Official Document: KYC/AML Policies

Document Identifier: HWCDAO-COMPL-KYC-AML-001 Version: 1.0 Date: Q3 2025 (Targeted for commencement of Phase 1 implementation) Classification: Official & Sensitive Purpose: To formally document the Hello World Co-Op DAO Ecosystem's comprehensive Know Your Customer (KYC) and Anti-Money Laundering (AML) policies, procedures, and controls, ensuring adherence to global regulatory standards and mitigating financial crime risks.

I. Introduction and Foundational Commitment

The Hello World Co-Op DAO Ecosystem is unequivocally committed to establishing and maintaining robust Anti-Money Laundering (AML) and Know Your Customer (KYC) policies and procedures. This commitment is not merely a regulatory obligation but a foundational pillar of our ecosystem's integrity, ensuring unparalleled user safety, legal adherence, and project viability amidst strict legal and financial liabilities. Our approach is multi-layered, integrating robust legal structures, proactive regulatory engagement, and smart contract enforcement.

II. Regulatory Context and Classification

The Hello World Co-Op DAO Ecosystem operates within a complex and evolving regulatory landscape. Our operations necessitate a proactive and comprehensive compliance posture:

**Virtual Asset Service Provider (VASP) Classification:** The
Hello World Co-Op's operations, particularly the Co-Op Marketplace
(facilitating multi-currency payments and fiat-to-crypto
conversions) and Otter Camp (accepting fiat for donations), will
*likely* classify it as a Virtual Asset Service Provider (VASP)
under Financial Action Task Force (FATF) standards. This is based on
a "functional approach" that focuses on the activities
conducted, rather than self-description, and acknowledges
implications of "control or sufficient influence" over
virtual asset arrangements.

FinCEN Money
Services Business (MSB) Registration: We are proactively
prepared to register as a FinCEN Money Services Business (MSB) if
deemed necessary for handling stablecoin or fiat transactions. This
involves implementing a robust AML compliance program, designating a
Compliance Officer, continuously monitoring transactions, filing
Suspicious Activity Reports (SARs) and Currency Transaction Reports
(CTRs), and adhering to strict record-keeping requirements.
Supervisors expect mitigation measures to be in place *before*
granting registration or licensing.

State Money
Transmitter Licenses: We acknowledge the potential need for
state-level money transmitter licenses in all U.S. states where our
operations, particularly with fiat on/off-ramps for the Marketplace
or Otter Camp, might trigger such requirements. The costs for these
can be substantial and are fully accounted for in our expanded
budget.

SEC
No-Action Letter Pursuit (Related Effort): A critical and
ongoing effort is pursuing an SEC No-Action Letter to affirm the
D.O.M. token's status as a pure utility token, not a security, which
is paramount to mitigating federal securities regulation
liabilities. This is reinforced by the D.O.M. token having no
governance role whatsoever.

III. Core Components of the KYC/AML Program

Our comprehensive AML/CFT program is risk-based, multi-faceted, and built-in from the ground up prior to the launch of any new product or service.

**Risk-Based Approach (RBA):** We are committed to identifying,
understanding, and assessing Money Laundering (ML), Terrorist
Financing (TF), and Proliferation Financing (PF) risks associated
with Virtual Asset (VA) activities. This assessment is undertaken
*before* the software or platform's launch or use.

Customer Due
Diligence (CDD) & KYC:



	Mandatory
	for Vendors: Customer Due Diligence (CDD) and Know Your
	Customer (KYC) are mandatory for all DAO-vetted vendors on the
	Co-Op Marketplace. These vendors are subject to identity
	verification and compliance checks in accordance with law. The
	Marketplace smart contracts enforce this by only allowing listings
	from addresses that have been marked as approved vendors.

	Thresholds
	and EDD: CDD is conducted when establishing customer
	relationships or for occasional VASP transactions above a USD/EUR
	1,000 threshold. Enhanced Due Diligence (EDD) is applied to
	higher-risk relationships, such as those involving Politically
	Exposed Persons (PEPs) or transactions in/from high-risk
	jurisdictions.

	Ongoing Due
	Diligence: We emphasize ongoing due diligence on the
	relationship and scrutiny of transactions to identify changes in
	customer profiles or suspicious activity.

