As a registered cryptocurrency provider, the governing body that regulates us is the Australian Transaction Reports and Analysis Centre (AUSTRAC), and the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the AML/CTF Act) which is the main piece of Australian government legislation that regulates AUSTRAC’s functions. The compliance risk we take on as a platform that facilitates outgoing cryptocurrency transactions is unique, which mandates our KYC procedures be more stringent than most are used to in other financial endeavours. The capacity for crypto withdrawals to be misused by nefarious parties is high and can only be mitigated by completing the appropriate due diligence.
KYC information (‘Know Your Customer information’) may include but is not limited to information in relation to matters such as:
The customer’s name;
The customer’s residential address;
The customer’s date of birth;
The customer’s occupation or business activities; and
The nature of the customer’s business with the reporting entity – including:
The purpose of specific transactions;
The income or assets available to the customer;
The customer’s source of funds including the origin of funds; and
The customer’s financial position.
Reporting entities must have and comply with anti‑money laundering and counter‑terrorism financing ('AML/CTF') programs. As a reporting entity Swyftx must carry out procedures to verify a customer’s identity before providing a designated service to the customer. However, in special cases, additional verification may be carried out after the provision of the designated service; which is why our ongoing customer due diligence verification procedures were established; Gold & Diamond verifications.
Ongoing customer due diligence
The AML/CTF Act states that a reporting entity must monitor all customers with a view to identifying, mitigating and managing money laundering or financing of terrorism risks. These Anti-Money Laundering and Counter-Terrorism Financing Rules (Rules) are made under section 229 of the AML/CTF Act.
The enhanced customer due diligence (ECCD) program must include appropriate risk-based systems and controls so that, in cases where the risk of money laundering or terrorism financing is high, we must undertake measures appropriate to those circumstances. Whilst we are not accusing you of committing these offences, certain account activity such as higher deposit amounts trigger these required ECDD measures. As such, we are conducting our requests inline with guidance we have received from AUSTRAC and against the appropriate legislative authorities.
Specifically, AUSTRAC require us to include a range of measures to seek information from the customer in order to clarify or update KYC information already collected from the customer; obtain any further KYC information, including taking reasonable measures to identify the source of the customer’s wealth; and the source of the customer’s funds; and clarify the nature of the customer’s ongoing business with us, the reporting entity.
If you would like to read more about these ECDD requirements, please direct your attention to this guidance presented by AUSTRAC here.
Why has my bank never requested this much information?
Banks fall under the same regulations, but unfortunately, do not seem to take their responsibilities very seriously, as evidenced by the recent record civil penalties handed out to banking organisations for failure to do exactly this. Australian financial and banking institutions have previously admitted to breaching the AML/CTF Act, acknowledging breaches of s 36(1) concerning ongoing customer due diligence in that it failed to conduct appropriate ongoing customer due diligence.
These programs were recognised to have failed to properly identify, mitigate and manage the ML/TF risks. These breaches have had ramifications for monitoring international payment flows concerning billions of dollars that had higher money laundering risks including risks associated with multiple different state and federal criminal offences.
Why do I need to provide a PDF bank statement or payslip?
We cannot accept a screenshot or picture of your source of funds document as they don't have the same inbuilt electronic signatures that a PDF statement from a bank has. Screenshots also pose a risk for our compliance objectives as they can easily be manipulated.
Why has this verification only just become required?
A reporting entity must include a transaction monitoring program in Part A of its AML/CTF program. The transaction monitoring program must include appropriate risk‑based systems and controls to monitor the transactions of customers. The transaction monitoring program should have regard to complex, unusual large transactions and unusual patterns of transactions.
Whilst we cannot reveal how our transaction monitoring programs operate, we can guarantee you that they are programmed to act impartial and free from bias and are necessary to provide our customers with an exchange service that is free from fraud and bad actors. As such, if you have been asked to complete an enhanced verification form, please remember that you are not being accused of committing any offense.
If you have any further questions about our compliance procedures or would like a hand navigating the process of verifying your account, please don't hesitate to get in touch with our team via the live chat.