AML / KYC Policy
Effective Date: September 26, 2026 • FATF Risk-Based Compliance Standard
Automated Risk-Based Policy: BreezeSwap does not require account registration. Identity verification (KYC) is not required for most swaps, but our liquidity partners may request it at any time — for example, when a deposit is flagged by automated risk screening, or for residents of certain jurisdictions (including the EU, Japan, South Korea, Singapore, Hong Kong, Australia and Canada). Incoming deposits are screened by our partners' automated blockchain analytics (KYT), and transactions linked to illicit activity or sanctioned entities are paused for verification.
1. Purpose & Regulatory Alignment
BreezeSwap and its independent third-party liquidity providers (“Execution Partners”) enforce a strict Risk-Based Approach (RBA) aligned with Financial Action Task Force (FATF) Recommendations, European Union Anti-Money Laundering Directives (AMLD), and OFAC sanctions regulations to prevent money laundering, terrorist financing, ransomware monetization, and protocol exploit laundering.
2. Real-Time Know-Your-Transaction (KYT) Screening
Every blockchain deposit routed through BreezeSwap (whether via Standard Swap or Private Tunnel mode) is evaluated by institutional on-chain forensics engines (such as Chainalysis, Elliptic, or Crystal Blockchain) operated by our Execution Partners. A transaction will be automatically flagged and placed on hold (`Verifying` status) if it exhibits exposure to:
- Sanctioned Entities: Wallets listed on OFAC SDN, UN, EU, or UK OFSI sanctions lists, or originating from embargoed jurisdictions.
- Cybercrime & Exploits: Funds linked to smart contract hacks, bridge exploits, phishing drainer clusters, or ransomware extortion.
- Darknet & Illicit Markets: Direct or high-proximity indirect exposure to darknet marketplaces, CSAM, terrorist financing, or human trafficking networks.
- Sanctioned Mixers & Tumblers: Assets originating directly from sanctioned coin-mixing smart contracts (e.g., Tornado Cash, Sinbad, Blender).
3. Compliant Private Tunnel Architecture
BreezeSwap's Private Tunnel mode protects commercial and personal financial confidentiality on public blockchains by routing swaps across two independent Execution Partners via a temporary Layer-1 bridge asset. Unlike unlawful cryptocurrency mixers, Private Tunnel never pools or commingles user funds, enforces strict transaction caps, and runs full KYT screening on both the entry and exit liquidity legs.
4. Triggered KYC & Source of Funds (SoF) Procedure
When an incoming deposit triggers a high-risk KYT alert, execution is paused and the user is notified via the Order Status page or Support Desk. To clear the hold, the user must provide the following verification materials required by the Execution Partner:
- Proof of Identity: A valid, government-issued photo ID (Passport, National ID card, or Driver's License) and an automated biometric liveness selfie check.
- Proof of Source of Funds (SoF): Verifiable documentation demonstrating the lawful acquisition of the deposited digital assets (e.g., exchange trade history, mining/staking logs, wallet ownership screenshots, or tax/income statements).
5. Review Timeframes, Refunds & Asset Freezing
5.1. Verification Window: Users are expected to initiate requested KYC/SoF verification within 72 hours (3 days) of notification. Standard compliance reviews by Execution Partners are typically completed within 1 to 5 business days after complete document submission.
5.2. Refund Policy: Where an Execution Partner determines that a flagged transaction cannot be executed but is not subject to a statutory freeze or law enforcement seizure warrant, the deposited funds will be refunded solely to the original sending wallet address, less applicable blockchain network gas fees and partner compliance processing charges.
5.3. Mandatory Law Enforcement Holds: If deposited funds are confirmed to be stolen property, ransomware proceeds, or directly subject to international sanctions or a valid law enforcement freeze order, the Execution Partner is legally obligated to freeze the assets indefinitely pending official judicial or law enforcement disposition.
For assistance with a flagged transaction or to request a secure verification link, contact our Compliance Desk at tickets@breezeswap-io.p.tawk.email.