AML / CTF Policy

BlockShield AML Ltd. is committed to the highest standards of Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) compliance. This policy sets out our obligations and the procedures we have implemented to detect, prevent, and report financial crime in connection with the provision of our blockchain compliance services.

1. Regulatory Framework

BlockShield AML operates in accordance with the following regulatory frameworks and guidelines:

• Financial Action Task Force (FATF) Recommendations, including the updated guidance on virtual assets (FATF Rec. 15)
• EU Fifth and Sixth Anti-Money Laundering Directives (5AMLD / 6AMLD)
• US Bank Secrecy Act (BSA) and FinCEN guidance on convertible virtual currencies
• UK Proceeds of Crime Act 2002 and the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017
• Applicable national legislation in jurisdictions where BlockShield AML operates

2. Risk-Based Approach

We adopt a risk-based approach (RBA) to AML/CTF compliance, as recommended by FATF. This means we assess and prioritise our resources and controls according to the level of money laundering and terrorist financing risk associated with our clients, products, services, and geographic exposure.

Our risk assessment framework considers:

• Customer risk: jurisdiction, business type, transaction volumes, PEP status
• Product/service risk: complexity, anonymity features, cross-border exposure
• Geographic risk: FATF blacklisted/greylisted jurisdictions, sanctions regimes
• Transaction risk: unusual patterns, velocity anomalies, high-risk counterparty exposure

3. Customer Due Diligence (CDD)

BlockShield AML applies Customer Due Diligence measures to all clients in accordance with applicable regulations:

• Standard CDD: Identity verification, business verification, UBO identification, and source of funds assessment for standard-risk clients.
• Enhanced Due Diligence (EDD): Applied to high-risk clients, Politically Exposed Persons (PEPs), and clients from high-risk jurisdictions. Includes additional documentation, senior management approval, and enhanced ongoing monitoring.
• Simplified CDD: Applied in limited circumstances where risk is demonstrably low, subject to regulatory permission.

4. Transaction Monitoring

Our platform continuously monitors blockchain transactions for indicators of suspicious activity, including but not limited to:

• Transactions involving addresses associated with sanctioned entities or jurisdictions
• Funds originating from or destined for darknet markets, mixing services, or gambling platforms
• Structuring of transactions to avoid reporting thresholds
• Rapid movement of funds through multiple wallets (layering)
• Unusual transaction patterns inconsistent with the customer's profile

5. Sanctions Screening

BlockShield AML screens all wallet addresses and counterparties against the following sanctions lists in real time:

• OFAC (US Department of the Treasury's Office of Foreign Assets Control) SDN list
• EU Consolidated Sanctions List
• UN Security Council Consolidated List
• UK HM Treasury Financial Sanctions
• INTERPOL notices

6. Suspicious Activity Reporting

Where our monitoring identifies a suspicion of money laundering or terrorist financing, our designated Money Laundering Reporting Officer (MLRO) is notified immediately. The MLRO will review the matter and, where appropriate, submit a Suspicious Activity Report (SAR) or Suspicious Transaction Report (STR) to the relevant Financial Intelligence Unit (FIU).

We do not tip off any customer that a SAR has been submitted. All staff are trained on "tipping off" prohibitions under applicable law.

7. Record Keeping

We retain all CDD documents, transaction records, and SAR/STR documentation for a minimum of five (5) years from the date of the business relationship or transaction, or seven (7) years where required by applicable law. Records are stored securely and are available to competent authorities upon lawful request.

8. Staff Training

All BlockShield AML employees receive mandatory AML/CTF training upon joining and at least annually thereafter. Training covers recognition of suspicious activity, legal obligations, reporting procedures, and the consequences of non-compliance.

9. MLRO and Compliance Contact

Money Laundering Reporting Officer: [MLRO NAME PLACEHOLDER]
Contact: [email protected]
Address: BlockShield AML Ltd., [ADDRESS PLACEHOLDER]

For compliance or regulatory enquiries, please contact our Compliance Team at [email protected].

10. Policy Review

This AML/CTF Policy is reviewed at least annually by senior management and updated as required to reflect changes in legislation, regulatory guidance, and the nature of our business. The Board of Directors holds ultimate responsibility for the effectiveness of this Policy.