ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM FINANCING POLICY

‍

1. INTRODUCTION, SCOPE, AND REGULATORY FRAMEWORK

1.1. Statement of Purpose and Commitment

Alterswap AG (hereinafter referred to as "Alterswap") is a Swiss-registered financial intermediary (Company No. CHE-400.153.137) committed to the highest standards of integrity and transparency. This Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Policy (the "Policy") serves as the foundational governance document for our operations, ensuring that Alterswap is never utilised as a conduit for money laundering, the financing of terrorism, or other illicit financial activities.

We operate under the firm principle that a robust compliance framework is not merely a legal obligation but a cornerstone of our reputation and the security of our global client base.

1.2. Regulatory Oversight and Affiliation

Alterswap is a supervised and regulated financial intermediary operating in full compliance with the laws of the Swiss Confederation. Our operations are subject to the professional standards and oversight of the Financial Services Standards Association (VQF), a self-regulatory organisation (SRO) officially recognised by the Swiss Financial Market Supervisory Authority (FINMA).

Our compliance protocols are rigorously aligned with:

- The Federal Act on Combating Money Laundering and Terrorist Financing (AMLA) [SR 955.0], which dictates the primary obligations of financial intermediaries in Switzerland.
- The Swiss Criminal Code (SCC), specifically Articles 305-bis (Money Laundering), 305-ter (Lack of Due Diligence), and 260-quinquies (Terrorist Financing).
- The Swiss Financial Market Supervisory Authority (FINMA) ordinances and guidelines on Combating Money Laundering and Terrorist Financing in the Financial Sector.

1.3. International Alignment

While headquartered in Switzerland, Alterswap recognises the global nature of foreign exchange and cross-border payment services. We therefore adopt a best-practice approach by harmonising our internal standards with leading international frameworks, including:

- FATF Recommendations: We support the Financial Action Task Force (FATF) standards applicable to regulated financial intermediaries providing currency exchange and cross-border payment services, including the FATF Guidance on the Risk-Based Approach for the Banking Sector and Money or Value Transfer Services.
- EU AMLD Standards: Our procedures are designed to meet the rigorous transparency requirements of applicable EU Anti-Money Laundering Directives, including the 5th and 6th EU AML Directives.
- Global Sanctions Compliance: We strictly adhere to sanctions lists issued by the Swiss State Secretariat for Economic Affairs (SECO), the UN Security Council, and other relevant international bodies.

1.4. Scope of the Policy

This Policy applies to all business relationships initiated or maintained by Alterswap, covering all transactions involving the conversion of currencies and the execution of cross-border payments. It is binding upon all employees, senior management, and third-party service providers, ensuring a unified and consistent defence against financial crime.

2. REGULATORY FRAMEWORK AND SUPERVISION

2.1. Self-Regulatory Oversight (VQF SRO)

Alterswap AG is a member of the Financial Services Standards Association (VQF), a Swiss self-regulatory organisation (SRO). As a VQF-affiliated financial intermediary, Alterswap is subject to rigorous and continuous oversight regarding its adherence to the Swiss Federal Act on Combating Money Laundering and Terrorist Financing (AMLA). Our membership in VQF signifies our commitment to maintaining a high-standard compliance culture that meets or exceeds the regulatory expectations of the Swiss Financial Market Supervisory Authority (FINMA).

2.2. Governing Laws and Ordinances

Our AML/CTF framework is derived from the comprehensive legal architecture of Switzerland. Alterswap maintains strict compliance with the following primary legislative acts and ordinances:

- Federal Act on Combating Money Laundering and Terrorist Financing (AMLA) [SR 955.0]: This Act defines our fundamental duties of due diligence, including client identification, the establishment of beneficial ownership, and the obligation to report suspicious activities.
- Swiss Federal Council Ordinance on Combating Money Laundering and Terrorist Financing (AMLO): Provides detailed implementation rules for the AMLA.
- FINMA Anti-Money Laundering Ordinance (AMLO-FINMA): Specifies the technical requirements for the prevention of money laundering in the financial sector under FINMA's direct and indirect supervision.
- The Swiss Criminal Code (SCC): Specifically the provisions concerning Money Laundering (Art. 305-bis), Lack of Due Diligence (Art. 305-ter), and the Funding of Terrorism (Art. 260-quinquies).

