-U.S. persons).

When opening an account for a foreign business or enterprise that does not have an identification number, an alternative government-issued documentation certifying the existence of the business or enterprise will be requested. Some of the unFederalReserve products require less documentation to access because transactions occur directly between the participants in non-custodial fashion from the Company’s standpoint.

3. Customers Who Refuse to Provide Information

If a potential or existing customer appears to have intentionally provided misleading information, unFederalReserve will not open a new account and, after considering the risks involved, consider closing any existing account. In either case, the BSA/AML Compliance Specialist will be notified so that unFederalReserve can determine whether it should report the situation to FinCEN in a SAR.

4. Verifying Information

Based on the risk, and to the extent reasonable and practicable, unFederalReserve will ensure that it has a reasonable belief that it knows the true identity of its customers by using risk-based procedures to verify and document the accuracy of the information. The BSA/AML Compliance Specialist, or his or her designee (i.e., Securitize), will analyze the information obtained to determine whether the information is sufficient to form a reasonable belief that true identity of the customer has been confirmed (e.g., whether the information is logical or contains inconsistencies).

Customer identity will be verified through documentary means, non-documentary means or both. UnFederalReserve, or his or her designee (i.e., Securitize), will use documents to verify customer identity when appropriate documents are available. In light of the increased instances of identity fraud, unFederalReserve will supplement the use of documentary evidence by using the non-documentary means described below whenever necessary. UnFederalReserve may also use non-documentary means, if unFederalReserve is still uncertain regarding the true identity of the customer. In verifying the information, unFederalReserve will consider whether the identifying information that unFederalReserve receives, such as the customer’s name, street address, zip code, telephone number (if provided), date of birth and Social Security number, allow unFederalReserve to determine that it has a reasonable belief that it knows the true identity of the customer (e.g., whether the information is logical or contains inconsistencies).

Appropriate documents for verifying the identity of customers include the following:

  • For an individual, an unexpired government-issued identification evidencing nationality or residence and bearing a photograph or similar safeguard, such as a driver’s license or passport; and
  • For a person other than an individual, documents showing the existence of the entity, such as certified articles of incorporation, a government-issued business license, a partnership agreement or a trust instrument.

UnFederalReserve understands that it is not required to take steps to determine whether the document that the customer has provided to us for identity verification has been validly issued and that unFederalReserve may rely on a government-issued identification as verification of a customer’s identity. If, however, unFederalReserve notes that the document shows some obvious form of fraud, unFederalReserve must consider that factor in determining whether unFederalReserve can form a reasonable belief that it knows the customer’s true identity.

UnFederalReserve recognizes that the risk that it may not know the customer’s true identity may be heightened for certain types of accounts, such as an account opened in the name of a corporation, partnership or trust that is created or conducts substantial business in a jurisdiction that has been designated by the U.S. as a primary money laundering jurisdiction, a terrorist concern, or has been designated as a non-cooperative country or territory. UnFederalReserve will identify customers that pose a heightened risk of not being properly identified.

5. Lack of Verification

When the identity of a potential customer cannot be reasonable confirmed, unFederalReserve will do the following: (1) not open an account; (2) impose terms under which a customer may conduct transactions while unFederalReserve attempts to verify the customer’s identity; (3) close an account after attempts to verify a customer’s identity fail; and (4) determine whether it is necessary to file a SAR in accordance with applicable laws and regulations.

6. Recordkeeping

UnFederalReserve will document our verification, including all identifying information provided by a customer, the methods used and results of verification, and the resolution of any discrepancies identified in the verification process. UnFederalReserve will keep records containing a description of any document that it relied on to verify a customer’s identity, noting the type of document, any identification number contained in the document, the place of issuance, and if any, the date of issuance and expiration date. With respect to non-documentary verification, unFederalReserve will retain documents that describe the methods and the results of any measures it took to verify the identity of a customer. UnFederalReserve will also keep records containing a description of the resolution of each substantive discrepancy discovered when verifying the identifying information obtained. UnFederalReserve will retain records of all identification information for five years after the account has been closed; unFederalReserve will retain records made about verification of the customer’s identity for five years after the record is made.

