KYC & AML Policy

1. Purpose & Scope

This policy establishes our procedures for:

• • Verifying the identity and eligibility of all users (Know Your Customer)
• • Preventing the use of the Platform for money laundering or terrorist financing (AML/CFT)
• • Detecting and reporting suspicious activity
• • Complying with economic sanctions (OFAC) and embargo programs
• • Maintaining records as required by federal and state law

This policy applies to all platform users, with enhanced requirements for high-value transactions, prediction market participation, and creator payouts.

2. Customer Identification Program (CIP)

2.1 Basic Verification (All Users)

All users are required to provide the following at registration:

• • Mobile phone number (verified via SMS OTP)
• • Full legal name
• • Date of birth (must be 18+)
• • Residential address (P.O. boxes not accepted)

Identity is initially verified through automated database checks against government records, credit bureau databases, and other reliable data sources.

2.2 Enhanced Verification

Enhanced verification is required before:

• • Participating in real-money prediction markets
• • Making deposits exceeding $300
• • Requesting any withdrawal
• • Accumulating lifetime deposits exceeding $2,500
• • Creator payout setup through Stripe Connect

Enhanced verification requires:

• • Government-Issued Photo ID: Driver's license, passport, state ID card, or military ID. Must be unexpired and display your full name, photo, and date of birth
• • Proof of Address: Utility bill, bank/credit card statement, or government letter dated within the last ninety (90) days showing your name and residential address
• • Social Security Number: Required for U.S. users for tax reporting (IRS Form 1099) and OFAC sanctions screening
• • Selfie Verification: Live selfie matched against photo ID using facial recognition technology

2.3 Enhanced Due Diligence (EDD)

Additional scrutiny is applied to:

• • Politically Exposed Persons (PEPs): Individuals who hold or have held prominent government positions, or their immediate family members
• • High-Volume Users: Users whose transaction activity exceeds $10,000 in a rolling 30-day period
• • Unusual Activity: Accounts flagged by automated monitoring systems for suspicious patterns
• • High-Risk Jurisdictions: Users located in jurisdictions identified as high-risk by FATF or FinCEN

EDD may include source-of-funds documentation, additional identification, and ongoing enhanced monitoring.

3. Transaction Monitoring

We maintain automated transaction monitoring systems that flag suspicious patterns including:

• • Structuring: Breaking transactions into multiple smaller amounts to avoid the $10,000 CTR reporting threshold
• • Rapid deposits followed by immediate withdrawal with minimal platform activity ("pass-through" pattern)
• • Prediction market activity inconsistent with the user's stated income or transaction history
• • Multiple accounts linked by IP address, device fingerprint, or payment method
• • Sudden dramatic changes in transaction volume or patterns
• • Transactions involving known high-risk jurisdictions
• • use of multiple payment methods by a single user without clear justification
• • Matched trading patterns between accounts suggesting collusion or layering

4. Regulatory Reporting

4.1 Currency Transaction Reports (CTRs)

As required by the Bank Secrecy Act, we file CTRs with FinCEN for all transactions (deposits, withdrawals, or aggregated same-day transactions) exceeding $10,000 in a single business day. CTR filing requires collection of the user's full name, address, SSN, date of birth, and government ID number.

4.2 Suspicious Activity Reports (SARs)

We file SARs with FinCEN when we identify transactions that:

• • Involve $5,000 or more and are suspicious in nature
• • Appear designed to evade reporting requirements
• • Have no apparent lawful purpose or business rationale
• • Involve funds derived from illegal activity
• • Suggest potential terrorist financing

Important: Federal law (31 U.S.C. § 5318(g)(2)) prohibits us from informing you that a SAR has been filed. Do not attempt to determine whether a SAR has been filed in connection with your account.

4.3 Tax Reporting (IRS)

For U.S. users, we issue IRS Form 1099-MISC for net winnings exceeding $600 in a calendar year. We may withhold federal income tax as required. Users are responsible for reporting all income from the Platform to the IRS, regardless of whether a Form 1099 is issued.

5. Sanctions Compliance (OFAC)

We screen all users against the following sanctions lists maintained by the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC):

• • Specially Designated Nationals and Blocked Persons List (SDN List)
• • Sectoral Sanctions Identifications List (SSI List)
• • Foreign Sanctions Evaders List (FSE List)
• • Non-SDN Menu-Based Sanctions List (NS-MBS List)

Screening is performed at account registration, upon identity verification, and periodically thereafter. Users matched against these lists will have their accounts frozen immediately and reported to OFAC.

The Platform is not available to users located in, or nationals of: Cuba, Iran, North Korea, Syria, the Crimea region of Ukraine, and any other jurisdiction subject to comprehensive U.S. sanctions.

6. Anti-Structuring Notice

Structuring is a federal crime.

Structuring means breaking a transaction into multiple smaller transactions to avoid the $10,000 CTR reporting threshold. This includes:

• • Making multiple deposits just under $10,000 across consecutive days
• • Using multiple accounts or payment methods to split a large transaction
• • Instructing others to make transactions on your behalf to stay under reporting limits

Structuring violates 31 U.S.C. § 5324 and carries penalties of up to $500,000 in fines and ten (10) years imprisonment. We actively monitor for and report structuring activity.

7. Geographic Restrictions

Certain features of the Platform are restricted based on geographic location to comply with state and federal regulations:

• • Real-money prediction markets: Available only in jurisdictions where such markets are legally permitted
• • Geolocation verification: We use IP geolocation and may require GPS-based location verification to confirm eligibility
• • VPN prohibition: Use of VPNs, proxies, or location-spoofing tools to circumvent geographic restrictions is prohibited and will result in immediate account termination and forfeiture of funds

8. Record Keeping

In compliance with BSA and FinCEN regulations, we maintain:

• • Customer identification records: minimum five (5) years after account closure
• • Transaction records: minimum five (5) years from the date of the transaction
• • SAR documentation: minimum five (5) years from the date of filing
• • CTR records: minimum five (5) years from the date of the report
• • Correspondence related to suspicious activity: minimum five (5) years

9. Compliance Program

• • Compliance Officer: A designated BSA/AML Compliance Officer oversees the program
• • Training: All employees with access to customer data or transactions receive annual AML training
• • Independent Audit: The AML program is subject to independent review on a periodic basis
• • Risk Assessment: We conduct periodic risk assessments to identify and address emerging money laundering and terrorist financing risks

10. Your Obligations

As a user of the Platform, you are required to:

• • Provide truthful and accurate identification information
• • Complete identity verification when requested, within the specified timeframe
• • Promptly update any changes to your personal information
• • Not use the Platform for illegal purposes, including money laundering or terrorist financing
• • Not circumvent geographic restrictions or KYC requirements
• • Not engage in transaction structuring to avoid reporting thresholds
• • Cooperate with any compliance-related inquiries

Failure to comply may result in account suspension, fund freezing, and referral to law enforcement.

11. Contact

Compliance Department:
Wavestar Holdings LLC
Email: compliance@reduel.xyz
Suspicious Activity Reports: compliance@reduel.xyz