VAF Compliance CEO Gilson Ribeiro Da Costa On Crypto Fraud And Compliance

As cryptocurrency regulation continues to take shape in different jurisdictions across the world, crypto’s Wild West may soon be over for good! Gilson Ribeiro da Costa, the CEO of VAF Compliance, offered valuable insights into how regulation and compliance can sanitize the crypto industry in this interview. 

He also walked me through VAF’s recently launched Telegram chatbot which instantaneously provides users with a quick risk assessment report of any crypto wallet. Read on!

Mr. Gilson, I would like to start with you. Can you tell us about your journey to blockchain and cryptocurrency?

Coming from a traditional banking background, I was given the opportunity to join a crypto exchange, and from that moment on, I was hooked. I became interested in the potential of blockchain technology and cryptocurrency to revolutionize the way we conduct transactions and store data.

As I learned more, I was fascinated by the elegance and simplicity of blockchain architecture and the potential of cryptocurrency to disrupt traditional financial systems.

This experience gave me the drive to start my own business in the crypto space, despite the challenges and limitations, as I remain convinced that blockchain has the potential to transform many aspects of our lives.

MiCA as a milestone in the crypto sphere brings compliance to the fore in the EU’s crypto markets. Do you see it having a far-reaching consequence for unregulated markets?

The implementation of MiCA regulation in the EU's crypto markets will bring compliance and regulatory oversight, which will have far-reaching implications for unregulated markets.

As the EU takes a more proactive approach to regulating crypto-assets, market participants may need to adapt or face potential enforcement action, which could lead to increased adoption of crypto-assets as a legitimate asset class.

Since frauds like Terra Luna and FTX took us by surprise, there has been a growing mistrust for crypto exchanges.  Does this in any way reduce the significance of the KYC and AML policies?

The occurrence of fraud on crypto exchanges does not reduce the significance of KYC and AML regulations.

In fact, it underscores the need for robust procedures to prevent and detect fraudulent activity within the crypto industry, and compliance with these regulations can help to increase trust and confidence in the industry. In other words, crypto frauds underscore the need for regulations.

Furthermore, the KYC and AML regulations are not just aimed at preventing fraud. They also serve important purposes such as preventing money laundering, terrorist financing, and other illegal activities.

By complying with these regulations, crypto exchanges can help to ensure the integrity of the financial system and protect consumers from harm.

What’s the story behind VAF Compliance?

VAF was born from my experience in the custody department for a startup where I witnessed the difficulties of obtaining a bank account due to the strict rules that local banks have when it comes to providing accounts for crypto businesses.

Our first client was a crypto whale we helped off-ramp, and from there, we began helping other crypto businesses to obtain corporate bank accounts.

Today, VAF is a fully-fledged compliance firm that offers a full spectrum of services, including assistance in obtaining regulatory licenses, establishing compliance programs, outsourcing compliance services, conducting crypto investigations, and auditing smart contracts.

Can you tell us about your experience as CEO of VAF Compliance and why you chose the MENA region?

The decision to choose the MENA region as the location for the firm was driven by several factors. Firstly, the MENA region has a growing interest in crypto-assets and blockchain technology, making it an attractive market for a compliance firm focused on this area.

Additionally, the regulatory landscape in the region is evolving, with several countries introducing new regulations and guidelines related to crypto assets.

This presents an opportunity for a compliance firm to provide much-needed expertise and guidance to businesses operating in the region. Finally, the MENA region has a diverse and dynamic business landscape, with a range of industries and sectors represented.

This provides ample opportunities for a crypto compliance firm to work with a variety of clients across different industries, helping to ensure that their operations are fully compliant with applicable laws and regulations.

As CEO, my job is to ensure that people are aware of our products and services and that VAF can be a trusted partner in helping the ecosystem grow.

You recently added a Telegram Bot as a security and compliance feature to your services. Can you elaborate on this?

We are very proud of our Telegram bot, which is a tool that allows you to obtain a quick risk assessment report of any wallet. We cover over 45 blockchains and can provide you with an easy-to-read report to understand the risk level prior to accepting any funds in your wallet. By doing so, you can avoid any tainted funds from landing in your wallet.

We aim to democratize data so that everyone can have access to it, and we also seek to educate and help people understand their risk exposure when conducting crypto transactions.

What can be done to solve crypto’s image problem at a time when the industry is experiencing a slow recovery?

There are several things that can be done to improve the image of the crypto industry during this slow recovery period. Education is key to helping people understand the benefits and risks associated with cryptocurrency.

The industry needs to make a concerted effort to educate the public, lawmakers, and regulators about the technology and how it works.

Compliance with regulations is important for the industry to gain the trust of mainstream investors and the wider public. This means implementing measures such as anti-money laundering (AML) and know-your-customer (KYC) policies to prevent illegal activity.

The industry needs to be more transparent with investors and the wider public. This means providing clear information about projects, including risks, and being upfront about any issues or challenges.

Collaboration between different players in the industry, including exchanges, regulators, and developers, can help to build trust and drive innovation. The industry should also ensure that marketing efforts are responsible and not promote unrealistic or misleading promises, which can lead to negative public sentiment.

Overall, the industry needs to take a proactive approach to address the challenges it faces and demonstrate its commitment to building a sustainable, transparent, and compliant ecosystem.

What is the toughest part of being in the compliance sector?

The toughest part of being in the compliance sector is keeping up with the constantly evolving regulatory landscape and ensuring that clients are fully compliant with all applicable laws and regulations, which can be complex and time-consuming. Additionally, the sector is still relatively new, and there is often a lack of clarity or consistency in regulatory guidance, which can make compliance challenging for all the players.

What are the career opportunities in it?

We are just getting started. The opportunities are endless and exist already in various organizations, such as crypto exchanges, wallet providers, blockchain startups, compliance firms, law firms, and regulatory bodies.

As the sector continues to grow and mature, there will likely be an increasing demand for skilled professionals with expertise in crypto compliance.

Any parting words?

As the crypto industry matures, compliance and regulation become critical for its development. Collaboration among stakeholders is essential to create a secure and transparent environment for crypto adoption.

Whether pursuing a career in compliance or exploring crypto, staying informed is crucial. VAF is thrilled to be part of this journey and committed to supporting clients and the ecosystem.