COMPLIANCE & REGULATORY
As at 2 February 2018
Anti Money Laundering (AML), Counter Terrorism Financing (CTF) and Fraud Prevention
What does AUSTRAC do?
AUSTRAC's purpose is to protect the integrity of Australia's financial system and contribute to the administration of justice through its expertise in countering money laundering and the financing of terrorism.
What is Money Laundering?
As AUSTRAC reports, every year, huge amounts of funds are generated from illegal activities such as drug trafficking, tax evasion, people smuggling, theft, arms trafficking and corrupt practices. These funds are mostly in the form of cash. The criminals who generate these funds need to bring them into the legitimate financial system without raising suspicion. The conversion of cash into other forms makes it more useable. It also puts a distance between the criminal activities and the funds.
'Money laundering' is the name given to the process by which illegally obtained funds are given the appearance of having been legitimately obtained. By some estimates, more than AUD1.5 trillion of illegal funds are laundered worldwide each year! By combating money laundering, we can reduce crime and weaken criminals.
What is Terrorist Financing?
Terrorist financing refers to the processing of funds to sponsor or facilitate terrorist activity. A terrorist group, like any other criminal organisation, builds and maintains infrastructure to facilitate the development of funding, to funnel those funds to entities who provide resources and services to the organisation, and often, to launder the funds used in financing the terrorist activity. Terrorist organisations obtain funding from a variety of sources, including from lawful and unlawful sources. Terrorist financing is often grouped in two types:
Financial support - as donations, solicitation and other fundraising initiatives, including from governments and large organisations, or from individuals.
Revenue generating activities - through criminal activities such as kidnapping, extortion, smuggling or fraud or from legitimate economic activities such as trading resources or real estate investment.
Fraud and digital currencies
Digital currency exchanges are an obvious target for fraudulent activity. Bitcoin transactions are mostly anonymous and definitely irreversible. A successful fraud attempt allows the criminal to convert fiat into digital currency. The proceeds could then be used to fund other illegal criminal activities or even finance terrorism.
AML / CTF Policy
In anticipation of falling under AML/CTF Act regulation in or around April 2018, NCX has implemented customer due diligence processes which require us to know our customer (KYC) by having a record of the name, residential address and date of birth. We use a verification system called Green ID (and we may use other providers of identity verification providers from time to time) to verify the identity of our users. Our decision to enforce this policy reflects our desire to prevent money laundering and terrorist financing. NCX reserves the right to update its AML / CTF Policy from time to time.
All identity information provided by users are checked against various international watch lists including:
US Treasury - Office of Foreign Assets Control
Australian Department of Foreign Affairs and Trade
Politically Exposed Persons
If a user positively matches any of the aforementioned watch lists you will be unable to verify and therefore unable to use.