EthBits Progress Report
NOTE: to provide some clarity around the blog entry. This entry is simply a progress report on the decision to incorporate in Malta, and an update of services we are able to provide as a result, including banking. This report does not cover topics related to development of the platform at this stage.
As many of you might know, the past couple of months have been very busy for the whole EthBits team, because we are still working to make sure the official launch of iTrade goes smoothly, and so far the Beta period has been a success. We know that information about what we’re doing has been scarce up until this point, but now that things have been advancing favorably, we decided to share with you some of the things we’ve been working on, so you can have a better idea of what exactly has been going on lately.
Let’s start with some exciting news first, as we’ve been studying the markets, and decided to take a trip to Malta to try and expand our business there. Now that wr’ve conducted our research, we can finally share with you some of the things we’ve been studying during our business trip.
Malta as a choice for Regulation
Most would agree that regulation is coming and it is best to tackle these things head on. In relation to the UK, recent decisions around Brexit and the lack of clarity around whether there will be a soft or hard Brexit has meant that Ethbits has been looking for a more solid solution for the world of crypto exchanges.
With one of our main drivers behind the foundation of Ethbits being trust and on the basis that one of our core principles is putting our customers first, the Ethbits team see regulation as an important part of the growth of the industry. Not only from the perspective of the customers we serve, but also the third party providers whose services we rely on to enhance our offering.
Investigations were made into a number of jurisdictions including but not limited to Switzerland, the UAE and Singapore. It was finally decided that given our anticipated growth strategy and most importantly the regulators acceptance of the industry, Malta posed the jurisdiction with the best offering and the least barriers to business. Given the recent move of some other exchanges, we also feel that the industry will have some consolidated lobbying power to ensure that the industry is treated fairly.
Eventually we see Ethbits as a global brand requiring global service providers. Ultimately Malta is seen as offering the best overall structures with expertise being built across the legal, compliance, corporate service and fund industries, especially in the crypto space. We have instructed legal and compliance teams in Malta and will begin the journey of getting regulated in Q4 2018 with eventual regulation being likely in 2019. Regulation will of course provide a huge number of benefits.
There is an issue around the listing of security tokens and we are working on a way to accommodate regulators concerns. This may require a partner and a securities listing licences which will be difficult, but we see it as an acceptable challenge and have a solution we will be investigating in Q4. Ideally the platform and systems will be up and running before we move to allow this element of the exchange to be formalized. On this note, MSE has joined forces with OKEx to allow listing of Security tokens. Whilst we see this as a huge leap forward we don’t necessarily require a stock exchange as a partner for trying to secure a licences in this area.
Banking and specifically custodian banking has been probably one of the most challenging aspects of operating an exchange. We have found a number of solutions for corporate banking with local banks in Malta, having met the teams and even the CEO of a couple of the most prominent. We also have a custodian solution whereby each client will obtain their own individual IBAN number and are able to transfer directly between their local European/International account and Ethbits. Fees will vary, as expected, but we are doing everything we can to ensure the most cost-effective routes for our customers.
Ethbits Pre-Paid Cards Master/Visa
We are working on a pre-paid solution and have three providers due to assist us with a pre-paid credit card offering. Clients will soon be able to pay for goods and services directly from their Ethbits account with a credit card from either MasterCard or Visa.
An initial meeting with Finance Malta was very fruitful. Finance Malta is an independent Quango, tasked with assisting start up finance business like ourselves and fledgling industries to be able to conduct and grow business in Malta. Discussion were had around launching the business formally in the Malta Stock Exchange building and we will naturally meet with the MSE to discuss the future of securitized tokens. We were extremely pleased and impressed with the commitment and dedication the Maltese authorities have placed into the sector.
Know your customer and onboarding
Solutions to KYC have been sourced and we will likely have an internal team as well as tie-ins with a few key KYC providers that will allow our clients to onboard swiftly and efficiently whilst making sure that we retain a high level of due diligence in our risk processes. Ethbits sees KYC as vital to building trust with clients and the regulator but will ensure our processes are streamlined to make onboarding a customer part of our unique service offering.
Whilst not distracting from the original product design and investment management offering, we would like to advance upon this, taking what works in the non-crypto world of wealth management and applying these tried and tested concepts to the crypto world. We want to be pioneers in the product range not just for the professional investor, but also providing solutions for those less experienced in the trading world.
We see the business as having two distinct arms. A platform, facilitating trading and a subsequent investment management offering. Therefore, we will add a number of product ranges next year and will aim to including the listing of crypto funds directly from the platform. Additionally, our Investment Management offering will extend to a fund of funds and fund of ICO’s, comprised of the best fund managers and investments, selected and monitored by a team of professional fund managers.
Fund supermarket (Trustee account/fund manager)
The Investment Management offering
Fund of Funds
Fund of ICO’s
The Insurance market has adapted as expected to the new market. There is still not enough data to give comfort to underwriters and re-insurers on pricing. Therefore, we do see a product being developed but insurers will be more comfortable with regulated entities in prime jurisdictions, with good management teams and advanced security measures. We are due to have quotes by the end of Q3 2018 and we can see how we can integrate this offering to our clients in due course.
Offices & Staff
We are currently looking at offices locations. There may be an opportunity for us to sublet a space from Binance which we will naturally investigate. We see there being a hub of crypto related business based out of Malta, all assisting one another for the benefit of the industry and its customers.
So, what do you think about it? Feel free to post your thoughts on the matter in the comment section below, and don’t forget to follow our social media accounts for more info.