AML/KYC Policies

Effective Date: December 1, 2025

1. POLICY STATEMENT

Micro Pawn Technologies Pty Ltd (“Micro Pawn,” “we,” “our”) is committed to preventing its platform from being used for money laundering (ML), terrorism financing (TF), or other illicit financial activities. As a provider of designated services under the *Anti-Money Laundering and Counter-Terrorism Financing Act 2006* (Cth) (“the AML/CTF Act”), we have developed this comprehensive AML/CTF Program to identify, mitigate, and manage the ML/TF risks associated with our operations.

This Policy applies to all employees, contractors, directors, and business partners acting on behalf of Micro Pawn. All Platform Users (“Users”), including Pawnshops and Investors, must comply with this Policy as a condition of using our Services.

2. DEFINITIONS

Term	Definition
AUSTRAC	Australian Transaction Reports and Analysis Centre, Australia’s financial intelligence unit.
BO	Beneficial Owner(s) – the natural person(s) who ultimately own or control a customer.
CDD	Customer Due Diligence – the process of identifying and verifying a customer’s identity.
EDD	Enhanced Due Diligence – additional measures for higher-risk customers.
KYC	Know Your Customer – the framework for CDD and ongoing monitoring.
ML/TF	Money Laundering and Terrorism Financing.
PEP	Politically Exposed Person – an individual entrusted with prominent public functions.
SMR	Suspicious Matter Report – a report to AUSTRAC about a suspicious transaction or activity.
TTR	Threshold Transaction Report – a report to AUSTRAC about cash transactions of AUD 10,000 or more.

3. RISK-BASED APPROACH

Micro Pawn adopts a risk-based approach to AML/CTF compliance. We have conducted an enterprise-wide ML/TF risk assessment considering:

• Customer Types: Risks associated with Pawnshops (handling physical goods/cash) and Investors (source of funds).
• Service Types: Risks in facilitating pawn loan funding, escrow services, and funds distribution.
• Jurisdiction: Risks associated with operations in Queensland, Australia, and the profile of Pawn Customers.
• Delivery Channel: Risks inherent in an online platform, including remote onboarding.

Our risk assessment is reviewed annually and updated following material changes to our business.

4. CUSTOMER IDENTIFICATION AND VERIFICATION (KYC PROCEDURES)

4.1 General Principle

We will not onboard any User without conducting appropriate Customer Due Diligence (CDD). The extent of CDD is determined by the User’s risk category.

4.2 Pawnshop Onboarding (Higher Risk Category)

For each Pawnshop User, we will collect and verify:

1. Entity Verification:
   • Australian Business Number (ABN) and business name.
   • Certificate of Registration (extract from ASIC).
   • Queensland Pawnbroker Licence number and current certificate.
2. Identity of Beneficial Owners & Controllers:
   • For each individual owning 25% or more, or who exercises effective control: Full name, DOB, residential address.
   • Verification via certified copies of Passport or Driver’s Licence + Medicare Card.
3. Identity of Authorised Representatives:
   • Identification of directors and primary account operators.
4. Business Operations:
   • Proof of business address (lease/utility bill).
   • Description of typical pawn loan size, customer base, and goods traded.
5. Source of Funds/Wealth:
   • Explanation of the capital base of the business.

4.3 Investor Onboarding (Standard/Lower Risk Category)

For each Investor User, we will collect and verify:

1. Individual Investors:
   • Full name, date of birth, residential address.
   • Verification via Document Verification Service (DVS) or certified copies of primary photographic ID (Passport, Driver’s Licence) and secondary ID (Medicare Card).
   • Source of funds declaration (e.g., employment, savings, investments).
2. Investor Entities (Trusts, Companies, SMSFs):
   • Entity documentation (Trust Deed, Company Extract).
   • Verification of all Beneficial Owners (as per 25% rule) and trustees/directors.
   • Identification of the source of the entity’s funds.

4.4 Verification Methods

We employ reliable and independent electronic verification where possible, using accredited third-party providers. For non-documentary verification failures or higher-risk cases, we require certified hard-copy documents.

5. ONGOING CUSTOMER DUE DILIGENCE AND MONITORING

5.1 Transaction Monitoring

We monitor User activity on a ongoing basis for unusual or suspicious patterns, including:

• For Pawnshops: Frequency of listing, loan sizes inconsistent with profile, high default rates, rapid turnover of similar high-value goods.
• For Investors: Unusual funding patterns, use of multiple accounts, rapid in-and-out movement of funds inconsistent with stated investment strategy.
• Across Platform: Structuring of transactions to avoid reporting thresholds, transactions with no clear economic purpose, use of anonymous digital assets.

5.2 Ongoing CDD

We will reconfirm or update a User’s KYC information:

• Periodically (every 2 years for standard risk, annually for high risk).
• Upon trigger events (e.g., significant change in transaction pattern, change in ownership).
• When we have doubts about previously obtained information.