7. Comparison with Government-Provided Lists of Terrorists

At such time as unFederalReserve receives notice that a federal government agency has issued a list of known or suspected terrorists and identified the list as a list for CIP purposes, unFederalReserve will, within a reasonable period of time after an account is opened (or earlier, if required by another federal law or regulation or federal directive issued in connection with an applicable list), determine whether a customer appears on any such list of known or suspected terrorists or terrorist organizations issued by any federal government agency and designated as such by Treasury in consultation with the federal functional regulators. UnFederalReserve will follow all federal directives issued in connection with such lists.

UnFederalReserve will continue to comply separately with OFAC rules prohibiting transactions with certain foreign countries or their nationals.

V. CUSTOMER DUE DILIGENCE RULE

UnFederalReserve, working with Securitize, have established, documented and maintained procedures reasonably designed to identify and verify beneficial owners of legal entity customers and comply with other aspects of the Customer Due Diligence (“CDD”) Rule. UnFederalReserve thru Securitize, will collect certain minimum CDD information from beneficial owners of legal entity customers. UnFederalReserve will understand the nature and purpose of customer relationships for the purpose of developing a customer risk profile. UnFederalReserve will conduct ongoing monitoring to identify and report suspicious transactions, and, on a risk basis, maintain and update customer information.

  1. Identification and Verification of Beneficial Owners

At the time of opening an account for a legal entity customer, the BSA/AML Compliance Specialist, or a selected vendor, will identify any individual that is a beneficial owner of the legal entity customer by identifying any individuals who directly or indirectly own more than a determined equity interests of the legal entity customer, and any individual with significant responsibility to control, manage, or direct a legal entity customer. UnFederalReserve maintains separate CDD Procedures that document this process.

2. Understanding the Nature and Purpose of Customer Relationships

UnFederalReserve will understand the nature and purpose of customer relationships for the purpose of developing a customer risk profile through an assessment of risk of that customer.

Depending on the facts and circumstances, a customer risk profile may include such information as:

  • The type of mer;
  • The account or service being offered;
  • The customer’s income;
  • The customer’s net worth;
  • The customer’s domicile;
  • The customer’s principal occupation or business; and
  • In the case of existing customers, the customer’s history of activity.

3. Sanction Screening and Checking OFAC SDN List

Before opening an account, and on an ongoing basis, the BSA/AML Compliance Specialist, or his or her designee (i.e., Securitize), will check to ensure that a customer does not appear on the OFAC SDN list or is not engaging in transactions that are prohibited by the economic sanctions and embargoes administered and enforced by OFAC. In the event there is only limited information regarding a user, like an Ethereum wallet address, that information will be checked against addresses or other information on similar lists. Because the SDN list and listings of economic sanctions and embargoes are updated frequently, unFederalReserve will consult them on a regular basis and subscribe to receive any available updates when they occur. With respect to the SDN list, unFederalReserve may also access that list through various software programs to ensure speed and accuracy, or through OFAC’s website that screens names against the SDN list. The BSA/AML Compliance Specialist, or his or her designee, will also review existing accounts against the SDN list and listings of current sanctions and embargoes when they are updated, and that person will document the review.

If someone is on the SDN list or is engaging in transactions that are prohibited by the economic sanctions and embargoes administered and enforced by OFAC, unFederalReserve will reject the transaction and/or block the customer’s assets and file a blocked assets and/or rejected transaction form with OFAC within 10 days. UnFederalReserve will also call the OFAC Hotline at (800) 540–6322 immediately.

VI. TRANSACTION MONITORING

UnFederalReserve will conduct ongoing monitoring to identify and report suspicious transactions and, on a risk basis, maintain and update customer information, including information regarding the beneficial ownership of legal entity customers, using the customer risk profile as a baseline against which customer activity is assessed for suspicious transaction reporting. Our suspicious activity monitoring procedures are detailed in unFederalReserve’s Transaction Monitoring procedure.

