Identity Verification, Sanctions and Financial Crime Controls Policy

1. Introduction and Scope

ZoneX AG is committed to preventing fraud, sanctions violations and other financial crime in connection with its trading-technology and evaluation services. For the Challenge and Funded Trader products described on this site, ZoneX does not consider itself a financial intermediary subject to the Swiss Anti-Money Laundering Act (AMLA) or to affiliation with a self-regulatory organisation (SRO), because ZoneX does not accept, hold, manage, invest, convert or transfer participant assets. A ZoneX Challenge is a simulated evaluation using simulated capital. A Funded Trader Arrangement is a contractual trading-service relationship under which the trader acts as a contractor/service provider and never owns the trading account, capital, crypto-assets, positions or proceeds; trading may be conducted using simulated capital, ZoneX-owned proprietary capital, or a combination of both.

Fees paid to ZoneX are consideration for ZoneX's software, programme access, trading environment and related services — they are not deposits, investments, margin, collateral, trading capital or customer money. Payments made to a trader are contractual, performance-based remuneration for services rendered, not withdrawals of participant assets. ZoneX maintains no participant fiat or crypto balance.

Notwithstanding the above, ZoneX voluntarily adopts robust identity-verification, sanctions-screening and fraud-prevention procedures as a matter of best practice, corporate responsibility and contractual risk management, informed by:

• The principles of the Swiss Federal Act on Combating Money Laundering and Terrorist Financing (AMLA), applied here as a voluntary best-practice framework and not as an admission of regulatory status
• Applicable Swiss and international sanctions regimes
• FATF (Financial Action Task Force) Recommendations, used as an internationally recognised reference standard
• Swiss criminal law provisions related to money laundering and fraud

2. When Controls Apply

3. Identity Verification and Risk-Based Enquiries

3.1 Identity Verification

Before a trader's first performance payout under a Funded Trader Arrangement, ZoneX verifies identity using:

• Government-issued photo ID: Passport, national ID card, or driver's licence
• Proof of address: Utility bill, bank statement, or government document (dated within 90 days)
• Selfie verification: Live photo with ID for facial matching
• Additional documents: May be requested based on risk assessment

3.2 Source of Funds Enquiry (Risk-Based)

In particular cases identified through risk assessment, sanctions exposure, fraud indicators, or payment-provider requirements, ZoneX may ask a trader to explain or evidence the source of funds used to pay Challenge or programme fees. This is not a universal requirement applied to every trader, but a targeted enquiry used where circumstances warrant it.

3.3 Purpose and Nature of the Relationship

Where relevant to risk assessment, ZoneX may seek to understand:

• The trader's intended use of the Funded Trader Arrangement
• Expected trading volume and patterns
• Trading experience and background
• Other information relevant to fraud and sanctions risk

4. Enhanced Checks

Enhanced checks may be applied in higher-risk situations, including:

• High-risk jurisdictions: Countries identified by FATF or relevant authorities as high-risk
• Politically Exposed Persons (PEPs): Government officials, senior executives, or their family members
• Larger Funded Trader Arrangements: Arrangements exceeding $100,000 in allocated capital
• Unusual trading patterns: Conduct inconsistent with the trader's profile
• Complex structures: Applications made through entities or trusts

Enhanced checks may include additional documentation, source-of-funds enquiry, and senior management approval, applied using ZoneX's reasonable discretion on the grounds set out in this Policy.

5. Sanctions and PEP Screening

5.1 Sanctions Lists

Every Funded Trader participant must complete identity-based sanctions screening no later than before the first performance payout. ZoneX may complete that screening earlier, including before purchase, admission, activation or trading, where required by applicable law, sanctions information, geographic restrictions, fraud/risk controls, or third-party providers. Screening may include checks against:

• Swiss State Secretariat for Economic Affairs (SECO) sanctions lists
• United Nations Security Council consolidated list
• EU sanctions lists
• OFAC (U.S. Treasury) Specially Designated Nationals (SDN) list
• UK HM Treasury financial sanctions list

A confirmed match generally results in rejection or termination of the arrangement. Applicants may challenge a decision through our Complaints Procedure, and any decision remains subject to mandatory law.

5.2 Politically Exposed Persons (PEPs)

PEPs include:

• Heads of state, government officials, senior politicians
• Senior executives of state-owned enterprises
• Important political party officials
• Senior judges, prosecutors, military officers
• Family members and close associates of the above

Where PEP status is identified, enhanced checks and senior management approval must be completed no later than before the first performance payout, and may be required earlier where the circumstances in Section 5.1 apply.

6. Prohibited Jurisdictions

ZoneX does not offer Funded Trader Arrangements to applicants from the following high-risk or sanctioned jurisdictions:

• Countries under comprehensive international sanctions (North Korea, Iran, Syria, etc.)
• FATF-identified high-risk jurisdictions with strategic deficiencies
• Jurisdictions where ZoneX's services are prohibited by local law
• Occupied territories subject to international sanctions (e.g., Crimea, Donetsk, Luhansk)

Restricted and prohibited jurisdictions are defined in Section 4 of the Terms of Use, which prevails; this Section describes the sanctions controls applied to them.

