KYC
Onboarding and KYC
Investments in Untangled Pool's are usually private placements from a regulatory perspective. This comes with certain regulatory requirements. For example, behind Untangled pools are a SPV incorporated in Delaware. Private placements from the SPV are conducted under Reg D or Reg S of the US Securities Act of 1933 which means US investors must be accredited and all investors must clear standard KYC ("Know Your Customer") checks. All investors must also sign a subscription agreement ("SubDoc") with the pools "Issuer", so the legal entity/SPV behind the pool.
This legal set-up leads to certain restrictions. For example, there usually is a minimum investment amount per pool, US investors have to be Accredited Investors and, unfortunately, investors from certain countries may be excluded due to sanctions or missing tax treaties.
Onboarding quick guide
To adhere to the regulatory requirements, Untangled has integrated Persona for an automated KYC/AML process.
After you have connected your wallet you want to use for the investment into a Untangled pool, there are three main steps to complete the onboarding (see further below for a more detailed step-by-step guide):
1) Link your permissioned wallet
First you need to link a newly created or existing wallet account to your profile on the platform. This is a one-time step.
2) Complete KYC through Persona
In the next step you will be transitioned to Personal screens (whilst still in Untangled Finance app) for KYC so Persona can verify your identity and investor status if you are an US resident. To complete KYC, Persona will usually ask you to provide:
A government issued photo ID or passport
[Optional] A selfie with this government issued photo ID
Proof of address, e.g. utility bill, phone bill or council tax bill, not older than 3 months
Persona’s automated KYC process is usually conducted within the same online session. If a manual review is required it may take longer.
Note, that this is a only one time step to become an eligible investor for Untangled. Thus, you can reuse your KYCed profile for all Untangled pools.
3) Sign Subscription Agreement
The final step is to digitally sign the subscription agreement with the pool's Issuer through Untangled. Please read the subscription agreement and attached executive summary carefully and sign it, fill in your data. Depending on your country of tax residency you may also be required to fill out additional tax forms. Your completed and signed document will be automatically shared with the pool’s issuer. After the Issuer has counter-signed and your KYC has cleared your wallet address will be whitelisted for investment and you are ready to go.
Note that this only has to be done once for every pool. This means that once you have signed the subdoc with the issuer you can freely invest and redeem in this pool.
FAQ
What documents/information do I need to provide for KYC?
To complete KYC, Persona will ask you to provide
A government issued photo ID or passport
[Optionally] A selfie with this government issued photo ID
Proof of address, e.g. utility bill, phone bill or council tax bill, usually not older than 3 months
How long does KYC take?
Persona’s automated KYC process is usually conducted within 1 hour. If a manual review is required it may take 24h-48h by the Untangled team.
What is an "Accredited Investor"?
An accredited investor is an individual or a business entity that is allowed to trade securities that may not be registered with financial authorities such as the SEC. They are entitled to this privileged access by satisfying certain requirements regarding their income, net worth, asset size, governance status or professional experience. In the U.S, the definition of an accredited investor is put forth by SEC in Rule 501 of Regulation D.
The regulations for accredited investors vary from between jurisdictions but usually require that a person:
must have a certain annual income [currently $200,000 ($300,000 for joint income) in the US] or
must have a certain net worth [currently $1 million in the US] or
be a general partner, executive officer, or director for the company that is issuing the unregistered securities or
be a registered brokers and investment advisor
Please find more information here and here.
What information do I need to provide as an accredited investor?
If you are an US investor you further need to provide documentation to prove you are an Accredited Investor. These documents can be, e.g.:
IRS documents such as 1040s, W2s, 1099s, or K1s as proof of income
Documents proving a net worth of at least $1MM USD excluding the primary residence value not older than 90 days
Third party letters signed by a licensed CPA, attorney, broker-dealer or registered investment advisor
Please find more details of required and accepted documents within Persona.
What happens with my data
All investors must consent to share their personal data, such as name, address and country of residence with Persona, Untangled and the pool's issuer. This data will be disclosed to Persona during the onboarding process. Persona may also share this data with the pool's issuer and Untangled.
For more information see the Data Sharing Policy below.
Resources
List of currently excluded countries
Unfortunately, due to US sanctions, investors that are located in or are a resident of the following countries are currently blocked from investing in Untangled pools:
Cuba
Democratic People's Republic of Korea (DPRK)
Democratic Republic of the Congo
Iran
Libya
Russia
Somalia
South Sudan
Sudan
Syria
Yemen
The Crimea region of Ukraine
Data sharing policy
The investor onboarding and due diligence process, also known as KYC (Know Your Customer) will be performed by Persona. Investors will disclose their personal data to Persona. Your Persona I.D. enables you (the investor) to direct Persona to disclose your personal data to issuers you are choosing. Investors located in the European Economic Area (“EEA”) or the United Kingdom should be aware that these disclosures may involve transfers to countries that do not provide the same level of protection for personal data as their home countries. Please note that this Data Transfer Consent Form should be read in conjunction with Persona's GLBA Privacy Notice and (for EEA and UK residents) our GDPR Privacy Notice. Any defined terms not defined herein take their meaning from those notices or the Persona Platform Terms of Service.
Persona will access and transfer your personal data to the issuer you identify. That issuer may be located in the United States or in other jurisdictions outside the EEA or the United Kingdom. What type of data will be disclosed? Persona will disclose your personal data stored in your “Persona I.D.” for the purpose set forth above. That information includes each category of personal data identified in the GLBA Notice or GDPR Notice, as applicable.
Persona only facilitates the initial disclosure to the issuers that you have affirmatively selected. Should you no longer want to communicate with a particular issuer after consenting to the disclosure discussed herein, or if you wish that issuer to delete the personal data it has been provided pursuant to this consent, please contact that issuer directly.
By consenting to this disclosure via Persona I.D., your information will be transferred to the country in which the particular issuer you have selected is located. According to EEA regulations, the United States does not provide an “adequate” level of protection for purposes of data protection, and no alternative safeguards are in place for this particular transfer. Further, the issuer you have selected may be located in the United States or in another country that does not provide such adequate levels of protection or safeguards. As such, your information may be at risk of unauthorized or unwanted access. Please note, however, that Persona takes the security of your information seriously and implements organizational and technical measures to ensure a level of security for your personal data appropriate to these risks. Content of Issuer Website. Persona is not responsible for the content of the issuer’s website and makes no representations, assurances or endorsements regarding the content of such website, the issuer, the issuer’s operations and business activities, or any offering of securities which the issuer may make. All content on such an issuer's website is created at its sole discretion.
You acknowledge you have read and consent to the transfer of your personal data as set forth herein. You may decline to consent to this transfer, in which case Persona will not be able to carry out your direction to disclose your personal information to your selected issuer.
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