Preventing Money Laundering and Stopping the Funding of Terrorism

1. Company Business Model

TheSmartest or the "Company" is a private company and operates online gaming. TheSmartest currently serves users in almost all around the world. As part of its international operations, TheSmartest has implemented compliance measures suitable for its services and products. These measures are designed to prevent and detect illegal activities on its platform. This includes initial screening and ongoing compliance checks of its customers and transaction-based controls.

2. Company Policy Statement

TheSmartest is not a financial institution and is therefore not directly bound by the laws and regulations that apply to certain financial institutions, money transfer services, or virtual asset service providers. However, following the Anti-Money Laundering and Counter-Terrorism Financing Regulations ("AML/CFT") required, TheSmartest strictly forbids and disallows the use of its products for any illegal activities, including money laundering, financing of terrorism, or violations of trade sanctions, in line with various international anti-money laundering laws, regulations, and standards. TheSmartest continually observes the guidelines set by the Financial Action Task Force ("FATF") and certain gaming trade organizations, and will take appropriate measures to adapt to legal changes as necessary.

TheSmartest aims to adhere to international best practices to prevent its products from being used for illegal activities. These best practices include:

• Developing a written policy, along with procedures and controls, specifically designed to prevent money laundering, terrorist financing, and violations of trade sanctions;
• Where necessary, appointing a compliance officer to ensure the policy, procedures, and controls are effectively implemented;
• Offering relevant education and training to the involved staff; and
• Conducting independent assessments, ongoing monitoring, and maintenance of the policy, procedures, and controls.

3. Definitions

The following terms are commonly used in the industry:

• Money Laundering: The act of disguising money obtained from illegal activities to make it seem as if it came from legitimate sources. This process typically includes three stages: placement, layering, and integration.
• Placement: The act of depositing ill-gotten gains into traditional financial systems, either through bank deposits or other methods.
• Layering: The practice of distancing the money from its criminal origins by engaging in complex financial transactions, such as converting cash into traveler’s checks, money orders, wire transfers, letters of credit, stocks, bonds, or buying assets.
• Integration: The process of making the money appear legitimate through transactions, allowing the laundered funds to re-enter the economy as seemingly clean money that can be used normally.
• Suspicious Activity: Actions by a user or non-user at an institution that suggest the transactions may be for illegal or fraudulent purposes.
• Sanctions: Measures taken by the international community to limit or prevent activities of a sanctioned target. They are utilized to:
  • Prompt a change in behavior of a targeted country or regime;
  • Pressure a targeted country into fulfilling specific goals;
  • Serve as a method of enforcement when international peace and security are at risk and diplomatic measures have failed; or
  • Help prevent and stop the funding of terrorist activities or acts.

4. Governance and Oversight

TheSmartest has appointed a private Chief Compliance Officer who is tasked with overseeing the execution of the AML Policy and policy program. The responsibilities of the Chief Compliance Officer also involve creating AML strategies, to update the AML policy, evaluating new regulatory demands, and investigating any potentially suspicious or unusual activities. TheSmartest also regularly provides AML training to all its employees.

5. Know Your Customer and Transaction Monitoring

TheSmartest will implement necessary user due diligence and continuous monitoring practices as mandated by law. TheSmartest aims to prevent users from participating in illegal or unauthorized activities. TheSmartest employs a blend of its software development and other service agreements, which are upheld through internal operational mechanisms to ensure compliance with relevant laws.

Know Your Customer

A. Customer Due Diligence.

TheSmartest has implemented a risk-based Customer Due Diligence (CDD) approach to better understand the relationship and purpose of users interacting with TheSmartest platform, enabling the creation of a customer risk profile. To achieve this, TheSmartest gathers both documentary and non-documentary information at the time of account opening, in line with the nature of the accounts and services it provides. TheSmartest employs varying levels of CDD for different types of accounts and services.

For example, the CDD involves users participating in TheSmartest's customer identification program ("CIP"). The CIP includes procedures for:

• Collecting basic information (such as payout wallet address, email address) during account creation through TheSmartest's user onboarding portal;
• Monitoring the risk profile of the payout method used to fund the user’s account;
• Keeping records of the information utilized for user identification; and
• Checking whether a user is included on any lists of known or suspected terrorists or terrorist organizations, using the information gathered.