“There is no perfect regulation without risk in the world of cryptocurrencies.”
– Maxim Kurbangarev on Sanctions and SUEX
In the fall of 2021, there was precedent for large-scale sanctions being launched in the crypto world. The U.S. Treasury Department has imposed sanctions on cryptocurrency company SUEX based on money laundering allegations.
According to the U.S. Treasury Department, SUEX was “participating in fraudulent financial schemes” including “serving Hydra”, the country’s leading dark web drug marketplace. Maxim Kurbangarev We discuss sanctions in the financial sector and explain what honest businesses should do to avoid such situations.
Maxim Kurbangaleev: Why SUEX Faced Sanctions
“Throughout the history of the cryptocurrency market, various controversial situations have occurred and have been the subject of many analyst debates. A year ago, Washington’s actions against SUEX became widely publicized. This is the first sanction of its kind imposed on a cryptocurrency company.Objectively, there is no perfect regulation in the cryptocurrency world.Governments have taken controversial control and regulatory services. Create and under its actions companies like SUEX will go bankrupt,” says Maxim Kurbangaleev.
The cryptocurrency exchange company was founded in 2017. The idea of cryptocurrency business started with exchanging currency between friends. Therefore, it was decided to create an exchange with an official account on Binance. Undoubtedly, cryptocurrency companies are becoming more susceptible to various factors. Monetary policy tightening, cryptocurrency market volatility, lack of legal frameworks, and many other factors can significantly affect the activities of crypto companies.
“On SUEX, cryptocurrencies on Binance official accounts were checked for ‘purity’ through a transaction monitoring service as required by AML/CTF. U.S. law enforcement and regulators have added the exchange to their sanctions list due to suspicions of money laundering, not considering ongoing AML surveillance activities.
No interviews with SUEX executives, no detailed analysis, no trial. Hundreds of individuals and businesses associated with the company were also affected. On Binance, he marked everyone who had made an operation using the SUEX wallet and flagged the account as suspicious,” said Maxim Kurbangaleev.
You can think of it as cash flowing from hand to hand. It is almost impossible to know who it belongs to and what kind of transactions it participates in before it enters the wallet. A series of banknote movements is only available up to the second link.
Imagine if a person had “dirty” funds and could not physically trace their path. He went into stores, shopped, was tried without verification, and accused of taking money for drug trafficking or money laundering. is. ” explains Maxim Kurbangarev.
Importance of KYC by Maxim Kurbangaleev
“Ambiguity and uncertainty are always present in the crypto world. We can analyze it in detail, but this requires a lot of resources,” says Maxim Kurbangaleev.
Anyone can find themselves in a situation where their crypto wallet may be marked as suspicious transactions. Any crypto company can be sanctioned for money laundering and other fraud charges without an investigation or trial. How can you minimize your risk and avoid sanctions like SUEX? is it ok?
“First of all, it is obligatory to enforce KYC for absolutely all clients. Businesses analyze fiat currency transactions like banks do, not just crypto monitoring using blockchain analytics services. of traditional tools must also be connected, without exception, a full bank check of the user must be carried out,” recommends Maxim Kurbangaleev.
The KYC procedure is a series of identity checks. Client identification is a must for any financial institution, from banks to cryptocurrency exchanges. In addition to verifying the customer’s identity, her SOF (Description of Source of Funds) and SOW (Data on Source of Wealth) steps may be required during onboarding. Both checks help identify fraudsters and criminals involved in money laundering, drug trafficking, or terrorist financing.
“We will operate in the “white” segment, form a compliance control department for the customer identification process, and monitor the “purity” of our operations. Gathering requirements from clients should not raise questions – this is standard and proper procedure, without which it is impossible to imagine an honest business. If you are under sanctions or scrutiny, hire a good attorney. The main thing is not to panic and take all risks calmly,” he sums up Maxim Kurbangaleev.