  1. FinCEN’S issuance of Special Measures

At times, FinCEN may issue special measures against foreign jurisdictions, financial institutions, or international transactions of primary money laundering concern. If FinCEN issues a final rule imposing a special measure against one or more foreign jurisdictions or financial institutions, classes of international transactions or types of accounts deeming them to be of primary money laundering concern, unFederalReserve understands that it must read FinCEN’s final rule and follow any prescriptions or prohibitions contained in that rule. For example, if the final rule deems a certain jurisdiction to be of primary money laundering concern, a special measure may be a prohibition for anyone in that jurisdiction from opening or maintaining an account in the United States for. In such cases, unFederalReserve will take a risk-based approach to ensure that the new measures are followed.

2. Emergency Notification to Law Enforcement by Telephone

In situations involving violations that require immediate attention, such as terrorist financing or ongoing money laundering schemes, unFederalReserve will immediately call an appropriate law enforcement authority. If a customer or company appears on OFAC’s SDN list, unFederalReserve will call the OFAC Hotline at (800) 540–6322. Other contact numbers unFederalReserve will use are: FinCEN’s Financial Institutions Hotline ((866) 556–3974) (especially to report transactions relating to terrorist activity), the U.S. Attorney’s office, or the FBI. If unFederalReserve notifies the appropriate law enforcement authority of any such activity, unFederalReserve must still file a timely SAR.

3. Transaction Monitoring for Suspicious Activity

UnFederalReserve will monitor account activity for unusual size, volume, pattern or type of transactions, taking into account risk factors and red flags that are appropriate to our business. Monitoring will be conducted through automated Chainalysis (https://www.chainalysis.com) analysis tools.

The BSA/AML Compliance Specialist, or his or her designee, will be responsible for this monitoring, will review any activity that our monitoring system detects, will determine whether any additional steps are required, will document when and how this monitoring is carried out, and will report suspicious activities to the appropriate authorities.

UnFederalReserve will conduct reviews of activity that our monitoring system detects and document its monitoring reviews. The BSA/AML Compliance Specialist or his or her designee will conduct an appropriate investigation and review relevant information from internal or third-party sources before a SAR is filed.

VII. SUSPICIOUS TRANSACTIONS AND BSA REPORTING

  1. Filing a SAR

UnFederalReserve will file Suspicious Activity Reports (“SAR”) with FinCEN for any transactions (including deposits and transfers) conducted or attempted by, at or through our platforms involving $5,000 or more of funds or assets (either individually or in the aggregate) where unFederalReserve knows, suspect or have reason to suspect:

  1. The transaction involves funds derived from illegal activity,
  2. Is intended or conducted in order to hide or disguise funds or assets derived from illegal activity as part of a plan to violate or evade federal law or regulation or to avoid any transaction reporting requirement under federal law or regulation;
  3. The transaction is designed, whether through structuring or otherwise, to evade any requirements of the BSA regulations;
  4. The transaction has no business or apparent lawful purpose or is not the sort in which the customer would normally be expected to engage, and after examining the background, possible purpose of the transaction and other facts, unFederalReserve knows of no reasonable explanation for the transaction; or
  5. The transaction involves the use of unFederalReserve to facilitate criminal activity.

UnFederalReserve will also file a SAR and notify the appropriate law enforcement authority in situations involving violations that require immediate attention, such as terrorist financing or ongoing money laundering schemes. In addition, although unFederalReserve is not required to, it may contact that SEC in cases where a SAR it has filed may require immediate attention by the SEC. UnFederalReserve also understands that, even if it notifies a regulator of a violation, unless it is specifically covered by one of the exceptions in the SAR rule, unFederalReserve must file a SAR reporting the violation.

UnFederalReserve may file a voluntary SAR for any suspicious transaction that it believes is relevant to the possible violation of any law or regulation but that is not required to be reported by unFederalReserve under the SAR rule. It is unFederalReserve’s policy that all SARs will be reported regularly to the CEO, or a committee appointed by the CEO, and appropriate senior management, with a clear reminder of the need to maintain the confidentiality of the SAR.

UnFederalReserve will report suspicious transactions by completing a SAR,and will collect and maintain supporting documentation as required by the BSA regulations. UnFederalReserve will file a SAR no later than 30 calendar days after the date of the initial detection of the facts that constitute a basis for filing a SAR. If no suspect is identified on the date of initial detection, unFederalReserve may delay filing the SAR for an additional 30 calendar days pending identification of a suspect, but in no case will the reporting be delayed more than 60 calendar days after the date of initial detection. The phrase “initial detection” does not mean the moment a transaction is highlighted for review. The 30-day (“or 60-day”) period begins when an appropriate review is conducted and a determination is made that the transaction under review is “suspicious” within the meaning of the SAR requirements. A review must be initiated promptly upon identification of unusual activity that warrants investigation.

