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Interview: “Anti-money laundering is much more than ticking boxes”

We sat down with Marks Balahanovs, Moonfare’s senior AML/KYC analyst to learn about his work in protecting investor interests and ensuring regulatory compliance.

“Our job can be as easy as ABC or it can get very complex,” says Marks, who is from Latvia but spent most of his professional career in Luxembourg, the global epicentre of financial compliance. 

Marks is specialised in anti-money laundering (AML) regulation and know your customer (KYC) processes. After working for Deutsche Bank and BNP Paribas, he now supports Moonfare in ensuring the integrity of our business that ultimately benefits our investors. “We have to be very precise at our work, always up to date and consider everything from changing regulations to geopolitical situations,” he adds. 

Do people have any idea about AML or KYC when you tell them what you do? 

Nine out of ten people think I work in KFC, when I mention that I am a KYC Analyst. People generally don’t know about AML or KYC and I'm not surprised even though it is a very important thing. The exception is Luxembourg where the compliance industry has its home.

Where did you learn about anti-money laundering? 

You get some knowledge about regulatory compliance in the university but it’s not in-depth. This means you typically learn the practicalities through intensive corporate training. In any case, information is widely accessible everywhere, what matters more is the skill set and the mindset.

So what’s the difference between AML and KYC?

Anti-money laundering (AML) rules help detect and report suspicious activity that could serve money laundering and terrorist financing. Know your customer (KYC) is a set of standards used to identify and verify customers and their risk.

The big brother of AML is compliance that makes sure that the company follows all the rules, including those around AML and KYC.

For example, regulation dictates that an ultimate beneficial owner or UBO needs to be identified in order to fight money laundering. The KYC process is how we identify stakeholders by requesting identity papers, proof of residence, bank statements and similar.

AML is essential to manage reputational risk. We need to make sure that everyone is screened correctly to protect eligible investors, as well as the reputation of our brand. 

What do you think is the biggest misconception people have about anti-money laundering? 

Many think it’s just about ticking out the boxes on a checklist. Yes, boxes must be ticked, checklists must be followed. All decisions should be based on the documents and facts. But, at the same time, AML is much more than that. 

You need to use common sense and often think outside the box. You need to work closely with different stakeholders to connect the dots. Someone will collect and analyse documentation, another one will verify them, while a third person will do the screening to make sure the entity is not blacklisted, for example. 

Across this process, people can have different opinions and solutions to the problem, which is good because it makes us better at what we do. 

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Would you say that your work is complicated? 

It can get very complex or it can be as easy as ABC. For example, someone can be a 100% owner of entity A and that's all there is. But it’s a different story if the entity is split into various shareholder structures or spread across different jurisdictions, each with its own regulations. Dealing with entities such as NGOs, charities and foundations requires extra attention, as well as managing people from countries with higher risk.

All this means we have to be very precise at our work, always up to date and consider everything from changing regulations to geopolitical situations.  

Does that mean updates to regulation are frequent? 

Yes, in recent years, AML updates are more and more frequent. The field is expanding and the policies are constantly getting revised and stricter.

For example, until now, an ultimate beneficial owner is anyone who owns more than 25% of an entity. This is soon going to change and everyone holding more than 15% will be considered an ultimate beneficial owner. 

From your experience, is investor screening usually a straightforward process? 

Not always. There are many cases when we request a document but it's provided in the wrong format or is outdated. Requirements also depend on the risk level of the investor. For the low risk investor we could potentially accept just a copy. A high risk investor would need the original.

In how many cases do you suspect suspicious behaviour?

Depends. The same thing can be considered suspicious in one case, but not in another one. For example, having Bitcoin as the source of wealth can be fine for some potential investors, but can indicate high risk for others.

But again, our work demands strict attention to detail. It makes a big difference if someone owns 5% of their wealth in cryptocurrencies or if that share is 95%.

Could you describe what Moonfare’s process looks like? 

We have a strict and well-established process that depends on the type of investor, entity type and so on. The number of documents we request depend on the investor type and range from just a couple to 25 or even more. All are in place to ensure our investors and their funds are protected. 

Once we analyse all the documents, we approve or request additional documentation to successfully finalise the onboarding process. In scenarios where investors have  high risk rating cases, we may seek additional approvals from compliance. After everything checks out, the investor is onboarded. 

This process can take one day and up to a few weeks. Again, depending on how complicated the case is. For example, if we're talking about a complexly structured trust from a high risk jurisdiction, our due diligence needs to be enhanced and will take longer.

Did you ever have to notify the financial police?

We are not the financial police and we don't work for the government. Our main job is to make sure our investors are protected and that Moonfare complies with all the regulations. 

Finally, what’s the best part of your job?

Think of a riddle — each case or investor is like one. I love board games and riddles, and when you finalise a case and fully onboard a user it feels like you completed a maths equation.

Sometimes the investor profile might be very complex and you need support from different teams and stakeholders. Achieving the result together is another great feeling. Team work makes dream work, isn’t that right? 


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Important notice: This content is for informational purposes only. Moonfare does not provide investment advice. You should not construe any information or other material provided as legal, tax, investment, financial, or other advice. If you are unsure about anything, you should seek financial advice from an authorised advisor. Past performance is not a reliable guide to future returns. Don’t invest unless you’re prepared to lose all the money you invest. Private equity is a high-risk investment and you are unlikely to be protected if something goes wrong. Subject to eligibility. Please see


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