AML KYC Policy
POLICIES AND PROCEDURES TO DETECT AND PREVENT MONEY LAUNDERING, TERRORIST FINANCING, AND CORRUPTION IN ACCORDANCE WITH RELEVANT UNITED ARAB EMIRATES LAWS AND DMCC REGULATIONS
Xenea Initiative DMCC (“the Company,” or “Xenea,” “XENEA Wallet”) (Last Update: 08/01/2025)
AREAS COVERED BY THIS MANUAL
This Manual covers the following main areas:
The purpose and importance of the compliance function
An overview of the UAE legal and regulatory framework (particularly under DMCC and federal UAE laws) relevant to the Company and its regulatory obligations
The role of the AML Compliance Officer (“Compliance Officer” or “MLRO”) and a summary of how the compliance function is monitored and reviewed
The procedures used to test compliance and how breaches are reported and rectified
DISCLAIMER
● Non-Custodial Wallet: XENEA Wallet is a non-custodial wallet solution, meaning that Xenea Initiative DMCC does not hold private keys on behalf of users, nor does it control or custody any users’ digital assets.
● Third-Party Services: If and when a user connects the XENEA Wallet to third-party services or plugins, those services or plugins will be subject to their own AML/KYC policies and applicable legal requirements. Users may be required to undergo KYC or other checks as determined by the third-party provider.
● Future Services by Xenea Initiative DMCC: If the Company, under the name “Xenea Initiative DMCC,” in the future provides any service (separate from the non-custodial wallet) that is subject to UAE regulatory requirements (including AML/CFT obligations), the Company will implement an appropriate KYC/AML process. This will be done in compliance with all relevant laws and regulations of the UAE and DMCC.
This Manual is designed to describe the Company’s approach to AML/CFT compliance for its regulated or potentially regulated activities. For the non-custodial XENEA Wallet functionality itself, users generally are not subject to KYC obligations imposed by Xenea Initiative DMCC, as the wallet does not custody user assets or process transactions on the users’ behalf. However, any third-party integrations or additional services the Company may offer in the future could carry specific AML/CFT compliance requirements.
1. INTRODUCTION
Xenea Initiative DMCC (“the Company,” “Xenea,” or “XENEA Wallet”) strictly prohibits and actively prevents money laundering (“ML”), terrorist financing (“TF”), bribery, and corruption. The Company complies with all relevant laws and regulations in the United Arab Emirates and DMCC to ensure that:
Its operations and (future) services do not facilitate illegal activities.
It maintains an internal framework to detect and report suspicious activities, where legally required.
All third-party integrations connected to XENEA Wallet are responsible for following their own AML/KYC policies consistent with UAE and DMCC regulations.
1.1 XENEA Wallet as a Non-Custodial Service
● XENEA Wallet is a software application that allows users to self-custody their digital assets.
● Because Xenea Initiative DMCC does not hold or manage user funds, KYC is not typically performed at the wallet level.
● However, external service providers that integrate with XENEA Wallet may request or require KYC from users in accordance with their policies and applicable law.
1.2 Future Services by Xenea Initiative DMCC
Should Xenea Initiative DMCC provide or expand into custodial or other regulated services under UAE/DMCC laws, it will implement a KYC/AML process as required by law. This Manual outlines the fundamental AML/CFT controls the Company would adopt if and when those services are launched.
2. THE PURPOSE AND IMPORTANCE OF THE COMPLIANCE FUNCTION
The primary objective of the compliance function is to:
Ensure that the Company and its (future) regulated services comply with all relevant AML/CFT obligations under UAE laws and DMCC regulations.
Establish procedures that detect and report suspicious activity to the appropriate authorities when legally mandated.
Demonstrate that the Company has sufficient internal systems and controls to meet high standards of compliance, if and when a regulated service is introduced.
Failure to comply with relevant AML/CFT laws can result in serious legal, financial, and reputational risks. Ultimate responsibility for compliance lies with the Board of Managers. The AML Compliance Officer (“Compliance Officer” or “MLRO”) has oversight of day-to-day implementation, training, and monitoring regarding AML compliance for any regulated products or services.
