SUEX, sanctions and legal crypto business: Maxim Kurbangaleev on cryptocurrency activities

In recent years, law enforcement agencies and regulators have been conducting thorough inspections of businesses for money laundering, terrorist financing and cybercrime. For the first time, in September 2021 sanctions were imposed on a cryptocurrency exchange company – SUEX, which was added to the sanctions list by the US Treasury. Maxim Kurbangaleev shares tips on how to organize a legal crypto business.

How to avoid the mistakes made by SUEX — Maxim Kurbangaleev

Maxim Kurbangaleev highlights several steps to the organization of a legal cryptocurrency company:

  • Choose a jurisdiction that allows working with cryptocurrency. It is even better to find a jurisdiction where such activities are licensed. “The crypto license allows companies to work with virtual assets legally, which means that the exchange of cryptocurrencies for fiat, transfers between crypto wallets, issuance and many other operations will also be legal. Depending on the chosen country of registration, the requirements for obtaining a license will differ, but most often the liquidity of capital, the reliability of information about the founders, beneficiaries and the company as a whole are assessed. You can get such a license in the USA, Lithuania, Estonia and a number of other countries,” the expert explains.
  • Open a legal entity that involves working with cryptocurrency.
  • Sign contracts with crypto exchange platforms. “It is advisable to choose exchange platforms with a license that comply with the AML requirements of the European and American regulators,” Maxim Kurbangaleev adds.
  • Open fiat bank accounts.
  • Hire AML specialists: “The tasks of the AML department employees are to assess risks and quickly respond to the emergence of new threats to business. After all, the continued existence of the company depends on how quickly measures to prevent fraud and money laundering will be taken.”

Maxim Kurbangaleev: AML procedures are the key to legitimate business

According to Maxim Kurbangaleev, many companies underestimate the importance of conducting AML procedures: “Crypto companies are obliged to check their customers and the cryptocurrency that has entered into circulation to counter illegal actions. This is the only way to protect yourself and your customers from sanctions and avoid the SUEX path.”

AML checks should be carried out for each client: both an individual and a legal entity. Users are required to provide a passport and their photo, thereby confirming their identity; companies should give a list of constituent documents. AML specialists check not only the reliability of the data, but also the presence of potential clients in the sanctions lists.   

“These checks increase business costs, but it is impossible to abandon them in favor of “quick money”. In addition to standard procedures, I would also add verification of the cryptocurrency itself through special AML services in order to secure activities on all fronts. The illegal nature of the activity will never take the business to a new level and will not increase the capitalization of the company. It is real to work legally in the crypto world, you just need to remember about the legal component,” Maxim Kurbangaleev adds.