ToonPay Terms and Conditions of Service

You ("user") agree that these terms and conditions ("Terms") regulate your access to and use of the Services. The terms "Company," "we," "us" and "our" refer to TOONPAY TECHNOLOGIES LIMITED incorporated in Hong Kong. Some regulated services will be provided by Partner. If a Partner provides a different policy for a specific site, application, or service, that particular policy will take precedence.

"Services" refers individually and collectively to the ToonPay Application, Partner Services, and any software services provided by us, as well as all written or electronic materials including software, graphics, data, database, text, audio, images, video, photos, or other content ("Content"), all related features, services, content and applications which the Company, Partners and its affiliated companies may make available to you from time to time.

By registering for the Services or continuing to use the Services, ToonPay Application, or web application ("Platform") you confirm that you have read, understood, and agreed to these Terms as well as our Privacy Policy. IF YOU DO NOT AGREE, PLEASE DO NOT USE THE SERVICES.

Important Statement:

The Company is not a bank, it is a technology company providing virtual asset services. Your account is not covered by deposit insurance against losses.

1. Onboarding

1.1 Registration

To use the Services available through our Platform, registration is necessary and the payment of a subscription-based account might be applied depending on the Service at the discretion of the Company. During this process, you'll need to provide contact information, including a phone number and password. Once registered, you'll receive an account allowing you access to our Platform ("Account"). We may, at our sole discretion, refuse to open an Account, authorize the Account activation, suspend, and even close it.

1.2 Eligibility

Use of the Services is contingent upon:

• Your capacity to enter into legally binding contracts, being of legal age in your country (e.g. 18 years old) or representing a legally constituted entity;
• No history of suspension or removal from our Services;
• Authority and non-violation of any other agreements by agreeing to these Terms;
• Not being located in, or a national or resident of any Restricted Locations or countries embargoed or prohibited from using the Services;
• Not on any denied persons lists or sanctions lists;
• You do not have an existing account with us (under same or different name);
• Not being under any legal restriction that prevents you from using the Services;
• Not being classified as a Politically Exposed Person (PEP) without proper enhanced due diligence;
• Not conducting business from high-risk jurisdictions as defined by FATF without additional compliance measures;
• Complying with all local, national, and international laws applicable to you regarding the use of the Services.

1.3 Identification and AML/CTF Compliance

To utilize certain Services, you need to create and maintain an Account. Access to Partner Services is subject to identification, verification, and screening ("KYC") following the Anti-money laundering and counter-terrorist financing standards ("AML/CTF"). Depending on the outcome, additional information might be requested continually.

Enhanced Due Diligence Requirements:

• Politically Exposed Persons (PEPs) must undergo enhanced due diligence procedures
• Customers from high-risk jurisdictions require additional verification
• Complex or unusually large transactions trigger enhanced screening
• Anonymous or pseudonymous account activity is prohibited
• Virtual asset service providers (VASPs) must be licensed or regulated

Access to or use of the Services may be denied if you do not provide necessary identity proofs or if the provided documents do not satisfy the Company or Partner's criteria.

1.4 Account Security

You are responsible for keeping your Account information confidential and overseeing all activities that occur under your Account. Should any unauthorized access or security breach occur, you must immediately notify the Company via support@toonpool.online.

2. Services

2.1 Scope of Services

Services for users include:

• Virtual asset wallet management and custody services
• Payment processing and settlement services
• Transaction monitoring and compliance services
• Access to partner financial services
• Blockchain transaction facilitation

2.2 AML/CTF Compliance Services

The Company implements comprehensive AML/CTF measures including:

• Customer risk classification (low, medium, high risk)
• Ongoing transaction monitoring for suspicious activities
• Automated and manual screening against sanctions lists
• Blockchain forensic analysis where necessary
• Suspicious Transaction Reporting (STR) to relevant authorities

2.3 Risk-Based Approach

ToonPay applies a risk-based methodology:

• Risk Assessments: Identify and assess risks related to products, services, delivery channels, jurisdictions, and customer types
• Customer Risk Classification: Customers are categorized into low, medium, or high risk
• Controls and Mitigation: Risk-tailored controls applied accordingly (e.g., lower thresholds for high-risk customers)

2.4 Virtual Asset Services

The Virtual Assets deposited in our Platform will be held in our Partner Custodian solution. You recognize that the Company will manage the Custodian services on your behalf, ensuring security and compliance with applicable AML/CTF laws.

3. Transaction Monitoring and Compliance

3.1 Automated Monitoring

• Automated systems shall be used to detect unusual or suspicious activity patterns
• Manual alerts must be escalated to the Compliance Officer
• Crypto-to-fiat conversions exceeding thresholds trigger enhanced monitoring

3.2 Sanctions Screening

Customers, counterparties, and transactions must be screened against:

• United Nations Security Council sanctions lists
• HKSAR Government sanctions lists
• Other relevant sanctions lists (e.g., OFAC, EU)

Immediate action will be taken in case of a positive match, including freezing of assets and reporting to relevant authorities.

3.3 Virtual Asset-Specific Requirements

ToonPay shall:

• Identify and verify ownership of wallet addresses associated with customers
• Monitor incoming/outgoing wallet transactions for potential high-risk patterns
• Follow the "Travel Rule" standards where applicable
• Conduct blockchain forensic analysis where necessary

4. Record Keeping and Reporting

4.1 Record Retention

Records related to Customer Due Diligence (CDD), transaction history, risk assessments, and Suspicious Transaction Reports (STRs) must be retained for no less than seven (7) years after the end of the business relationship or transaction. Records must be retrievable promptly upon request from regulatory authorities.