3. REGULATORY FRAMEWORK APPLICABLE TO THE COMPANY
3.1 UAE Federal AML/CFT Framework
● Federal Law No. 20 of 2018 (as amended by Federal Law No. 26 of 2021)
● Cabinet Decision No. 10 of 2019
These laws outline the requirements for Customer Due Diligence (CDD), Suspicious Transaction Reporting (STR), and recordkeeping. While non-custodial wallet services typically do not fall under direct KYC obligations, any regulated services provided by the Company must adhere to these requirements.
3.2 DMCC Regulations
Any services or activities regulated under DMCC rules must comply with DMCC AML/CFT guidelines. In particular, if the Company engages in a licensed activity that triggers AML/CFT oversight, it must fulfill DMCC’s compliance requirements (e.g., obtaining a relevant license, instituting a compliance program, filing regulatory reports).
4. INTERNAL REPORTING POLICIES AND PROCEDURES
4.1 Appointment of an AML Officer (Compliance Officer / MLRO)
● For non-custodial XENEA Wallet operations, an AML Officer is not mandated by law, as the wallet itself does not process or control user funds.
● If or when Xenea Initiative DMCC launches or operates regulated services that involve handling user funds or otherwise trigger AML/CFT obligations, the Company will formally appoint an AML Compliance Officer.
That AML Officer/MLRO, once appointed, would be responsible for:
Receiving internal suspicious activity reports (SARs) for regulated services.
Reporting suspicious transactions to the UAE FIU, where legally required.
Maintaining AML/CFT policies, procedures, and training programs for staff supporting regulated activities.
4.2 Suspicious Transaction Reporting (STR/SAR)
● For non-custodial wallet operations: The Company does not control or monitor user assets or transactions. Hence, it does not have visibility into private transaction details that would typically trigger STR obligations.
● For future regulated services: If suspicious transactions are detected through the Company’s operational systems, the MLRO must evaluate and file an STR with the UAE FIU in accordance with the law.
4.3 Tipping Off
All Company personnel, if involved in regulated business activities, must avoid “tipping off” any customer or third party about ongoing or potential investigations or STR filings. Violating this duty of confidentiality could result in legal consequences under UAE federal law.
5. RISK ASSESSMENT
5.1 Risk in Non-Custodial Wallet Context
As a non-custodial wallet provider, the Company does not typically handle customer funds or collect personal data required for KYC. The direct ML/TF risk exposure at the wallet layer is therefore limited. However, third-party providers integrating with XENEA Wallet may have separate risk profiles and their own AML obligations.
5.2 Risk for Future Services
Should Xenea Initiative DMCC offer services that are regulated under UAE/DMCC laws (e.g., custodial crypto services, token sales, brokerage, or other financially regulated activities), the Company will conduct a thorough ML/TF risk assessment. This assessment will consider:
● The nature of the product/service
● The types of customers and jurisdictions involved
● The volume and size of transactions
● Potential involvement of high-risk jurisdictions or PEPs (Politically Exposed Persons)
Based on the assessment, the Company will implement a risk-based approach with appropriate Enhanced Due Diligence (EDD) where needed.
6. CLIENT IDENTIFICATION POLICIES AND PROCEDURES
6.1 Non-Custodial Wallet Users
● No KYC by Default: Users of the XENEA Wallet are not generally required to undergo KYC checks by the Company, since the wallet is non-custodial and does not handle user funds.
● Third-Party Services: If the user connects the wallet to a third-party provider (such as an exchange, lending platform, or DeFi service), that provider may require KYC or other verifications according to their policies and applicable regulations.
6.2 Potential Future Services by Xenea Initiative DMCC
If the Company itself provides a product or service that falls under AML/CFT regulations (for example, acting as a digital asset custodian or payment service), the following measures would apply:
Customer Due Diligence (CDD): Collection of official identification documents, contact details, and verification against sanctioned party lists.
Enhanced Due Diligence (EDD): Additional checks for high-risk customers, PEPs, or those from high-risk jurisdictions.
