Sign In
Register

Anti-Money Laundering, Anti-Terrorist Financing Statement

1. Company Business Model

Medium Rare N.V. (‘Stake’ or the ‘Company’) was established in 2017 and is incorporated under the laws of Curaçao. It operates the online casino canada-stake.ca. Stake holds a licence from the Curaçao Gaming Authority under licence number OGL/2024/1451/0918 and presently supports users in more than 169 countries around the world.

As part of its international operations, Stake has introduced compliance measures proportionate to its products and services and reasonably designed to prevent and detect unlawful activity on its platform. These measures include customer onboarding checks, compliance screenings and controls based on transaction activity carried out through the service.

2. Company Policy Statement

Stake is not a financial institution within the meaning of applicable law of Curaçao and is accordingly not directly subject to the statutes and regulations applicable to certain financial institutions, money transfer, or virtual asset service providers. However, in accordance with the 2016 Regulations for Anti-Money Laundering and Combating the Financing of Terrorism (“AML/CFT”) applicable for the Curaçao jurisdiction as provided by the Curaçao Gaming Control Board, Stake expressly prohibits and rejects the use of Stake products for any form of illicit activity, including money laundering, terrorist financing or trade sanctions violations, consistent with various national anti-money laundering (“AML”) laws, regulations and norms. Stake continues to monitor norm setting parameters promulgated by the Financial Action Task Force (“FATF”) and certain gaming trade groups in addition to the Curaçao Gaming Control Board and will take necessary action as it deems appropriate to reflect changes in law.

Stake aims to follow international best practices to prevent its products from being used to facilitate these activities. The best practices used for this purpose include the following:

  • Adoption of a written policy, and procedures and controls, reasonably designed to guard against money laundering, terrorist financing and trade sanctions violations;
  • Where appropriate, designation of a compliance officer to oversee the implementation of the policy, procedures and controls;
  • Provision of related education and training to relevant personnel; and
  • Independent reviews, monitoring and maintenance of the policy, procedures and controls.

3. Definitions

The terms defined below are commonly used throughout the industry:

Money Laundering: The process of presenting proceeds obtained illegally as legitimate funds. It is generally divided into three separate stages, known as placement, layering and integration.

Placement: Introducing unlawful proceeds into traditional financial institutions, whether through deposits or through other available channels for placing funds.

Layering: Separating the proceeds of criminal activity from their source through multiple layers of complex financial transactions. Examples include converting cash into traveller’s cheques, money orders, wire transfers, letters of credit, stocks or bonds, or using those proceeds to purchase assets.

Integration: Disguising illicit proceeds through transactions that appear legitimate, allowing the laundered funds to be returned to the criminal and bringing the apparently clean money back into ordinary financial use.

Suspicious Activity: Activity carried out through the institution by a user or non-user where there are signs that the people involved in a transaction may be acting for fraudulent purposes or for other illegal reasons.

Sanctions: Measures taken by the international community to prohibit or restrict the activities of the person or entity targeted by the sanctions. For example, such measures are used for the following purposes:

  • To encourage a change in behaviour for a target country or regime;
  • To apply pressure on a target country to comply with set objectives;
  • As an enforcement tool when international peace and security has been threatened and diplomatic efforts have failed; or
  • To prevent and suppress the financing of terrorists or terrorist acts.

4. Governance and Oversight

Stake has designated a Chief Compliance Officer (‘CCO’) to coordinate the implementation of the AML Policy and the associated policy program. The role also involves developing AML initiatives, collaborating with other stakeholders on policy revisions, evaluating new regulatory requirements and investigating activity that may be unusual or suspicious. Stake additionally provides regular AML training to every employee as part of its continuing compliance arrangements.

5. Know Your Customer and Transaction Monitoring

Stake will carry out the appropriate user due diligence and continuing monitoring required by law, and will endeavour to prevent users from undertaking illicit or otherwise unauthorised activity. Its software development arrangements and other service agreements operate together, supported by internal operational features, to ensure compliance with the laws applicable to the services it provides.

5.1. Know Your Customer

A. Customer Due Diligence

Stake uses a risk-based CDD approach to understand the nature and purpose of a user’s relationship with its platform and develop a customer risk profile. To support that approach, Stake collects documentary and non-documentary information when an account is opened, proportionate to the type of account and the services offered. Different CDD procedures are maintained for different account categories and services, reflecting the nature of the relevant relationship with the user.

For example, CDD requires users to complete Stake’s customer identification program (‘CIP’). That program includes procedures for carrying out the following steps:

  • Collecting baseline (e.g., wallet address, email address) information at account creation through Stake’s user onboarding portal;
  • Monitoring the risk profile associated with the underlying cryptocurrency wallet used to fund the user’s account;
  • Maintaining records of the information used to identify the user; and
  • Determining if a user appears on any list of known or suspected terrorists or terrorist organisations provided to the financial institutions based on the above information.

