Robust and effective compliance programs for virtual asset exchanges such as Bitcoin of America, which owns and operates a crypto exchange platform as well as a national network of Bitcoin ATM sites , are not just a question of operation of a system for CIP, KYC and AML Procedures.
An interview with Bitcoin of America lawyer William Suriano
This is to ensure that processes are followed and to have the capacity to identify and report suspicious activity by collecting information and indicators of potential crimes related to virtual assets, by working with law enforcement agencies. order to ensure that issues like fraud are quickly monitored and reported. Thus, as part of the Bitcoin of America monitoring program in September 2019, when a new Bitcoin of America customer placed several online orders totaling $ 500,000 of bitcoin , due to the volume of transactions, the due diligence requirements of the compliance Officer / service have increased accordingly. As counsel forBitcoin of America, William Suriano, the fact that it was both a new customer and because of the speed and volume of the transaction, this raised an alarm signal for the compliance department of Bitcoin of America: "Fortunately,
During the period that Bitcoin of America was required to deliver bitcoin to the customer, Bitcoin of America staff identified the FBI office responsible for prosecuting the customer and contacted the FBI office in Seattle, Washington for alert them of the current transaction. Bitcoinof America expressed concern that the pending transaction was being used to circumvent the pending restitution order, thereby depriving victims of their due. The FBI acted immediately by obtaining a warrant for seizure requiring the forfeiture of the funds, so that the funds could be made available to the victims. "Throughout the process, I was very impressed with the professionalism of the FBI, the State of California and our bank," said Surinao.
He added that the experience strengthened relationships Bitcoin of America with their bank, reassuring the bank that the AML program, policies and procedures in place to Bitcoinof America are really applied, that implementation must even tell our bank, you know, you're holding half a million dollars, it's going to come back. "Because you have to tell your bank" Hey, you know that $ 496,000 we have on deposit there, you're going to get a court order obtained by the FBI saying that these funds are subject to return. " So it certainly helps to have a bank that understands and is involved. All in all, it was a great process and there is an emotional gain at the end, where you think we scored one for the good ones here, ”said protected consumer Suriano.
The case highlights the fact that, as most larger transactions take the form of wire transfers to be purchased on the online exchange, this is where the majority of the problems and efforts are concentrated rather than with the bitcoin exchange network managed by Bitcoin of America through the US. And as a new, rapidly evolving market, there is sometimes a steep learning curve involved and companies such as Bitcoinof America who wish to promote healthy industry growth must implement and enforce a robust compliance program to ensure consumer safety as well as company reputation. Suriano cites an example once at the start of the business where there was no agreement, that despite a customer sending a bank transfer, who had authorized, this authorization could be revoked. “So we issued bitcoin quickly after the bank transfer hit our account. And then the bank transfer was revoked but we had already issued bitcoin . I mean, you learn from your mistakes, right? Yes, I hate learning this way, but sometimes you do. "
The Bitcoin ATM Company
While the level of compliance due to transaction size is a key differentiator with Bitcoin of Bitcoin ATM activity, it has not been without its own learning curves for the business. In 2018, it was estimated that there were less than 2,500 such machines in the United States, and that new ones were installed at a rate of about five per day. In 2020, there are nearly 6,000 Bitcoin ATMs , according to Coin ATM Radar. It has not always been easy for Bitcoin of America in this booming market of bitcoin ATMs, or “BTM” as they are often called. A particularly unpleasant experience for Bitcoinof America took the form of "some 70 Bitcoin ATMs " having been destroyed, including "almost 20" operated by Bitcoin of America, highlighted in a trial against the criminal triumvirate Andrew Konja, Alvin Konja and Odai Mabroukare in late 2016. As stated by PassionCrypto at the time, their goal was to disadvantage other operators by extorting and destroying property, and as a result, the defendants were charged with violating racketeering and organizations law corrupt (RICO).
"I was surprised that people did this. I mean, I live in Chicago, it seemed like in the 1920s in Chicago, people were running around and breaking their competitors' Bitcoin machines just to pay a competitive edge and get into a place across the street. So we really felt compelled to do something because we didn't want to be a competitor in the Wild West. We want this whole industry to be a very professional and well-managed industry, ”said Suriano. The story of destroyed bitcoin ATMs seems to have a relatively happy ending, with a successful $ 196,000 judgment against Andrew Konja, that Bitcoinof America is enforcing. “It's about letting people know that we are not going to defend this.
Although the case received unwanted publicity from Bloomberg in 2018, describing Bitcoin ATMs as a serious risk of money laundering, it is clear that Bitcoin of America has a robust system to keep them safe. Each machine comes with a camera built into the machine so that Bitcoin of America staff can see exactly what's going on and who's on the machine. "There are a number of things we can do on the machine that can actually guarantee the security of a particular transaction, so it is not possible for someone to steal someone's ID and d use this ID to buy on a Bitcoin machine. Plus the fact that it is safer since we do not do two-way transactions. We only work in a direction where you put money and get out of bitcoin , sent to your wallet. This therefore eliminates a number of security concerns, ”added Suriano.
The great American history
The fraud victim restitution case and successful action against Kanja is not only good news for Suriona, but also testifies to the hard work of the president and founder of Bitcoin of America, Sonny Meraban, who started the business. business from scratch. Coming from the high-end automotive sector, it meant learning the nuts and bolts of cryptocurrency, bitcoin exchanges and ATMs from start to finish. Suriona explained, "This is the thing that most impresses me about Bitcoinof America; it's really what we in America would call great American history, right? Someone decides that I can do it. It's going to take a lot of work. I mean, it's not something a lot of people would watch. I mean, the guy on the street, you know, is he going to walk down the street and have this idea in mind? But for some reason, Sonny Meraban decided, I'm going to do it, but I'm going to do it right and I'm going to start a business. And he has done a remarkable job in this regard. ”
"Now, with 300 Bitcoin ATMs in 2020 from scratch in 2015, and with the trading software and compliance in place, we have all of these things working pretty well right now. And to put it all together in the time he has done and build this business, I am proud of the guy for doing it, "he added.
