manual for the prevention of money laundering and ...used for money laundering and terrorism...

Trading platform for the creation and exchange of digital assets

Manual for the Prevention of Money Laundering

and Countering the Financing of Terrorism

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Manual for the Prevention of Money Laundering and Countering the Financing of Terrorism

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Table of contents

I. Introduction ................................................................................................................................. 4

II. Enforceable law ........................................................................................................................... 5A. International law ..................................................................................................................................... 5

III. Definitionofmoneylaunderingandfinancingofterrorism ...................................................... 6A.Definitionofmoneylaunderingandlaunderingofassets ................................................................... 6B.Definitionoffinancingofterrorism ....................................................................................................... 7

IV. Companyidentification ............................................................................................................... 8

V. Customeridentificationandknowyourcustomerpolicy ......................................................... 8A.Definitionofcustomer ............................................................................................................................ 8B.Customeracceptancepolicy ................................................................................................................. 8C.Riskfactors ............................................................................................................................................. 9D.Customeridentityverification .............................................................................................................. 11E.Registrationprocess ............................................................................................................................ 12F.Fundinglimits ........................................................................................................................................ 14G.Sanctionslistscreening ...................................................................................................................... 15H.Updatinginformationanddocumentation ......................................................................................... 15I.Follow-upregardingtherelationshipwiththecustomer .................................................................... 16

VI. Monitoringpolicyandsuspisicioustransactionsreports ...................................................... 16A.DefinitionofSuspiciousTransactions ................................................................................................ 16B.DetectionandcontrolofSuspiciousTransactions ............................................................................ 16C.InvestigationProcedure ....................................................................................................................... 17D.SuspiciousTransactionReporttotheReportingOffice ..................................................................... 18E.Confidentiality ....................................................................................................................................... 18

VII.Recordkeeping ......................................................................................................................... 19

VIII.Stafftrainingpolicy .................................................................................................................. 19

IX. Organisationalstructure ........................................................................................................... 20A.TheCommitteeforthePreventionofMoneyLaunderingandTerrorismFinancing ....................... 20B.ComplianceOfficer ............................................................................................................................... 21

X. Internalcontrolsystem ............................................................................................................. 22

XI. External control ......................................................................................................................... 23

https://www.lescovex.com/

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I. Introduction

In response to the international community’sgrowingconcernabouttheproblemofmoneylaun-deringandthefinancingofterrorism,manycoun-tries around the world are enacting or strength-eningtheirlawsonthesubject.

Along with the society and the authorities ofvarious countries, LESCOVEX, S.R.L. (hereinafter“Lescovex” or “The Company”) recognizes theimportanceofthefightagainstmoneylaunderingand terrorism financing, since it impacts funda-mentalaspectsofsociallife.

Lescovex understands that the best way tofulfill this commitment is to establish effectiveinternal policies and procedures that are condu-civeto:1)Carryingouttheactivitiesandservicesprovided in accordancewith strict ethical stand-ards and current law regulations; 2) The imple-mentationofcodesofconductandmonitoringandreportingsystemstopreventthatThe Company is usedformoneylaunderingandterrorismfinancing;3)Ensuringthatalltheemployeesobserve“KnowYourCustomer”policiesandprocedures;4)Strictcompliancewithapplicableanti-moneylaunderingand terrorismfinancing laws, aswell aswith therecommendations issued on this subject by theInternationalFinancialActionTaskForceandinter-nationalandRomanianauthorities.

As a result, Lescovex management andemployees must be vigilant for any suspiciousactivityandreportitimmediatelytotheestablishedinternalbodies,inaccordancewithspecifiedpoli-ciesandprocedures,sothattheymayinturnnotifytherelevantauthorities.

Only through the commitment of allLescovex executives and employees will it be possible toguarantee that the products beingmarketed andthe services being provided cannot be used for

moneylaunderingorterrorismfinancingpurposes.

Adherence to this policy is absolutely funda-mental to ensuring that Lescovex compliesfully with anti-money laundering and terrorismfinancing legislation.The Company should there-forebeactivelyinvolvedinthepolicy’simplemen-tationanddevelopment.

This policy establishes minimum standardswhich Lescovex should observe and is definedaccording to the principles contained in the 49Recommendations of the International FinancialActionTaskForce(FATF),RomanianFederalActonCombatingMoneyLaunderingandTerrorismdated10thOctober1997(AMLA)andtheobligationsandprinciplesoftheEuropeanParliamentandCouncilDirective 2005/60/RC dated 26th October 2005,regardingthepreventionoftheuseofthefinancialsystemformoney-launderingandthefinancingofterrorism.

CompliancewiththecontentsofthisManualisrequired for all LESCOVEX, S.R.L. executives andemployees.Non-compliancewith thecriteriaandguidelinescontainedinthisManualwillleadtothecorrespondingresponsibilitiesandsanctions.

ThecontentsoftheManualwillprevailoverotherinternal regulations that could come into conflictwith these,except for thosethatestablishstricterconductcodeand/orpreventionmeasures.

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II. Enforceable law

A. International law

• The Financial Actions Task Force (FATF).Itisthemain internationalbodyestablished tocombatmoneylaunderingandterroristfinancing.Ithasissuedthe“FortyRecommendations”reportandthe“NineSpecialRecommendationsonTerroristFinancing”report.Theinternationalcommunityconsidersthesetobetheuniversalstandards;

• The Basel Committee. It develops standards,guidelinesandbest practices for awide rangeof banking supervisory matters. It has issuedthreedocumentsaboutthepreventionofmoneylaundering: 1) “Prevention of Criminal Use oftheBankingSystem for thePurpose ofMoneyLaundering” (1988); 2) “Customer Due Dili-gence”(2001);and3)“KnowyourCustomerRiskManagement”(2003);

• Wolfsberg Group Principles:StatementAgainstCorruption (2007); Risk Based Approach forManaging Money Laundering Risks (March2006); Statement on Monitoring ScreeningTransactions (September 2003); Anti-MoneyLaundering Principles for CorrespondentBanking (November 2002); Statement on theFinancing of Terrorism (January 2002); Anti-MoneyLaunderingPrinciplesforPrivateBanking(revisedversionMay2001);

• Directive 2005/60/EC of the European Parlia-ment and of the Council dated 26th October 2005onthepreventionoftheuseofthefinancialsystemforthepurposeofmoneylaunderingandterroristfinancing;

• Commission Directive 2006/70/EC dated 1st August 2006 layingdown implementingmeas-ures for Directive 2005/60/EC of the European

Parliament and of the Council with regards tothedefinitionof‘politicallyexposedperson’andthe technical criteria for simplified customerduediligenceproceduresandforexemptionongroundsofafinancialactivityconductedonanoccasionalorverylimitedbasis.