The above steps are operationalised using the following measures:

  • Identity and Age Verification. A third-party service provider will support Stake’s ability to determine the legitimacy of the identification information and other KYC materials or information provided and will confirm that the user is permissible. The service provider also will confirm that the user does not appear to be located in a comprehensively-sanctioned or otherwise prohibited jurisdiction and will search global sanctions lists to confirm that the user does not appear thereon using onboarding information such as wallet addresses.
  • Customer Information. Stake will collect details on each user to form a reasonable belief that Stake knows the identity of its users commensurate with the user’s risk profile. For example, Stake may collect such details as the wallet address, name, address, country, date of birth, or postal code (collectively, “KYC Information”). Stake will collect any of the above KYC Information prior to issuing a Stake funding address (e.g., QR code) to users. Stake does not presently allow users who are non-natural persons. Stake may, at its own discretion, rely on the performance by another institution of some or all of the elements of our CIP.
  • Geo-blocking for Prohibited Jurisdictions. Stake will require contractual client certifications that, through IP address-based geo-blocking, no gaming services will be offered in countries where such activity is not permitted.
  • Geo-blocking for Sanctioned Jurisdictions. Stake also will require contractual client certifications that such users are not subject to United States, European Union, or other global sanctions or watch lists, including individuals or entities associated with the United States’ comprehensively sanctioned jurisdictions, Iran, Cuba, North Korea, Syria and the Crimean region of Ukraine. Stake will rely on various risk-based measures to verify these representations including as in the below-described know-your-customer (“KYC”) measures and through IP address-based geo-blocking.
  • Contractual Prohibitions on Users Onboarding from Prohibited Jurisdictions. During onboarding, users are informed that Stake does not provide services in restricted jurisdictions. The policy restricting user activity reflects its risk standards, fraud prevention measures and AML requirements, together with assessments of whether its services may be provided in particular jurisdictions under the relevant circumstances.

B. Enhanced Due Diligence and Ongoing Monitoring

Stake performs ongoing monitoring on its users in order to detect any behaviours or indicators that might raise suspicions in relation to money laundering and terrorism financing practices. For that purpose, Stake has implemented a set of red flag indicators that help it determine such behaviours and require further action from Stake in assessing the customer information.

If any of these red flags is triggered, the user’s account will be suspended while Stake undertakes enhanced due diligence. Under this policy, enhanced KYC diligence is understood to include, but is not limited to, supplying the following information and documents:

  • Full legal name;
  • Country of citizenship;
  • Permanent Address (which, for an individual, must be a residential or business street address, and for an entity, must be a principal place of business, local office or other physical location);
  • Identification number (either a taxpayer identification number, or, if unavailable, a passport number and country of issuance, alien identification card number or number and country of issuance of another government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard);
  • Identification Document; and
  • Source of Funds and Source of Wealth.

Stake may use a third party service provider to verify any of the above information as determined to establish a reasonable basis to know the true identity of the user where the user’s activity warrants such action.

C. Acceptance Policy

Stake will not accept and will block the users that:

  • Do not provide the identification information requested by Stake;
  • Provide fake identification documents;
  • Try to use different means to deceive about their location;
  • Are from restricted or prohibited jurisdictions; or
  • Are subject to United States, European Union, or other global sanctions or watch lists;
  • Are gambling addicted or have mental health issues;
  • Whose source of funds originated or are exchanged in restricted jurisdictions;

Stake retains the right to block and suspend players for any other reasons in its own discretion.

5.2. Transactions Monitoring

Stake is firmly committed to observing the economic and trade sanctions programs imposed by jurisdictions where it does business. It has therefore established a transaction monitoring program, supported by controls and procedures intended to identify and detect unusual activity both in real time and through ongoing monitoring of the activity on its platform.

Stake will regularly carry out continuing monitoring through rule-based systems developed internally and supplied by third-party vendors. These systems review user histories and activity patterns to detect unusual activity, report it where required, and support the development and implementation of any additional controls or limits needed within the platform as part of that monitoring.

Stake has put procedures in place to address the following two principal aspects of managing unusual or suspicious activity:

  • identification of unusual activity through methods of identification that may include employee and customer identification, law enforcement inquiries, other referrals, or transaction and surveillance monitoring system reports; and
  • alert management that focuses on processes used to investigate, evaluate and document identified unusual or potentially suspicious activity.

