The prices of virtual goods and products, like real goods and products, constantly fluctuate over time. Any currency, virtual or otherwise, could be subject to large swings in value and at any time might become worthless. As such, the value of your holding may increase or decrease over time. With any type of market-based trading, buying or selling, there is an inherent risk that losses will occur. It follows that you should not hold money you cannot afford to lose in cryptocurrencies.
Trading in cryptocurrencies brings special risks not typically shared with trading in official, recognised currencies or goods or commodities in a market. Unlike most recognised currencies backed by governments or other legal entities, or commodities such as gold and silver, cryptocurrencies are backed and supported by technology and trust. In this way it is a unique kind of ‘fiat’ currency. Often there exists no central bank or dedicated authority that can take corrective measures, such as creating or issuing more currency, to protect the value in a crisis.
The price of cryptocurrencies is susceptible to bubbles or loss of confidence, which could collapse demand relative to supply, having an adverse effect on the price. For example, confidence in a cryptocurrency could disintegrate because of unexpected changes imposed by software developers or others, the risk of state regulation, the creation of superior competing alternative currencies, or a deflationary or inflationary spiral. Confidence might also collapse because of technical problems: if the partial anonymity of the system is compromised, if bitcoin is lost or stolen, or if hackers or governments are able to prevent any transactions from settling.
Cryptocurrency is an autonomous and, as far as the current UK regime is concerned, unregulated worldwide system of currency firms and individuals linked through technology. At their own discretion traders put their trust in a digital, decentralised and partially anonymous system that relies on peer-to-peer networking and cryptography to maintain its integrity.
Given the above, you should carefully assess whether your financial situation and tolerance for risk is suitable for buying, selling or trading cryptocurrencies.
We use our banks and/or escrow service providersto receive clients’ funds and make payments. Our banking providers do not transfer cryptocurrencies, exchange cryptocurrencies, or provide any services in connection with cryptocurrencies.
Anti-Money Laundering (AML) and Counter Terrorism Funding (CTF) policy
Money laundering is defined as the process where the true origination of the proceeds of a crime is disguised in such a way to appear to be from legitimate income sources. In many cases, there are strong ties between money laundering and terrorism.
In an effort to curb and prevent money laundering, and its aid in terrorism, the United Kingdom (UK) has passed legislation, supported by regulations, rules and industry guidance, that compels financial institutions to ensure they are not acting as an intermediary to enable illegal behaviour in any way, shape or form.
BitQuoine OTC, whilst not formally regulated as a company, is committed to acting as a responsible financial investment firm, and complies with all AML/CTF obligations as set out by the legislation. As such, all individuals and / or companies requesting access to our services are assessed for, and cleared of, AML/CTF risk prior to being onboarded as a client.
UK AML/CFT Legal and Regulatory Framework
The UK AML regime is set out in the following legislation and regulations:
- The Proceeds of Crime Act 2002 (POCA), as amended by the:
- Serious Organised Crime and Police Act 2005 (SOCPA); and the
- Proceeds of Crime Act (Amendment) Regulations 2007;
- The Terrorism Act 2000, as amended by the:
- The Anti Terrorism, Crime & Security Act 2001; and the
- Terrorism Act (Amendment) Regulations 2007;
- The Terrorism Act 2006;
- The Money Laundering Regulations 2007; and
- The Joint Money Laundering Steering Group (JMLSG) Guidance for the UK Financial Sector on the prevention of money laundering/combating terrorist financing.
BitQuoine OTC AML and Compliance Policy
BitQuoine OTC AML and Compliance Policy is designed to meet the UK AML legislation obligations by having systems and controls in place to mitigate the risk of the firm being used to facilitate financial crime. This AML Policy sets out the minimum standards which must be complied with and includes:
- The appointment of a Compliance Officer who has responsibility for oversight of compliance with relevant legislation, regulations, rules and industry guidance;
- Assessing and managing the money laundering and terrorist financing risks to the company;
- Using risk-based customer due diligence, identification, verification and know your customer (KYC) procedures, including enhanced due diligence for those customers presenting higher risk;
- Using risk-based systems and procedures to monitor ongoing customer activity for suspicious behaviour;
- Procedures for reporting suspicious activity internally and to the relevant law enforcement authorities as appropriate;
- Maintenance, storage and back-up of appropriate records for the minimum prescribed periods;
- Ongoing training and awareness for all relevant employees.
BitQuoine OTC AML and Compliance Assessment Process
Individual Account Assessment
Individuals or persons opening a BitQuoine OTC account in their personal capacity are required to supply the following information used for verification purposes:
- Registered full names;
- Date of birth;
- Current physical address;
- Previous physical address (if residing less than 3 years at current);
- Proof of identification (identification card, driver’s licence, passport or similar)
- Proof of physical address (utility bill or similar no older than 3 months).
Additional assessment information includes:
- Bank account details;
- Employment information;
- Current investment and savings portfolio.
BitQuoine OTC feeds this data confirmed against any or all of the following databases:
- UK Edited Electoral Roll;
- UK National Identity Register;
- UK Credit Header (AML);
- UK Mortality;
- International Sanctions (Enhanced);
- International Politically Exposed Persons (PEP);
- International Passport.
Further compliance checks include the supply of all supporting documentation and verification of those against the aforementioned databases, and others available to us, to ensure that the individual in question does not pose any risk to BitQuoine OTC in terms of AML / CTF regulations and compliance to the legislation.
BitQuoine OTC reserves the right to request, at any point in time, any further documentation and / or verification as required from individual clients where we deem, at our own discretion, or under the instruction of third parties, further investigation is necessary to comply with regulatory obligations.
Corporate Account Assessment
Corporate accounts are granted, subject to the successful assessment, verification and clearance of the company or partnership as a standalone identity, as well as the assessment, verification and clearance of all directors, shareholders, or partners, including corporate identities, holding more than 25% interest in the registered business.
Corporates are required to provide and submit the following information for verification purposes:
- Copy of the memorandum and articles of association;
- Copy of the certificate in incorporation;
- Copy of the most recent accounts;
- Proof of registered address (recent annual return or print out from the company registry);
- Proof of trading (postal) address if different to registered address (recent copy of bill or bank statement showing the company’s name and business address);
- Recent bank statement confirming the bank details that will be used to fund the account;
- Copy of register of shareholders (or partners if a partnership or LLP) as well as verification of the identity of all shareholders and / or partners with a holding of 25% or more;
- Individual shareholders are to provide a copy of passport and a recent copy of residential utility bill being no more than 3 months old for each;
- If a shareholder with a shareholding of 25% or more is corporate entity, then all the above applies to each entity too;
- Identification and address verification of two directors or partners;
- Full name, address and date of birth of the authorised signatories. If an authorised signatory is not a director then a Power of Attorney signed by a director authorising the individual(s) to operate the account will need to be supplied.
Further compliance checks include the supply of all supporting documentation and verification of those against the aforementioned databases, and others available to us, to ensure that the company and individuals in question do not pose any risk to BitQuoine OTC in terms of AML / CTF regulations and compliance to the legislation.
Bitstocks reserves the right to request, at any point in time, any further documentation and / or verification as required from corporate clients where we deem, at our own discretion, or under the instruction of third parties, further investigation is necessary to comply with regulatory obligations.