Ongoing Monitoring: Regular transaction monitoring and risk profile updates.
All such measures would strictly follow UAE and DMCC laws.
7. INTERNAL CONTROLS AND ONGOING MONITORING PROCEDURES
7.1 For the Non-Custodial Wallet
Because XENEA Wallet is a technology platform that does not take custody of or facilitate user transactions, the Company:
● Does not monitor individual user transactions or balances.
● Does not impose KYC obligations on end users.
7.2 For Future Regulated Services
If Xenea Initiative DMCC initiates any regulated activity:
AML Officer/MLRO: An AML officer will establish and oversee required compliance controls.
Transaction Monitoring: The Company will employ risk-based monitoring tools, screening for suspicious activity and sanctioned addresses.
Internal Audits: Periodic audits will be conducted to ensure compliance with AML/CFT regulations.
8. SUSPICIOUS ACTIVITY INDICATORS
8.1 Non-Custodial Wallet Context
The Company does not typically see user transaction details. Therefore, it lacks the ability to identify suspicious activity at the wallet level. Indicators or red flags are more relevant to third-party or future in-house regulated services.
8.2 Future Regulated Services
Where the Company handles or processes transactions (e.g., custody, payment processing, brokerage), potential red flags include:
● Unusually large or frequent transactions without clear economic rationale
● Funds originating from or moving to high-risk or sanctioned jurisdictions
● Structuring transactions to avoid detection (e.g., multiple small deposits)
● Use of false identification or inconsistent personal data
9. INDEPENDENT REVIEW
9.1 Non-Custodial Wallet Operations
As the wallet service itself is not regulated in the same manner as financial institutions, there is no mandatory AML/CFT independent audit required for the wallet’s basic functionalities. However, the Company maintains best practices for cybersecurity, user data protection, and compliance readiness.
9.2 Future Regulated Services
If and when the Company engages in regulated services, an independent review or audit of AML/CFT controls will be conducted at least annually. This includes:
Reviewing KYC/CDD and transaction monitoring procedures
Verifying risk assessment processes
Testing the effectiveness of STR reporting mechanisms
Documenting any recommendations and remedial actions taken
10. RECORD KEEPING POLICIES AND PROCEDURES
10.1 Non-Custodial Wallet
The Company does not keep individual customer KYC or transaction records for XENEA Wallet users, as no custodial or transactional service is provided.
10.2 Future Regulated Services
If regulated services are provided, the Company must retain CDD records, transaction data, and any suspicious activity reports for at least five years (or as mandated by UAE/DMCC regulations). These records must be secure, confidential, and accessible to regulators upon lawful request.
11. ANTI-MONEY LAUNDERING TRAINING POLICIES
11.1 Current State (Non-Custodial Wallet)
Because XENEA Wallet does not involve typical AML-sensitive workflows (e.g., controlling assets, onboarding customers), the Company’s training primarily focuses on:
● General AML/CFT awareness
● Regulatory updates relevant to digital assets and blockchain in the UAE/DMCC
11.2 Future Regulated Services
Should the Company operate any regulated service:
Annual Training: Relevant employees will be trained on AML laws, KYC processes, and STR filing procedures.
Role-Specific Instruction: Employees dealing with high-risk transactions or customers receive targeted, advanced training.
Training Records: The Company will maintain logs of training sessions, including participants, dates, and content covered.
CONCLUSION
Xenea Initiative DMCC (“Xenea,” “XENEA Wallet”) provides a non-custodial wallet service that does not require KYC or transaction monitoring at the wallet level. Any third-party services connected to the wallet are governed by their own AML/KYC policies. In the event Xenea Initiative DMCC launches or operates additional regulated services under UAE/DMCC law, it will implement robust AML/CFT controls, including KYC, reporting, and recordkeeping obligations as required by the relevant legal framework.
This Manual is reviewed and updated periodically to reflect changes in UAE/DMCC regulations and the Company’s potential service offerings. The Company remains committed to compliance with all applicable laws to prevent money laundering, terrorist financing, and other illicit activities.
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