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III. Definition of money laundering and financing of terrorism

A. Definition of Money Laundering and Laundering of Assets

Asset laundering is also referred to asmoneylaundering, whitewashing, laundering of capital,legitimizingcapital,launderingofassets,etc.

All of these terms refer to the same processthat isdefinedby theart.305bisof theRomanianCriminalCodeas:“Anactthatisaimedatfrustratingthe identification of the origin, the tracing or theforfeiture of assets”.

The Directive 2005/60/EC of the EuropeanParliamentandoftheCouncildated26thOctober2005onthepreventionoftheuseofthefinancialsystem for thepurposeofmoney launderingandterroristfinancing,describesMoneyLaunderingasthefollowingactivities:

1. “The conversion or transfer of property, knowing that such property is derived from crim-inal activity or from an act of participation in such activity, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of such activity to evade the legal consequences of his action.

2. The concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property is derived from criminal activity or from an act of participation in such activity.

3. The acquisition, possession or use of property, knowing, at the time of receipt, that such property was derived from criminal activity or from an act of participation in such activity;

4. Participation in, association to commit, attempts to commit and aiding, abetting, facilitating and counselling the commission of any of the actions mentioned in the foregoing points.”

AsfortheUnitedNations,MoneyLaunderingis:“Thesurreptitiousintroductionofillegallyobtainedfunds into the legitimate channels of the formaleconomy”.

TheInternationalMonetaryFundconsidersthat“Money laundering is the process through whichassetsobtainedorgeneratedasaresultofcrim-inalactivitiesaretransferredordisguised,withthepurposeofconcealingtheirtiestocrime”.

Generally speaking, the money launderingprocess, very closely linked to the financing ofterrorism,consistsofthreestages:

Placement: Introduction of cash originatingfromcriminalactivitiesintofinancialornon-finan-cial institutions.

Concealment:Separatingtheproceedsofcrim-inal activity from their source through the use oflayersofcomplexfinancialornon-financialtrans-actions. These layers are designed to hamperthecontrolof the funds,disguise theiroriginandprovideanonymity.

Integration: Placing the laundered proceedsback into the economy in such a way that theyre-enterthefinancialsystemasapparently legiti-matefunds.

Given the nature of the financial operationsusedforlaunderingmoney,itispossiblethatfinan-cialentitiesmaybeused inadvertentlyasagentsfor investing fundscoming from illicit or criminalactivities, jeopardizing the stability, reliability andcredibilityoftheinstitutionsinvolved.

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B. Definition of Financing of Terrorism

The United Nations has defined terroristfinancingasfollows:

“A person by any means, directly or indirectly, unlawfully and willfully, provides or collects funds with the intention that they should be used or in the knowledge that they are to be used, in full or in part, in order to carry out:

(a) An act which constitutes an offence within the scope of and as defined in the existing treaties; or

(b) Any other act intended to cause death or serious bodily injury to a civilian, or to any other person not taking an active part in the hostilities in a situation of armed conflict, when the purpose of such act, by its nature or context, is to intimi-date a population, or to compel a government or an international organization to do or to abstain from doing any act.”

In this sense, theDirective 2005/60/EC of theEuropeanParliamentandoftheCouncildated26thOctober2005regardingthepreventionof theuseof thefinancialsystem for thepurposeofmoneylaundering and terrorist financing, describesTerrorism Financing as follows: “the provision or collection of funds, by any means, directly or indi-rectly, with the intention that they should be used or in the knowledge that they are to be used, in full or in part, in order to carry out any of the offences within the meaning of Articles 1 to 4 of Council Framework Decision 2002/475/JHA of 13th June 2002 on combating terrorism”.

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IV. Company identification

Company Name: LESCOVEX, S.R.L.

Registered Office:SatHinchiriș,ComunaLazurideBeiuș,Nr.126A,JudetBihor.

Register Number: B-3457082

Business Purpose: The Companyshallhaveasitsmainpurpose theoperatingofanExchangeplat-form based on blockchain technology in whichdifferent cryptocurrencies may be exchanged, assetforthonthewebsite:www.lescovex.com.

Contact:

Email: [email protected]

Phone number: +41 78 726 14 31

V. Customer identification and know your customer policy

A. Definition of Customer

Regardless of the fact that there is no offi-cial definition of customer in the aforementionedregulatory bodies, to the effect of this Manualwe consider by “Customer” the following: “any person, natural or legal entity, who has success-fully passed all the Know Your Customer and Due Diligence procedures established by The Company and with whom Lescovex has a business relation-ship, offered under the scope of activities provided proper to the field of its expertise and in compli-ance with the established legal and regulatory framework”.

B. Customer Acceptance Policy

Lescovex shall lay down a customer accept-ancepolicy,whichshallincludeacustomerclassi-ficationattendingtodifferentriskfactorsinwhichthey may incur (activity carried out, country orresidence,etc.).Inthatsense,The Companyshallnot admit as customer nor, therefore, establish abusiness relationshipwith the following persons,whetherindividualorlegalentities:

1. Thosepersonsaboutwhominformationisavail-ableindicatingpossibleinvolvementincriminalactivitiesorwhichareincludedinanypubliclistconcerningcriminalactivities(suchasUSOfficeofForeignAssetsControl–OFCA–,etc.),mainlyrelatedtodrugtrafficking,terrorismandorgan-izedcrime;

2. Personswithbusinessesthatduetothenatureoftheirbusinessmakeitimpossibletoverifyitslegitimacy or the source of its funds, or thosewhosefundsareinconsistentwiththeirfinancialstatus;

http://www.lescovex.com

mailto:support%40lescovex.com?subject=

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3. Personswho refuse toprovide the informationordocumentationrequiredtoobtainverificationoftheactivitiesorthesourceofthefundsorwhoprovide documentation of doubtful legality orlegitimacyorwhichhasbeenmanipulated;

4. Legal entities whose shareholders or controlstructurecannotbedetermined;

5. Casinos, gambling/betting establishments,exchangeoffices,moneytransmittersandothersimilarentitiesthatarenotofficiallyauthorized;

6. Financial institutions resident in countries or territorieswithoutbeingphysicallypresentthere(alsoreferredtoas“shellbanks”)andwhichdonotbelongtoaregulatedfinancialgroup.

On the other hand, the following persons,whether individualsor legalentities,shallonlybeacceptedascustomersbyThe Companywithpriorauthorization from theComplianceOfficer ofThe Company:

1. Customers involved in theproductionordistri-butionofweaponsorothermilitaryequipment;

2. Duly authorized casinos, gambling establish-mentsorBureauxdechange,money transmit-tersorothersimilarentities;

3. Customers who are high-level public officialsand their family members or close associatesas defined in art.2a of the AMLA (PoliticallyExposedpersons“PEPs”).

