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Why do we ask to confirm the origin of funds?
Why do we ask to confirm the origin of funds?
Diana Paul avatar
Written by Diana Paul
Updated over a week ago

CEX.IO was one of the first platforms to make fiat to crypto transactions available. Since our inception, we’ve chosen to be a regulated cryptocurrency exchange. This allows us to provide our customers with secure and reliable services, offer a range of payment methods (including debit/credit cards and bank transfers), and comply with legal requirements and standards in the jurisdictions where we provide service.

CEX.IO follows a strict AML/KYC policy to ensure a safe trading environment on the platform. We’ve built robust relationships with dozens of reputable banks across key markets. Most of them implement AML/KYC procedures before doing business with any entities. This helps to discourage unlawful transactions and improves account and wallet security.

KYC (Know Your Customer) refers to a set of procedures and processes that a company uses to confirm the identities of its customers. It involves collecting and verifying government-issued identity documents, phone numbers, physical addresses, email addresses, and utility bills — any information that can prove customers are who they say they are.

AML (Anti-Money Laundering) rules and regulations apply to financial and legal entities. AML is designed to prevent financial crimes, such as making money illegally and moving illicit funds. Define the customer's location and residence to provide you with the service in accordance with the applicable local regulations. That's why we ask every customer to identify the country of residence at the step of registration.

To comply with AML policies, CEX.IO needs to identify customers and monitor incoming and outgoing transactions. The process is generally divided into four levels:

  • Verify the customer’s identity. This in fact is nothing more than gathering some personal information and supporting documents such as your government-issued ID and proof of residency.

  • Define the customer’s location and residence to provide service in accordance with applicable local regulations. This is why we ask every customer to identify their country of residence during registration.

  • Continuous monitoring of transactions. This includes identifying suspicious activities. The criteria for suspicious activities varies from country to country but generally is any operation that is unusual for a particular customer.

  • Risk management. CEX.IO takes a rational approach to AML/KYC by identifying real risk factors rather than simply satisfying regulatory requirements.

Why is it important to monitor transactions?

CEX.IO uses enhanced technologies for automated monitoring of all incoming and outgoing transactions to identify any attempts at suspicious payments, payments to or from the black market, or transfers of stolen funds. This is required by regulators and government institutions in jurisdictions where CEX.IO is licensed to provide services.

Sometimes we may ask you to provide documents that prove the origin of funds you’ve deposited to CEX.IO. This is a standard procedure for platforms that work with fiat money and doesn’t mean we’ve detected suspicious activity on your account.

By having documented evidence of the origin of your funds, we can respond to regulators and bank partners to safeguard the reputation of our customers and our company. Following a strict AML/KYC policy allows CEX.IO to process:

  • fast card deposits and withdrawals in different fiat currencies (USD, EUR, GBP);

  • international bank transfers via SWIFT in USD, EUR, and GBP

  • domestic bank transfers via ACH (for US residents), SEPA (for Eurozone residents), and Faster Payments (for UK residents)

  • deposits and withdrawals via other payment systems like Skrill and Epay.

What documents can prove the source of funds?

A proof of source of funds can be any document that explains where your funds or crypto assets come from:

  • A tax return (for the last tax year)

  • Letter from a bank/accountant stating assets

  • Bank statement and/or equities statement

  • Paystube(s) showing a previous year’s income

  • An accountant’s letter stating real estate holdings and inheritance to demonstrate net worth

  • Proof of balance on crypto exchanges

  • Signed message in a crypto wallet

Usually, due to regulatory requirements, we ask you to provide information for the period of the last year.

Please be informed that we are not able to provide services to customers who cannot prove the origin of their funds. If you have no evidence of the origin of your funds or don’t agree to provide it, your account may be suspended.

We must monitor transactions and take necessary measures so as to follow regulatory and bank requirements and be able to provide our services worldwide.

Why you should trust CEX.IO

When providing data and documents to CEX.IO, you can be sure you’re dealing with a legitimate business:

  • CEX.IO exchange implements the highest security standards, including DDoS attack protection, two-factor authentication, SSL certificates, cold storage for cryptocurrency funds, etc.

  • Finally, CEX.IO possesses a Level 1 PCI DSS (PCI Data Security Standard) certificate allowing us to store, process, and transmit our users’ cardholder data. This means that the card data you submit on CEX.IO is strongly encrypted and safe. This is extremely important, as card payments are the most popular option on the platform.

We understand the value of anonymity that the cryptocurrency community stands for. Still, to stay compliant with AML directives and ensure we are acting legally, we are obliged to verify users and monitor all incoming and outgoing transactions. This is the only way to ensure a safe and healthy trading environment on our platform.

We’re constantly working on our AML/KYC procedures to comply as fast and easy as possible.

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