	Ultimate
	Beneficial Owner (UBO) Transparency: Our legal wrapper is
	subject to UBO reporting, requiring KYC checks for individuals with
	significant voting power or control (e.g., 10-25%+). We
	meticulously clarify and document the process for identifying and
	conducting KYC on UBOs within the Cooperative LLC, particularly
	concerning signatories of multi-signature wallets
	(TreasuryManager.sol, GovernanceMultisig.sol) or key roles in
	oversight committees.

	Technical
	Implementation: Technical implementation may leverage "on-chain
	KYC solutions" or "Decentralized Identity (DID)
	Protocols" to balance privacy with compliance.



Transaction
Monitoring: We establish robust transaction monitoring systems
utilizing on-chain analytics tools and AI-powered analytics for
real-time monitoring to detect suspicious activities and identify
connections to sanctioned addresses.



	Monitoring
	includes flagging high-risk transactions (e.g., large sums, rapid
	movements, or complex obfuscation techniques).

	Monitoring
	depth is adjusted based on institutional risk assessment and
	customer risk profiles, including transactions to/from unhosted
	wallets.



Unhosted
Wallet Interaction Policy: Given D.O.M. supports P2P
transactions, we have a clear policy for managing ML/TF risks
associated with transactions to/from unhosted wallets. This may
involve enhanced due diligence, limiting certain types of
transactions, or utilizing blockchain analytics tools to assess
risk, as recommended by FATF.

Record-Keeping
(FATF Recommendation 11): We adhere to FATF Recommendation 11,
requiring maintenance of all transaction records and CDD measures
for at least five years, in a way that allows individual
transactions to be reconstructed and provided swiftly to
authorities. It is crucial to explicitly state that reliance *solely*
on the blockchain for record-keeping is insufficient.

Travel Rule
(FATF Recommendation 16) Implementation Strategy: We have a full
implementation strategy for the FATF 'Travel Rule' (Recommendation
16), which requires obtaining, holding, and securely and immediately
transmitting required originator and beneficiary information for VA
transfers above a USD/EUR 1,000 threshold.



	The
	information does *not* need to be attached directly to the VA
	transfer on the blockchain; it can be submitted indirectly via
	various technology solutions, with emphasis on interoperability.

	We conduct a
	detailed three-phase counterparty VASP due diligence process: (1)
	determine if the transaction is with a counterparty VASP; (2)
	identify the specific VASP (using regulated VASP lists,
	registries); and (3) assess their AML/CFT controls, verifying their
	regulated status, audit reports, and ability to protect sensitive
	information.

	VASPs may "put
	a wallet on hold until screening is completed" and confirmed,
	documenting this remediation control action to facilitate effective
	supervision.



Suspicious
Transaction Reports (STRs) & Regulatory Reporting: A
Compliance Officer is designated to monitor transactions and file
Suspicious Activity Reports (SARs) for suspicious activity with the
Financial Intelligence Unit (FIU). Reporting mechanisms may include
device identifiers, IP addresses, VA wallet addresses, and
transaction hashes.

Sanctions
Compliance (OFAC): We implement a tailored, risk-based sanctions
compliance program, developed *prior* to launching products.



	This includes
	management commitment, pre-launch risk assessment, robust internal
	controls (e.g., geolocation/IP blocking, transaction screening),
	testing, auditing, and employee training.

	Continuous
	screening against the Specially Designated Nationals (SDN) list and
	leveraging blockchain analytics are used to identify and block
	transactions associated with sanctioned persons or entities.

IV. Integration with Legal & Governance Framework

The KYC/AML policies are deeply embedded within the Hello World Co-Op's foundational legal and governance structures:

**Wyoming DAO LLC Framework:** The Hello World Co-Op LLC,
incorporated in Wyoming, provides a clear legal identity for the
DAO, enabling it to own property, enter contracts, and maintain fiat
accounts. This legal wrapper is subject to UBO reporting, directly
integrating KYC requirements for individuals with significant voting
power or control, such as signatories of multi-signature wallets.

Operating
Agreement: The Operating Agreement meticulously details how DAO
resolutions and on-chain voting are formally recognized and upheld,
and defines fiduciary duties and standards of conduct. It explicitly
integrates or references our AML/CFT policies, including KYC for
vendors, comprehensive transaction monitoring, and the use of
multi-signature wallets for high-risk transactions.

Conflict
Resolution Process: A transparent, multi-tiered conflict
resolution process, managed by the ConflictResolution.sol smart
contract, handles reporting, investigation, and DAO resolution for
any ethical or compliance violations, ensuring fairness and due
process.