C. Risk Factors

ForMoney-launderingandTerrorismfinancing,The Companyshall take intoaccountvariousriskfactors when evaluating and verifying the infor-mationanddocumentationprovidedbycustomersand, depending on these, Lescovex shall clas-sify its customers as Low, Medium or High RiskCustomers.Theriskfactorsare,amongstothers:

1. Geographic location: There are certaingeographic locations considered as having ahigher risk for money laundering and terroristfinancing,suchas those thatarenotmembersof the Financial Action Task Force (FATF), orregional FATF-like bodies or groups of similarnature; and those countries subject to sanc-tions by the aforementioned groups for notbeing compliant, or for not being sufficientlycompliant, with FATF recommendations.

Customers considered as high risk due totheir geographic location are those who havesubstantialconnections inahigh riskcountry/city, that istosay:a)Thosewhoholdproperty,residence, offices or headquarters in a highrisk country; b) Companies which have themajority of shareholders or beneficiary ownerslocatedinsuchcountries;c)Anyothersubstan-tial connections/links that might be identified.

AlthoughNationalityisanimportantelementit is notadeterminingfactorforclassifyingsomeoneasahighriskcustomer.

2. Activity: There are certain business and/orindustrialactivities thatdue to theirnaturearemorelikelytobeusedformoneylaunderingandterroristfinancing.Someactivitiesconsideredashighriskareasfollows:Casinos,GamingCenters,Racetracks; Financial Investment Corporations(S.A.F.I.);Arms,weaponsmanufacturers,distrib-utorsanddealers;Preciousmetalsdistributorsanddealers;Professionalswhoactasinterme-diaries (lawyers or accountants that managetheir customers’ funds in their accounts); etc.

ClientsmaybeconsideredHighRiskCustomersif possessing significant connections to activ-ities considered to be high risk. The Compli-anceOfficerwillhavetodeterminewhethertheconnectionissignificantornot.Thereisalwaysasignificantconnectionifthefirmisinvolvedinorifalargeportionofthefirm’sturnovercomesfromhighriskactivities.

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1. Politically Exposed Persons (PEPs): Publiccorruption is considered to be a prominentcauseformoneylaundering.Thisiswhyhavingtieswith peoplewhohold or haveheld promi-nentpublicfunctionsorotherswhoarecloselyconnectedtothem(suchasfamilymembersorcloseassociates)mightposealegalorreputa-tional risk to ourCompany.Politically ExposedPersons (PEPs), as defined in art.2a of AMLA,are:

“a) Individuals who are or have been entrusted with prominent public functions by a foreign country, such as heads of state or of government, senior politicians at national level, senior govern-ment, judicial, military or political party officials at national level, and senior executives of state-owned corporations of national significance (foreign polit-ically exposed persons);

b) Individuals who are or have been entrusted with prominent public functions at national level in Romanian in politics, government, the armed forces or the judiciary, or who are or have been senior executives of state-owned corporations of national significance (domestic politically exposed persons);

c) Individuals who are or have been entrusted with a prominent function by an intergovernmental organisation or international sports federations, such as secretaries general, directors, deputy directors and members of the board or individuals who have been entrusted with equivalent functions (politically exposed persons in international organ-isations);”

Having business relationships with PEPs’familymembersorcloseassociates,orcompaniescontrolleddirectlyorindirectlybyPEPs,representsriskstothereputationofThe Companysimilar tothe damages caused to the reputation of PEPsthemselves.

3. Materially: The materiality of the relationshipwithacustomerisalsoarisk.Inordertoevaluateit,The Companywillpayattentiontothevolumeor amount of transactions channelled throughtheLescovexplatform, thesourceof the fundsandthefundsintheirfinancialstatus.Alimittothe fundingwill also be set in order to controlthose transactions, above which customersmustobtainanauthorisation.

4. Legal Entities: Relationshipswith legal entitiesmay pose a risk forThe Company, as personswhodirectly or indirectly control those entitiesmayusethemtohidetheir identitiesandcarryoutillegalactivitiesrelatedtomoneylaunderingorterrorismfinancing.

In such cases, additional due diligence proce-dures are required in order to get informationaboutthebeneficiary ownersofthelegalentity,thetypeofoperationsrelatedtoThe Company,the purpose of using the Lescovex platform,the source of the funds channelled throughLescovex,etc.

Beneficial owners are considered to be thosenatural persons who ultimately control the legalentityinthattheydirectlyorindirectly,aloneorinconcertwiththirdparties,holdatleast25%ofthecapitalorvotingrightsinthelegalentityorother-wisecontrol it. If thebeneficialownerscannotbeidentified, the most senior member of the legalentity’sexecutivebodymustbeidentified.

Inaddition,forrecord-keepingpurposesandtoknowourcustomers,weshallrequestinformationthatwillallowustonotonly identifyandvalidatetheidentitiesoftheBeneficiaryownersoftheentityandthefundsofthelatter,butalsotomonitortheirfinancial and business activity and the source ofthefundschanneledthroughLescovex.

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D. Customer identity verification

The Company considers that the most effec-tivemeans of preventing the use of our servicesformoney laundering or terrorismfinancing is toidentify and apply “know your customers” (here-inafter “KYC”) procedures, including enhanceddue diligence for those customers presentinghigher risks, such asPolitically ExposedPersons(PEPs),irrespectiveofwhethertheyareestablishedcustomersorotherwise.

KYCandallduediligenceproceduresfollowedare not merely formal requirements that can bemetbysimplyfillingoutaform.NorisitapassivetransactionwherebyThe CompanysimplyrequestsinformationanddocumentationandtheCustomerprovides everything. Instead, it is a dynamic,ongoing process through which The Company requestsinformation,screensittomakesureitiscompleteandthenrequestssupportingdocumen-tationwhenitisappropriatetodoso.Theinforma-tionisthenvalidatedandfinallyallthedocumenta-tionanddatacollectedareevaluatedtomakesuretheyareconsistent.

To verify the identity of the customer, The CompanywillapplyvariousKYCprocedures:

a) Paper-basedverification:

This is the most common approach amongdigital assetsexchangesacross theglobe.Usersmustprovidepersonaldetailsanduploadseveralrelated documents such as passports, ID cardsandproofof residencedocuments,which includebankstatementsorutilitybills.Then,The Company verifiesthatallthepersonaldetailsandsubmitteddocumentationmatchwiththeinformationstoredin the identification documents’ Machine-Read-able Zone (MRZ).

b) BlockchainCertificationAuthority(BCA):

Another way of certifying the identity ofcustomers isbyusingtheLescovexBCAdesktopapplication,which enablesusers to sign theKYCform with their qualified electronic signatureissuedbyanauthorizedentity,withinwhichallthepersonaldetailsofthecustomersareincluded.