2.3. Internal Governance and Control Framework

To operationalise these legal mandates, Alterswap has documented a detailed Internal Control Framework. This framework defines mandatory procedural steps, automated monitoring routines, and manual control checks. Adherence to this framework is:

- Mandatory: Binding for all management, employees, and contractors.
- Audited: Subject to periodic external audits to verify the effectiveness and performance of the documented controls.
- Evolving: Constantly reviewed and updated to align with new regulatory requirements, international recommendations, and shifting risk landscapes.

2.4. Independent Compliance Function

Alterswap maintains a specialised Compliance Department led by a designated Money Laundering Reporting Officer (MLRO). The MLRO operates with complete professional independence and has unfettered access to all company records and data necessary to fulfil their supervisory duties. This independence ensures that compliance priorities are never compromised by commercial interests.

3. CLIENT DUE DILIGENCE (CDD) AND IDENTITY VERIFICATION

3.1. Fundamental Principles of Due Diligence

In accordance with its statutory obligations under the Swiss Anti-Money Laundering Act (AMLA) and the professional standards of the VQF, Alterswap AG maintains a rigorous Client Due Diligence (CDD) framework. The Company is mandated to objectively assess the eligibility of every applicant — whether a natural person or a legal entity — for account opening and ongoing service provision.

The core of our CDD process is the principle of Know Your Client (KYC). This involves:

- Identification and Verification: Verifying the identity of the applicant and ensuring they are indeed the person or entity they purport to be.
- Representative Authority: Determining whether an individual is acting on their own behalf or on behalf of a third party.
- Economic Purpose: Establishing and validating the purpose and intended nature of the business relationship, including the expected volume and nature of currency conversion and payment activity.
- Ongoing Monitoring: Continuously monitoring the business relationship and transactions to ensure they remain consistent with the client's known profile and stated purpose.

3.2. Identification of Natural Persons

Natural persons seeking to establish a relationship with Alterswap must be at least 18 years of age and must not be residents of any prohibited jurisdictions. The identification process requires the submission of reliable and independent documentation, typically including:

- Government-Issued Identification: A valid passport or national identity card.

- Proof of Residence: Recent utility bills or official government-issued correspondence dated within the last three months to verify the permanent address. Bank statements are not accepted as proof of residence.

- Liveness Verification: Biometric or digital liveness checks to prevent identity fraud during the onboarding process.

3.3. Know Your Business (KYB) and Legal Entities

For corporate clients, Alterswap conducts extensive Know Your Business (KYB) procedures to verify the legal existence and operational status of the entity. This includes:

- Entity Verification: Review of constitutional documents (such as Articles of Association and Certificates of Incorporation) and extracts from relevant commercial registers.
- Ownership and Control Structures: Mapping complex ownership chains to identify the controlling powers within the organisation.
- Ultimate Beneficial Ownership (UBO): In compliance with Article 4 of the AMLA, Alterswap is legally obligated to identify the Ultimate Beneficial Owner(s). A UBO is defined as any natural person who directly or indirectly holds at least 25% of the capital or voting rights, or otherwise exercises effective control over the legal entity.

3.4. Risk-Based Approach (RBA)

Alterswap applies a Risk-Based Approach (RBA) throughout the client lifecycle. This dynamic methodology allows the Company to:

- Risk Categorisation: Assign a risk level (Low, Medium, or High) to each client based on geographic, product, and behavioural risk factors.
- Enhanced Due Diligence (EDD): For relationships identified as posing a higher risk — including Politically Exposed Persons (PEPs) or transactions involving high-risk jurisdictions — the Company applies intensified scrutiny.
- Source of Funds and Wealth: For high-risk profiles, Alterswap requires comprehensive documentation regarding the Source of Funds (SoF) and Source of Wealth (SoW) to ensure the legitimacy of assets entering the platform.

3.5. Prohibited Relationships

To maintain the integrity of the platform, Alterswap strictly refuses to establish business relationships with:

- Anonymous Accounts: We do not accept funds from anonymous accounts or fictitious holders.
- Shell Banks and Special Purpose Vehicles (SPVs): Financial institutions that have no physical presence in any country, and special purpose entities that have no genuine independent economic activity, no employees, and no operational substance beyond holding assets or acting as a pass-through for funds. Legitimate holding companies with transparent ownership structures, a documented business purpose, and fully identified beneficial owners are assessed on a case-by-case basis and are not automatically prohibited.

- Sanctioned Entities: Any individual or company appearing on Swiss (SECO), UN, or other major international sanctions lists.

