AML/KYC POLICY
INTRODUCTION
LOTUS is committed to maintaining a secure and compliant platform. We have implemented robust Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures to safeguard against illicit activities and ensure regulatory adherence. Our KYC process involves thorough identity verification for all users, including enhanced due diligence for high-risk individuals such as Politically Exposed Persons (PEPs). We require users to provide authentic, verifiable documents, including but not limited to national IDs, passports, and bank statements. This information is collected and verified to comply with regulatory requirements and mitigate risks associated with money laundering and terrorist financing. LOTUS utilises advanced verification technologies to confirm the authenticity of submitted documents and information. Our team may conduct additional investigations for users deemed suspicious or high-risk. We continuously monitor user activity for unusual patterns or transactions that may indicate potential illicit behaviour. To maintain ongoing compliance and protect against emerging threats, we may request updated identification documents or re-verify user identities at any time, even if previous verification has been completed. Our goal is to ensure that our platform remains a secure and trusted environment for all users. All user information is collected, stored, shared, and protected in accordance with our Privacy Policy and applicable regulations. We prioritise the confidentiality and security of user data and have implemented robust measures to safeguard against unauthorised access or disclosure. By verifying user identities and conducting ongoing monitoring, LOTUS takes proactive steps to mitigate legal risks associated with illicit activities conducted through our platform. We are committed to maintaining the highest standards of compliance and security to foster a trustworthy and reliable environment for our users.
UNDERSTANDING AML/KYC
Know Your Customer (KYC) is a set of procedures that financial institutions use to identify, verify, and record information about their customers.
Anti-Money Laundering (AML) refers to a set of laws, regulations, and procedures designed to prevent and detect illegal activities involving the movement of money obtained through criminal activities.
COMPLIANCE OFFICER
The Compliance Officer is a designated individual responsible for ensuring effective implementation and enforcement of LOTUS AML/KYC Policy. Their duties include:
1. Identity verification: Collecting and verifying user identification information.
2. Policy development: Establishing and updating internal policies and procedures for compliance with applicable laws and regulations.
3. Transaction monitoring: Identifying and investigating significant deviations from normal activity.
4. Records management: Implementing a system for storing and retrieving relevant documents and records.
5. Risk assessment: Regularly updating and assessing risk levels.
6. Regulatory compliance: Providing information to law enforcement as required. The Compliance Officer has the authority to
interact with law enforcement agencies involved in preventing money laundering, terrorist financing, and other illegal activities.
KYC PROCEDURE
1.Customer Identification: We may collect the following information from all new customers:
A. Identity proof (e.g., passport, driver's licence, PAN Card, Aadhaar card.)
B. Address proof (e.g., utility bill, bank statement)
C. Occupation and source of income
D. Contact information
2.Verification: We verify the authenticity of the provided documents using various methods, including:
A. Checking against government databases
B. Conducting due diligence checks
C. Comparing information with other customer data
We may conduct any other checks against the government databases, to ensure fraud prevention and to comply with the applicable Indian laws.
Periodic Reviews: We conduct periodic reviews of customer information to ensure it remains accurate and up-to-date.
CUSTOMER DUE DILIGENCE (CDD)
We will maintain accurate customer information and identify beneficial owners. We may adopt procedures for client due diligence, including using software for KYC, data collection, and reporting. We will retain identification documents and other details for f ive years and apply CDD measures based on risk.
ENHANCED DUE DILIGENCE (EDD)
We will conduct enhanced due diligence (EDD) for high-risk customers, including those from high-risk jurisdictions and PEPs. EDD measures may include more frequent monitoring, additional information gathering, source of funds verification, and enhanced sanctions screening.
AML MEASURES
1. Transaction Monitoring: We monitor customer transactions for suspicious activity, such as large or unusual transactions, complex transactions, or transactions that do not align with the customer's known profile.
2. Suspicious Activity Reports (SARs): If we suspect that a transaction may be related to money laundering or terrorist financing, We promptly report suspicious activity to the appropriate law enforcement agencies in all jurisdictions where we operate.
3. Sanctions Screening: We screen all customers against sanctions lists to ensure we donot dobusiness with sanctioned individuals or entities.
4. Employee Training: Our employees receive regular training on AML/KYC regulations and procedures to ensure they can effectively identify and report suspicious activity.
5. Periodic KYC: We may conduct periodic KYC reviews for existing customers at least once a year, or more frequently if required by our risk-based assessment (RBA). Due to the high-risk nature of virtual digital assets (VDAs), we may implement more frequent reviews to ensure ongoing compliance with AML/CFT regulations.
FIU COMPLIANCE
We maintain records of all customer information and transactions as required by the FIU. We also cooperate with the FIU in any investigations or inquiries.
RECORD KEEPING
We maintain records of all customer information and transactions for a period of five years, as required by the PMLA.
RISK ASSESSMENT
We conduct regular risk assessments to identify and mitigate money laundering and terrorist financing risks associated with our business.
DISPUTE RESOLUTION
If you have any questions or concerns about this AML/KYC Policy, please contact our Compliance Officer at legal@lotus.sx
We will investigate your concerns and try to resolve them in a timely and fair manner
BREACH OF THIS POLICY
We may take appropriate action, including suspending, terminating, and reporting a customer's account, in cases of breach of this policy.
CONFIDENTIALITY
We will keep all customer information confidential, except as required by law or to report suspicious activity.
Additional Considerations:
1. Record Retention: We will retain records of all customer identification, transaction, and SAR information for a period of five years, as required by the PMLA.
2. Training: We will provide ongoing training to our employees on AML/KYC regulations and procedures.
3. Independent Audits: We will conduct independent audits of our AML/KYC program to ensure its effectiveness.
4. Customer Communication: We will communicate our AML/KYC requirements to our customers and obtain their consent to our data collection and processing.
This AML/KYC Policy is intended to comply with the PMLA and other relevant laws and regulations. We may revise this policy from time to time to reflect changes in the law or our business practices.
LOTUS provides continuous training to its employees, contractors, consultants and other affiliates to ensure AML & CFT compliance. This includes regular updates on changes to regulations and emerging trends in the virtual asset industry.
These training programmes are focused on our customer support staff, back office staff, compliance staff, risk management staff and staff dealing with new users.
LOTUS reserves the right to modify, update or amend this compliance statement at any time without prior notice. Users and other stakeholders are responsible for regularly reviewing this page for any changes.
For any further information regarding compliance, please do not hesitate to reach out to legal@lotus.sx