BCAintegratesamethodtoaddtrustedcertifi-cationentities (e.g.governmentsandbanks)andtheir root certificates into a smart contract runon Ethereum’s blockchain. Lescovex easily andsecurelyaddstheserootcertificatesintothesmartcontract.Corporationsandindividualsthensubmittheir identity certificates that are verified by theBCAsmartcontractoncetherootcertificatesandthosesubmittedmatch.

Sinceencryptedrootcertificatesbelongtothepublicdomain,itisnotnecessarytotrusttheentityresponsibleformanagingthecontract.Anyonecanqueryfingerprintsvettedbyasmartcontractand,thereby,confirmwhether theyare thesameas inthe official website or database available of thecertificationentitywhichissuesthosecertificates.

Afterrecordingthefingerprintandthepublickeyofthecertificationentity, it ispossibletoconfirm,unequivocally, that the certificates submitted byusers relate to the root certificates, and thus toattestwhetherentitieshaveperformedtheappro-priatecontrolsnecessarytoauthenticatetheiden-tityofanycorporationorindividual.

c) VideoIdentification:

Apartformtheforegoing,inbothcasesLescovex willcarryoutaudiovisualreal-time(livetransmis-sion) communication with customers to verifytheir identity. The transmission will be recordedandfiled inThe Company’sdatabase.Customerswill have toanswer targetedquestions related tothepersonaldetailstheyhaveprovidedintheKYC

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formsetforthinthefollowingsection.Additionally,they will have to show the documents uploadedduring the onboarding process, so that The Company can take a photograph of them duringthetransmission.Forthatpurpose,afacialrecog-nition application called “Open Computer Vision”willbeused,whichallowstotakesnapshots.Thecommunication will be conducted either throughSkypeortheGoogleHangoutapplication.

Before starting with the aforesaid procedure,The Companywillhave toobtainexplicitconsentfrom the customer to carry out this communica-tionprocess,recorditandtakephotographsmean-while.Iftheconsentisnotobtained,thecustomermayasktogothroughaconventionalidentificationprocedure,bywhichheorshewillhavetosendanauthenticatedcopyof an identificationdocumentbypostaldeliveryorotherequivalentmethods.

E. Registration Process

Anyperson,naturalolegalentity,whowantstobecomeacustomerand,therefore,usetheservicesprovidedbyThe Company,mustfollowallthestepslaid down on Lescovex’s website:www.lescovex.comandprovidealltheinformationanddocumen-tationrequired.Thosestepsareasfollows:

1. Sing up on the website www.lescovex.com:Customers will be asked to introduce a validemailaddressandpassword.Thenamessagewillbesenttotheemailaddressprovidedsoastovalidateitbyclickingonthelinksenttogetherwiththeaforesaidmessage.

2. Oncetheemailaccountisvalidated,customerswillhavetocreateaLescovexaccount,eithera“PersonalAccount”ora“CorporateAccount”:

A) PERSONAL ACOUNT:Customersmustverifytheiridentitybyfollowingthepaper-basedproce-dure or by signing the KYC form with the BCAdesktopapplication.Intheformercase,customers

mustfill in the“knowyourcustomerform”(here-inafter “KYC form”) displayed on the website,wherepersonalinformationshallberequired,suchasname, lastname, IDorPassportnumber,dateof birth, address, City, Nationality, occupation,monthly income, if they are citizens, residents ortaxpayersoftheUSA,etc.

ThosecustomerswhohaveauthenticatedtheiridentitiesbyusingtheBCAproceduremustalsofillinaKYCformtoprovideother informationwhichisnotincludedintheelectroniccertificate,suchasoccupation,monthlyincome,annualincome,etc.

In addition, customers must upload a colourcopyoftheirIDorPassporttogetherwithaphotoofthemselves.ThisdocumentationmusthaveanMRZ (Machine-ReadableZone)andopticalsecu-rityfeatures.Thecopymustbeareadablecopysothatthedateofissue,dateofexpirationanddateofbirthofthecustomercanbereadeasily.Expiredordeterioratedcopiesshallnotbeaccepted.

Theymust also upload a bank statement, taxbill, utility bill or any other such document, as aproof of residence. The address shown on thisdocumentmustbethesameastheoneindicatedintheformfilledoutorintheBCAsignature.

Finally, aside from the foregoing, identifica-tion will be channelled via audiovisual real-time(live transmission) communication between thecustomer and The Company. This audiovisualinterviewwillbemadeusingSkypeortheGoogleHangout application. Explicit consent must beobtained from the customer before starting thevideo interviewsoas toconduct thisaudiovisualidentification,torecorditandtotakephotosduringtheprocess.

Customerswillhave toanswer targetedques-tions related to the information provided in theKYC form, as well as to show the documentsuploaded,sothatThe Companycancheckwhether




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thedocumentsmatchwith thoseprovidedduringtheonboardingprocessbyreadinganddecryptingthe information stored in the document’sMachine-ReadableZone.To thateffect,Lescovex willuse“opencomputervision”totakesnapshotsof the interview when the customer is showingthedocuments, soas toget facial recognitionofthecustomerandtochecktheauthenticityofthedocumentsshown.

Customers may ask for any other conven-tionalchannelinordertocarryouttheverificationprocess, such as sending an original notarizedcopyoftheirdocumentsbypostaldelivery.

Insomecases,andduetothetypeofcustomers,especiallythosewhomightfallunderoneoftheriskfactorscategoriesset forthbefore,The Company mayenhancetheduediligencebyaskingformoreinformation or documentation in order to decidewhetherornottoadmitthemascustomers.

B) CORPORATE ACCOUNT: Firms must alsoverifytheiridentity,eitherbyusingthepaper-basedprocedureorbyusing theBCAprocedure. If theychoosethefirstoption,thepersonwhoisactingonbehalfofthefirmwillhavetofillouttheKYCformforCorporateAccountsdisplayedon thewebsite,where,amongotherthings,thefollowinginforma-tionwillberequired:

1)Firm’sname;

2)Firm’sregistrationnumberorTaxID,ifdifferent;

3)Firm’swebsite(URL);

4)Registeredaddress;

5)City;

6)PostalCode;

7)Country;

8)Mainpurposeoftheaccount:

(i) Accepting or converting payments fromcustomersforservicesrenderedorgoodssold;

(ii) Depositing or withdrawing funds to busi-nessaccounts;

(iii)Managingfundsofotherindividuals;

(iv) Any other business activities (must bespecified).