UnFederalReserve will retain copies of any SAR filed and the original or business record equivalent of any supporting documentation for five (5) years from the date of filing the SAR. UnFederalReserve will identify and maintain supporting documentation and make such information available to FinCEN, any other appropriate law enforcement agencies, federal or state securities regulators or SROs upon request.

UnFederalReserve will not notify any person involved in the transaction that the transaction has been reported, except as permitted by the BSA regulations. UnFederalReserve understands that anyone who is subpoenaed or required to disclose a SAR or the information contained in the SAR will, except where disclosure is requested by FinCEN, the SEC, or another appropriate law enforcement or regulatory agency, or an SRO registered with the SEC, decline to produce the SAR or to provide any information that would disclose that a SAR was prepared or filed. UnFederalReserve will notify FinCEN of any such request and our response.

2. Currency Transaction Reports

UnFederalReserve prohibits transactions involving fiat currency and has the following procedures to prevent such transactions: If unFederalReserve discovers such transactions have occurred, it will file with FinCEN CTRs for currency transactions that exceed $10,000. Also, unFederalReserve will treat multiple transactions involving currency as a single transaction for purposes of determining whether to file a CTR if they total more than $10,000.01 and are made by or on behalf of the same person during any one business day. UnFederalReserve will use the BSA E-Filing System to file the supported CTR Form.

3. Safe Harbor Laws for Suspicious Activity Reporting

Federal law (31 USC 5318(g)(3)) provides protection from civil liability for all reports of suspicious transactions made to appropriate authorities, including supporting documentation, regardless of whether such reports are filed pursuant to the SAR instructions. Specifically, the law provides that a financial institution and its directors, officers, employees, and agents that make a disclosure to the appropriate authorities of any possible violation of law or regulation, including a disclosure in connection with the preparation of SARs, “shall not be liable to any person under any law or regulation of the United States, any constitution, law, or regulation of any State or political subdivision of any State, or under any contract or other legally enforceable agreement (including any arbitration agreement), for such disclosure or for any failure to provide notice of such disclosure to the person who is the subject of such disclosure or any other person identified in the disclosure.” The safe harbor applies to SARs filed within the required reporting thresholds as well as to SARs filed voluntarily on any activity below the threshold.

VII. RECORDKEEPING AND RETENTION

  1. Responsibility for Required AML Records and SAR Filing

UnFederalReserve’s BSA/AML Compliance Specialist and his or her designee will be responsible for ensuring that AML records are maintained properly and that SARs are filed as required.

In addition, as part of our BSA/AML program, our Company will create and maintain SARs and relevant documentation on customer identity and verification. UnFederalReserve will maintain SARs and their accompanying documentation for at least five years. UnFederalReserve will keep other documents according to existing BSA and other recordkeeping requirements, including certain SEC rules that require six-year retention periods (e.g., Exchange Act Rule 17a-4(a) requiring Company’s to preserve for a period of not less than six years, all records required to be retained by Exchange Act Rule 17a-3(a)(1)-(3), (a)(5), and (a)(21)-(22) and Exchange Act Rule 17a-4(e)(5) requiring Company’s to retain for six years account record information required pursuant to Exchange Act Rule 17a-3(a)(17)).

2. SAR Maintenance and Confidentiality

UnFederalReserve will hold SARs and any supporting documentation confidential. UnFederalReserve will not inform anyone outside of FinCEN, the SEC, an SRO registered with the SEC or other appropriate law enforcement or regulatory agency about a SAR. UnFederalReserve will refuse any subpoena requests for SARs or for information that would disclose that a SAR has been prepared or filed and immediately notify FinCEN of any such subpoena requests that unFederalReserve receives. UnFederalReserve will segregate SAR filings and copies of supporting documentation from other Company books and records to avoid disclosing SAR filings. Our BSA/AML Compliance Specialist will handle all subpoenas or other requests for SARs.