- Restricted Industries: Businesses involved in illegal activities, unregulated financial services, unlicensed gambling, adult entertainment, or weapons trafficking.

4. PROHIBITED JURISDICTIONS AND RESTRICTED ACTIVITIES

4.1. Geographic Risk Management

Alterswap AG operates with a global perspective but maintains strict adherence to the jurisdictional requirements of the Swiss Confederation and international financial oversight bodies. To mitigate risks associated with money laundering, terrorist financing, and sanctioned regimes, the Company does not establish business relationships with natural or legal persons residing in or incorporated within designated Prohibited Jurisdictions.

The full list of prohibited and restricted jurisdictions is maintained as an internal compliance document, reviewed on an ongoing basis in line with updated guidance from FINMA, VQF, the FATF, and the Swiss State Secretariat for Economic Affairs (SECO). It is not published publicly to ensure that complex jurisdictional cases — including those involving partial restrictions, occupied territories, or evolving sanctions regimes — are assessed individually by the Compliance Department rather than handled through automated exclusions.

For public-facing purposes, the following statement applies:

Alterswap does not provide services to clients residing in or incorporated within jurisdictions subject to Swiss, EU, UN, or OFAC sanctions, or those classified as high-risk or non-cooperative by the Financial Action Task Force (FATF). Restricted jurisdictions are reviewed on an ongoing basis in line with guidance from FINMA and the VQF. If you are uncertain whether your jurisdiction is supported, please contact us at support@alterswap.ch before submitting an application."

Jurisdictions are categorised internally across three tiers:

- Tier 1 — Sanctioned and Prohibited: Jurisdictions subject to full Swiss, EU, UN, or OFAC sanctions where no business relationships may be established under any circumstances.

- Tier 2 — Enhanced Monitoring: Jurisdictions identified as high-risk by the FATF or FINMA, where business relationships may only be established following Enhanced Due Diligence (EDD) and explicit MLRO approval.

- Tier 3 — Complex Jurisdictions: Jurisdictions presenting specific legal, territorial, or humanitarian complexity — including partially sanctioned territories and conflict-affected regions — where each applicant is assessed individually by the Compliance Department before a determination is made.

The internal tiered list is reviewed at minimum quarterly and updated promptly following any revision to SECO, UN, OFAC, or EU sanctions designations, or following updated FATF grey or black list publications.

4.2. Restricted Business Sectors (KYB)

To ensure the integrity of the Alterswap platform, the Company prohibits engagement with specific high-risk business sectors that are susceptible to illicit financial flows or ethical violations. Alterswap does not provide services to:

- Non-Transparent Entities: Shell banks, shell companies, and anonymous account holders.
- Unregulated Financial Services: Unlicensed money transmitters, unregulated foreign exchange operators, and entities involved in tax evasion schemes.
- High-Risk Commercial Activities: Unlicensed gambling, iGaming, lotteries, adult entertainment, and pornography distribution.
- Illicit Trade and Harmful Industries: Weapons manufacturing and distribution, counterfeit products, and entities connected to environmental crimes such as illegal logging or poaching.
- Fraudulent Schemes: Financial pyramids (Ponzi schemes), Multi-Level Marketing (MLM) fraud, Money Mule operations, and Pump and Dump schemes.

4.3. Sanctions Compliance

Alterswap maintains a zero-tolerance policy regarding sanctioned individuals and entities. All prospective clients are screened against comprehensive global sanctions lists, including:

1. SECO (Switzerland): Swiss national sanctions list.
2. UN Security Council: International consolidated lists.
3. Other Major International Lists: Including but not limited to OFAC (USA) and EU consolidated lists, as part of our global risk assessment.

Any match with a sanctioned individual or entity results in an immediate rejection of the application and, where legally mandated, a report to the relevant Swiss authorities.

5. RISK MANAGEMENT AND TRANSACTION MONITORING

5.1. The Risk-Based Approach (RBA)

Alterswap AG employs a Risk-Based Approach (RBA) as the central pillar of its AML/CTF strategy. This methodology ensures that compliance resources are deployed proportionally to the specific risks identified within a business relationship. Every client is subjected to a multifaceted risk assessment that evaluates:

- Geographic Risk: Residency or incorporation in jurisdictions with varying levels of regulatory oversight.
- Product and Service Risk: The nature, value, and volume of requested currency conversions and cross-border payment services.
- Behavioural Risk: Deviations from expected transactional patterns or inconsistencies in provided documentation.