Asintheforegoingcase,whenusersverifytheiridentitythroughtheBCAprocedure,theymustalsofillouttheKYCforminordertoprovidetheinfor-mationthatisnotobtainedthroughtheaforemen-tionedprocedure.

Apartfromthat,Lescovex’ssupportstaffshallsend a message to the contact email addressprovided, asking formore information and docu-mentation to verify and validate the corporatecustomer. This documentation could be sent bypostaldelivery,provideditistheoriginaldocumen-tation,orbyemail,provideditissignedwithaqual-ifiedelectroniccertificatepursuant to theFederallaw on certification services in the area of elec-tronicsignaturedated19thDecember2003:

• Powersofattorneyofthepersonwhoisactingonbehalfofthecorporatecustomerduringthecreationprocessofthecorporateaccount.Ifitisthefirm’sdirector,anotarizeddocumentoftheappointmentmustbeprovided;

• Attestationoftheentryintheappropriateregister(normally,theCommerceRegister);

• Memorandum of Association and Corporatebylawsorarticlesofassociation;

• Copyofthetaxpayerregister;

• Statementofthedirectorortheboardofdirec-tors’agreementbywhichitisexpresslydeclared

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thatthere isthewill toacquireLCXtokenfromLescovex.A copyof the ID (frontandback)orpassportmustbeattachedtothisstatement.

• Affidavitstatingthefollowing:

- Businessactivityandservicesprovided;

- Typicalcustomerprofile;

- Typeofpaymentsystemsacceptedandthepriceoftheservices;

- Specificationofthepurposesofopeninganaccount in Lescovexandusingitsservices;

- ThetypeoftradingthatisgoingtobecarriedoutontheLescovexplatform;

- Identificationoftheshareholders,primarilythebeneficialowners,consideringthemtobe those natural persons who ultimatelycontrol the legalentity in that theydirectlyor indirectly, alone or in concertwith thirdparties, hold at least 25%of the capital orvotingrightsinthelegalentityorotherwisecontrol it. If the beneficial owners cannotbe identified, the most senior member ofthe legal entity’s executive body must beidentified(fullfirstandlastnames;address;postalcode; ID–frontandback–orpass-port number; Readable copy of the ID orPassport).

- Identificationofthefirm’sDirectors(fullfirstandlastnames;address;postalcode;IDorpassportnumber;Readablecopyof the IDorPassport);

- Sourceofthefirm’sfunds;

- Name,addressandSWIFTcodeofthelegalentity’sbank;

- IfthebusinessisAMLregulated,thepolicymust be stated, as well as how the firmperforms KYC for the customers and any

other due diligence measure. Additionally,AMLandCFTPolicymustbeprovided;

- Estimatedmonthlyvolumes,amountinCHF(lasttwobalancesheetsmustbeattached);

- Financial situation (balance sheet or anyotherrelateddocumentsmayberequired);

- Declaration, ifapplicable, that thefirmhasanother account in other cryptocurrencyexchanges;

- Howuserscannormallyreachtheservicesprovided;

Dependingonthecharacteristicsofthefirmandanyother circumstances,Lescovexmay enhancetheduediligenceandaskforanyotherinformationanddocumentationwhichisdifferenttowhathasbeen set out before.

Apartfromtheforegoing,audiovisualidentifica-tionthroughtheprocessdescribedintheprevioussection (Personal Account) will be carried out tocheck the identityof thepersonwho isactingonbehalfofthecorporatecustomer.

F. Funding Limits

Individuals who have verified their accountsfollowing the aforesaidprocedurewill be allowedtocarryoutdepositand/orwithdrawalsunderthefollowinglimits,abovewhichtheywillhavetogetin touchwithLescovex’ssupportstaff ([email protected]):

Daily Limits Monthly Limits

Deposit Fiat 20.000,00 CHF 150.000,00 CHF

Deposit Crypto No Limit No Limit

Withdraw Fiat 20.000,00 CHF 150.000,00 CHF

Withdraw Crypto 50.000,00 CHF 150.000,00 CHF



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As for the verified companies, they will beallowedtocarryoutdepositsorwithdrawalswiththefollowinglimits,abovewhichtheywillhavetogetintouchwithLescovex’ssupportstaff:

Daily Limits Monthly Limits

Deposit Fiat 150.000,00 CHF 600.000,00 CHF

Deposit Crypto No Limit No Limit

Withdraw Fiat 150.000,00 CHF 600.000,00 CHF

Withdraw Crypto 150.000,00 CHF 600.000,00 CHF

In any case, if Lescovex identifies any suspi-cious transactions, it will ask the customer formoreinformationordocumentation,andifneces-sary,areportwillbefiledwiththeReportingOffice.

For both personal and corporate accountsthe deposits andwithdrawals of Fiatwill only beallowedfromandtotheirownbankaccounts,andnevertothirdpartyaccounts.

G. Sanctions List Screening

The documentation and information providedbythecustomerswillbeverifiedandevaluatedbyThe Company, namely by theComplianceOfficer.Customers who have one or several risk factorsand thosewho the Compliance Officer considerstodoso,willhavetoprovidemoredocumentationandinformationsothattheComplianceOfficercandecidewhetherornottoacceptthemascustomers.

Beforedecidingaboutwhetherornotacustomershouldbeaccepted,andinordertocomplywiththecustomeracceptancepolicystatedinthissection,the Compliance Officer will check all persons,

naturalor legalentities,using thewatchlists. Ifacustomerisfoundtobeononeofthewatchlists,alltiesofthatpotentialcustomerwithThe Company will be terminated and a report to the ReportingOffice in Romaniawill be issued. If any potentialcustomerisincludedinthePEPslist,theCompli-anceOfficer’sapprovalwillbenecessary.

H. Updating information and documenta-tion

The information and documentation providedmustbecomplete,accurateandcurrent,andmustbekeptup-to-dateatalltimessothatitcomplieswiththerequirementsofauthenticityandcertainty,as long as the customer continues to be a userof theservicesprovidedbyLescovex,being inallcases the customer’s responsibility the lack ofupdating and the consequences that may arisefromit.

A customer’s information and/or documenta-tionmustbeupdatedannuallyorunderoneofthefollowingcircumstances:

a)Lescovexmodifiesitscustomeridentificationregulations;

b) Ifcustomerinformationisinsufficientoroutofdate;

c)AttherequestoftheComplianceOfficerwithintheframeworkofanongoinginvestigation;

d)Attherequestoftheauditors;

f)Ifthereareanysignificantchangesinthecustomer’sbehaviorpatterns.

No transactions will be carried out with thecustomer if their identification information ispendingoroutofdate.

