Stronghold Institutional Services Know Your Customer & Anti-Money Laundering Policy
I. Anti-Money Laundering and Countering Financing of Terrorism Compliance Program
Stronghold Institutional Services, Ltd. (“we” or “our”) has developed a Bank Secrecy Act and Anti-Money Laundering Compliance Program (“AML/CFT Program”) for our digital asset exchange and custody service (collectively, “Stronghold”), in an effort to maintain the highest possible compliance with applicable laws and regulations relating to anti-money laundering in New Zealand and other countries where we conduct business. This includes, but is not limited to:
- Establishing robust internal policies, procedures and controls that strive to combat any attempted use of Stronghold for illegal or illicit purposes and to ensure our customers basic protections under consumer protection laws;
- Complying with the applicable regulations and guidance set forth by the Financial Markets Authority (“FMA”);
- Filing Suspicious Activity Reports (“SARs”);
- Filing Currency Transaction Reports (“CTRs”);
- Maintaining comprehensive records of orders and other transfers;
- Appointing a Chief Compliance Officer who will be responsible for the implementation and oversight of our AML/CFT Program;
- Executing Know Your Customer (“KYC”) procedures on all customers;
- Performing regular, independent audits of our AML/CFT Program;
- Following record retention requirements; and
- Implementing a formal and ongoing compliance training program for all new and existing employees.
Policies and Procedures
Our AML/CFT Program has been reviewed and approved by our Board of Managers (the “Board”). Our AML/CFT Program is regularly reviewed and, if necessary, revised in an effort to comply with applicable rules, regulations and policies.
We have developed robust internal policies, procedures, and controls designed to comply with applicable AML/CFT laws and regulations, some of which are outlined here on this page including, but not limited to, our Customer Identification Program (“CIP”), the filing of SARs and CTRs, as well as other reporting requirements and audits.
All of our employees and officers receive ongoing broad-based AML/CFT training, as well as position-specific training. They must repeat this training at least once every twelve (12) months to ensure they are knowledgeable and in compliance with all pertinent laws and regulations. New employees receive training within thirty (30) days of their start date. All documentation related to compliance training including materials, tests, results, attendance and date are maintained. In addition, our compliance training program is updated as necessary to reflect current laws and regulations.
Our CCO is responsible for developing and enforcing the policies and procedures of our AML/CFT Program. Our CCO is required to report any violations of our AML/CFT Program directly to our CEO and our Board. In addition, our CCO is responsible for recording and filing SARs, CTRs and performing a AML/CFT Program audit at least annually.
II. Customer Identification
Our Customer Identity Program (“CIP”) is an important part of our AML/CFT Program, and helps us detect suspicious activity in a timely manner, and prevent fraud.
Account Opening Process
In order to open an account and use Stronghold, your identity must be verified, authenticated, and checked against government watchlists, including the Office of Foreign Assets Control (“OFAC”). Failure to complete any of these steps will result in your inability to use Stronghold.
Prior to opening an account for an individual customer, we will collect, verify and authenticate the following information:
- Email address;
- Mobile phone number;
- Full legal name;
- Social Security Number (“SSN”)or any comparable identification issued by government;
- Date of birth (“DOB”);
- Proof of identity (e.g., driver’s license, passport or government-issued ID);
- Home address (not a mailing address or P.O. Box); and
- Additional information or documentation at the discretion of our Compliance Team.
- Non-US Customers will be required to provide proof of address (e.g., electric, gas or water bill).
If you successfully meet and complete our CIP requirements and do not appear on the OFAC or any other government watchlist, then we will provide you with account opening agreements electronically.
Prior to opening an account for an institutional customer, we will collect, verify and authenticate the following information:
- Institution legal name;
- Employer Identification Number (“EIN”) or any comparable identification number issued by government;
- Full legal name (of all account signatories and beneficial owners);
- Email address (of all account signatories);
- Mobile phone number (of all account signatories);
- Address (principal place of business and/or other physical location);
- Proof of legal existence (e.g., state certified articles of incorporation or certificate of formation, unexpired government-issued business license, trust instrument or other comparable legal documents as applicable);
- Contract information of owners/principals/executive management (as applicable);
- Proof of identity (e.g., driver’s license, passport or government-issued ID) for each individual beneficial owner that owns 10% or more, as well as all account signatories; and
- Identifying information for each entity beneficial owner that owns 10% or more (see individual customer information collected above for more details).
If your institution successfully meets and completes our CIP requirements and neither it nor any of its owners, principals, executive, or managers appear on OFAC or any other governmental watchlist, we will provide you with account opening agreements electronically.
III. Suspicious Activity / Currency Transaction Reports
We file SARs if we know, suspect or have reason to suspect suspicious activities have occurred on Stronghold. A suspicious transaction is often one that is inconsistent with a customer’s known and legitimate business, personal activities or personal means. We leverage our compliance department, which performs transaction monitoring to help identify unusual patterns of customer activity. Our CCO reviews and investigates suspicious activity to determine if sufficient information has been collected to justify the filing of a SAR.
In addition, all currency transactions over a determined USD value are be reported to FMA via a CTR filing.
Our CCO maintains records and supporting documentation of all SARs and CTRs that have been filed.
IV. Reporting Requirements
All records are retained for seven (7) years and are readily available upon official request by an applicable examiner, regulator, or law enforcement agency.