Internal Transactions Monitoring Policy

  1. Purpose

The primary intent is to establish a robust framework dedicated to the vigilant monitoring of fiat transactions on the Lithuanian regulated crypto exchange, GenesisXchange (the “Company”). This framework is meticulously crafted to proactively identify, scrutinize, and thwart potential instances of money laundering, fraud, or illicit financial activities.

  1. 2. Aims to achieve

This Policy has the following aims to achieve:

  1. Detect and Prevent Illicit Activities: The core mission is to identify and prevent money laundering, fraud, and other illicit financial activities prevalent within the dynamic realm of cryptocurrency trading.
  2. Ensure Regulatory Compliance: A paramount goal is to uphold strict adherence to pertinent Lithuanian regulations, encompassing Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) requirements.
  3. Safeguard Reputation: The policy is intrinsically designed to safeguard the reputation of GenesisXchange, ensuring that every transaction adheres to the highest standards of integrity and security.
  1. 3. General information

GenesisXchange stands unwavering in its commitment to maintaining an ecosystem that is not only secure and transparent but also fully compliant with regulatory standards. The Transaction Monitoring Policy, outlined herein, is a strategic initiative aimed at discerning, evaluating, and mitigating risks associated with transactions on the platform. Its overarching objective is to fortify the integrity of the cryptocurrency market.

  1. Criteria for monitoring

GenesisXchange has implemented a comprehensive approach to monitoring customer activities, specifically targeting transactions that exhibit suspicious characteristics.

The focal points include:

πŸ•°οΈ Unusual Trading Hours – Raise a flag for transactions outside the standard trading hours, acknowledging the likelihood of abnormal activities during these off-hours.

πŸ“ˆ Transaction Volume – Keep a watchful eye on the ebb and flow of fiat transaction volumes, alert to any sudden spikes or dips that might signal potential irregularities.

πŸ‘€ Customer Profiling – Deploy robust customer profiling mechanisms to identify deviations from typical user activity, aiding in the detection of potential fraudulent transactions.

πŸ”„ Transaction Frequency – Dive into the frequency of fiat transactions, seeking out patterns or anomalies that could be indicative of suspicious or illicit activities.

πŸ’° Large Transactions – Exercise heightened scrutiny on hefty fiat transactions, recognizing their potential as indicators of money laundering or other illicit financial activities.

πŸ’³ Multiple Payment Providers – Identify and scrutinize transactions involving multiple payment providers, particularly those from various banks or card methods, as they could indicate attempted obfuscation.

πŸ” Source of Funds Verification – Undertake thorough verification of the source of funds for large transactions, keeping a close eye on any inconsistencies in the provided information.

🚨 Excessive Login Attempts – Monitor and flag accounts with numerous login attempts within a short period, suggesting potential unauthorized access or brute-force attacks.

πŸ”„ Rapid Succession of Transactions – Vigilantly flag and scrutinize instances where a user engages in a high number of transactions within a short time frame, potentially signaling involvement in a money laundering scheme.

🌐 Transaction Destinations – Maintain vigilant oversight on the destinations of fiat transactions, especially international transfers, to detect suspicious patterns or high-risk jurisdictions.

πŸ”’ IP Address Discrepancies – Flag transactions linked to different IP addresses than the user’s usual login locations, signaling potential unauthorized access.

πŸ“„ KYC Document Rejections – Track and investigate accounts facing a high number of declined attempts for KYC documents or failed face verifications, indicating potential fraudulent activity.

🌍 Geographical Discrepancies – Engage in geographical scrutiny, comparing the locations of counterparties in fiat transactions to unveil potential discrepancies or unexpected patterns.

  1. 5. Transaction Monitoring Process

The transaction monitoring program adopts a multi-faceted approach, incorporating risk-based procedures to identify Money Laundering typologies and detect transaction patterns indicative of suspicious behavior. The program includes processes to cross-reference established customer transaction profiles against risk-based typologies and transaction patterns, with alerts assigned to customers identified as high risk or engaging in transactions that raise suspicions. The process is primarily conducted manually by the Compliance Officer, complemented by on-chain analytics tools.

6.Additional Safeguards to Enforce

  1. Enhanced Due Diligence (EDD): Application of enhanced due diligence for high-risk transactions or users, involving meticulous investigations and documentation reviews.
  2. Adherence to Regulations: Regularly evaluating the alignment of fiat transactions with pertinent Lithuanian regulations, ensuring unwavering compliance with AML and CTF requirements.
  3. Automated Monitoring Alerts: Implementation of automated alerts for specific thresholds or patterns, facilitating real-time identification of potentially risky transactions.
  4. Integration with Regulatory Reporting Systems: Incorporating monitoring systems with regulatory reporting tools to streamline the reporting of suspicious transactions to relevant authorities.
  5. Transaction Recency: Taking into account the recency of transactions, as abrupt changes in behavior could signify new and potentially suspicious activities.
  1. 7. Internal Review

A commitment is made to regularly review and update these indicators based on evolving risks and regulatory changes, ensuring the maintenance of an effective fiat transactions monitoring system for GenesisXchange.

  1. Training and Awareness

GenesisXchange is dedicated to conducting regular training sessions for relevant staff, ensuring they stay informed about the latest trends in cryptocurrency-related risks and fraud. The aim is to foster a culture of awareness and vigilance among employees involved in transaction monitoring.

  1. 9. Integration with Regulatory Reporting Systems

A strategic integration plan is in place to seamlessly integrate monitoring systems with regulatory reporting tools. This integration ensures the prompt and accurate reporting of suspicious transactions to relevant authorities, enhancing the overall effectiveness of AML and CTF compliance efforts.

  1. 10. Amendments

The policy remains dynamic, allowing for amendments at any time. However, any change to this policy must undergo a formal approval and adoption process by the Director.


Last updated: January 2024


Approved by Director

Costas Makrides