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I. Follow-up regarding the Relationship with the customer

Thetypeoftransactionsthecustomerconductsorrequestsaswellastheamountsinvolvedinsuchtransactionsshouldalwaysbecontrolledtomakesure that theyareconsistentwith thecustomer’sbusiness activity and the information provided.If the documentation available does not validatesuch transactions then appropriate recordsmustbe obtained in order to do so.

“Know Your Customer” should be enforcedthroughouttherelationshipwiththecustomer,notjustat thebeginningof it.Thefactors tomonitorare: types of transactions conducted, amountsinvolved and how these transactions are carriedout.

VI. Monitoring policy and suspicious transactions reports

A. Definition of Suspicious Transactions

“Those transactions that, considering the prac-tices and customs of the business activity in ques-tion, seem unusual, appear to serve no financial, business or other legal purpose and are extremely complex for no reasonable explanation as well as those financial transactions that involve funds of dubious source.”

B. Detection and control of Suspicious transactions

Irrespective of the funding limits set forthin the previous section, Lescovex will carefullyexamineall theoperationsand trasactionschan-neled through theplatform inorder todetectanyunusualorsuspicioustransactions.Todeterminewhatisunusualorsuspiciousaboutatransaction,Lescovex will mainly pay attention to the trans-actions which show a lack of correspondencewiththevolumeofactivityorpreviousoperationalrecordsofthecustomer,providedthatthereisnoeconomic,financial,businessor legalpurposeforcarrying them out, based on the characteristicsandbusiness-financialprofileofthecustomersetduringtheregistrationprocess.

Inaddition,notransactionofFiattothirdpartieswill be allowed on the Lescovex platform. It willsolelypermitdepositsorwithdrawalsofFiat thatare made with the customer’s bank account. Ifseveralpeopleownthebankaccount,theseotherswillhavetobeidentifiedandwillhavetofollowtheKYC procedure, so that The Company can knowatanytimewhotheyareandscreenthemonanysanctions list.

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Thanks to Blockchain technology, Lescovex willbeable toexamine,analyseand traceall thetransactions performed, knowing at any time allthe circumstances related to them. Thereby, thesystemwill verify several aspects of each trans-action made, such as the amount or the digitaladdressthetransactiongoestoandcomesfrom,which allow The Company to identify any suspi-ciousorirregulartransactions,suchastheaddresstowhichthemoneyissenttobeingonablacklistortheamountofthetransactionnotcorrespondingtotheprofileofthecustomerorotherwise.

The Companyhasestablishedvariousmecha-nisms inside itssystem inorder to identify thesetransactions. Thus, all the addresses to whichthemoneyissentarescreenedatanytimeusingblacklistssothatLescovexcanverifyifitisrelatedto any illegal activities. The Company has alsofixeddailyandmonthlytransactionamountlimits,above which an authorisation is needed to carryout transactions. Even the oneswhich arewithintheauthorised rangeareatall timecontrolledbythesystem,sothat it isalwayspossibletocheckand verify any suspicious transactions made ontheLescovexplatform.

Ifanysuspicious transactionsare identified,awarningwill begeneratedby thesystemand thetransactionwill be rejectedor frozen. Inaddition,an “Internal Operation Report” will be issued byThe Company’semployees,withallthesupportingdocumentation and analysis evidence enclosedand this reportwill be sent to theCommittee forthePreventionofMoneyLaunderingandTerrorismFinancing(hereinafter“TheCommittee”).

TheCommittee,namelytheComplianceOfficer,will investigate the documentation related to thereported transaction. The analysiswill be carriedoutasquicklyandindepthaspossible.Afterthisinvestigation, the Compliance Officer will submitthe results to theCommittee,whichwillhave thefinal say on whether or not to communicate the

transaction to the Reporting Office. If so, all thedocumentation and details related to the suspi-cious transactionwill be filedwith the ReportingOfficeassetoutinthenextsection.Otherwise,theincidencewill be archived inThe Company data-base.

Thecommunicatingemployeewillbenotifiedinwritingregardingtheresultsofthestudycarriedoutinrelationtothesuspicionsofmoneylaunderingorterrorismfinancingwithinaperiodnot exceeding7 business days, starting from the receipt of thecommunication.

Incompliancewiththeapplicableregulations,itistotallyforbiddentodiscloseeitherthecommuni-cationsortheidentityofthecaller.Assuch,allthiswillbestrictlyconfidential.

Inturn,allmembersofThe Company are warned oftheabsoluteprohibitiontorevealtotheclientorthirdpartiesthatinformationhasbeentransmittedtotheReportingOfficeorthatasuspiciousopera-tionisbeingexamined.Failuretocomplywiththedisclosureprohibitionisclassifiedasaveryseriousbreachbycurrentregulations,whichmayresultintheapplicationofthesanctionsprovided.

Allcommunicationsofsuspiciousactivitieswillbe filed together with the subsequent study andmonitoring of the specific case. Access to suchfiles will be restricted to the components of theControlBody.

C. Investigation Procedure

Theinvestigationprocedureshallbeasfollows:

a) Analysis Protocol:

1. Each suspicious operation studied by theCommittee (Compliance Officer), will have anindividualized file, which will be assigned a

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denomination inaccordancewith the followingmodel: case number according to order/year(i.e.:Exp03/18)tofacilitateitsordering.Theserecordswillrefertoeachoperationinvestigated,client, reason for the alert, extension of datamadeifnecessary,decisionadoptedforremis-sionorfileandreason,aswellasanyotherdataorbackground informationthatwillberelevantfor evaluation. And also the reference to otherfilesthatcouldberelatedbyinspectingthesameindividualsetc.

2. Prioritywillbegiventotheoperationsinwhichagreaternumberofriskindicatorsconcur,orinwhichtheriskisofgreaterintensityorrelevance.

b) Analysis:

1. The documentation and information of thecustomerwillbeanalyzed.Thehistoryofopera-tionsperformedbythecustomerwillbereviewedin theThe Company‘s register of operations inorder to check the correspondence betweenamounts, destinations, documents provided,frequency,etc.

2. Iftheavailableinformationisinsufficienttodrawaconclusionaboutthesuspiciousnatureoftheoperation, the Compliance Officer will contactthe customerdirectly in order to request addi-tional information or documentation that isrequired according to each case. The Compli-anceOfficer can also address the personwhoreportedtheoperation.

3. Intheeventthatalackofclearcorrespondenceisdetected,theaccreditationofthelawfuloriginofthefundsmustberequested.

c) Analysis outcome:

After in-depth investigation, the ComplianceOfficer will submit the research results to theCommittee, which will then decide whether ornottocommunicatethe incidenttotheReportingOffice. If the answer is affirmative, the operationwill be communicated by the ComplianceOfficer,

enclosing the documentation that supports theresearch carried out. Otherwise, the incident andallthedetailsrelatedtoitshallbearchivedinthedatabase of The Company.

