Manfred Bekeris, the Chief Compliance Officer at Paxful, recently discussed with Compliance Week the company’s renewed focus on compliance. This shift comes in the wake of the former Chief Operating Officer and co-founder, Artur Schaback, pleading guilty to violating the Bank Secrecy Act (BSA). Since taking on the role of CCO in June, Bekeris has been instrumental in driving these changes as Paxful aims to redefine how money moves globally.
Background and Immediate Actions
Paxful, which temporarily halted operations in 2023, is now under new leadership. Following Schaback’s guilty plea, the company issued a statement underscoring its commitment to enhance compliance measures, specifically in areas such as Know Your Customer (KYC), monitoring, reporting, and sanctions screening. Bekeris, with 14 years of experience in compliance, including roles at Western Union, Crypto.com, OKX, and BVNK, is tasked with developing a robust compliance program tailored to Paxful’s unique position in the crypto landscape.
The Challenges and Opportunities in Crypto Compliance
Bekeris highlights that while operating outside traditional financial frameworks allows for rapid innovation, it also requires the development of custom solutions. The lack of established frameworks in crypto necessitates building compliance programs from the ground up, ensuring they are both scalable and in line with global regulatory standards. He also points out the advantages of blockchain’s transparency, which offers unparalleled opportunities for tracing and monitoring transactions.
Learning from Past Mistakes and Setting New Standards
The regulatory action against Paxful’s former co-founder has reinforced the company’s commitment to compliance. Bekeris explains that the company has undertaken a comprehensive review of its policies and procedures, strengthening controls and governance mechanisms. Paxful’s new compliance framework focuses on proactive regulatory engagement and preventing a repeat of past issues, aiming to build trust with users and regulators.
Goals and Challenges in the Next 12 Months
In the coming year, Paxful’s goals include enhancing KYC processes, improving customer and transaction monitoring, and ensuring compliance practices meet or exceed regulatory requirements across all jurisdictions. Bekeris also emphasizes the importance of employee training to keep staff updated on the latest compliance standards.
However, implementing these enhanced processes comes with challenges. The company faced resistance from users in various jurisdictions who were not accustomed to stringent KYC requirements. Paxful also had to retrofit its compliance systems to accommodate a large, diverse user base, adding operational strain and the need for extensive customer education.
Scaling Compliance Operations
To address these challenges, Paxful initially utilized managed services to handle compliance needs. Bekeris is now focused on transitioning responsibilities to in-house teams, fostering a more integrated compliance function. The company is actively recruiting globally, seeking professionals with both compliance and crypto industry experience to navigate the unique challenges of the sector.
Paxful’s commitment to enhancing its compliance posture is evident through its strategic initiatives and the expertise of its leadership. With Bekeris at the helm, the company is poised to navigate the complex regulatory landscape of the crypto industry.
Source: complianceweek.com
