AML/KYC Policy and Risk-Score

1. Introduction

The Anti-Money Laundering Policy and Know Your Customer Procedure (hereinafter referred to as the “AML/KYC Policy”) are designed to prevent and reduce the possible risks of WestChange service involvement in any illegal activity.

2. Purpose of internal regulation and general principles

WestChange service adheres to practices and measures in the field of combating the legalization (laundering) of proceeds from crime and the financing of terrorism (AML/CFT). The purpose of the measures is to demonstrate the serious attitude of the service to any attempts to use it for illegal purposes.

2.1. Disclaimer

The WestChange service warns users against attempts to use the service for money laundering, terrorist financing, fraud of any kind, as well as for the purchase of prohibited goods and services.

The WestChange service, its administration, employees and domain owners are not responsible for the improper use of the service by third parties, the actions of attackers and possible damage associated with the use of the service.

3. Requirements for applications and users

To prevent illegal transactions, the WestChange service establishes requirements for all applications created by the user:

The sender and recipient of the payment for the application must be the same person. Transfers in favor of third parties are strictly prohibited.
All contact information entered by the user in the Application, as well as other personal data transmitted to the service, must be up-to-date and completely reliable.
It is strictly prohibited to create applications using anonymous proxy servers, VPN, Tor or any other anonymous connections to the Internet.

4. Risk-oriented approach and Risk-Score

WestChange uses a risk-oriented approach and the Risk-Score automatic risk assessment model to determine the risk of transactions and sources of clients’ crypto assets.

4.1. Determining Risk-Score

Risk-Score is a numerical estimator formed based on the analysis of on-chain interactions (incoming/outgoing transactions) and address connections with various sources of risk data. The indicator reflects the likelihood that assets have undesirable connections or origins related to illegal activities (money laundering, terrorist financing, activities on darknet markets, etc.).

4.2. How the Risk-Score is formed

the presence of connections with high-risk sources (for example, dark markets, mixers, illegal services, etc.) is analyzed;
direct and indirect transactional connections of addresses with dubious activities are taken into account;
systеm data is updated regularly to maintain the relevance of the assessment.

4.3. Thresholds and Consequences

If the Risk-Score of an address or transaction exceeds 60% or there is a High Risk of 0.1%, the systеm automatically blocks the exchange until additional AML control is carried out.

Exceeding the threshold may also trigger a request for explanation of the source of funds (SoF) and a request to undergo KYC verification before the transaction is allowed.

5. AML Analyzer and Data Sources

A professional AML analyzer is used to estimate the Risk-Score, which is based on a large amount of data on blockchain transactions and known risk sources.

The systеm analyzes:

data on transactions on the blockchain;
historical connections of addresses with known suspicious activities;
signals from open and closed databases on risky assets;
results from international sanctions lists and regulatory sources.

Based on this data, a machine or algorithmic component assigns a Risk-Score to each address and labels it according to the level of risk (low, medium, high). The results are used to automatically filter transactions and make a decision (approval, delay, rejection or additional verification).

6. Verification Procedures (KYC) and Source of Funds (SoF)

One of the international standards for preventing illegal activities is due diligence of customers (hereinafter referred to as due diligence). To this end, WestChange implements its own verification procedures in strict AML standards and the “Know Your Customer” procedure.

6.1. Right to request documents and information

The WestChange service may require the User to provide reliable, independent source documents, data or information to undergo verification and confirm the sources of origin of funds/cryptoassets.

6.2. List of materials for KYC/SoF

Usually requested (but not limited to):

Valid passport or other official ID;
Scan or photo of passport (first, second pages and page with registration in good quality);
Photo of passport in expanded form, where the photo and full name are clearly visible;
Confirmation of residential address (utility bill, bank statement, etc.);
Confirmation of sources of funds (photo/scan/screenshots/extracts), sales contracts, income documents;
Details about the source of cryptocurrency assets (screenshots/extracts from other services, transactions, wallets);
A video in which the person who sent the funds, with a passport in hand (spread out), reports that she created an ID application at the WestChange exchange point, the funds sent are her personal funds and she bears full legal responsibility for this cryptocurrency; the video must mention the source of origin of the funds;
Record a video from the platform from which the funds were sent: the video must inсlude the hash, the address of the sender and recipient, the amount with the ticker and the date of the transaction; the video duration is at least 10 seconds;
Additional confirmations at the request of the security service (photos, explanatory documents).