D. Suspicious Transactions Report (STR) to the Money Laundering Reporting Office of Romania (Reporting Office)

If the Committee deems that there is enoughevidence toconsider thata transactionoropera-tionhasbeenmadeaspartofanactivity relatedto Money Laundering, Terrorism Financing orFraud,theComplianceOfficerwillfileareportwiththeReportingOfficeinatimelyformandmanner.Cases in which The Company has terminated arelationshipwithacustomerduetothereasonablesuspicionof thecustomerbeing involved insuchactivities shall also be reported, just like when acustomer has not been accepted for registrationduetosomeoftheOfficialSanctionLists.

Once the report has been filed, Lescovex will actassetoutinthearts.9aand10oftheAMLA,inorder toexecuteor freeze the transactioncarriedoutbythecustomerwhichwasreported,andatalltimeswillactasisrequiredbytheReportingOffice.

E. Confidentiality

Lescovexwillnotdisclosethefactthatinforma-tionhasbeensenttoorrequestedbytheReportingOfficetoanypersoninvolvedorconnectedtothesuspicious transaction or operation reported ortoanythirdparty.Noreferencewhatsoevertothecasewillbemade.

The self-regulatory organisation to whichThe Company isaffiliatedand theFINMAarenotregardedasthirdparties.

Anyactions takenconnected to thepreventionofmoney laundering or terrorism financing shall betreatedwithutmostreserveandconfidentiality.

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VII. Record keeping

The following information and documentationmust be kept by Lescovex for at least 10 years,soitcanbeavailableifitiseverrequestedbytheReportingOffice,theFINMAoranyotherauthority:

1. Documentation obtained during the KYC andDue Diligence procedures for identification ofcustomers, which shall be kept for at least 10yearsaftertheterminationofthebusinessrela-tionshipwiththecustomer;

2. Original documentation or certified copiesof the transactions carried out by customersthrough the Lescovex platform and the infor-mationrelatedtothem,whichshallbekeptforaminimumof10yearsafterthecompletionofthetransactionoroperationcarriedout;

3. Any Report of Suspicious Transactions issuedand the documentation and informationattachedtoit,whichshallbekeptduringthe10yearsfollowingthedateofthereport.

Lescovexhasitsowndatabaseinwhichallthisdocumentation and informationwill be stored soastoguaranteethedueconservationandretriev-abilityforbothinternalcontrolandpetitionsfromauthorities.OnceapersonappliestobeaLescovex customer,theinformationanddocumentationwillbe registered in the Lescovex database, where itwill be stored on an encrypted hard drive solelyaccessiblebyLescovexthroughaninternalVPN.

VIII. Staff training policy

Lescovexbelievesthatoneofthebesttoolstocombatmoneylaunderingandterrorimsfinancingis to create a culture of compliance and controlamongitsstaff.ForthisPurpose,thisManualandalltheregulationissuedbyThe Company related to thePreventionofMoneyLaunderingandTerrorismFinancingwillbepartoftheinternalproceduresofThe Companyandknowledgeandcompliancewillbemandatoryforallthosewhoareapartofit.

Lescovex’sstaffwillhaveaccesstotheupdatedversion of thisManual and other internal regula-tionsrelatedtoitandwillbeinvolvedinthetaskofprevention,forwhichtheywillbedulyinformedandinstructed.

IfthereareanylegalorregulatorymodificationsorimprovementswithregardstothePreventionofMoney Laundering, TerrorismFinancing or Fraud,the entire staff will be informed so that the newimplementationscanbeappliedandcompliedwithproperly.

Courses aimed at informing and training The Company’sstafftolearnaboutthepolicyandhowtoapply theprocedures related to thePreventionofMoney Laundering andTerrorismFinancing atLescovexwillbeperiodicallyprovidedforthestaffbyThe Company.

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IX. Organisational structure

To comply with the policies set forth in thismanual and with the requirements of the FINMAand other legal authorities regarding the preven-tionofMoneyLaunderingandTerrorismFinancing,LescovexwillsetuptheCommitteeforthePreven-tionofMoneyLaunderingandTerroristFinancing,whichwillbecomposedofthreemembers:

1. TwomembersoftheBoardofDirectors;

2. The Compliance Officer: the person, natural orlegalentity,thatmaybeamemberoftheBoardofDirectorsoranyotheronehiredtocarryoutthetasksrelatedtothis.

TheBoardofDirectorswillevaluatetheperfor-mance of the Committee and the ComplianceOfficerannually.

A. The Committee for the Prevention of Money Laundering and Terrorism Financing

TheCommitteewillwork as a collegiate bodyresponsible for planning, coordinating and safe-guarding the compliance of the legal frameworkandthepoliciesestablishedintheManualforthePrevention of Money Laundering and TerrorismFinancing (hereinafter “The Manual”). For thispurpose, The Committee will have full access toany and all information and/or documentation itdeemsnecessaryinordertofulfillitsduties.

The Committee will meet at least every threemonthsandwilldealwithalltheissuesrelatedtotheimplementationandcomplianceofthePreven-tionofMoneyLaunderingandTerroristFinancingwithinThe Company.Whenaspecificissuerelatedto itmust bedealtwithurgently, theComplianceOfficer will convene an extraordinary meeting oftheCommittee.

TheCommitteewill have, amongst others, thefollowingdutiesandresponsibilities:

• TodrafttheManualforthePreventionofMoneyLaundering and Terrorist Financing to beapprovedbytheBoardofDirectors;

• To report annually (through the ComplianceOfficer) to the Board of Directors regardingcompliance with The Manual and all of The Company‘s internal regulations related to thePrevention of Money Laundering and TerroristFinancing, suggesting, if needed, any pertinentmodification to improve them or to implementany legal modifications, justifying the reasonsandthemannerinwhichthisshallbedone;

• TospreadamongthestaffofThe Companytheinformation and documentation necessary intermsofPrevention;

• Todesignthetrainingstaffplanand its imple-mentation;

• Toacknowledgeandpromote compliancewiththe remedial measures to be taken based onthe reports of Internal and/or External Auditsregarding the prevention of money launderingandterroristfinancing;

• To decide on enhancements to themonitoringandcontrolmeasuressuggestedbytheCompli-anceOfficerregardingthepreventionofmoneylaundering;

• To analyze the “Internal Operations Reports”submittedbyThe Company’sstaffandapproveor dismiss relaying suspicious transactions totheReportingOffice;

• TocooperatewiththeReportingOfficesoastoprovide all the documentation and informationrequired;

• Topreserveallthedocumentationandinforma-tiongeneratedbyallthetransactionsandoper-ationsreported,assetoutinSectionVIIofthisManual.

