1. Introduction

Nook Savings App (“Nook”) is a decentralized, self-custody digital asset wallet that enables users to interact directly with blockchain networks. Although Nook does not take custody of user assets, we are committed to supporting compliance with applicable anti-money laundering (AML), counter-terrorism financing (CTF), and sanctions regulations, including those of the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).

2. Regulatory Scope

This policy is designed in accordance with:

• The Bank Secrecy Act (BSA)

• USA PATRIOT Act

• OFAC Sanctions Programs

• Financial Action Task Force (FATF) guidelines

• FinCEN guidance for convertible virtual currency and self-hosted wallets

3. AML/CTF Framework

3.1 

Risk-Based Approach

We assess and mitigate risks based on:

• Geographic exposure

• Nature of blockchain transactions

• Type of on/off-ramp integrations (e.g., fiat onramps via Plaid or Stripe)

• Volume and velocity of transfers

• Interaction with DeFi protocols and smart contracts

3.2 

Transaction Monitoring

While Nook does not control or process transactions, we implement:

• Integration with on-chain analytics tools (e.g., Chainalysis or TRM Labs) to flag wallet addresses tied to known illicit activity.

• Heuristics to identify high-risk behaviors (e.g., mixers, high-volume bridging).

4. OFAC Sanctions Compliance

4.1 

Blocked Address Screening

Nook screens addresses interacting with the application (via APIs or UI) against OFAC’s SDN (Specially Designated Nationals) list and other restricted party lists using third-party tools.

4.2 

Geolocation & IP Blocking

We restrict access to users located in OFAC-sanctioned jurisdictions using:

• IP geofencing

• VPN detection heuristics

5. Know Your Customer (KYC) Policy

While Nook does not require identity verification to use the wallet core, KYC is enforced under specific conditions:

5.1 

Conditional KYC Triggers

• Fiat on/off ramp usage (via integrated providers)

• Elevated transaction limits

• Linking to centralized services

• Participation in specific Nook rewards, airdrops, or staking programs

5.2 

KYC Procedure

Where triggered, users must provide:

• Government-issued ID

• Proof of address

• Selfie liveness check

KYC verification is conducted via a regulated identity provider (e.g., Persona, Jumio).

6. Recordkeeping

• Transaction metadata (e.g., wallet address, timestamp, IP) is stored in encrypted logs for a minimum of 5 years, where applicable.

• KYC records, when collected, are securely retained for at least 5 years post-relationship termination.

7. Reporting Obligations

Nook cooperates with law enforcement and may file suspicious activity reports (SARs) in coordination with compliance partners and on-ramp providers when required.

8. Internal Controls & Training

• All staff undergo AML/CTF training annually.

• We designate a Compliance Officer responsible for policy oversight, audits, and regulatory correspondence.

9. Policy Review

This policy is reviewed and updated at least annually, or as required by regulatory changes.