IX. TRAINING PROGRAMS

UnFederalReserve will maintain an ongoing employee training under the leadership of the BSA/AML Compliance Specialist and senior management. Training will occur on at least an annual basis and will be assigned to appropriate stakeholders. It will be based company’s size, its customer base, and its resources and be updated as necessary to reflect any new developments in the law.

Vaster’s training includes, at a minimum: (1) how to identify red flags and signs of money laundering that arise during the course of the employees’ duties; (2) what to do once the risk is identified (including how, when and to whom to escalate unusual customer activity or other red flags for analysis and, where appropriate, the filing of SARs); (3) what employees’ roles are in unFederalReserve’s compliance efforts and how to perform them; (4) unFederalReserve’s record retention policy; and (5) the disciplinary consequences (including civil and criminal penalties) for non-compliance with the BSA.

UnFederalReserve will maintain ongoing training, or contract for it. Delivery of the training may include educational news articles, videos, intranet systems, in-person lectures and explanatory memos. Currently our training program is completing a review of our annual AML training deck. UnFederalReserve will maintain records to show the persons trained, the dates of training and the subject matter of their training.

UnFederalReserve will review our operations to see if certain employees require specialized additional training. Our written procedures will be updated to reflect any such changes.

X. TEST OF AML PROGRAM

Independent testing of unFederalReserve’s overall program shall be done annually and shall cover the lender’s AML program, including but not limited to:

  • Customer due diligence
  • Transaction monitoring
  • Required reporting and recordkeeping,
  • Training, and
  • The BSA/AML Compliance Specialist functions.

Independent auditors for AML Compliance (either external or internal to the Company) will have a reporting relationship to senior management with the authority to direct those corrective actions warranted by audit findings. If unFederalReserve utilizes an internal audit function, that function must be independent from the compliance unit.

After unFederalReserve has completed the independent testing, staff will report its findings to appropriate senior management. UnFederalReserve will promptly address each of the resulting recommendations and keep a record of how each noted deficiency was resolved.

XI. CONFIDENTIAL REPORTING OF AML NON-COMPLIANCE

Employees will promptly report any potential violations of unFederalReserve’s AML compliance program to the BSA/AML Compliance Specialist, unless the violations implicate the BSA/AML Compliance Specialist, in which case the employee shall report to CEO, or a committee appointed with the approval of the CEO. Such reports will be confidential, and the employee will suffer no retaliation for making them.

XII. SENIOR MANAGEMENT APPROVAL

UnFederalReserve’s CEO is responsible for approving this Policy.

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Although the material contained in this website was prepared based on information from public and private sources that Residual Token, Inc. d/b/a unFederalReserve believes to be reliable, no representation, warranty or undertaking, stated or implied, is given as to the accuracy of the information contained herein, and Residual Token, Inc. expressly disclaims any liability for the accuracy and completeness of information contained in this or any article.

This article, our website, social media posts and other public forum materials are distributed for general informational and educational purposes only and is not intended to constitute legal, tax, accounting, or investment advice. The information, opinions and views contained herein have not been tailored to the objectives of any one individual, are current only as of the date hereof and may be subject to change at any time without prior notice. Residual Token, Inc. does not have any obligation to provide revised opinions in the event of changed circumstances.

All investment strategies and investments involve risk of loss. Nothing contained in this website should be construed as investment advice. Any reference to an investment’s past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.

Any ideas or strategies discussed herein should not be undertaken by any individual without prior consultation with a finance, tax or legal professional for the purpose of assessing whether the ideas or strategies that are discussed are suitable to you based on your own personal objectives, needs and risk tolerance. Residual Token, Inc. expressly disclaims any liability or loss incurred by any person who acts on the information, ideas or strategies discussed herein.

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‘Credit vs Cash’ spot market fintech using blockchain protocols. Great liquidity access. Instantaneous settlement. $ersdl #DeFI #middlemarketdefi #uniswap

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unFederalReserve

unFederalReserve

‘Credit vs Cash’ spot market fintech using blockchain protocols. Great liquidity access. Instantaneous settlement. $ersdl #DeFI #middlemarketdefi #uniswap

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