Introduction and Objectives
Zero Hash Liquidity Services LLC ("ZH Liquidity") and Zero Hash LLC ("ZH") (collectively, "Zero Hash") are prohibited from engaging in or permitting fraudulent activity. In furtherance of this goal, Zero Hash takes reasonable steps to detect and prevent fraud, including by establishing and maintaining this anti-fraud policy. This Zero Hash Anti-Fraud Policy includes: (1) the identification and assessment of fraud; (2) procedures and controls to protect against and prevent identified risks; and (3) allocation of responsibility for monitoring, detecting and reporting on risks. Zero Hash also takes steps to provide education to customers relating to fraud and fraudulent activities.
Zero Hash has effective processes to identify and manage fraud risks as well as effective internal control mechanisms to protect against those risks. This Zero Hash Anti-Fraud Policy is an overview of the systems and controls in place that:
- Identify fraud risks wherever they arise in its activities;
- Measure and control the different types of risk;
- Allocate responsibility for risk management to persons with appropriate knowledge and expertise; and
- Provide sufficient, reliable information to key individuals.
Zero Hash recognizes that fraud risks are continually evolving as fraudsters execute new novel schemes. Fraud may be defined as any act that for gain uses deception as its principal method of operation. For the purpose of the Zero Hash Anti-Fraud Policy, “fraud” may include, but is not limited to:
- manipulation of trading markets or other violative or disruptive trading practices;
- manipulation, falsification or alteration of records or documents;
- misappropriation of assets such as fiat currency or digital assets;
- bribery and corruption;
- usurpation of corporate interests for personal gain;
- payment or receipts of bribes, kickbacks or other inappropriate payments; and
- identity theft or fraud as further described below.
The following is a non-exhaustive list of identity fraud risks or methods of identity fraud :
- First Party Fraud - a person or a group falsely identifying themselves or providing incorrect information.
- Second Party Fraud - an individual agreeing to give their personal information to their family member or a close friend to commit the fraud.
- Synthetic Identification - a combination of fabricated credentials where the implied identity is not associated with a real person. Fraudsters may create synthetic identities using potentially valid social security numbers (“SSNs”) with accompanying false personally identifiable information (“PII”).
- Third Party Fraud - generally known as identity theft, Third Party Fraud occurs when a malicious actor uses another person's identifying information to open new accounts without the knowledge of the individual whose information is being used.
- Account Takeover - a form of identity theft that works through a series of small steps including a fraudster gaining access to a victim’s account(s) and then making non-monetary changes such as modifying PII and/or changing the password.
Identifying Fraudulent Transactions
Fraudulent activity may be identified from a variety of sources including system alerts, complaints, and personnel referrals. Once identified, the potentially fraudulent activity will be investigated and, if determined to be true fraud, addressed.
Investigations
If the investigation substantiates fraudulent activities, the Compliance team will work with Zero Hash management to determine appropriate action to take, based on the nature of the identified fraud. Decisions to report or refer the investigation results to the appropriate law enforcement and/or regulatory agencies will be made in conjunction with Legal Counsel.
If during the course of the investigation evidence of other potential money laundering or financial crimes is uncovered, the case will be escalated for further investigation and disposition. Investigations into potentially fraudulent activity, including those that may involve an employee of Zero Hash, are to be conducted without regard to the suspected wrongdoer’s length of service, position/title, or relationship to Zero Hash.
Terminating and Divesting Relationships
If an investigation results in a recommendation to terminate and divest an end-user relationship, the recommendation will be reviewed for approval by the designated Compliance personnel. Legal Counsel may also be consulted before any such action is taken.
Support & Fraud Prevention Education
Upon the conclusion of an investigation into an instance of fraud, whether committed by a Participant or an employee of Zero Hash, and such investigation finds fraudulent activity, a conclusion report or summary will be sent to applicable regulatory authorities, including NYDFS.
We encourage all fraud victims to report fraud to relevant regulatory authorities. Please visit the Zero Hash fraud education page for more information and details on how to report fraud incidents to regulatory agencies: Fraud Education Page
If you believe you have been the victim of fraud, please contact Zero Hash at:
1 (855) 744-SEED or support@zerohash.com