OTC Policy

Definitions

1. Bitcoin is a digital currency created in January 2009. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies.

There are no physical bitcoins, only balances kept on a public ledger in the cloud, that – along with all Bitcoin transactions – is verified by a massive amount of computing power. Bitcoins are not issued or backed by any banks or governments.

2. Etherium is an open source, public, blockchain-based distributed computing platform and operating system featuring smart contract (scripting) functionality. Ethereum was proposed in late 2013 by a cryptocurrency researcher and programmer. Development was funded by an online crowdsale that took place between July and August 2014. The system then went live on 30 July 2015, with 72 million coins "premined". This accounts for about 68 percent of the total circulating supply in 2019.

«Ether» is a fundamental token for operation of Ethereum, which thereby provides a public distributed ledger for transactions. It is used to pay for gas, a unit of computation used in transactions and other state transitions. Mistakenly, this currency is also referred to as Ethereum.

It is listed under the ticker symbol ETH and traded on cryptocurrency exchanges, and the Greek uppercase Xi character (Ξ) is generally used for its currency symbol. It is also used to pay for transaction fees and computational services on the Ethereum network.

Why OTC?  

Liquidity on cryptocurrency exchanges is often low or volatile, thus making it difficult to exchange large amounts when needed. If a large buy or sell order appears on a centralized exchange’s order book, it is unlikely to get filled immediately at the price requested. The order may even be broken up into smaller orders at different prices, an unfavorable phenomenon called price slippage. OTC brokers eliminate slippage and provide liquidity to cryptocurrency markets by matching buyers and sellers through their developed networks at a mutually agreed-upon fixed price.

Many traders have expressed interest in the ability to make larger trades directly with a counterparty without having to go through the public order books.

OTC desks also provide anonymity that is often impossible to achieve on a centralized exchange. For example, if a large buy order of 1,500 BTC were placed on an exchange such as Coinbase, this could alert other traders and move the price of the asset. The anonymity of a large over-the-counter trade prevents such unwanted price movements.

Centralized exchanges also make it difficult to trade large amounts due to order limits or the lack of fiat on-ramps. OTC desks enable customizable direct trades between buyers and sellers, without the restrictions present on exchanges.

To make that possible, we would like to announce the launch of our new Over The Counter (OTC) Trading Desk for BTC (Bitcoin) and ETH (Ether). Through our OTC desk, traders will be able to access digital currency liquidity without affecting the exchange market price.

Our customers make deals for huge amounts of money, so we are responsible for them. To ensure maximum security, all the counterparties undergo the mandatory KYC procedure to make sure that all of our customers follow with AML rules.

Summary

The Belmont Exchange carries out the identification and examines the Partner with whom it enters commercial relations prior to the provision of any product or service or establishment of any business relationship, effectively preventing the legalization of proceeds from crime and the financing of terrorism.

The Belmont Exchange has established a Know-Your-Client (KYC) procedures for OTC Trading to ensure that identification of all new and existing Partners was verified with a reasonable level of certainty.

On the onboarding stage, mandatorily before the establishment of business relations and performing any transactions, Belmont Exchange identifies its Partner by means of documents of evidentiary value and based on information obtained from reliable and independent sources.


1. KYC [1]:

On the onboarding stage, mandatorily before the establishment of business relations and performing any transactions, Belmont Exchange mandatorily requires the OTC Partner to fill in and sign the developed onboarding form with the following information:


Company Information

PEPs & Contacts

Funds

Others

Company name

PEP status/connection

Source of funds and origin of funds

Tax residency

Registered address, Contact details (website, mail address, phone numbers)

Complete information regarding ownership structure and UBOs

Estimated transactions volume in EUR per month

BTC address for corresponding transaction(s)

Company registration number

Register of directors/managers

Type of business and the purpose of establishing business- relations

 


2. Documental request:

In order to clarify, check and verify the provided information regarding the client, The Belmont Exchange requests the following documents together with the duly filled and signed OTC onboarding form:


 

 

 

 

 

 

 

Corporate documents

1.

Certificate of Incorporation

Recent Certificate of Good Standing/Recent Certificate of Incumbency/Recent extract from the Companies register of the respective jurisdiction which contains share allotment details, management details and legal status of the company

Articles of Association/Organization or Memorandum of Association

VAT ID (if applicable)

Shareholder Certificate/Register of Shareholders Certificate of appointment of Director/Register of Directors

Copy of Business/Operating License/link to the license on the regulator's website (if applicable)

Organization Chart / Company Structure (Shareholders, etc.)

2.

3.

4.

5.

6.

7.

8.

Scanned Copy of

1.

Ultimate Beneficiary Owner(s)

passport of:

2.

Director(s) and/or Authorized signatory(s)

Copy of utility bill:

1.

