BestChange In UAE: Dubai Has Become An Ideal Place For Business Development

After Tucker Carlson's interview with Pavel Durov, Telegram founder, whose headquarters are in Dubai, our media decided to find out about the state of business of another formerly Russian company in the UAE — BestChange.

In modern times, cryptocurrencies are becoming an essential part of life, offering people new opportunities for investing, trade, and funds transfer. In this context, services-directories of exchangers act as the key tool for working with crypto.

The BestChange service, launched back in 2007, stands out in the volatile e-commerce market thanks to its long time in the business (over 16 years). It is usually visited by crypto enthusiasts, freelancers, developers, and people connected to IT in some way.

Like many Russian companies, BestChange moved to Dubai in 2022. The founder of Telegram, Pavel Durov, mentioned in his interviews that his choice of UAE as a place to locate the company was dictated by the ease of doing business, the possibility of quickly hiring staff from all over the world, effective taxation, and well-developed infrastructure.

In our material, we will look into the business story of BestChange and tell the audience about the difficulties they faced when moving to the UAE.

Project launching

The BestChange service was launched 17 years ago by a programmer Dennis Malkov, who had just graduated from a technical university. Malkov was interested in electronics and computers and became fascinated with programming when he was 12 years old. He studied at the faculty of developing software at Ryazan State Radio Engineering University, the leading university in Russia in this field.

While still a student, the native of Kazakhstan began creating his own software products and building websites. On June 19, 2007, 19-year-old Malkov created BestChange.

In the 2000s, many fraudulent sites on the Russian internet posed as electronic exchangers, and users lost their money there. Against the backdrop of this problem, Malkov decided to create his own tool to help users distinguish bona fide participants in the exchange market from scammers.

Inspired by various services for comparing exchange rates, he launched an aggregator of exchange services on the bestchange.ru domain, which initially existed only in Russian. At the first stage, Malkov invested less than $1,000 in his project, doing programming, searching for partners in the exchanger market, and marketing on his own.

Rollout

At that time, Malkov's project's main competitor was the service Obmenniki.com, which had been launched into the market with a large advertising budget. Being a leader in this niche at that time, the service had around 2000 clients per day.

In the beginning, BestChange could not compete with such volumes, having only dozens of clients per day. At the moment of launching, the start-up had 25 exchangers in its listing.

The project began to bring the first noticeable profit only in a year. With time, Malkov managed to buy out his once main competitor in the market – Obmenniki.com, which made his service the most popular exchanger directory in Russia.

Three years after its opening, the site's interface was updated, and an international version in English appeared.

In 2012, the first cryptocurrency, Bitcoin, was added to the list of supported currencies, and operations with it began to gain popularity among the project's users gradually.

According to CoinDesk, an information resource that studies virtual currencies, the number of Bitcoin wallets doubled in 2015 and exceeded 12 million. At the time, Bitcoin and other digital currencies were a relatively unfamiliar technology. This allowed early adopters who believed in the success of cryptocurrencies to invest in them at a low price. For example, in 2015, you could buy Bitcoin for $380. Since then, the main digital asset has risen in price to $19 thousand. By investing in Bitcoin in 2015, you could profit about 5000% today. However, this required strong nerves not to sell the asset during this entire time.

The active growth in the popularity of cryptocurrencies could not but affect the work of exchangers and the BestChange project. The site's traffic currently amounts to about 750 thousand visitors per month. The service is often used for international transfers, which expats or users having relatives in different parts of the world can make. According to statistics, the largest number of visits to the resource occurs in Eastern Europe (41%), Central Asia (12%), and the Middle East (9%).

The turnover of the directory, which is serviced by fifty employees, is a million dollars a year. During its existence, the service has accumulated 1.8 million reviews about exchange services in different languages.

Challenges

Since the cryptocurrency sector is not regulated in various countries, the service has repeatedly faced blocking in Russia, Belarus, and Kazakhstan. Obtaining a court decision to unblock was often relatively easy since there were no legal grounds for blocking the site. Country regulators frequently misinterpret their current legislation, which is not yet prepared for the cryptocurrencies gaining popularity.

For example, in 2020, the resource was blocked by Roskomnadzor (Federal Service for Supervision of Communications, Information Technology and Mass media) in Russia. The reason for blocking the portal was information about an offer to purchase Bitcoin and use it to pay for certain goods. Roskomnadzor called cryptocurrency a "means of payment and hoarding" prohibited in Russia. By that time, this was already the third such claim but the first one to be carried out. After appeals had been filed, all of them were eventually overturned[1] [2] [3] due to the inconsistency of the charges.

"In each case, the court and the administrative plaintiff change, but the legal basis for the blocking remains the same: firstly, the plaintiff states that cryptocurrency is a money surrogate, and money surrogates are prohibited by the Federal Law "On the Central Bank of Russia." Secondly, the circulation of cryptocurrency does not have legal regulation, is outside the control of the state, and, therefore, has a potential danger." Valeria Smirnova, a representative of the law firm Digital Rights Center (DRC), explained to RBC.

The problem with government agencies often lies in their failure to distinguish between information aggregators and sites that directly carry out exchanges. As a rule, in Russia, blockings of cryptocurrency sites had an en-masse nature, including news sites, aggregators, and stores.

Moving

The pressure forced BestChange to move its head office to the UAE in 2022, a country with more lenient and advanced cryptocurrency legislation. There, the project came under the management of Agretis Software Design LLC, registered in Dubai.

The consulting company Nikoliers has calculated that since the beginning of 2022, the number of Russian brands in the United Arab Emirates has grown almost 4.5 times. Now, their number has reached nearly fifty. According to the media Business Russia, by this time, about 40 thousand entrepreneurs have moved there for permanent residence. Under sanctions in many countries, Dubai has become an attractive location for companies operating in the international market; the city provides opportunities not only for eastern, but also for western companies.

The relocation of BestChange's office to a new country did not significantly affect the coherence of the company's work processes. Many project employees, especially in the development department, began to work remotely from different countries of the world even before the move - during the COVID-19 pandemic, periodically having video call meet-ups. The company's managers are confident that such a change of jurisdiction will allow the project to develop even faster and conquer new markets.

After appeals had been filed, all of the claims were eventually overturned due to the inconsistency of the charges.