Mikhail Djaksigoulov - How to Stay Bankable in a Crypto World

crypto tax advisor based in Belgium. Since 2020, he is working as a regulatory compliance and he's helping crypto users across Europe in order to have transaction um in order to have tax reports uh and deal with banks. His talks is how to stay bankable in a crypto world. So, it's like a bridge between trade and defy. All right.

Uh, let's let me put your slides on. Amazing. Come on. Let's give a round of applause for MK.

Thank you. Thank you.

Okay. Let me also give you this one. Have a double check. Should be okay. Okay.

Okay. Working great.

That's great.

Thanks for the nice introduction. Um, as as you said, so I'm coming from Belgium, so it will be maybe a bit more difficult for me to talk in Italian. Um, nevertheless, I hope that you will understand. Uh, so I founded Compliance, which is a crypto tax and compliance firm. Basically, yeah.

uh help crypto investors whenever they have issues with the banks and the tax. And speaking of banks, we will actually aboard one of the pain point for many crypto investors, the banks actually. So this is some re research that I did um over the last two days on Reddit regarding how many crypto investor are facing uh the same issue whenever they want to repatriate their funds. So, you can see my bank got blocked. Uh, what can I do to avoid the risk of bank account blocking when trading crypto peer-to-peer in Georgia?

The bank has blocked my account just because I'm suspected of money laundering. Revolute blocked my crypto. No real reason, no real help. I'm done. So, you see, that's an issue that's not limited either to Italy or to Belgium or to Europe.

That's something that many crypto investors are facing around the world. Uh on the right you were also some uh interviews so that I did like um on one of the national newspaper in Belgium uh stating banks closing the doors to the winners of the bitcoin. So I don't know if some people here already have any issues with their banks when they try to repatriate. So far no if you do you can raise your hands. So that's actually something quite strange when you think about because if you invest in crypto unless you did some mining you had to at some point to invest uh some fiat money so you did some onrem so this means that at some point a bank was involved in the process and that's what I tend to call the banking paradox where you see that 90% of bank are being involved in the the crypto transaction But simultaneously we see 80% of them are refusing crypto clients.

So this is the the the current situation and it might be also like interesting to to get to know why uh there is such stance from the banks uh against the crypto investors. So I tried to summarize uh the reasoning uh inside the mindset of the bank into six points. So first lack of operational resource. So I was previously uh working as a compliance officer within financial institutions and what I can say is like there is a scarcity of compliance officers. So if you want to find like a way or a job compliance officer is highly paid and is always on demand around the world.

So the compliance officers are actually the guys within the banks, the financial institutions uh that make you your life complicated. So they are the guy behind the QC, the AML procedures, all the things that I know many crypto investors uh prefer to avoid. But that's their job and as I said so there is a lack of uh compliance officers but you can also imagine how many crypto compliance officer you can find. So that's something even more rare. Uh secondly, we have regulatory warnings and pressure.

The web 3 is something really nice. It's a it's a wonderful ecosystem which also adds some bad press and we know that cases like um rrook uh falling of so many big exchanges FTX Mox and many others. So the crypto sphere is kind of tinted by this bad behaviors, bad actors and this makes uh the our the regulators the national regulators but as well the European regulators like the ESA European super authority uh making many warnings and these warnings makes the banks also stance at the same uh with the same positioning. So of course if the regulators is not pro crypto you won't see any bank being pro crypto and why you see UK or the Emirates UAA being more and more kind of a crypto up is because they have some uh regulators that permit uh this situation. Of course uh with the recent um innovation kind of regulatory innovation that we see like Mika marketing crypto asset uh and others uh to follow that's that's starting to to breaking some the doors and we see maybe in Germany some banks offering crypto services uh so I think over time that's something will change but still nowadays there is a big warning when for banks when they if they want to on board crypto clients uh reputational risk and illicit activity concern as I said.

So this is falling uh after of right after the regulator warnings uh of course due to the bad activities the illicit uh transaction because there is a cryp the crypto crime report from chen analysis 2025 reports 41 billions worth of dollars being involved in illicit transactions. I'm sure that most people here all of you are not involved in this type of transaction. Well, at least I hope because of course that's something that can uh restrain the bank from uh letting you uh uh repatriating your fronts. Technical in operation complexity banks are quite big hold it's you have to see them like big mammoths all kind of they have really old uh operational system uh on which it's quite complicated uh to innovate to implement new process and of course for crypto transaction you need to implement such things uh legal uncertainty and regulatory gaps so as I said Mika is bringing some clarity but the clarity bringing It's mainly focusing on the license on the on the CASPs on the exchanges level. It's a great uh it's a great step forward but still there is some space being quite vague mainly from tax perspective and tax is something really important.

We'll quickly see that later. And finally I compliance cost also falling uh out of the previous point. If there's a scarcity of compliance officers, they are also quite uh there's a they are quite costly for a bank to uh to hire but also the tools for instance uh the chais tool one of the leading uh onchain tool for a financial institution cost about uh 50,000 to 100,000 I would say more 100,000 so it's really depend on your type of organization But you see, it's a lot of cost. It's a lot of work for a bank before to be able uh to even make any gains out of this crypto investors. Uh, of course, with all this being said, I don't want also you to be quite afraid feeling that okay, uh, the market is going is doing well.

