Frontnode is committed to complying with applicable sanctions laws and preventing its services from being used to evade sanctions, conceal prohibited property, or support activities connected with Russia’s war against Ukraine.
This policy explains:
This policy applies to Frontnode’s customers, beneficial owners, authorized representatives, counterparties, transactions, virtual currency wallets, business partners, vendors and personnel.
Frontnode applies Canadian sanctions requirements and related anti-money laundering obligations relevant to its activities as a Canadian MSB. These include, as amended from time to time:
Where a transaction, customer, counterparty, service provider or payment route has a material connection to another jurisdiction, Frontnode may also consider relevant European Union, United Kingdom, United States and United Nations sanctions measures. These additional lists and restrictions are used as risk controls and to meet applicable contractual, banking, payment or correspondent requirements.
Frontnode monitors regulatory developments, including sanctions directed at crypto-asset service providers, wallets, exchanges, stablecoins and other mechanisms used to facilitate sanctions evasion. This includes measures concerning A7A5 and other Russia-linked or ruble-linked crypto-assets where their use is prohibited or presents an unacceptable sanctions risk.
Frontnode does not knowingly provide services to a listed or sanctioned person or entity, process prohibited property, or facilitate a transaction that would breach applicable sanctions. Frontnode also does not support activity intended to circumvent or avoid a sanctions restriction.
Frontnode may reject, restrict or discontinue services involving:
A customer’s nationality, place of birth, name, language or use of a Russian identity document does not, by itself, establish that the customer is sanctioned or that a transaction originates from or is bound for Russia. Frontnode assesses the complete facts and context and may nevertheless apply restrictions where required by law or justified by its documented risk appetite.
Frontnode screens customers and relevant connected persons at onboarding and on an ongoing basis. Screening may include:
Potential matches are reviewed using identifying information sufficient to distinguish a true match from a false positive. Frontnode does not rely solely on name matching and may request additional information or documentation before completing its assessment.
In accordance with the applicable Canadian Ministerial Directive, Frontnode treats every financial transaction determined to originate from or be bound for Russia as high risk, regardless of amount.
For such a transaction, Frontnode applies measures that may include:
Indicators of a transaction originating from or bound for Russia may include Russian originator or beneficiary details, Russian addresses, a Russian ruble component, Russia-linked wallets or service providers, or other facts showing a substantive connection to Russia. Frontnode considers the circumstances as a whole.
Frontnode applies transaction monitoring and blockchain analytics, where appropriate, to identify sanctions exposure and attempts to obscure the origin, destination, ownership or control of virtual currency.
Monitoring may consider exposure to:
Blockchain analytics and risk scores support, but do not replace, human assessment. Frontnode considers the nature, proximity, value, timing and context of identified exposure before deciding what action is appropriate.
Frontnode applies proportionate controls across its products and delivery channels, which may include:
The use of a virtual private network or other privacy technology is not automatically treated as unlawful. Frontnode may, however, refuse or restrict access where such technology prevents required verification or appears to be used to circumvent geographic, sanctions or security controls.
A potential sanctions match, prohibited property concern or suspected sanctions-evasion activity is escalated promptly to Frontnode’s compliance function. Frontnode may pause onboarding, delay or decline a transaction, restrict an account, prevent withdrawal or transfer, or take other protective measures while the matter is reviewed.
Where required by applicable law, Frontnode will:
Frontnode will not disclose a report, investigation or restriction where disclosure is prohibited, could prejudice an investigation, or could expose confidential monitoring or security controls.
Frontnode maintains records sufficient to demonstrate how Russia-related sanctions risks, screening results, transactions and decisions were identified, assessed and resolved.
Depending on the circumstances, these records may include:
Frontnode retains relevant records for at least five years from the date the record was created, the relevant transaction, or the end of the customer relationship, as applicable. Records may be retained for a longer period where required or permitted by law, regulatory direction, legal proceedings, fraud prevention, or the establishment, exercise or defence of legal claims.
Records are protected using appropriate technical and organizational measures. Access is limited to authorized personnel and service providers with a legitimate compliance, legal, security or operational need.
Frontnode’s compliance function oversees the sanctions compliance framework and escalates material matters to senior management. Responsibilities are allocated through internal policies, procedures and approval authorities.
Frontnode’s governance arrangements include, as appropriate:
Employees and contractors must report suspected sanctions exposure or control failures promptly and must not override, conceal or assist in circumventing a sanctions control. Breaches may result in disciplinary action, termination of access or engagement, account closure, contractual remedies and reporting to competent authorities.
Frontnode may update this policy to reflect changes in applicable law, sanctions designations, regulatory guidance, services, delivery channels or identified risk.
The current version will be published on Frontnode’s website. Customers and business partners are encouraged to review this policy periodically.
