ANTI-MONEY LAUNDERING AND COUNTER-TERRORIST FINANCING POLICY
Last update: 09 of September, 2025
Introduction
BLOCKNEST CORP., a company duly incorporated under the laws of the Republic of Panama, is committed to complying with Law 23 of April 27, 2015, its regulations, and the guidelines issued by the Financial Analysis Unit (Unidad de Análisis Financiero – UAF) and other competent supervisory authorities. This Anti-Money Laundering and Counter-Terrorist Financing Policy (“AML/CTF Policy” or “Policy”) sets forth the Company’s framework for the prevention of money laundering, terrorist financing, and the financing of weapons of mass destruction, in accordance with applicable Panamanian laws and international standards.
1. Risk Assessment and Management Framework
We implement a comprehensive risk-based approach in accordance with Law 23/2015 to identify, assess, and mitigate AML/CTF risks associated with customers, products, services, and geographical locations. Annual risk assessments are conducted, with enhanced due diligence for high-risk clients, including Politically Exposed Persons (PEPs), clients from jurisdictions identified as high-risk by the FATF or the UAF, and entities with complex corporate structures. Risk Classification Criteria: Low Risk: Individuals from low-risk jurisdictions; Predictable transaction patterns; Low-value transactions Medium Risk: an exchange of untraceable cryptocurrencies Customers from countries with average AML/CTF controls; Occasional high-value transactions; Use of higher-risk products or services High Risk: an exchange of untraceable cryptocurrencies with high-value PEPs or their close associates; Customers from high-risk jurisdictions; Customers from sanction country Complex corporate structures or trusts; Frequent high-value transactions; Involvement in high-risk industries (e.g., gambling, precious metals)
2. Customer Due Diligence (CDD/KYC)
Our Know Your Customer (KYC) procedures comply with Panamanian AML regulations. The process involves: - Identification and verification of natural persons (passport, national ID, proof of address, source of funds, and tax identification number). - Identification and verification of legal entities (certificate of incorporation, shareholder structure, ultimate beneficial owners, business license, financial statements, and tax registration). - Ongoing monitoring of transactions and business relationships. - Risk classification of customers into low, medium, or high risk, based on their profile and activities. Enhanced Due Diligence (EDD) is applied to high-risk categories, including PEPs, clients from high-risk jurisdictions, and customers with unusual or complex transactions. EDD includes: - Obtaining additional identification documents. - Verifying the legitimacy of funds and source of wealth (bank statements, tax returns, business records). - Conducting independent background checks and adverse media searches. - Obtaining senior management approval for establishing or continuing business relationships. - More frequent reviews and monitoring of transactions. - Periodic updates of customer information, at least annually for high-risk customers.
3. Definition of Politically Exposed Persons (PEPs)
For the purpose of this Policy and in line with Law 23/2015, a Politically Exposed Person (PEP) refers to an individual who is or has been entrusted with prominent public functions, either domestically or internationally. This includes, but is not limited to: - Heads of state, heads of government, ministers, and deputy ministers. - Members of parliament, congress, or other legislative bodies. - Senior government officials, ambassadors, and high-ranking officers of the armed forces or law enforcement. - Members of state-owned enterprises’ boards or senior management. - Judicial or prosecutorial authorities at the highest levels. Close relatives (spouse, parents, children, siblings) and close associates (business partners, personal advisors) of PEPs are also considered to fall under the PEP category. Due to the higher risk associated with PEPs, EDD must always be applied when dealing with such individuals or entities controlled by them.
4. Compliance Officer
The Company appoints a Compliance Officer (“Oficial de Cumplimiento”) approved by the relevant Panamanian supervisory authority. The Compliance Officer reports directly to the Board of Directors and the UAF, overseeing the implementation, monitoring, and enforcement of this Policy.
5. Transaction Monitoring and Reporting
Transactions are monitored to detect unusual or suspicious activities. Reports of Suspicious Transactions (ROS/STR) must be submitted to the UAF within 30 calendar days of detecting the suspicion, as required by Law 23/2015. Cash Transaction Reports (ROE) are filed for cash transactions exceeding USD 10,000. Monitoring includes: - Automated systems for detecting unusual transaction patterns. - Review of large, complex, or unusual transactions without apparent economic justification. - Special attention to wire transfers and cross-border operations. - Identification of linked transactions designed to evade thresholds. The Know-Your-Transaction (KYT) solution is a real-time tool designed to support anti-money laundering compliance by tracking cryptocurrency activities. With its focused methodology, it has enabled our compliance department to detect transactions involving illicit funds much faster and more efficiently. Our transaction monitoring system utilizes risk-based rules and machine learning algorithms to identify potentially suspicious activities. Our monitoring framework relies on advanced technologies to identify potentially suspicious activity, such as: irregular or unusual transaction flows; behavior inconsistent with a customer’s typical activity; attempts to exchange privacy-focused or untraceable cryptocurrencies; clients currently under investigation; trading originating from high-risk jurisdictions; transfers of digital assets that exceed FATF-defined thresholds; dealings involving politically exposed persons (PEPs). Records of all transactions and reports are kept for at least 5 years.
6. Employee Training
All employees and directors receive mandatory AML/CTF training annually, with records maintained as required by Panamanian law. Training includes identifying suspicious activities, reporting procedures, due diligence processes, and record-keeping obligations. Employees in sensitive positions undergo more frequent and specialized training.
7. Prohibited Activities and Jurisdictions
The Company does not provide services to customers engaged in illicit activities or located in jurisdictions identified as high-risk or subject to sanctions by the FATF, United Nations, or Panamanian authorities. A list of prohibited jurisdictions is maintained and updated periodically. We maintain a list of prohibited countries, which currently includes: Afghanistan, Central African Republic, Cuba, Crimea and Sevastopol, Democratic Republic of Congo, Eritrea, Iran, Iraq, Libya, Lebanon, Mali, North Korea, Somalia, South Sudan, Sudan, Yemen, Syria, Guinea-Bissau, USA, countries of the European Union, United Kingdom and any other country subject to UN Security Council Sanctions. We reserve the right to refuse or terminate services to customers engaged in suspicious or illegal activities.
8. Record Keeping and Audit Trail
The Company maintains all customer records, transaction data, reports, and internal investigations for a minimum of 5 years, in compliance with Law 23/2015. These records are securely stored and retrievable for audits by regulators. Audit trails are regularly tested to ensure accuracy and compliance.
9. Policy Review and Updates
This Policy is reviewed annually or upon major regulatory changes issued by Panamanian authorities. Updates are communicated to employees and stakeholders. The Company demonstrates its ongoing commitment to robust AML/CTF practices in accordance with Panamanian law and international standards. For any questions regarding this Policy, please contact: legal@blocknest.solutions This document has been prepared by Lic. Ana Lorena Rodríguez, an attorney-at-law duly admitted to practice with professional license No. 13138.