KYB & Anti-Money Laundering Policy

To safeguard against money laundering, we have implemented rigorous review procedures to assess risks. This includes an understanding of risks, comprehensive customer due diligence, and Know-Your-Business checks to vet users on our platform.

Definition and Application to Carbon Markets

Definition and Application to Carbon Markets

Money laundering is the process of concealing the origins of money obtained through illegal activities and making it appear as if it came from legitimate sources.

As they pertain to carbon markets, this might look like:

• Shell companies purchasing credits with illicit funds

• Multiple rapid trades between related entities to obscure sources of funds

• Purchase of credits at inflated prices to justify large transfers

• Mixing legitimate and fraudulent credits to obscure origins

High Risk Indicators:

• Unusual trading patterns or volumes

• Complex ownership structures

• Transactions with high-risk jurisdictions

• Inconsistent business profiles

• Reluctance to provide verification documents

KYB (Know Your Business)

• KYB checks are conducted and approved for anyone who wishes to (a) propose a new project, (b) provide data for a project (including on verification), and (c) hold, transfer, and retire credits.

• For KYB vetting, general information is collected and passed through for verification. The general information includes the business name (as registered with the IRS), Address (HQ if it is a larger company), taxpayer identification number associated with the business, and a list of people related to the business (the main personnel interacting with the OCP).

• This data is cross-referenced with Secretary of State filings to verify state registrations and the business's operational footprint. The business address, web presence, and government watchlists get scanned, and any potential risks are flagged and compiled into a comprehensive report, determining whether the account is approved or rejected.

• Email addresses are screened and verified before allowing access for users that do not fit into the above categories (i.e., experts overseeing methodology creation and not involved in issuing credits).

• Additional diligence checks, such as vetting company funding sources and leadership, will be conducted when necessary.

Continuous Monitoring

• We maintain detailed data of all OCP carbon credit transactions, and any suspicious activities will be immediately flagged.

• All data on KYB checks will be stored for record-keeping for at least 5 years.

Training and Implementation

• All employees must review anti-money laundering policies and risks as outlined here.

• We will adhere to international and relevant national AML regulations where trading occurs.

• Our team of software engineers is trained in flagging accounts and transactions that seem out of the ordinary in order to be able to report suspicious activities. This consists of detecting patterns in transaction data, account activities, and user behaviors specific to carbon credit trading.

  • They will also maintain audit trails for all system activities, ensuring any flagged activities can be investigated in line with data protection laws.

Reporting and Mitigations

• Employees are required to report suspicious activity to the Head of Product, Rio Richardson.

• If a flag comes in during the initial KYB screening, the account will not be permitted. If there's a flag raised during a transaction on the OCP, the account will be frozen until further investigation occurs.

• When necessary (i.e., if a potential conflict of interest is present), suspicious activities will be reported to the independent advisory Board, which will conduct a further investigation.