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Swyftx's regulatory and verification requirements

In Australia and New Zealand, cryptocurrency exchange services (such as Swyftx) are required to be registered with the relevant local authorities responsible for the regulation of local Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) legislation.

In both Australia and New Zealand, Swyftx is required to maintain an AML/CTF Program which dictates how we take steps to prevent criminals from using our services to disguise and transmit proceeds from heinous crimes such as drug trafficking, modern slavery, fraud, theft, and other crimes.

This AML/CTF Program is regularly audited to ensure compliance with the AML/CTF Act 2006 in Australia and the AML/CFT Act 2009 in New Zealand; this means that Swyftx needs to ensure it has and enforces sufficient risk-based controls to know who our customers are, where their money comes from, and that these funds are not proceeds of crime.

The compliance risk we assume as a platform that facilitates outgoing cryptocurrency transactions is unique.

The ability to send cryptocurrency across the globe anonymously and instantly is a huge advancement in personal financial freedoms for those who choose to use it for good, but it is unfortunately also very attractive to criminals wanting to move large amounts of money offshore very quickly.

The attractiveness of cryptocurrency to criminals means that some of our controls need to be stricter than other financial service providers who don’t bear the same risks.

This means that Swyftx might ask you for information about yourself or your transactions that you won’t be asked by your local bank.

These questions help us ensure that our customers are not using our services for criminal activity but also help us ensure that your account and your funds are not vulnerable to account takeover, fraud, theft, and other scams.

What is KYC?

KYC stands for Know Your Customer.

Throughout the life of your account, you may need to complete one or more of our 3 KYC verification processes, where we collect and verify different types of information. 

The verification levels are KYC level 0, KYC level 1 and KYC level 2.

Each verification level differs, from short phone calls to filling out forms and submitting documents.

If your information changes or is no longer accurate, you may be asked to update your information by completing a KYC verification process again.

You can minimise repeat verification requests by ensuring the information you provide is accurate.

KYC information may include but is not limited to the following:

  • Your name
  • Your residential address
  • Your date of birth
  • Your occupation or business activity.

The nature of your business with us – including:

  • The purpose of specific transactions
  • The income or assets available to you
  • The source of and origin of funds for your deposits
  • The source of your wealth, and
  • Your financial position.

Swyftx knows that this information is extremely sensitive.

If we ask you for this information, it is used only by our compliance teams to meet the requirements of our AML program and the relevant legislation. It is not used for marketing purposes or given to third parties.

Not all customers are required to complete the KYC verification processes.

These are triggered when we identify customers or transactions that come close to matching transactions that are widely considered to, or historically seen to be, at a higher risk of being related to scams, frauds, mule activity, or proceeds of crime.

Oftentimes, victims of scams won’t even know they’re being scammed until we reach them with one of these verification processes!

Unfortunately, many legitimate transactions share the same indicators as illegitimate transactions, so many of our more active or higher account-value customers are likely to run into these verification processes at some point.

While they can take some time out of your day, you can be confident that we are constantly reviewing and updating our indicators as scammers and fraudsters change and evolve.

This means that your security and the safety of the community are kept front of mind with any transaction you make with Swyftx.

Why has my bank never requested this much information?

Banks fall under the same regulations but have a much different risk profile than a cryptocurrency exchange.

For example, you can’t send money internationally directly, instantly, and anonymously to a bank.

All bank transactions are tracked with names and account numbers, making it difficult for a scammer/hacker/fraudster to get very far with your stolen funds.

The decentralised nature of cryptocurrency means there is no method for tracking and retrieving stolen funds; to counter this, Swyftx performs more due diligence on your account and transactions upfront to prevent them from being misused in the first place.

Why has this verification only just become required?

A reporting entity must include a transaction monitoring program in its AML/CTF program.

The transaction monitoring program must include appropriate risk-based systems and controls to monitor the transactions of customers.

The transaction monitoring program should have regard for complex, unusual, and/or large transactions and unusual patterns of transactions.

Our KYC verification processes are triggered when our transaction monitoring program identifies a transaction that requires further review.

These verifications are necessary to provide our customers with an exchange service free from fraud and bad actors.

Asking you to complete a KYC verification process helps us to understand your transactions and fulfil our obligations; it is not a suggestion that you are committing an offence.

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