5.2. Real-Time Transaction Monitoring

To ensure the ongoing integrity of the platform, Alterswap utilises advanced automated systems to perform retrospective and real-time monitoring of all transactions. This continuous oversight is designed to detect:

- Unusual Patterns: High-frequency transfers or sudden spikes in conversion or payment volume that deviate from a client's established economic profile.
- Structuring (Smurfing): Attempts to circumvent reporting thresholds through multiple smaller transactions designed to avoid detection.
- High-Risk Counterparties: Payments to or from accounts or entities associated with illicit activities, restricted industries, or sanctioned parties.
- Unusual Payment Corridors: Transactions routed through jurisdictions inconsistent with the client's known business activities or geographic profile.

5.3. Counterparty and Payment Screening

Alterswap integrates specialised screening and analysis tools into its transaction monitoring framework, applied to all incoming and outgoing payments. This process involves:

- Beneficiary and Remitter Screening: All payment counterparties are screened against global sanctions lists, PEP databases, and adverse media sources prior to transaction execution.
- Payment Provenance Review: Where transaction patterns or source of funds documentation indicate elevated risk, the compliance team conducts a detailed review of the origin and intended destination of funds.
- Prohibited Sources: Payments originating from or destined for sanctioned accounts, unregulated financial operators, or jurisdictions subject to enhanced monitoring are automatically flagged for investigation and may be declined pending compliance review.

5.4. Enhanced Due Diligence (EDD)

When a business relationship or transaction is flagged as high-risk, Alterswap initiates Enhanced Due Diligence (EDD) protocols. This intensified scrutiny may include:

- Requirement for certified documentation regarding the Source of Funds (SoF) and Source of Wealth (SoW).
- In-depth investigation into the identity and beneficial ownership of the transaction counterparty.
- Requirement for senior management approval — including the MLRO and where appropriate the CEO — prior to proceeding with high-risk relationships or transactions.
- Ongoing enhanced monitoring of the client's account activity following the initial EDD review.

5.5. Reporting Obligations

In the event that transaction monitoring identifies activity that is suspicious or indicative of money laundering or terrorist financing, Alterswap adheres to its mandatory reporting obligations under the AMLA. The applicable procedure differs depending on whether a sanctioned party is involved:

Sanctions Cases — Asset Freezing

Where a client, counterparty, or transaction is linked to a sanctioned individual or entity appearing on the SECO, UN, OFAC, or EU consolidated sanctions lists, Alterswap is legally obligated to:

- Freeze Funds Immediately: Suspend all account activity and freeze the relevant assets without prior notice to the client. This obligation arises directly from applicable Swiss and international sanctions law and requires no further judicial order.

- Report to Authorities: Notify the relevant Swiss authorities — including SECO and MROS — as required by applicable sanctions regulations.

- Maintain Full Documentation: Preserve a complete audit trail of all actions taken, communications, and the basis for the freeze.

AML/CTF Suspicion Cases — Execute, Report, and Record

Where suspicious activity is identified that is indicative of money laundering or terrorist financing but does not involve a confirmed sanctioned party, the correct procedure under the Swiss AMLA is as follows:

- Execute the Transaction: Alterswap is required to proceed with the execution of the transaction as instructed. Refusing or blocking a transaction in a non-sanctions AML case — without a legal basis — may constitute a breach of contract and could alert the client to the existence of a compliance investigation.

- Tipping-Off Prohibition: Alterswap is strictly prohibited under Article 10a of the AMLA from informing the client, any counterparty, or any third party that a suspicious activity report has been filed or that an investigation is underway. This prohibition applies to all staff and management.

- File a Suspicious Activity Report (SAR): The MLRO is authorised to submit a formal Suspicious Activity Report (SAR) to the Money Laundering Reporting Office Switzerland (MROS) in accordance with the AMLA. The SAR must be filed promptly and include all relevant transaction details, the basis for suspicion, and supporting documentation.

- Maintain the Paper Trail: A complete and contemporaneous record of all transactions, compliance assessments, internal escalations, and the SAR submission must be retained in accordance with the ten-year retention requirement under Section 6.1. This record must be available for immediate production to the MLRO, VQF, FINMA, or MROS upon request.

