KYC & AML Policy

1. Regulatory Framework

Fazen Pay operates in compliance with the following EU regulations and directives:

• AMLD5/6 — EU Anti-Money Laundering Directives (Directive 2018/843 and Directive 2024/1640).
• MiCA — Markets in Crypto-Assets Regulation (Regulation 2023/1114).
• EMD2 — Electronic Money Directive (Directive 2009/110/EC), applicable through our EMI partner Striga Technology OUE.
• EU Funds Transfer Regulation — Travel Rule compliance for crypto transfers above applicable thresholds.

2. KYC Verification Process

Identity verification is required to access banking features (SEPA transfers, card issuance, fiat deposits and withdrawals). Verification is performed by our certified partner Sumsub.

Required documents:

• Valid government-issued photo ID (passport, national ID card, or driving license).
• Proof of address (utility bill, bank statement, or government correspondence dated within 3 months).
• Live selfie or video verification for liveness check.

Verification levels:

• Basic (no KYC): App access, MPC vault for self-custody stablecoins. Under MiCA Art. 3(1)(19), self-hosted wallets are not classified as custodial services and do not require KYC.
• Full KYC: Required for EUR account, SEPA transfers, card issuance, and fiat on/off-ramp. Verification typically completes within 5 minutes.

3. AML Monitoring

We implement the following AML measures:

• Transaction monitoring: All SEPA and card transactions are monitored in real time against velocity limits (per-transaction, daily, weekly).
• Sanctions screening: All users are screened against EU, UN, and OFAC sanctions lists at onboarding and on an ongoing basis.
• PEP screening: Politically Exposed Persons checks are performed during onboarding.
• Suspicious activity reporting: We file Suspicious Activity Reports (SARs) with relevant Financial Intelligence Units (FIUs) as required.
• New IBAN cooldown: Transfers to newly added beneficiaries are subject to a 24-hour cooling period.

4. Transaction Limits

Default velocity limits for verified accounts:

Limits may be adjusted based on account history and compliance requirements.

5. MPC Vault & MiCA

The Fazen Pay MPC Vault is a self-custody solution where private keys are split using Multi-Party Computation. Under MiCA Art. 3(1)(19), self-hosted wallets where the user retains control of their crypto-assets are not subject to the same regulatory requirements as custodial services.

This means:

• No additional KYC is required to create or use the MPC vault.
• Fazen Pay does not hold, manage, or have unilateral access to your vault assets.
• You are responsible for understanding the risks of holding crypto-assets, including price volatility and smart contract risk.

6. Data Handling

KYC documents and verification results are processed by Sumsub under a Data Processing Agreement (DPA) compliant with GDPR. Documents are stored in encrypted form and retained for a minimum of 5 years after account closure, as required by AMLD5.

For more details on how we handle your data, see our Privacy Policy.

7. Account Restrictions

We may restrict, suspend, or close your account if:

• KYC verification fails or you provide fraudulent documents.
• You are identified on a sanctions or PEP list.
• We detect patterns consistent with money laundering or terrorist financing.
• Regulatory authorities request account freezing.
• You exceed velocity limits repeatedly without legitimate explanation.

8. Contact

For questions about our KYC/AML procedures, contact our compliance team at compliance@fazenpay.com.