AML & KYC POLICY

1. Who we are and what this policy covers

Freebnk Europe, UAB (“FreeBnk”, “we”, “us”) is a technology company registered in Lithuania. We develop and operate software for stablecoin and cross-border payments: the Stablecoin API, the Business Global Account, FreeBnk Pay and the OTC Desk, including white-label versions of these products operated by our partners under their own brand.

FreeBnk is not a bank, an electronic money institution, a payment institution or a crypto-asset service provider, and does not currently hold such an authorisation. Where a product involves a regulated activity, such as receiving or paying out fiat currency, exchanging crypto-assets for fiat, or custody of client assets, that activity is carried out by a licensed third-party partner under its own authorisation and its own AML programme. FreeBnk’s wallets are non-custodial: the client controls the keys, and FreeBnk never has access to or control over client funds.

This policy describes the anti-money-laundering (AML), counter-terrorist-financing (CTF), sanctions and know-your-customer (KYC/KYB) controls that FreeBnk applies to its own technology and to the businesses it onboards, and how those controls connect to the obligations of our licensed partners. It applies to every FreeBnk product and to every white-label deployment of our technology.

2. Our commitment

FreeBnk has zero tolerance for money laundering, terrorist financing, sanctions evasion, fraud and other financial crime. Although many of the legal obligations in this area rest with our licensed partners, we design our technology and our onboarding so that:

• no business can use a FreeBnk product without being identified and verified first;
• every wallet address and every transaction that passes through our technology is screened before it is accepted;
• our partners receive the data they need to meet their own legal obligations, including Travel Rule data;
• suspicious activity can be detected, escalated and reported through the licensed partner responsible for the flow.

Our controls are aligned with the Financial Action Task Force (FATF) Recommendations, including Recommendation 16 on virtual assets, the EU Anti-Money Laundering Directives, Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain crypto-assets, and the requirements our licensed partners are subject to in the jurisdictions where they operate.

3. Client onboarding (KYB and KYC)

FreeBnk products are available to businesses and institutions only. Before any product is activated, the client completes know-your-business (KYB) onboarding in the FreeBnk web dashboard or through the relevant partner. Onboarding is carried out with specialist identity-verification providers and includes, as a minimum:

Business verification

• legal name, registration number, registered address, legal form and date of incorporation, verified against official registry data;
• ownership structure and identification of every ultimate beneficial owner (UBO) holding 25% or more, or otherwise exercising control;
• directors, authorised signatories and the individuals who will operate the account or request trades;
• nature of the business, expected products, corridors, volumes and transaction types.

Individual verification

• government-issued identity document checks with document authenticity controls;
• liveness detection and biometric matching of the individual to the document;
• proof of address where required by the partner or the risk profile.

Risk assessment

Each client is assigned a risk rating based on its jurisdiction, industry, ownership, products used, expected volumes and the results of screening. Higher-risk clients are subject to enhanced due diligence, which may include source-of-funds and source-of-wealth evidence, additional documentation on the business model and counterparties, and senior-level approval before activation. For the OTC Desk, source-of-funds evidence is requested as standard for large or unusual tickets.

Where FreeBnk technology is provided white-label, the partner may conduct onboarding under its own programme; FreeBnk requires that programme to meet at least the standards set out here, and no end client is activated on our technology until onboarding is complete.

4. Sanctions, PEP and wallet screening

At onboarding and continuously thereafter, every business, its UBOs, directors and authorised individuals are screened against:

• sanctions lists, including those of the United Nations, the European Union, the United States Office of Foreign Assets Control (OFAC) and the United Kingdom’s OFSI;
• politically exposed persons (PEP) lists, including family members and close associates;
• adverse media and law-enforcement watch lists.

In addition, every blockchain address that interacts with our technology, whether a deposit address, a paying customer’s wallet at a FreeBnk Pay checkout, or a counterparty wallet on the OTC Desk, is screened with blockchain analytics before funds are accepted. Screening covers sanctioned addresses, exposure to mixers, darknet markets, ransomware, scams, stolen funds and other high-risk sources, both directly and through transaction history. Addresses and transactions that exceed our risk thresholds are declined, not processed, and the responsible partner is notified.