Uh, it the ether is is pumping. uh uh I'm starting to get to get maybe a crypto millionaire but uh what what will happen if I could not repatriate my funds? Well, it's still possible of course and here I would like to share also some tips to kind of mitigate the risk of not of being blocked by your bank. So first use three civil cryptos. Uh you know Monero, you know Zitcash banks most of them know them as well.

So they don't know in details but they know that if they see some of this uh crypto being involved in your crypto portfolio uh they might be more less reluctant to on board you. So please refrain restrain and if you did in the past use some of this crypto it's not a big issue we can always explain but from now please restrain uh do not also of course use mixers. Um we saw in all end the recent case involving uh the developer behind the tornado cashache protocol again for the banks using these kind of protocols is being is like you are willing to to hide the transaction I something uh but the idea behind the tornado cashache is not necessarily to uh to money launder the funds As we know also like in the crypto it's not fully anonym if we we can identify one wallet being uh by you we can target you. So tornado cache these protocols are actually being uh created for that to also let the user being less uh the target of other scammers. So that's something that you can mitigate but for banks it's it's better to not use any kind of mixers opt for gasps.

So what that's what I said uh previously um on VA the regul uh the the new the regulation regarding the licensing why is it important to opt for CASPs well banks are regulated entities they deal in a regulated framework for them it's super important to deal with under regulated entity that have also the same level of AML procedures QC as I say QA or your transactions So by opting for like for instance Coinbase or I don't know Binance all these kind of related entities within the Europe uh you can facilitate your repatriation process uh avoid activities via pro prohibited seed domains of course don't use your crypto to buy some elicit products on the dark web uh we can always track that actually with the tools um if the banks ask the tools to view your your wallet in your transaction on chain they can easily see what you did with your cryptos. So through if you use the mixer if you use another uh uh anonymous coins or so and maybe here the the five the point five is quite I think the most important actually is it is keep track of all the transactions. uh why this is so much important is because from two perspective first of course the compliance and the tax but let's tip first on the compliance for a bank they must know the full u flow of the transactions so from the your first uh on-ramp so the fiat that you send on the crypto exchanges to the all the transaction you did on chain and if tomorrow something happen like happened to FTX empty you lose all your transactions And then there's a big gap that you need to explain some for some banks that's can be also a nogo if you lost some of the transaction. And from tax perspective uh I had so many cases where we lost also the track because the the the blockchain upgraded and they just removed the uh the past um onchain scanner kind of. So you were not able to retrieve some of the data or again some of the uh the uh the exchanges just fall and then yeah it's starting to be difficult and for from tax perspective your gains also based on the purchase cost etc.

Um speaking of the of that maybe because the the previous talk was talking about NFT there's also one thing maybe to add um NFTs are also quite specific in terms of um I would say data management by yourself. So if you invested in a specific uh project protocol often they create this code telegrams where they explain everything but if the projects crash they rapidly uh delete everything and then there's also a big issue to explain maybe uh how do you proceed to get uh that uh NFT sometimes because there's some NF uh rewards u process uh system So keep track, keep screenshot maybe I will say every two months or every six months but please just extract all the CSV, keep it in one folder and you will save your life for later. Uh avoid unnecessary complications. By that I mean try to limit also yourself in terms of number of wallets that you create. I had cases where some one guy just add 100 wallets.

So it's also a big mess for yourself to manage the the the funds to to get to know what you have where you have it. Uh same for the crypto exchange try to limit because the more you have uh wallets the more you have like account the more you need to explain also also by that it's also better to to avoid having too much transaction. Of course, if you have the the the lower your transaction you have, uh the easier it will be for the bank to to review your case and uh yeah to accept your fund. actually maybe something I also wanted uh to add that's maybe uh not here but a bit bonus for the people here is so I talk about that um a bit but I would like really to emphasize the fact that uh taxes are super important it's really not funny uh but repatriating funds on which taxes uh were not paid is tax fraud and banks have to uh ensure that uh if there were taxes that needed to be paid that they are paid and they can refuse until it's it's of course paid. So make sure that your uh fiscal house is is in order.

And also maybe another kind of bonus tips that I would like to share like sometimes I see people that say to me yeah so I want to repatriate. So I made a meeting with my banker and I started to explain uh that I invested into that protocol. I went uh with that uh uh other staking reward system on which I received that and and I exchanged that token to another. You have to understand that in front of you it's almost uh sort of baby. So they don't understand at all and they can get really uh easily scary.

Uh and to get quickly an understanding how how deep is their knowledge. Uh there's like a story that I had. So it was a time I was searching a bank for a client um to get a credit specific credit to buy a house. So I contacted multiple banks and I ended up contacting um a bank um u a Dutch bank. So I explained my client invested in Bitstamp only and Bitcoin two crypto simple everything is on one exchange that exchange Bitstamp is regulated and Luxmbourg fully clean.

Uh so yeah I I took the time to explaining everything and so at the end the banker told me okay so the blockchain is in Luxembourg so that's uh how they can see still the the crypto uh uh the crypto and the web ecosystem and then well so this is uh uh this is I hope that you had at least some insightful uh tips and if you have any questions or specific case can do not hesitate to ask a bit further. Thank you. Thank you.