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B. Compliance Officer

Thispositionwillbeheldbytheperson,naturalor legal entity, appointed by the Board of Direc-tors. Itmay be possible to outsource the servicebyhiringanypersonwhomeetsalltheduecapa-bilities tocarryout thetasksrelatedto it.Tothiseffect,The Companywilldraftanagreementlistingall the tasks and responsibilities assigned to theComplianceOfficer.

TheappointmentoftheComplianceOfficerwillbecommunicatedtotheFINMAandtheReportingOffice(detailingname,positionandbranch).Ifthereareanychangesorupdatesinthisinformation,theFINMAandtheReportingOfficemustalsobenoti-fied,within5daysaftertheOfficer’sappointment.

The Compliance Officer will have, amongstothers,thefollowingresponsibilitiesandduties:

• ToconvenethemeetingsoftheCommittee;

• To file the reports to the Reporting Officeregarding operations or transactions in whichthere iscertaintyorsignsofmoney launderingorfinancingofterrorism;

• ToreceivethepetitionsfromtheReportingOfficetoprovide informationanddocumentationandtoexecutetheactionsaskedfor;

• ToimplementtheManual;

• To monitor transactions carried out bycustomers;

• To investigate reportsof unusual transactions,as well as those detected in the centralizedmonitoringprocess;

• To keep the rest of the committee membersinformedofanycircumstancesthatcouldalterthepreventionpolicycontainedherein;

• TopresentbeforetheCommitteesuggestionstoimprove or implement new procedures for TheManual;

• TokeepLescovex informedandupdatedaboutanylegalmattersandregulationsthataffectThe Company in itsmanagement of the preventionagainstmoneylaundering.

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X. Internal control system

Due to the nature of the services provided byLescovex,The Companywillapplyvariousmethodstoguarantee thesecurityof the transactionsandtoavoidthattheplatformbeusedasasystemtoperformanyillegalactivity.

Thereby, The Company will apply policies andproceduresintheareaofduediligence,documentpreservation,internalcontrolandriskmanagementso as to prevent transactions related to moneylaundering and terrorism financing. These poli-ciesandprocedures,someofwhichhavebeensetoutinthisManual,willbecirculatedamongalltheemployeesandexecutivesofThe Company.

Theaforementionedpolicieswillincludeadescrip-tionof thetypesofcustomersthatcouldpresentahigher risk, taking intoaccount the risk factorsset forth above and those determined in accord-ance with the applicable international standardsfor each case. As has been said, the customermustprovideall the informationanddocumenta-tionrequiredsothatThe Companyisabletoverifythecustomer’s identityandestablishaprofile foreachofitscustomers.Ifanyofthemhasanyoftheriskfactorsmentioned,The CompanywillenhancetheduediligencebyaskingformoreinformationordocumentationtodecidewhetherornottoacceptapersonasaLescovexcustomer.

On the other hand, and in order to control thetransactions made by customers, Lescovex will pay attention to the transactions carried out bycustomersanditscorrespondancewiththeprofilewhichhasbeenestablished foreachcustomer. Ifthe system detects that any of the transactionsmade do not correspond with the profile of thecustomer,whether due to the amount, frecuency,and so on, the system will issue a warning andthetransactionwillbereportedto theCommitteeasasuspicioustransaction inorderto initiatean

investigation.Tothiseffect,The Companyhasalsoestablishedadailyandmonthlyamountfortrans-actions,todepositorwithdrawcryptocurrenciesorlegaltender,abovewhichanauthorisationmustbegrantedbyThe Company,soastokeepalltransac-tions under control.

Lescovex will also use blockchain technology toexamineandanalyseallthetransactionsmadeontheplatformandtocheckifanyoftheadressestowhichthecryptocurrenciesor legaltender issentarelistedinanyofthepublicblacklists.

The Company will always verify that the bankaccounttoorfromwhichthecustomerdepositsorwithdraws legal tender isownedbythecustomerandnobodyelse.Ifanyotherpersonisaco-owner,Lescovexwill alsoask for informationanddocu-mentation related to that co-owner, in order tohave thenecessary informationsoas toknowatalltimeswherethemoneygoes.

Intermsofsecurity,transactionswillnotbemadeifcustomersarenotverifiedandiftheydonotusethe two-factor authenticator system, so that it isguaranteed that the transaction has been madeonlybythem.Apartformthat,anemailwilbesenttotheiremailaccounttoverify if theyhavemadethattransaction.

TheCommitteewill be in charge of applying anddevelopingthisManualandalltheregulationandpoliciesrelatedtothePreventionofMoneyLaun-deingandTerrorismFinancing,keepingtheafore-mentionedManualupdatedatalltimesandavail-ablefortherelevantauthorities.

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XI. External control

Themost important commitment byLescovex is thecompliancewithall thathasbeensetforth inthis Manual and any other regulations and poli-ciesrelatedtothePreventionofMoneyLaunderingandTerrorismFinancing.Thisway,apartformtheinternal control measures already established,Lescovexwillbeauditedbyexternalauditentities,sothatthereisverificationthattheprocedurestopreventmoneylaunderingandterrorismfinancingwhichhavebeenestablishedbyThe Company are effectiveandforceful.

This external audit will take place annually. The Company will entrust the external audit to thosepersonswhohavetheappropriateknowledgeandareacademicallyqualifiedtocarryoutthetask.

The results of the verificationwill be recorded ina report,whichwilldescribe indetail theexistinginternal control measures, evaluate their opera-tional efficiency and propose, if necessary, anyrectificationsorimprovements.

The report will be submitted within a maximumperiodofthreemonthsfromthedateofissuetotheBoardofDirectors,whichwilladoptthenecessarymeasurestoresolvethedeficienciesidentified.

Theaforementionedreportwillbeavailabletoanyauthorityduringthefollowingfiveyearsafterbeingissued.

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Trading platform for the creation and exchange of digital assets

Manual for the Prevention of Money Laundering

and Countering the Financing of Terrorism

Lescovex isanearly-stagebusinessprojectandtherefore the information in thisdocumentmightbesubject tochangewithout

notice,andshouldnotbeconstruedasacommitmentbyLescovex. Lescovexassumesnoresponsibilityforanyerrorsthatmay

appear in this document. In no event shallLescovex be liable for incidental or consequential damagesarising fromuseof this

document.ThisdocumentandpartsthereofmustnotbereproducedorcopiedwithoutLescovex‘swrittenpermission,andcontents

thereofmustnotbeimpartedtoathirdpartynorbeusedforanyunauthorisedpurpose.

Lescovex2018.Allrightsreserved.

manual for the prevention of money laundering and ...used for money laundering and terrorism...

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