Sanctions Tier Feature

As part of KYC verification, Synapse passes all users through watchlists to avoid facilitating money laundering or terrorism financing. Synapse provides different sets of watchlists or “sanctions tiers” dependent on the nature of a platform’s use case (to asynchronously run the KYC of each user through sanctions lists as well as additional screenings such as FBI most wanted databases). As you integrate with Synapse, the most appropriate sanctions tiers for your platform, for its users, and for the products you offer will be defined with your Account Manager.

User Watchlists Flag and Documents Watchlists Flag

We flag users at the KYC documents-level and user-object level with the watchlists flag. The user object will reflect the results of the documents watchlists flags (i.e. will reflect the highest severity flag among all collected documents) and thus should be the point of reference for the platform to determine next steps and whether the user will be able to transact. If you view a user you will see a single watchlists flag for the user, and a watchlists flag associated with the documents array within the user object.

In some instances, a user who cleared the initial watchlists check may be flagged at a later date since:

• Synapse watchlists are routinely updated.
• Synapse routinely runs checks on existing users and their KYC documents to determine if any of their watchlists statuses have changed.

Please note that any funds present in a flagged user account will be locked until the issue is resolved.

Documents Watchlist

Each KYC identity associated with the user will have its own watchlists flag.

Possible values are:

• PENDING: KYC verification for the document is still pending
• NO_MATCH: a document did not trigger a watchlist
• MATCH: a document was either flagged by our KYC verification system or was flagged by our compliance team
• FALSE_POSITIVE: our compliance team has determined that a document triggered a false positive match in a watchlist

Per User Watchlist

Depending on the watchlists results for all KYC documents, the user object will have a singular watchlists flag that should be the point of reference for platforms. If any documents have MATCH or PENDING set for their watchlists flag, then the documents-level watchlists flag value will be reflected in the user-level watchlists flag level.

Possible values are:

• PENDING: user KYC is still being processed / is unverified (user is created but user will be unable to perform any actions)
• NO_MATCH: user did not have any documents that triggered a match in our sanctions watchlists
• SOFT_MATCH: user was deemed a potential match by our KYC verification system due to the presence of at least one documents-level MATCH; our compliance team is verifying the user
  • SOFT_MATCH|PENDING_UPLOAD: user was deemed a potential match by our KYC verification system; please upload a government ID (GOVT_ID) to allow the match to be rechecked by our KYC verification system or by our compliance team
• MATCH: user confirmed by our compliance team as a match in watchlists
• FALSE_POSITIVE: user confirmed by our compliance team to not be part of the watch watchlist for which they were initially flagged (i.e. that documents-level flag was a false positive)

Process Flow

The process for shifting watchlists flags is fairly rigid, but follows transparent logic:

• Any user with flag set to SOFT_MATCH, SOFT_MATCH|PENDING_UPLOAD, or MATCH will not be able to transact.
  • Additionally, please note our compliance team will review SOFT_MATCH users, and will only directly shift a user watchlists flag to either MATCH or NO_MATCH.
• If our compliance team determines that a document triggered a false positive in our KYC verification system, then they will manually shift the relevant documents-level watchlists flag to FALSE_POSITIVE.
  • The user object will then reflect the FALSE_POSITIVE flag (assuming there are no other matches).
  • We force the manual compliance change at the documents level to prevent our KYC verification system from issuing recurring false positive matches for the same documents.