This list is subject to change based on sanctions developments and legal guidance. Current restrictions are available upon request. See also the Funded Trader Rules for eligibility conditions.

7. Monitoring of Trading Conduct and Programme Integrity

Because ZoneX holds no participant fiat or crypto balances, monitoring under this Policy focuses on trading conduct and programme integrity rather than customer deposits or withdrawals. ZoneX monitors for:

• Fraud or manipulation indicators: Trading behaviour inconsistent with genuine skill-based trading (e.g., exploiting pricing errors, latency arbitrage, or coordinated manipulation)
• Multi-account abuse: Use of multiple accounts or identities to circumvent programme rules
• Geographic inconsistencies: Access patterns inconsistent with the trader's declared location or that suggest circumvention of jurisdictional restrictions
• Sanctions exposure: New information suggesting sanctions risk arising during the relationship
• High-risk counterparties or payment sources: Fee payments or payout instructions linked to sanctioned or high-risk parties

8. Cryptocurrency Fee Payments and Wallet Screening

Paying a Challenge or programme fee in cryptocurrency does not automatically trigger routine blockchain analytics or wallet screening. However, ZoneX may apply wallet and transaction screening controls where appropriate or required in a particular case, including where sanctions exposure, fraud risk, or a payment-provider requirement is identified. Cryptocurrency received by ZoneX as a service fee becomes ZoneX's own asset and revenue; it is not held by ZoneX on the trader's behalf and is not customer money.

9. Reporting to Authorities

9.1 Reporting Practice

Where required or permitted by applicable law, ZoneX may report suspicious activity to the Swiss Money Laundering Reporting Office (MROS) or other competent authorities, including where ZoneX:

• Knows or suspects that assets involved are the proceeds of criminal activity
• Has reasonable grounds to suspect terrorist financing or sanctions evasion
• Identifies attempts to circumvent identity-verification or sanctions controls
• Encounters applicants or traders who refuse to provide required information

9.2 Confidentiality

9.3 Restricting Dealing, Returning Payments or Withholding Payouts

ZoneX does not hold or freeze customer funds, because it holds no participant fiat or crypto balances. Where a sanctions issue affects ZoneX-owned assets or an incoming cryptocurrency service-fee payment, ZoneX may, as required by applicable sanctions law:

• Restrict further dealing with the affected assets or counterparty
• Return the payment in question
• Withhold a performance payout pending sanctions or fraud-risk assessment
• Terminate the Funded Trader Arrangement

10. Record Keeping

As a corporate, contractual and evidentiary practice — and to satisfy any applicable legal obligation — ZoneX retains records for a minimum of 10 years from the end of the relationship, including:

• Identification documents and verification records
• Records of trading activity relevant to fraud and integrity monitoring
• Communications regarding onboarding and the ongoing relationship
• Risk assessments and due-diligence documentation
• Internal reports and analyses

11. Refusal and Termination

11.1 Right to Refuse

ZoneX may refuse to enter into a Funded Trader Arrangement, using its reasonable discretion on the following grounds:

• Identity-verification documentation is incomplete or unsatisfactory
• ZoneX cannot verify identity or, where requested, source of funds
• The applicant is from a prohibited jurisdiction
• Sanctions or PEP screening reveals concerns
• Risk assessment determines the relationship is too high-risk
• The applicant refuses to provide required information

11.2 Termination of Existing Arrangements

ZoneX may terminate a Funded Trader Arrangement at any time, on reasonable grounds, if:

• Monitoring reveals fraud, manipulation, or programme-integrity concerns
• The trader fails to provide updated documentation when requested
• New information suggests sanctions exposure or involvement in financial crime
• Changes in sanctions or legal requirements necessitate termination

11.3 Review Rights

Decisions made for the reasons set out in this Policy are made on the objective grounds described above, using reasonable discretion rather than unfettered discretion. ZoneX may be limited in the detail it can provide about such decisions where this would compromise a review or investigation, but affected applicants or traders may challenge a decision through our Complaints Procedure, and any decision remains subject to mandatory law.

12. Staff Training and Compliance

ZoneX maintains a financial-crime and sanctions risk-control programme including:

• A designated Compliance Officer
• Regular staff training on sanctions, fraud-prevention and identity-verification procedures
• Internal controls and audit procedures
• Risk-assessment frameworks
• Periodic review and update of this Policy

13. Data Protection and Privacy

Identity verification and sanctions-screening procedures involve processing sensitive personal data. This processing is carried out for:

• Compliance with applicable legal obligations, where they apply
• Prevention of fraud and financial crime (legitimate interest)
• Protection of ZoneX, its traders and its corporate assets

Data handling complies with our Privacy Policy and applicable data-protection law. Data may be shared with authorities and law enforcement where required or permitted by applicable law.

14. Swiss Reporting Office

Where a report is made under Section 9, it is made to the following Swiss reporting office (the authority to which reports are made where required or permitted, without this constituting an admission of AMLA-regulated status):

15. Updates to This Policy

This Policy may be updated to reflect changes in law, sanctions regimes, or best practice. Material changes will be communicated to active traders. See also our Funded Trader Rules for the underlying contractual framework.

16. Contact

For questions regarding this Policy, or to raise a concern internally: