The Evolving Regulatory Landscape

If you've been following the cryptocurrency space, you'll know that regulatory compliance isn't just a box-ticking exercise anymore — it's become fundamental to business survival and growth.

At Altify, our dual presence in South Africa and Poland gives us a unique perspective on navigating the complex web of regulations that govern crypto businesses across multiple jurisdictions. Today, we're sharing our approach to regulatory compliance and how it shapes our risk management framework.

MiCA: The New Standard for European Crypto Regulation

The Markets in Crypto Assets (MiCA) regulation represents the most comprehensive regulatory framework for crypto assets to date. As a platform with significant operations in Poland, we've been preparing for MiCA implementation well ahead of the deadline.

What does MiCA mean for Altify and our clients?

• Enhanced consumer protection: Our platform now includes additional disclosures and cooling-off periods aligned with MiCA requirements
• Stricter operational resilience: We've upgraded our systems to meet MiCA's technical standards for system resilience and security

The good news? These measures actually enhance user experience while providing greater protection. Our clients in Europe can now trade with increased confidence, knowing they're protected by a comprehensive regulatory framework.

South African Regulatory Framework: Embracing FICA, Directive 9, and Beyond

South Africa's approach to crypto regulation continues to evolve, with the Financial Intelligence Centre Act (FICA) serving as the cornerstone of our AML/CFT compliance program.

Recent amendments to FICA have brought crypto asset service providers like Altify under its scope, requiring:

• Registration with the Financial Intelligence Centre (FIC)
• Approval from the Financial Sector Conduct Authority (FSCA)
• Implementation of robust KYC procedures
• Ongoing transaction monitoring
• Travel Rule Monitoring
• Suspicious transaction reporting

We've gone beyond these baseline requirements by implementing a risk-based approach that aligns with both South African regulations and international best practices. This means our South African clients benefit from a compliance framework that meets global standards while addressing local regulatory nuances.

AML and KYC Approach at Altify Going Beyond Checkbox Compliance

Let's be honest, nobody enjoys the KYC process. But at Altify, we've worked hard to make compliance as painless as possible while maintaining the highest standards.

Risk-Based Client Categorisation

Not all clients present the same level of risk. Our platform categorises clients based on multiple risk factors:

• Geographic location
• Transaction patterns
• Account activity
• Investor suitability questionnaire
• Source of funds

This categorisation determines the level of due diligence applied:

• Low-risk clients undergo standard verification, with streamlined processes that minimise friction while ensuring compliance.
• Medium-risk clients face additional verification steps, including enhanced documentation requirements and more detailed source of funds verification.
• High-risk clients are not accepted as customers on the platform at this time.

This graduated approach ensures we apply appropriate scrutiny where needed without creating unnecessary friction for lower-risk clients.

Travel Rule Implementation and Staying Ahead of Global Crypto Compliance Standards

The FATF Travel Rule has been a game-changer for crypto businesses worldwide. At Altify, we've implemented a comprehensive Travel Rule solution that ensures compliance across jurisdictions.

For transfers exceeding the threshold (currently €1,000 under MiCA and R5,000 under South African regulations), our platform:

• Securely collects and verifies originator/destination information
• Transmits required data to beneficiary VASPs using industry-standard protocols
• Screens transactions against sanctions lists before processing
• Maintains comprehensive records for regulatory reporting

Our technical implementation leverages interoperable standards, ensuring seamless compliance regardless of which platform our clients are transferring to or from.

Unhosted Wallet Transfers: Balancing Freedom and Compliance

Transfers to and from unhosted (private) wallets present unique regulatory challenges. MiCA and South African regulations take different approaches to these transfers, requiring careful navigation.

For our European clients, MiCA requires enhanced due diligence for unhosted wallet transfers exceeding €1,000. Our approach includes:

• Verification that the unhosted wallet belongs to the client
• Enhanced monitoring of transaction patterns
• Risk-based assessment for larger transfers

For South African clients, we apply similar principles while adapting to local regulatory guidance from the FSCA and FIC:

• Verification that the unhosted wallet belongs to the client
• Enhanced monitoring of transaction patterns
• Risk-based assessment for larger transfers

Suspicious Transaction Monitoring

Detecting suspicious transactions requires more than just static rules. Our transaction monitoring system employs advanced algorithms to identify unusual patterns that might indicate:

• Money laundering
• Terrorist financing
• Market manipulation
• Fraud

When potential suspicious activity is detected, our system:

• Flags the transaction for review
• Applies appropriate temporary restrictions
• Triggers human review by our compliance team
• Generates regulatory reports when necessary

This combination of automated detection and human expertise ensures we meet our regulatory obligations while minimising false positives that could impact legitimate client activities.

Regulatory Technology as the Backbone of Compliance in Crypto

Behind the scenes, our compliance framework is powered by sophisticated RegTech solutions that enable us to:

• Screen clients against global sanctions and PEP lists in real-time
• Monitor transactions using dynamic risk scoring
• Generate comprehensive regulatory reports
• Maintain auditable compliance records

These technological capabilities allow us to maintain compliance at scale without compromising on user experience — a critical balance in the competitive crypto marketplace.

Compliance as a Competitive Advantage

The regulatory landscape continues to evolve, with new requirements emerging regularly. At Altify, we maintain a forward-looking approach, actively participating in regulatory consultations and industry working groups.

Upcoming regulatory developments we're preparing for include:

1. Further refinements to MiCA implementation standards
2. South Africa's comprehensive crypto asset regulatory framework
3. Global convergence of Travel Rule standards
4. Enhanced requirements for stablecoin issuers and custodians

By staying ahead of regulatory trends, we ensure our platform remains compliant while advocating for sensible regulations that protect consumers without stifling innovation.

We view regulatory compliance as a competitive advantage. Our robust compliance framework:

• Builds trust with clients
• Enables access to banking partnerships
• Reduces operational risks
• Creates a foundation for sustainable growth

As the crypto industry matures, we believe that platforms with strong compliance foundations will ultimately prevail. By investing in comprehensive regulatory compliance today, we're building a platform that can thrive in tomorrow's regulated crypto landscape.