Ultimate Beneficiary Owner (UBO)

2.

Director(s) and/or Authorized signatory(s)

Bank reference**

1.

Scanned copy of a bank statement

2.

Scanned printout from Internet bank

Website

1.

URL

2.

Test login (User/PW)

Financial background

1.

Financial Statement

2.

Annual Return


3. Request for Additional Information:

In case of reasonable doubt regarding the Partner, discovered adverse media which may have a connection to a Partner and/or UBO/Director of the Partner or any other grounded concern of necessity of receipt of the additional information in order to assess the risk score of Partner, The Belmont Exchange shall demand that a Partner and/or UBO/Director of the Partner to provide additional information/documents related to:

  1. business activity/business model and financial status of the Partner and/or UBO;
  2. detailed information and documental confirmation of the source of funds and actives;
  3. the purpose of establishment of the business relationship and the purpose of the transaction in question.

After receipt of the necessary information and documents, Belmont Exchange proceeds to the onboarding decision stage.

4. Information Check, Additional Information Search and Onboarding Decision:

The Belmont Exchange will examine the provided information and documents in order to

  1. Identify the Partner. The Belmont Exchange will use reliable and objective documentation, data and information to identify and verify its Partner.
  2. Identify the Ultimate Beneficial Owner of the Partner. The Belmont Exchange will verify the identity of the ultimate beneficial owner of the Partner with whom it enters into commercial relations.
  3. Identify the Source of FundsThe Belmont Exchange will obtain the documental confirmation of the source of funds of the Partner
  4. Understand the purpose of establishment of Business Relationship. The Belmont Exchange will obtain information on the purpose and intended nature of the business relationship.

After obtaining all the necessary documents and information, based on the risk assessment policy, available information and independent research via open sources performed by the CO and information service providers, The Belmont Exchange shall categorize the Partner’s dossier in one of three risk categories: Low risk, Medium risk or High risk and proceed to establishing legal binding business relations.

The following risk categories are used to define the risk score of the Partner:

(1) Customer risk; (2) Geographical risk; (3) Product risk; and (4) Delivery channel risk.

Depending on the level of risk, Enhanced Due Diligence, allowed transaction limits, information update and transactions monitoring procedures will be applied to the Partner in future.

The “Company name” will monitor its Partners using PEP lists provided by data providers and applies EDD measures in case Partners are identified as PEPs, their family members or close associates.

The “Company name” performs sanction screening of its Partners on the same rules which are used for PEP screening.

The Company will perform screening against the following sanctions lists:

 

  1. UN Sanctions;
  2. EU Sanctions;
  3. Sanctions administered by the Office of Foreign Assets Control (“OFAC”);
  4. Sanctions imposed under the (Local jurisdiction sanctions act).

In case Partner’s dossier is categorized as Prohibited, the process of establishment of business relations is stopped and all the negotiations are ceased.

In case CO decides that the Partner’s dossier documents and gathered information show reasonable suspicion of involvement in illegal activity and/or terrorist financing, internal suspicious activity report will be tendered to the CCO for consideration of SAR (suspicious activity report) tendering.

5. Transaction execution/transaction monitoring:

The Belmont Exchange will not execute transactions to third-parties beneficiaries.

In order to clarify and check the provided information regarding the Partner, Belmont Exchange will carry out ongoing monitoring of Partner’s transactions.

The Belmont Exchange will execute transactions according to earlier provided payment details and/or BTC addresses only. Any changes in payment details and/or destination/beneficiaries will be executed via beforehand notice to the Belmont Exchange and further information update of the Partners dossier.


6. Ongoing monitoring:

The Belmont Exchange will conduct ongoing monitoring of business relationships with Partners, to ensure that the documents and information held are kept valid and up to date.

The Belmont Exchange will conduct ongoing monitoring for all business relationships with Partners. This will be done on the same basis as the CDD conducted when the business relationship with the Partner was established and taking into account the level of risk involved.

The Belmont Exchange particularly involves regularly reviewing and refreshing Company’s view of Partners dossier, their risk score, and whether anything is inconsistent with information previously held about the Partners. It can also include anything that appears to be a material change in the nature or purpose of the client’s business relationship with Belmont Exchange.


7. Reporting:

After CCO has received the internal suspicious report from the CO, CCO will review it and take steps to validate the suspicion in order to judge whether or not a SAR should be submitted to the respective government agency. In case CCO decides that the suspicion of involvement in illegal activity and/or terrorist financing is grounder and objective, CCO tenders SAR to the respective government agency.

 

8. Recordkeeping:

The Belmont Exchange will retain all records relevant to its AML Program including those related to Know-Your-Client (KYC) procedures, carried transactions and all business correspondence relating to business relationships with Partners, for a period of not less than five years after the termination of business relations.


[1] Know Your Customer


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