Know Your Transaction (KYT) and blockchain analytics controls as an integral part of its AML/CFT framework to identify, assess, monitor, and mitigate risks related to money laundering, terrorist financing, sanctions, and other illicit financial activity.

Transaction monitoring is conducted in accordance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), applicable FINTRAC guidance, and relevant Financial Action Task Force (FATF) Recommendations.

• All customers using YOB Pay services.
• All supported digital assets and blockchain networks.
• All inbound, outbound, and internal transactions processed through the platform.
• All wallet addresses interacting with YOB Pay.

Regulatory & Standards Alignment

• Registered as a Money Services Business (MSB) with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and is subject to Canadian AML/CTF obligations.
• Transaction monitoring controls are designed to comply with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated regulations and guidance issued by FINTRAC.
• The KYT framework is aligned with the Financial Action Task Force (FATF) Recommendations applicable to virtual asset service providers, supporting effective management of cross-border and digital asset risks.

Risk-Based Monitoring

• Transactions are monitored on an ongoing, risk-based basis using automated systems and blockchain analytics tools.
• Monitoring considers factors including transaction size, frequency, velocity, asset type, blockchain network, source and destination wallet exposure, geographic risk indicators, and consistency with the customer’s risk profile.

Blockchain Transaction Monitoring

• All blockchain transactions processed through YOB Pay are subject to continuous monitoring as they occur or shortly after they are recorded on the blockchain.
• Blockchain analytics are used to identify direct and indirect exposure to illicit activity, including links to sanctioned entities, prohibited jurisdictions, and high-risk services.
• Transactional behaviour is continuously analysed over time to detect emerging risks and evolving typologies.

Wallet Address Screening

• Wallet addresses are screened before and after transaction execution.
• Screening assesses exposure to sanctioned persons and entities, darknet marketplaces, ransomware and cybercrime-related activity, fraud and scam typologies, terrorist financing indicators, stolen or misappropriated funds, and obfuscation mechanisms such as mixers or tumblers (risk-based).

Transaction Risk Assessment & Scoring

• Transactions are assessed using automated and rule-based indicators to determine their relative risk level.
• Risk assessment factors may include source and destination wallet risk, transaction value, frequency and velocity, asset type, blockchain network characteristics, known typologies and red flags, and consistency with expected customer behaviour.
• Each transaction is categorised according to a risk level (e.g. low, medium, or high) to determine the appropriate level of monitoring, review, escalation, or control measures.

Ongoing Monitoring & Pattern Analysis

• Continuous analysis is conducted to identify unusual or suspicious patterns, including structuring, rapid movement of funds, layering, circular flows, or activity inconsistent with the customer’s stated purpose or expected behaviour.
• Cross-border digital asset transactions are subject to enhanced monitoring based on jurisdictional and transactional risk indicators.

Alerts, Review & Escalation

• Transactions generating elevated risk alerts are reviewed manually by the Compliance function.
• Alerts may be escalated to the MLRO for further assessment and decision-making.
• Where elevated risk is identified, Enhanced Due Diligence measures may be applied, including additional information requests, increased monitoring, temporary restrictions, or other risk mitigation actions.

Enhanced Due Diligence (EDD)

• Where elevated transaction risk is identified, Enhanced Due Diligence measures may be applied.
• EDD measures may include manual review of transactions and wallet exposure, requests for source of funds or transaction purpose information, additional documentation or explanations, increased monitoring, or temporary transaction restrictions.

Controls & Confidentiality

• NEXA PAYMENTS INC. may delay, reject, restrict, suspend, or freeze transactions or accounts where required by law or where risk is deemed unacceptable.
• The methodologies, rules, thresholds, and tools used for transaction monitoring are confidential and are not disclosed to customers.

Suspicious Transaction Reporting

• Where suspicious activity is identified, internal investigations are conducted.
• Where required under Canadian law, Suspicious Transaction Reports (STRs) or other applicable reports are submitted to FINTRAC within prescribed timelines.

Record Keeping

• Records related to transaction monitoring activities are maintained in accordance with Canadian regulatory requirements.
• Records include transaction data, KYT alerts, risk assessments, investigation notes, and supporting documentation.
• Such records are retained for a minimum of five (5) years, or longer where required by applicable law or regulatory obligations.

Use of Third-Party Analytics Providers

• To support effective transaction monitoring, NEXA PAYMENTS INC. may use reputable third-party blockchain analytics providers.
• Such providers are subject to appropriate due diligence and ongoing oversight.

Sanctions Compliance

• Transactions are screened for exposure to applicable sanctions regimes, including Canadian sanctions, United Nations sanctions, and other relevant international sanctions lists.
• Transactions involving sanctioned wallets, entities, or jurisdictions are prohibited.

Governance & Review

• This transaction monitoring framework is reviewed periodically to ensure continued effectiveness and alignment with FINTRAC guidance, FATF recommendations, emerging risks and typologies, and changes in applicable laws or supervisory expectations.