AML Policy

Digital Zedd F.Z.C is firmly committed to the prevention of money laundering, terrorist financing, and the evasion of sanctions. Unwavering compliance with applicable laws and regulations shall serve to safeguard Digital Zedd F.Z.C's reputation and uphold public trust in Zedd Funding.

Therefore, Digital Zedd F.Z.C maintains an anti-money laundering (AML) policy that delineates the prescribed measures to be observed, aiming to ensure the efficient execution of guidelines that support the attainment of overarching organizational goals, while guaranteeing conformity with the regulatory structure governing designated non-financial businesses and professions (DNFBP) in the United Arab Emirates (UAE). The scope of the AML policy encompasses Digital Zedd F.Z.C and the Zedd Funding platform.

The objectives of the AML policy are as follows:

• To establish precise and unambiguous policies for Digital Zedd F.Z.C concerning the matters of money laundering, terrorist financing, and the avoidance of sanctions.
• To provide clear and concise explanations of the compliance responsibilities that all employees are obligated to fulfil.
• To offer guidance to employees regarding their daily business activities in alignment with legal requirements.
• To foster a work environment that upholds a culture of adherence to legal regulations in the manner in which employees execute their duties.

As per the provisions outlined in Article 2 of the Anti-Money Laundering (AML) Law, the offense of money laundering is defined as the engagement in any of the following activities with the knowledge that the funds involved are derived from a criminal act:

• Transfers or moves the proceeds, or disposes of the funds/proceeds intending to conceal or disguise their source.
• Conceals or disguises the true nature, source or location of the proceeds including the manner of disposal.
• Acquires, possesses or uses the proceeds on receiving them.
• Assists the person who committed the felony/misdemeanour to escape punishment.

It is essential to note that money laundering is always an intentional act and cannot be committed through mere negligence. However, Digital Zedd F.Z.C acknowledges that acts exhibiting gross negligence, particularly those involving the failure to report suspicions of criminality to the Financial Intelligence Unit (FIU), may incur criminal liability.

The laws which Digital Zedd F.Z.C is subjected to and with which Digital Zedd F.Z.C complies:

• UAE Federal Law No. 20 of 2018: Anti-Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organizations (AML Law).
• Cabinet Resolution No. 10 of 2019: Implementing Regulations of Federal Law No. 20 of 2018 (AML Regulations).
• UAE Federal Law No. 7 of 2014: Combating Terrorism Crimes.
• UAE Federal Penal Law No. 3 of 1987 as amended (Penal Code).
• UAE Federal Penal Procedures Law No. 35 of 1992 as amended (Penal Procedures Law).
• UAE Federal Law No. 5 of 2012: Combating Cyber Crimes.
• Any United Nations sanctions that are applicable through ratification by the UAE (singularly and collectively, Regulation and Regulations).

Pursuant to the Regulations, it is mandated to adopt a risk-based approach in order to fulfil legal obligations. This requirement applies to customer onboarding and conducting periodic anti-money laundering (AML) assessments throughout the course of business operations. Digital Zedd F.Z.C is fully committed to implementing a robust and meticulous risk-based compliance program, in strict accordance with both legal mandates and industry-leading best practices.

The oversight of reporting and probing suspected illicit financial conduct in the United Arab Emirates (UAE) falls within the purview of the Financial Intelligence Unit (FIU) operating under the UAE Central Bank. The Public Prosecution retains the authority to initiate legal proceedings pertaining to these offenses, which are adjudicated within the criminal courts system. Digital Zedd F.Z.C will cooperate with lawful requests from competent authorities.

The Regulations do not provide any legally established defenses specific to charges of money laundering. The defenses applicable under United Arab Emirates (UAE) law for money laundering charges are not distinct from those available for any other criminal offense.

It is important to note that criminal proceedings related to money laundering cannot be resolved through settlement or plea agreements. Once the Public Prosecutor determines that actions amount to a money laundering offense, prosecutorial discretion is not allowed, and the Public Prosecutor is obligated to refer the case to the criminal courts.