5. Ongoing monitoring

Onboarding is not a one-off check. Across all products, we and our partners apply:

• transaction monitoring: limits, velocity and pattern checks on every payment and trade, configurable per client and per partner, with alerts for activity inconsistent with the client’s declared profile;
• periodic reviews: client files, risk ratings and documents are refreshed on a schedule that depends on the risk rating, and immediately when a trigger event occurs (for example a change of ownership, a sanctions hit or unusual activity);
• continuous screening: clients and their related individuals are re-screened whenever sanctions and PEP lists change;
• suspension: we can suspend access to our technology at any time while a review is carried out, and will do so at the request of a licensed partner or a competent authority.

6. Travel Rule

Where a transfer of crypto-assets through our technology is subject to the Travel Rule (FATF Recommendation 16 and Regulation (EU) 2023/1113), the required originator and beneficiary information is collected at onboarding and exchanged between the licensed partners involved before or at the time of the transfer. Transfers to or from unhosted wallets are subject to the additional checks required by the partner responsible for the flow, which may include verification that the client controls the wallet.

7. Reporting and cooperation with authorities

Suspicious transaction and activity reports (STRs/SARs), currency transaction reports and other regulatory filings are made by the licensed partner that provides the regulated service, under its own obligations and to its own financial intelligence unit. FreeBnk supports these obligations by:

• escalating alerts and screening results to the responsible partner without delay;
• providing partners and competent authorities with the records, logs and on-chain references they lawfully request;
• freezing access and preserving records when instructed by a partner or an authority;
• not informing a client that a report has been or may be made (“no tipping-off”).

FreeBnk cooperates fully with law-enforcement agencies, financial intelligence units and supervisory authorities in the jurisdictions where its technology is used.

8. Prohibited clients and activities

We do not onboard, and our technology may not be used by or for:

• individuals or entities on a sanctions list, owned or controlled by a sanctioned person, or resident in, incorporated in or operating from a comprehensively sanctioned country or territory;
• shell banks and companies without a verifiable business purpose, physical presence or identifiable beneficial owners;
• anonymous or numbered accounts, or accounts opened in a fictitious name;
• mixers, tumblers, privacy-coin exchange services, darknet markets, unlicensed gambling, unlicensed money-services businesses and other businesses whose activity we or our partners assess as unacceptable;
• any activity that is illegal where the client, the counterparty or the partner is located;
• persons resident or located in the United Kingdom, or any other jurisdiction where our partners are not permitted to provide the relevant service.

Clients must use FreeBnk products only for their own legitimate business and may not act as an undisclosed intermediary for third parties. Breach of these requirements results in suspension or termination and, where appropriate, reporting through the responsible partner.

9. Record keeping and data protection

Onboarding documents, screening results, risk assessments, transaction records, alerts and the outcome of reviews are retained for at least five years after the end of the business relationship or the date of the transaction, or longer where the law of a partner’s jurisdiction requires. Records are stored securely, with access restricted to authorised personnel, and are made available to licensed partners and competent authorities on lawful request.

Personal data collected for these purposes is processed in accordance with the EU General Data Protection Regulation and our Privacy Policy. AML/CTF obligations constitute a legal basis for processing this data, and the rights of data subjects may be limited where necessary to prevent tipping-off or to preserve the integrity of an investigation.

10. Governance, training and review

• FreeBnk has appointed a compliance officer responsible for this policy, for liaison with licensed partners and authorities, and for escalations.
• All staff with client, product or operational responsibilities receive AML/CTF and sanctions training on joining and at least annually.
• Licensed partners are assessed before integration and reviewed periodically for the adequacy of their AML programme and authorisations.
• This policy is reviewed at least annually and whenever there is a material change in our products, our partners or the applicable law. Where FreeBnk obtains its own authorisation in future, this policy will be updated to reflect the obligations that apply to it directly.

11. Contact

Questions about this policy, requests from competent authorities and compliance correspondence from partners should be sent to help@freebnk.io, marked for the attention of the Compliance Officer.

Freebnk Europe, UAB · Žalgirio str. 88-101, LT-09303 Vilnius, Lithuania