6.3. Withholding funds in case of high risk/investigation

In case of blocking due to high risk or official investigation, funds may be withheld until verification is completed or the investigation is completed. For such purposes, the service reserves the right to collect the User’s identification information to comply with the AML/KYC policy.

Suspension of application processing is temporary and cannot be indefinite. In the absence of confirmation of the illegal origin of funds, their return to the User is carried out within a reasonable period, but no later than 5 (five) business days after the completion of the check.

6.4. Authentication and re-inquiries

The service will take measures to confirm the authenticity of documents and information provided by users; legal methods for double-checking will be applied.
The service has the right to investigate cases of users whose identities are identified as dangerous or suspicious.
The service has the right to verify the user’s identity on an ongoing basis, especially when identification information has changed or activity appears suspicious.
The service has the right to request up-to-date documents even if the user has previously been authenticated.

6.5. Additional Provisions for the Provision of Services

After verifying the identity, the service may refuse to provide services if the services are used to conduct illegal activities.
Users who intend to use payment cards must undergo card verification in accordance with the instructions available on the WestChange website.
The service has regulatory requirements for verifying the source of funds or cryptocurrency to know that the sources of funds that users use for trading are legitimate.

7. Stages and estimated verification time (KYC/SoF)

7.1. The verification procedure usually includes the following stages:

Initiation of verification – the client is requested to submit documents after detecting a suspicious Risk-Score;
Data acquisition – the client provides the necessary documents/information;
Document verification – checking the completeness and reliability of the received data;
Analysis of sources of funds – checking the provided sources of funds for risk assessment;
Decision making – confirmation of the transaction, additional requests, refusal or freezing of assets.

7.2. Estimated turnaround times:

Basic Verification: 1–3 business days;
Full Source-of-Funds Verification: 3–10 business days depending on the complexity of the documents and the amount of information requested.
Times may vary depending on internal workload, volume of documentation, and client cooperation.

8. Systеm Functions, Behavioral Analysis, and Risk Assessment

8.1. Systеm Functions

The WestChange service performs compliance-related tasks, including data collection, filtering, record keeping, investigation management, and reporting. systеm functions inсlude:

daily checking users for the existence of recognized “blacklists” (e.g. OFAC), aggregating checks across multiple data points, placing users on watch lists and denial of service lists, opening cases for investigation where necessary, sending internal notifications and completing mandatory reports where appropriate;
case and document management.

8.2. Behavioral Analysis

WestChange verifies users not only by verifying their identity, but more importantly, by analyzing their transaction behavior. The service relies on data analysis as a tool for risk assessment and detecting suspicions.

8.3. Risk Assessment

WestChange, in accordance with international requirements, applies risk assessment practices to combat money laundering and terrorist financing and ensures that measures to prevent or mitigate risks are commensurate with the identified risks.

9. Performing customer checks and acting upon suspicion

If the WestChange service administration has reasonable suspicions that a user is trying to use the service for money laundering or any other illegal transactions, the administration has the right to:

suspend the user’s exchange transaction;
ask the user for identification documents;
ask the user for any additional information and documents in case of suspicious transactions;
ensure that reports of suspicious transactions are forwarded to the appropriate law enforcement agencies through the official responsible for compliance with AML regulations.

10. Refund of funds and commissions in case of AML blocking

10.1. Refund Terms and Conditions

In the event that the transaction cannot be completed due to non-compliance with AML/KYC requirements, the client may be provided with the opportunity to refund the funds under the following conditions:

The refund is made in the original currency to the address/account from which the transaction was initiated, subject to successful verification of the owner of the funds;
If the client has not provided the necessary documents or they are invalid, the service may hold the funds for additional verification or block them in accordance with internal policies and legal requirements;
Refund period after confirmation of the application: from 1 to 7 business days depending on the method of sending and blockchain platform;
If the funds cannot be automatically refunded, the client will receive instructions for organizing a manual refund (may take up to 14 additional days).
All refunds are made in accordance with applicable laws and requirements AML/CFT.

