🌟 Onboarding a stablecoin settlement client at Kotani Pay requires conducting thorough due diligence to ensure compliance with regulatory requirements and mitigate potential risks. Here are the steps we follow to ensure regulatory compliance:
📑 Request for KYB/KYC documents: Here we kindly ask the client to provide us with company documents that will undergo a thorough verification process. 🕵️♀️ Obtaining the necessary documentation is crucial to confirm their legal status and compliance with laws. We need the following documents at least:
📋 Company registration documents
🤝 Directors, shareholders, and Universal Beneficial Owners' Proof of ID
💼 Company financial statements
🆔 Company Proof of ID
🔒 AML/CFT policy
📜 Regulatory Compliance: The next step is to verify that the stablecoin settlement client complies with all relevant regulations, such as anti-money laundering (AML) and know-your-customer (KYC) requirements.
🔍 Background Check: We then perform a comprehensive background check on the stablecoin settlement client. This includes researching their reputation, history, and any potential involvement in illegal activities. We use third-party compliance tools or services to assist with this process, namely Smile I.D and Metamap.
💰 Financial Stability: We assess the financial stability of the stablecoin settlement client. By reviewing financial statements, audited reports, and other relevant documents, we evaluate their financial health. We also verify their ability to settle transactions and handle potential risks.
🔒 Security Measures: We evaluate the security measures implemented by the stablecoin settlement client. This includes their technology infrastructure, data protection protocols, and cybersecurity practices. We ensure they have robust measures in place to protect sensitive information and prevent unauthorized access.
📝 Compliance Policies: We review the stablecoin settlement client's internal compliance policies and procedures. We ensure they have robust AML and KYC policies to prevent money laundering, terrorist financing, and other illicit activities. We assess their processes for monitoring and reporting suspicious transactions.
🔎 Transaction Monitoring: We check the stablecoin settlement client's transaction monitoring capabilities. We assess their ability to detect and report suspicious or potentially fraudulent transactions. We must ensure they have robust systems in place to identify and mitigate risks effectively.
📄 Legal Documentation: The next step is to draft and review legal agreements between our organization and the stablecoin settlement client. This includes terms and conditions, service level agreements, and any other necessary documentation.
⏰ Ongoing Monitoring: We have established a process for ongoing monitoring of the stablecoin settlement client. Regularly, we review their compliance with regulatory requirements, financial stability, and security measures. We also monitor any changes in their business activities or ownership structure.
🔍 Audit and Reporting: Kotani Pay conducts periodic audits to verify the stablecoin settlement client's adherence to regulatory standards and internal policies. We maintain comprehensive records of all client interactions, including transactions and compliance-related activities. We also prepare regular reports for internal and external stakeholders as required.
⚖️ Risk Mitigation: We have developed a risk mitigation strategy for potential risks associated with onboarding the stablecoin settlement client. This may involve setting transaction limits, implementing additional monitoring measures, or obtaining additional guarantees or collateral.
Updated 3 months ago