Anti-Money Laundering (AML) Policy

1. Policy Statement

Coinbax, Inc. ("Company," "we," "us," or "our") is committed to preventing money laundering, terrorist financing, and other financial crimes. This Anti-Money Laundering (AML) Policy outlines our compliance framework for Coinbax Send (the "Service").

While Coinbax Send operates as a non-custodial service and is not a registered money services business (MSB), we voluntarily implement robust compliance measures to ensure our platform is not used for illicit purposes.

2. Non-Custodial Architecture

Important distinction: Coinbax Send is a non-custodial software interface. This means:

• We do not take possession, custody, or control of user funds at any time
• Users interact directly with escrow smart contracts on the Base network through their own self-custodial wallets
• We do not exchange or convert digital assets, and we do not accept, exchange, convert, or transmit fiat currency
• All transfers are wallet-to-wallet and executed on-chain by the user; escrowed funds are held by the smart contract, not by us

Despite our non-custodial nature, we maintain compliance measures that exceed what is typical for similar services.

3. Sanctions Compliance

On every transfer, we screen the sender and every recipient wallet address in real time, before any funds move, through Chainalysis against sanctions lists including:

• OFAC: U.S. Office of Foreign Assets Control Specially Designated Nationals (SDN) List
• UN: United Nations Security Council Consolidated List
• EU: European Union Consolidated Financial Sanctions List

Transactions involving sanctioned addresses are automatically blocked before the sender is asked to sign. Users attempting to transact with sanctioned addresses will be unable to use the Service.

4. Transaction Monitoring

We use blockchain analytics to identify and act on risk signals, including:

• Transactions involving known high-risk addresses
• Addresses associated with darknet markets, ransomware, or fraud
• Connections to mixing services used for illicit purposes
• Unusual transaction patterns or volumes

Flagged activity may result in transaction blocking or suspension of access to the Service.

5. Risk-Based Approach

We employ a risk-based approach to compliance, considering factors such as:

• Transaction size and frequency
• Amount limits enforced on every transfer
• Blockchain analytics and address reputation
• Historical transaction patterns
• Connection to known illicit activities

Higher-risk transactions may be subject to enhanced scrutiny or additional controls, such as SMS verification before release.

6. Prohibited Activities

The following activities are strictly prohibited and will result in immediate service termination:

• Money laundering or attempts to disguise the origins of illicit funds
• Terrorist financing or support for designated terrorist organizations
• Transactions with sanctioned individuals, entities, or jurisdictions
• Fraud, theft, or other criminal activities
• Tax evasion or circumvention of legal obligations
• Ransomware payments or extortion
• Human trafficking or exploitation
• Illegal gambling operations
• Drug trafficking or illegal arms dealing

7. Reporting and Cooperation

We cooperate fully with law enforcement and regulatory authorities:

• Law Enforcement Cooperation: We respond to valid legal requests, subpoenas, and court orders.
• Sanctions Matters: Apparent sanctions violations are reported to OFAC as required by law.
• Voluntary Reporting: Where appropriate, we may voluntarily report suspected illicit activity to relevant authorities.

8. Record Keeping

We maintain comprehensive records of:

• All transactions processed through the Service
• Sanctions screening results
• Investigations of flagged activity
• Compliance decisions and their rationale

Records are retained for a minimum of five (5) years in accordance with applicable regulatory requirements.

9. Compliance Oversight

Our compliance program is overseen by a team responsible for:

• Implementing and maintaining this AML Policy
• Monitoring regulatory developments and updating procedures
• Conducting risk assessments and audits
• Training employees on compliance requirements
• Investigating and resolving compliance issues

10. User Obligations

By using the Service, you represent and warrant that:

• You are not subject to economic sanctions or on any prohibited party list
• You will not use the Service for any illegal purpose
• The funds you transfer are not derived from illegal activities
• You will comply with all applicable laws and regulations
• You will not attempt to circumvent our compliance controls

11. Policy Updates

This AML Policy is reviewed and updated regularly to reflect changes in regulations, industry best practices, and our risk assessment. Material changes will be communicated through our Service.

12. Contact Information

For questions about this AML Policy or to report suspicious activity, please contact: Coinbax, Inc. Compliance Team — compliance@coinbax.com.