- Await MROS Guidance: Following the SAR submission, Alterswap awaits instruction from MROS. If MROS directs that the business relationship be terminated or that further transactions be blocked, the Company will act accordingly and immediately.

‍

6. INFORMATION MANAGEMENT, DATA RETENTION, AND TRAINING

6.1. Data Retention and Record Keeping

Alterswap AG maintains a rigorous and systematic approach to record keeping, ensuring that all data related to client identification and transactions is preserved for the duration required by law. In accordance with the Swiss Anti-Money Laundering Act (AMLA) and the Swiss Code of Obligations, the Company adheres to the following retention standards:

- Duration of Retention: All records, including client identification documents (KYC/KYB), business correspondence, and transaction logs for all currency conversions and cross-border payments, are securely stored for a minimum of ten (10) years following the termination of the business relationship or the completion of an occasional transaction.
- Accessibility: Records are maintained in a manner that ensures they are readily accessible to the Money Laundering Reporting Officer (MLRO) and can be provided to Swiss law enforcement or regulatory authorities — such as MROS or VQF — within the timeframes mandated by law.
- Confidentiality and Security: All retained data is protected by advanced encryption and robust cybersecurity protocols to prevent unauthorised access, ensuring full compliance with the Swiss Federal Act on Data Protection (FADP) and, where applicable, the EU General Data Protection Regulation (GDPR).

6.2. Professional Training and Capacity Building

The effectiveness of Alterswap's AML/CTF framework relies on the expertise of its personnel. The Company mandates a comprehensive and ongoing training programme for all employees, senior management, and associated persons who interact with client data or financial systems:

- Initial Induction: All new hires must complete a mandatory AML/CTF and KYC training module promptly after joining the Company to ensure an immediate understanding of their compliance obligations.

- Ongoing Professional Development: Personnel with day-to-day compliance responsibilities are required to participate in targeted training programmes and stay informed of the latest regulatory updates from VQF and FINMA.

- Specialised MLRO Training: The designated MLRO maintains advanced professional qualifications and undergoes regular specialised training to stay at the forefront of global AML best practices and Swiss legal requirements.

- Annual Certification: All employees must acknowledge annually that they have read, understood, and will continue to adhere to the Company's internal AML/CTF policies and procedures.

6.3. Audit and Internal Review

To ensure that these policies are not only documented but effectively implemented, Alterswap's compliance framework is subject to:

- Annual AML Audits: An independent review of the Company's AML/CTF operations to verify compliance with VQF standards and the requirements of the AMLA.
- Internal Control Reviews: Routine audits conducted by the Compliance Department to detect potential weaknesses, assess the effectiveness of monitoring systems, and optimise procedural efficiency.
- Policy Review Cycle: This Policy is reviewed at least annually and updated promptly in response to changes in applicable Swiss law, VQF regulatory guidance, or international AML/CTF standards issued by the FATF.

‍

7. ESCALATION AND DISPUTE RESOLUTION

7.1. Internal Escalation

If a Client's issue is not resolved through standard support channels, they may request a review by a senior support manager or submit a formal complaint via support@alterswap.ch. All compliance-related escalations are reviewed by the MLRO or a designated senior compliance officer.

7.2. External Mediation (VQF / Ombudsman)

If a dispute remains unresolved after exhausting Alterswap's internal escalation process, Clients may escalate the matter to the Financial Services Standards Association (VQF) or a recognised Swiss Ombudsman — specifically FINOS (Finanzombudsstelle Schweiz) — for independent mediation or arbitration.

Contact Information for VQF:
Financial Services Standards Association (VQF)
Gubelstrasse 11, 6300 Zug, Switzerland
Website: www.vqf.ch

Contact Information for FINOS:
Finanzombudsstelle Schweiz (FINOS)
Talstrasse 20, 8001 Zürich, Switzerland
Website: www.finos.ch

‍

REGULATORY

AlterSwap AG
Company Registration: CHE-400.153.137
Registered Address: Assetstrasse 37, CH 6438, Ibach, Switzerland
Regulatory Status: AlterSwap AG is an officially affiliated member of the VQF (Self-Regulatory Organisation), a supervised body officially recognised by the Swiss Financial Market Supervisory Authority (FINMA) for the purpose of combating money laundering and terrorist financing (AMLA). AlterSwap AG does not hold a banking licence from FINMA and does not provide traditional deposit insurance.

For cookie and tracking inquiries, please contact: support@alterswap.ch

‍