4.2 Suspicious Activity Reporting

All suspicious transactions must be promptly reported to the Joint Financial Intelligence Unit (JFIU) using a Suspicious Transaction Report (STR). All records related to STRs must be retained securely and confidentially.

5. Customer Due Diligence Requirements

5.1 Standard CDD Measures

For all customers, we shall:

• Verify customer identity using reliable, independent sources
• Identify and verify beneficial ownership for legal persons
• Understand the purpose and intended nature of business relationships
• Conduct ongoing due diligence throughout the business relationship

5.2 Enhanced Due Diligence (EDD)

Enhanced measures apply to:

• Politically Exposed Persons (PEPs)
• High-risk jurisdictions (as defined by FATF)
• Complex or unusually large transactions
• Anonymous or pseudonymous account activity
• Virtual asset service providers (VASPs) that are not licensed or regulated

6. Account Management and Restrictions

6.1 Account Limitations

The Company reserves the right to:

• Impose transaction limits based on risk assessment
• Require additional verification for high-value transactions
• Freeze accounts pending compliance review
• Terminate services for non-compliance with AML/CTF requirements

6.2 Prohibited Activities

You agree not to engage in:

• Money laundering or terrorism financing
• Transactions with sanctioned individuals or entities
• Use of mixing services or privacy coins without disclosure
• Providing false or misleading information
• Circumventing compliance controls

7. Third-Party Services and Partners

7.1 Partner Services

The Company's Services might provide access to various financial services. These services are offered directly by Partners and may necessitate separate registration, identity verification, and agreement processes.

7.2 Partner Disclaimer

You neither have any contractual relationship with our Partners nor do our Partners owe any duty of care to you under all circumstances except if otherwise agreed.

8. Fees and Charges

8.1 Service Fees

Fees may be charged for:

• Account maintenance and compliance monitoring
• Enhanced due diligence procedures
• Transaction processing and settlement
• Regulatory reporting and compliance

8.2 Fee Structure

All fees are listed on the Platform and may be updated at the Company's discretion. Fees are final and non-refundable under any circumstances unless otherwise determined by the Company.

9. Compliance and Legal Obligations

9.1 Regulatory Cooperation

Both the Company and Partners reserve the right to conduct comprehensive customer due diligence through KYC, Know Your Transaction (KYT) checks, AML/CTF, and other due diligence checks. You must cooperate in any investigations related to suspicious activities or transactions.

9.2 Training and Awareness

All personnel undergo AML/CTF training annually, with specialized training for customer-facing teams and transaction monitoring teams.

9.3 Independent Audit

ToonPay's AML/CTF program is reviewed at least annually by an independent auditor or competent third party. Audit findings are reported directly to the Board of Directors.

10. Termination and Suspension

10.1 Termination Rights

The Company reserves the right to terminate, suspend, or limit your use of Services for:

• Breach of Terms or AML/CTF requirements
• Suspicion of unlawful or prohibited activities
• Failure to provide required compliance information
• Risk management or regulatory compliance reasons

10.2 Account Closure Procedures

Upon termination, withdrawal of remaining balance may be subject to additional identification, verification, and fraud prevention steps to comply with AML/CTF requirements.

11. Risk Disclosure

When using our Services, be aware of risks associated with Virtual Assets and Services as outlined in our Risk Disclosure document. Additional risks include regulatory changes affecting AML/CTF requirements and potential impact on service availability.

12. Limitation of Liability

TO THE FULLEST EXTENT PERMITTED BY LAW, THE PLATFORM AND SERVICES ARE PROVIDED ON AN "AS IS" AND "AS AVAILABLE" BASIS. The Company's total liability shall be limited to a maximum of USD 500 as of the date your claim arises.

13. Dispute Resolution

13.1 Internal Resolution

If you have a dispute with the Company, you agree to first contact our support team at support@toonpool.online to seek an amicable resolution.

13.2 Arbitration

For unresolved disputes, parties agree to binding arbitration governed by Hong Kong International Arbitration Centre (HKIAC) Rules, conducted in Hong Kong.

14. General Provisions

14.1 Governing Law

These Terms shall be governed by and construed in accordance with the laws of Hong Kong Special Administrative Region.

14.2 Entire Agreement

This agreement, the privacy policy, and all disclosures comprise the entire understanding between the user and Company.

14.3 Amendment

The Company may change these Terms from time to time. Continued use of Services after changes constitutes acceptance of revised Terms.

14.4 Contact Information

For questions regarding these Terms, contact us at support@toonpool.online

Definitions

• "AML/CTF" means Anti-Money Laundering and Counter-Terrorism Financing
• "CDD" means Customer Due Diligence
• "EDD" means Enhanced Due Diligence
• "FATF" means Financial Action Task Force
• "JFIU" means Joint Financial Intelligence Unit
• "KYC" means Know Your Customer
• "KYT" means Know Your Transaction
• "PEP" means Politically Exposed Person
• "STR" means Suspicious Transaction Report
• "Virtual Assets" refer to any digital representation of value that can be digitally traded, transferred or used for payment
• "VASP" means Virtual Asset Service Provider