As an entity operating a retail evaluation model, Digital Zedd F.Z.C's transactions predominantly involve one-time challenge fees (Pay Later Flex starts at USD 10; Pay from Payout is about 35% of the list price at checkout). Remaining Pay Later Flex fees are collected after a pass, before a live evaluation account is unlocked. Remaining Pay from Payout fees are collected from funded profit payouts. Digital Zedd F.Z.C does not hold client trading capital.

In adherence to legal obligations, a meticulous approval process is undertaken for purchases and payouts, employing the principles of due diligence. Challenge purchases and remaining-fee payments are processed through Stripe card checkout. Funded profit withdrawals may be sent by bank transfer, PayPal, or cryptocurrency after eligibility checks. This approach serves the purpose of detecting any transaction that may exhibit characteristics of being abnormal, irregular, or indicative of potential suspicious activity.

Users must be at least 18 years old. Identity verification (KYC) is completed by the account holder before bank payouts and may be required at other points. Documents may include a valid government-issued photo ID, proof of address not older than three months, and a selfie with the ID. Expired documents are not accepted. Sharing an account or submitting another person's documents is prohibited.

A robust approach to document retention has been implemented. All relevant records and documents shall be securely preserved for a minimum period of five years, in adherence to legal and regulatory requirements.

Within Digital Zedd F.Z.C, risk assessment is applied to individual client profiles. With an emphasis on comprehensive review, due diligence is conducted on customers subsequent to evaluating their risk rating. This process allows the team to assess and mitigate potential risks associated with the clientele in compliance with applicable legal and regulatory frameworks.

Higher-risk users — including inconsistent KYC, unusual payment or payout behaviour, or links to higher-risk jurisdictions — receive closer review before any reward is paid. Services are not offered to residents of restricted jurisdictions, including countries on FATF and EU/UN sanctions lists, Vietnam, and the UAE, and any other jurisdiction Digital Zedd F.Z.C designates.

In situations where there is non-compliance with the established standards, the Regulations offer administrative sanctions to ensure the appropriate implementation of the regulatory framework. These sanctions may include various measures such as warnings, monetary fines, limitations or suspension of business activities, apprehension of board members and senior management who are held accountable for violating the regulations, as well as curtailment of the authority of the board and senior management through the appointment of a temporary observer.

In the event of a conviction for a money laundering offense, the Anti-Money Laundering (AML) Law prescribes punitive measures which encompass financial penalties ranging from AED 100,000 to AED 10 Million, along with the possibility of imprisonment for a period of up to 10 years.

Independently of criminal law, Digital Zedd F.Z.C may refuse, freeze, or terminate an account, withhold performance rewards, and report activity where it identifies money-laundering or terrorist-financing risk, material inconsistencies, sanctions exposure, legal impediment, or any circumstance that makes continuation inappropriate from a compliance standpoint.

Digital Zedd F.Z.C shall:

• Identify potential risks associated with criminal activities within its operations.
• Conduct ongoing assessments of these identified risks.
• Establish internal controls and policies to effectively manage the identified risks.
• Implement appropriate due diligence procedures, as further elaborated below.
• Adhere to and implement any United Nations (UN) directives pertaining to the prevention of financing terrorism and the proliferation of weapons of mass destruction.

Digital Zedd F.Z.C conducts a meticulous review and approval of each transaction, applying the principles of due diligence. This rigorous procedure serves as a preventive measure against establishing business relationships with shell banks or organizations.

On an annual basis, employees at Digital Zedd F.Z.C should be provided training on AML/CFT. The training includes:

• Identification and reporting of transactions that must be reported to government authorities.
• Examples of different forms of money laundering / terrorist financing involving the company's products / services.
• Information on internal policies to prevent money laundering / terrorist financing and escalate suspicious activity and red flags.

Digital Zedd F.Z.C should maintain documentation of its training sessions, which may include records of attendance and pertinent instructional materials. The company should ensure that any newly enacted or amended anti-money laundering / counter-terrorism financing (AML/CFT) laws, as well as updates to existing AML/CFT policies or practices, are communicated to the appropriate staff members.

The Risk Management team should regularly perform compliance testing to ensure adherence to legal requirements. A Designated Compliance Officer should hold responsibility for the comprehensive Anti-Money Laundering / Combating the Financing of Terrorism (AML/CFT) program, including the coordination and oversight of its day-to-day operations.