V. Smart Contract Enforcement

Our smart contract architecture is meticulously designed to embed AML/CFT rules and facilitate compliance enforcement:

**Embedding AML/CFT Rules:** AML/CFT rules are incorporated
directly into smart contracts where feasible, such as transaction
screening and automated reporting.



	**EthicsCompliance.sol:**
	Automatically checks marketplace transactions against ethical
	criteria, potentially blocking disallowed products (e.g., banned
	items, those lacking required ethical certifications) or
	sanctioning vendors for violations.

	**VendorRegistry.sol:**
	Ensures only DAO-approved vendors can list products on the Co-Op
	Marketplace, acting as a permission list that marketplace contracts
	consult.



Automated
Enforcement: Smart contracts facilitate automated enforcement
actions, such as disabling vendor status, burning staked tokens for
severe violations, or transaction reversals, which are binding
decisions.

Multi-signature
Wallets (Gnosis Safe): The DAO's treasury is secured by a
multi-signature wallet, specifically utilizing Gnosis Safe, and
overseen by the TreasuryManager.sol contract. This requires multiple
approvals for large withdrawals, enhancing security and operational
resilience for high-risk transactions.

Smart
Contract Audits: We commit to continuous, rigorous third-party
security and compliance audits for all core smart contracts,
especially those handling funds and governance. Our roadmap includes
a "Smart Contract Audit for Alpha" in Q4 2025.

VI. Partner and Vendor Vetting

A robust "Partner, Vendor, & Integration Questionnaire" is utilized to ensure that every organization we collaborate with is fully aligned with our mission, ethical standards, and regulatory posture from the outset.

**KYC/AML for Partners/Vendors:** Prospective partners and
vendors are required to disclose their legal name, type of entity,
jurisdiction, and VASP/MSB status, which is critical for managing
regulatory interoperability and assessing AML/CFT risks. They must
be DAO-vetted members, subject to identity verification and
compliance checks (KYC/AML) in accordance with law.

Ethical &
Compliance Commitments: Partners and vendors must explicitly
agree to adhere to our Ethical and Sustainability Terms of Service,
which include zero-tolerance for exploitative labor, counterfeit
goods, fraud, trafficking, and environmental degradation. They must
be willing to undergo regular compliance checks and accept automated
enforcement actions or DAO-led sanctions for violations.

Individual
Membership for Organizational Members: For an organization's
members to receive the full benefits of individual membership within
the Hello World Co-Op Ecosystem (e.g., voting rights, patronage
dividends, access to platforms), each individual member of that
organization must also become a registered Hello World Co-Op DAO
member by acquiring a Membership NFT and adhering to our Terms of
Service. This ensures true alignment with our "1 Member = 1
Vote" ethos.

VII. Budget and Roadmap Integration

The implementation and ongoing maintenance of these comprehensive KYC/AML policies require substantial resources:

**Legal and Compliance Budget:** We acknowledge the substantial
legal and compliance costs, estimated to range from $70,000 to
$310,000+ for initial setup, and commit to an expanded legal and
compliance budget. Initial SEC-related costs for Phase 1 are
projected at ~$50,000 to $100,000+. This is a critical investment in
foundational safety and regulatory resilience.

Roadmap
Milestones: The "Legal and Compliance Framework
Reinforcement," including FinCEN MSB registration preparedness
and KYC/AML policies, is a key activity scheduled to commence during
Phase 1 (Q3 2025). Risk-Based AML/CFT Program Implementation and
Accounting and Tax Record-Keeping Infrastructure are further
integrated into Phase 2 (Q4 2025).

VIII. Conclusion and Continuous Vigilance

The Hello World Co-Op DAO Ecosystem's KYC/AML policies are a critical component of its comprehensive compliance strategy, meticulously designed to operate with the utmost safety, compliance, and efficacy. By proactively addressing VASP obligations, implementing robust AML/CFT measures, leveraging smart contract enforcement, and committing substantial resources, we ensure a legally sound and ethically driven environment. Continuous vigilance and adaptability are crucial in this dynamic regulatory landscape, and we remain committed to monitoring international regulatory developments and maintaining flexibility in our legal and technical implementation to adapt to new requirements. This meticulous approach is our shared imperative in building a regenerative future.