To achieve both objectives, Stake will use the processes outlined below:

  • Transaction Monitoring for Sanctioned or Prohibited Jurisdictions. Stake may in its reasonable discretion impose certain due diligence requests at user balance withdrawal. Stake presently conducts a mixture of manual and automated transaction monitoring processes to identify “red flag” behaviour. Where such red flag behaviour is identified, Stake may refuse to process any withdrawal attempts or collect additional information from the recipient. Stake will further endeavour to limit any attempted user account funding from prohibited jurisdictions (which are identified in the Stake user facing disclosures and updated from time to time internally) where the associated wallet address indicates that the user or the user’s funds are located in such a prohibited jurisdiction. For example, Stake may prohibit a user from funding their Stake account using a known U.S. based exchange wallet as such assets indicate that the user is a U.S. person. Users will have the ability to rebut any suspension with additional information as part of Stake’s ongoing transaction monitoring and user due diligence standards.
  • Screening for Sanctioned Parties. Prior to issuing a Stake funding address to a user, Stake will screen a user’s wallet address against applicable sanctions databases. Such screening measures will rely on third party blockchain forensics vendors such as Chainalysis. Stake will periodically re-screen wallet addresses against such databases.
  • Identification of Unusual Activity. Stake will monitor account activity for unusual size, volume, pattern or type of transactions, taking into account risk factors and red flags that are appropriate to its business. Monitoring will be conducted running regular reports of unusual, high risk, or suspicious user activity.
  • Anti-Mixing Measures. Stake will utilise software designed to detect other suspicious deposit or withdrawal patterns. Such instances will be dealt with on a case-by-case basis, depending on the perceived level of risk. In such instances, a user may be required to explain their methodology and purpose for using the platform.
  • Chainalysis Review. Every single crypto deposit or withdrawal both indirect and direct will run through Chainalysis and be reviewed for signs of fraud or suspicious behaviour. A user’s account will be suspended and reviewed upon alert of potential illicit behaviour. Sufficient proof of wealth may be requested from high-risk accounts. Stake may refuse to withdraw to certain “high-risk” addresses as determined in consultation with Chainalysis risk scoring.
  • Withdrawal Threshold KYC. Additionally, and independently, every account, wherever or with whomever associated, will be suspended until adequate KYC diligence occurs once that account reaches a withdrawal threshold dependent on the accounts risk characterisation over the life of the account.

D. Other Ongoing Monitoring Controls

In addition to the controlling procedures mentioned above, Stake has also implemented the following procedures to complement its know your customer and ongoing monitoring procedures:

  • Ban Evasion Detection. In addition, Stake will utilise third-party service provider software designed to detect the use by one user of multiple accounts. This software relies on detection of links between the same devices used to access multiple accounts. Such instances will be dealt with on a case-by-case basis, depending on the perceived level of risk. In such instances, a user may be required to explain their methodology and purpose for using the platform. Stake accounts are funded by users using local (non-custodial) or hosted (custodial) wallets. In addition to a Chainalysis screening, Stake monitors user activity within the Stake platform and any withdrawals must meet Stake’s and its third-party service provider’s verification processes. Stake further prohibits peer-to-peer account transfers within the Stake platform infrastructure. Any attempts to circumvent this restriction will be treated as a red flag.
  • Time Zone Monitoring. Stake has implemented time zone controls that detect the user’s device information and cross it with restricted jurisdictions to understand if they are trying to use geolocation software to hide the jurisdictions where they are connecting from.
  • Products and Services Review. Stake will establish additional procedures to avoid facilitating user attempts to exploit the Stake platform. Stake has a robust set of user-facing terms that users attest to in order to utilise the Stake platform. Stake will establish certain additional safeguards to mitigate against the risk of such misuse. For example, Stake may establish policies or procedures for limiting which user assets can be onboarded to the Stake platform. Stake lists the assets that are available for use on the Stake platform. Stake does not allow the use of anonymity enhancing technologies such as mixers, tumblers, or certain coins and tokens. Where Stake becomes aware that an anonymity enhancing technology is being used on the Stake platform, Stake will disallow such use.
  • Vendor Management. Stake works with reputable third-party service providers as part of its compliance infrastructure. Stake will periodically assess the strength of its key third party service providers to determine if additional services are needed, the third-party service provider is not performing consistent with its contractual obligations, or if other remedial action is necessary for Stake to comply with this policy. Stake may request information from any third-party service provider as part of its vendor review process.
  • Compliance Innovation

6. Education and Training

With assistance from its legal counsel and under the supervision of its CCO, Stake may periodically provide employees with training on AML, anti-terrorist financing and trade sanctions compliance, whenever such training is considered appropriate to its requirements.

7. Reporting

Stake must report unusual or suspicious transactions in accordance with the National Ordinance. Where customers are identified on a sanctions list, connected with money laundering or terrorism financing, or linked to other criminal activity, that activity will be reported to the regulator as suspicious activity under the applicable reporting process.