Financial institutions must comply with increasingly stringent anti-money laundering and anti-terrorist financing (AML/CTF) laws and regulations.
The FATF is the global money laundering and terrorist financing authority with more than 200 members. The FATF Virtual Assets and Virtual Asset Service Providers recommendations are worldwide guidelines for national laws and regulations.
Failure to comply with legislation to combat money laundering and terrorist financing can adversely affect financial institutions. For example, supervisors can give drastic directions, or sanctions in the form of a fine can be imposed. In addition, there is an increasing focus on the criminal prosecution of senior individuals within organizations if there are shortcomings in compliance.
NEXUS AML/CTF compliance tools:
Risk-based transaction monitoring
With NEXUS’s automated AML/CTF risk-based transaction monitoring tools, the compliance team can implement rules based on their business model and national regulations. When properly implemented, it mitigates the risks that your company will be involved with these financial crimes, thus ensuring its reputation with regulators, banks, and customers.
Sanction Lists Monitoring
UN Security Council sanction resolutions, EU decisions, or sanctions issued by individual countries or jurisdictions, crypto companies are legally obliged to check whether the person or party they do business with appears on a sanctions list. In addition, they must take the appropriate follow-up steps.
In NEXUS, you can check individuals against sanction lists. The most commonly used sanction lists are the OFAC list, the EU sanction list, and country-specific lists. All transactions are automatically monitored; if there is a match, the system automatically scores the match based on the risk from 1 to 10.
You can set your own rules at which risk level you take follow-up actions. For example, you could take no immediate action if the score is lower than six; if the score is between 6 and 8, you could put the transaction on hold, and if the score is eight or higher, you can block the transaction.
It is also possible to block customers from high-risk countries based on IP addresses or block specific banks.
Anti-Money Laundering Monitoring
NEXUS has a customer and transaction management system that continuously monitors all buy and sell transactions in numbers and volumes at an individual customer level. As a result, unusual or risky transactions or attempts to circumvent anti-money laundering regulations are detected and, if necessary, placed on hold for further investigation by the compliance officer.
Transaction monitoring is real-time. If there is an indication of fraudulent behavior, the transaction status is automatically updated to “under review.”
IP Monitoring: Blocklists or the use of Anonymous VPN
Customers’ IP addresses are being checked against the IP blocklist to prevent fraud and further reduce risks. The IP blocklist is compiled based on experience and IP risk assessment tools. Additionally, it is possible to block IP addresses that use anonymous VPN providers.
Event-based transaction monitoring and reports
NEXUS will create event-based transaction monitoring reports for further evaluation by the compliance team. Examples of event-based rules you can set are; first-time buyers, all customer transactions totaling more than 15.000 Euros (or any other value), or the use of different crypto addresses.
All event-based monitoring reports are available as an Excel file that you can share with the regulatory institutions or other stakeholders.
The review process
When automated or event-based transaction monitoring results in a transaction monitoring alert, the customer’s status is updated to “under review,” preventing the customer from completing the order or initiating a new transaction. The compliance team will review the customer for further investigation, approve the transaction or take the appropriate action.
Nexus provides additional compliance security measures called “Trust levels.” With Trust Levels, you can set daily, monthly, and yearly limits. In addition, you can set rules for specific customer groups, providing an extra layer of security.
NEXUS Crypto ⇄ Fiat Infrastructure Platform
The NEXUS platform, developed and maintained by Quantoz Technology, has been in operation since 2015. NEXUS runs redundantly on Microsoft Azure EU servers. The software development and SaaS delivery are ISO 27001 and ISAE 3402 Type II certified. With 100% uptime in 2021, NEXUS processed over 100,000 on-chain transactions per day, totaling over EUR 1 bn
More information NEXUS platform