5.3 Enhanced Due Diligence (EDD)

EDD measures will be applied to higher-risk customers, including:

• Pawnshops with complex ownership structures or operating in multiple locations.
• Users from (or transacting with) jurisdictions identified as high-risk by FATF or AUSTRAC.
• Politically Exposed Persons (PEPs) and their close associates.
• Users involved in cash-intensive activities beyond standard pawnbroking.
• Measures include: obtaining senior management approval for onboarding, identifying source of wealth, conducting enhanced transaction monitoring, and more frequent review.

6. REPORTING OBLIGATIONS

6.1 Suspicious Matter Reports (SMRs)

All staff are required to report any activity they suspect may be related to ML/TF to the Compliance Officer immediately. The Compliance Officer will:

1. Investigate the matter promptly.
2. Determine if there are reasonable grounds to suspect.
3. If yes, submit an SMR to AUSTRAC within 24 hours of forming the suspicion.
4. Tipping-off offence is STRICTLY PROHIBITED. No one may inform the customer or any other person that an SMR has been submitted or is being considered.

6.2 Threshold Transaction Reports (TTRs)

We will submit a TTR to AUSTRAC for any cash transaction of AUD 10,000 or more (or foreign equivalent) that we facilitate. This is particularly relevant for Pawnshops who may receive cash redemptions from Pawn Customers.

• Pawnshops are contractually obligated to report to Micro Pawn any cash component of a Pawn Customer redemption that meets the AUD 10,000 threshold.
• Reports are submitted within 10 business days after the transaction.

6.3 International Funds Transfer Instructions (IFTIs)

We will report all inbound and outbound international wire transfers to/from Users as required by the AML/CTF Act.

7. RECORD KEEPING

We will maintain the following records for the period required by law (7 years after the end of the customer relationship or transaction):

• All KYC/CDD/EDD information obtained.
• Records of all transactions.
• Reports made to AUSTRAC (SMRs, TTRs, IFTIs).
• The AML/CTF Risk Assessment and Program documents.
• Training materials and attendance records.

Records will be stored securely and be readily accessible to AUSTRAC and other competent authorities upon request.

8. SANCTIONS SCREENING

We screen all Users (and their Beneficial Owners) against relevant sanctions lists at onboarding and on an ongoing basis, including:

• The DFAT Consolidated List.
• UN Security Council Sanctions Lists.
• Other relevant lists as required.
  No business will be conducted with a listed individual or entity.

9. TRAINING AND AWARENESS

All employees and relevant contractors will receive annual AML/CTF training covering:

• Their obligations under the AML/CTF Act and this Policy.
• How to identify red flags and suspicious activity.
• Internal procedures for reporting.
• The consequences of non-compliance (individual and corporate).
  Training will be documented, and comprehension tested.

10. DESIGNATED REMITTANCE SERVICE CONSIDERATIONS

Micro Pawn does not currently operate as a registered Remittance Service Provider. If our services evolve to include funds transfer features beyond the closed-loop Platform escrow, we will immediately reassess our AML/CTF Program and register with AUSTRAC if required.

11. COMPLIANCE OFFICER

The Board appoints a Chief Compliance Officer with the authority and responsibility for:

• Implementing and maintaining this AML/CTF Program.
• Acting as the point of contact for AUSTRAC.
• Receiving and assessing internal suspicious activity reports.
• Ensuring staff training is conducted.
• Producing an annual compliance report for the Board.

12. INDEPENDENT REVIEW

The effectiveness of this AML/CTF Program will be subject to an independent audit at least every two years, or as required following significant business change. Findings will be reported to the Board.

13. USER COOPERATION AND CONSEQUENCES OF NON-COMPLIANCE

13.1 User Obligation

All Users contractually agree (via the Terms of Service) to:

• Provide accurate and complete KYC information.
• Update information promptly upon any change.
• Cooperate with ongoing due diligence requests.
• Not use the Platform for any illicit purpose.

13.2 Consequences

Failure by a User to comply with this Policy or our requests for information will result in:

• Suspension of the User’s account.
• Blocking of transactions.
• Termination of the User’s agreement.
• Reporting to AUSTRAC and other authorities as required by law.

APPENDIX A – RED FLAGS AND INDICATORS OF SUSPICIOUS ACTIVITY

Pawnshop-Specific Red Flags:

• Pawnshop listing loans for identical or serialized high-value goods (e.g., luxury watches, bullion) repeatedly in short succession.
• Pawn Customer information appears falsified or inconsistent across loans.
• Pawnshop is reluctant to provide information about Collateral origins or Pawn Customers.
• Transactions where the loan amount does not reflect the true value of the Collateral.

Investor-Specific Red Flags:

• Investor deposits funds from multiple unrelated accounts or third parties.
• Investor shows no concern for investment risk or returns, only for moving funds.
• Use of funds from jurisdictions known for high ML/TF risk.
• Rapid investment and withdrawal of funds with no logical investment holding period.

General Platform Red Flags:

• Attempts to structure investments/transactions to avoid the AUD 10,000 threshold.
• User provides suspicious or fraudulent identification documents.
• User is evasive or provides inconsistent information when questioned.
• Use of anonymizing technologies to access the Platform.