10.2. Commission in case of AML-blocking

In case of temporary blocking of the transaction due to AML-control, KYC and/or SoF procedures, the service reserves the right to withhold an administrative commission related to the processing of the check and support of the transaction.

The amount of such commission may be up to 5% of the amount of blocked funds, but not more than 100 (one hundred) US dollars in the equivalent at the exchange rate at the time of settlement.

At the same time, if the results of the check establish that the client’s funds are not related to money laundering, terrorist financing or other illegal activities, and the client is recognized as bona fide, the service undertakes to:

not apply an administrative commission for the AML-check;
make an exchange or refund of funds withholding only the actual commission of the relevant blockchain network (network fee) or payment systеm.

The decision on whether or not to apply the commission is made by the service based on the results of an internal audit and in accordance with the current legislation in the field of AML/CFT.

11. Preliminary AML check of the transaction/address (Risk-Score)

In order to increase the transparency of operations and minimize the risks of blocking funds, the user can undergo a preliminary paid AML check of the crypto address or transaction before making the exchange.

The check is carried out according to the Risk-Score model on the page of the AML report (analyzer BitOK) – :

https://t.me/BitOK_AML_bot

11.1. User action options

Before creating or during the application, the user has the right to choose one of the options:

11.1.1. Submit AML check results to the operator

The user can submit the received AML report to the operator for preliminary risk assessment – https://help.westchange.top. In this case, the operator:

analyzes the Risk-Score;
reports on possible blocking risks;
provides recommendations for further actions, if necessary.

Providing a report does not guarantee automatic confirmation of the application, but it reduces the likelihood of the operation being suspended.

11.1.2. Opt out of preliminary check

The user can deliberately opt out of preliminary AML check by confirming this with the corresponding check box when creating the application. When confirming the refusal, the user agrees that:

the exchange is carried out at his own risk;
in case of detection of an increased Risk-Score, the transaction may be temporarily blocked;
KYC/SoF procedures may be applied in accordance with the service’s AML policy;
the transaction execution time may be increased.

11.2. Important information

Preliminary AML check is an additional risk reduction tool, but does not exclude mandatory internal verification by the service. The final decision on the execution of the transaction is made based on internal AML/CFT procedures and applicable legislation.

It is recommended to undergo a preliminary check in cases of:

receiving funds from exchanges, P2P platforms or third-party wallets;
doubts about the history of assets;
making large amounts of exchange.

12. Responsible official

The person responsible for AML compliance is a person duly authorized by the WestChange service, whose duty is to ensure the effective implementation and compliance with the AML / KYC Policy.

The official’s duties inсlude (but are not limited to):

collecting user identification information;
creating and updating internal policies and procedures for completing, reviewing, submitting and storing
monitoring transactions and investigating significant deviations from normal operations;
implementing a records management systеm to store and retrieve documents, files, forms and logs;
regularly updating the risk assessment;
providing law enforcement agencies with information required by law and regulations.

The official has the right to interact with law enforcement agencies involved in the prevention of money laundering, terrorist financing and other illegal activities.

13. Confidentiality

The WestChange service guarantees client confidentiality in accordance with the Privacy Policy.

The service and its employees undertake to maintain confidentiality regarding any facts discovered in connection with any questionable transaction. The obligation also applies to users of the service and third parties to whom information was transferred under the agreement.
The obligation of confidentiality persists after termination of work or any contractual relationship with the service, as well as when transferring employees to another workplace.
Disclosure of information to state and law enforcement agencies and other entities in cases specified by law does not constitute a breach of confidentiality.
The restriction of confidentiality does not apply to the exchange of information between financial institutions forming a consolidated group, provided that the information is used only to prevent money laundering and terrorist financing.

14. Final provisions and acceptance of terms

In connection with the above, the WestChange service does not bear legal responsibility for its use for the purpose of money laundering, terrorist financing or the purchase of prohibited goods and services, but undertakes to take all possible and available actions to prevent such attempts.

By making an exchange, the user agrees to the terms of this AML / KYC Policy and undertakes to comply with them.