This section aims to give the opportunity to introduce some of the best 🇪🇺 founders. Most people loves their products but don’t know who are the founders behind them. Hello World.
Background: ‘Hi Etienne, I’m calling because our bank is threatening us to shut down our account. I don’t know what to do. Any advice?’ I had this call multiple times from European and US crypto startups with well known backers and strong business models. If you don’t have banking relationship, you can’t pay your employees or your rent. Having a strong fiat banking partner is key.
Hi Sven, you launched Postraise with a mission to create a multi bank and multi jurisdictional fiat banking portfolio for your crypto clients. Could you share a bit about your background? How did you get into the bitcoin and blockchain industry?
I first heard about bitcoin back in March of 2013 under very strange circumstances. I was travelling in China and I had met an Italian living in Guangzhou; we bonded over both being traders and struck up a friendship. I had remarked I was looking to visit some factories in the area and he mentioned that he had a friend who owned a jewellery factory and asked if I would like to have a tour. I, of course, jumped at the chance and a few days later we were walking through the factory with gold and silver absolutely everywhere, including lots of little bits on the floor. The tour ended with a look inside the vault where for the first time in my life I saw actual gold bars sitting on a pallet. The owner of the factory said they were worth somewhere in the region of 3 million dollars. At that point, my head was spinning and when my new friend and I left the factory to grab some lunch he began telling me about a digital gold created by some Japanese professor that uses cryptography to create digital scarcity. I really had no idea what he was talking about and couldn’t really take the idea seriously as I thought this was all part of an elaborate scam to get me to “invest” in some sort of digital money which didn’t exist.
I heard about the substantial increase in Bitcoin’s price around the latter part of 2013 as my friend had invested in Bitcoin and was telling me about all of the money made. Then came the crash and two years of Bitcoin’s price going sideways which for me was not very interesting as at the time I was trading FX.
The light finally came on for me when in the early part of 2016 I read two very interesting books: The Age of Cryptocurrency: How Bitcoin and the Blockchain Are Challenging the Global Economic Order (Paul VIgna & Michael J Casey) and Digital Gold by Nathaniel Popper.
Since then I’ve been firmly in the Crypto space — trading, investing and learning. If I recall correctly, both books mentioned Jesse and Kraken so when the opportunity to join them came upI jumped at the chance. Unfortunately, the position never really turned into what I thought it would but I enjoyed my time there and still have a good bunch of buddies at Kraken. My time there also opened my eyes to the banking issues faced by both individuals and companies who have a Crypto touchpoint to their activities.
Can you share a bit more about the team working at Postraise?
There is no team currently. Since early 2019 I have tried to work with a couple of people: one on the business development side and the other on the marketing end. However, these “trial runs” didn’t work out; I have a crystal clear vision of what I want PostRaise to be and as such its difficult to work with people who are trying to add/remove elements that could steer me away from that vision. Even though the initial trials have been unsuccessful I still continue the search.
Are you hiring? If so what type of roles and where?
It’s possible that by the end of 2019 I will hire an admin/support person to handle the basics like filling in forms, chasing clients for documents and answering simple questions from banks which come up during the application process.
Can you shed light on the current relationship between Fiat banking and Crypto Businesses?
In one word: tenuous. The guys at Coin Center wrote a brilliant report on the dynamics between Virtual Currency Businesses, VCBs being their term for Crypto businesses, and banks. Even though the report is 3 years old, it is still a true reflection of the situation today. I firmly believe the only way to have a stable connection to the Fiat world if you are a Crypto Business is to have multiple banking relationships, ideally with some jurisdictional diversification. I also wrote an article on this topic using the report as a reference.
What’s your business model?
I work with clients on an advisory basis.
Who is your target audience?
Founders of well run, compliant, Crypto businesses who are bringing something valuable to the space.
How is Postraise ensuring their clients are offered the best possible prices for crypto-to-FIAT over the counter trades?
It’s a straightforward process, usually when someone wants to sell X amount of Y Crypto and they want to cash out in Z Fiat currency they either:
a) have an indicative price from their contact (often the OTC desk of the exchange they are most familiar with)
b) they ask me to find them the best price.
In both cases I take the variables (XYZ) to the OTC desks I know who can execute the trade and I get indicative pricing from them. I then make the introduction to the desk who offers the best price and execution for the given variables.
What are your thoughts on the crypto European ecosystem compared to the US ecosystem?
It’s funny, in the last 11 months while I have focused all of my energy on building my understanding of the regulatory environment, Fiat / Crypto dynamics as well as building out my banking relationships, I have not been able to stay up to date with all of the most interesting developments in the Crypto space, so I’m probably not the best person to ask.
I see my role as helping Crypto businesses to function and thrive in what is currently a Fiat dominated world. That takes up all of my attention, so I don’t have time to formulate opinions on the merits of which ecosystem is better or in which way one is superior to the other.
One thought I can share is that even in the face of uncertainty — be that regulatory, political, financial, legal, etc. — there are entrepreneurs (potential clients I’m speaking with) in EU, US and Asia building great businesses. If I have to sacrifice staying up to date on the latest goings-on in the Crypto space so that I can help their businesses to grow and succeed I view that as a worthwhile trade-off.
What’s the most underrated project in Europe?
Probably Ethereum, from what I know they have some of the smartest people on the planet attempting to solve some very difficult problems. I get that they have not delivered ETH 2.0 yet, but when they do, I think they will be back in favour.
Is there any recent industry news that you would like to highlight?
The French legislation I have pulled up below, because it highlights that you cannot always believe what you read. Once the news came out, I immediately contacted the CEO’s of an OTC desk and Crypto Exchange (based in France) who I know and I asked them for their feedback. They had the same answer which was basically this: while it might be possible to get a bank account if you jump through the hoops, the banks can simply make the account they have to provide you very difficult to use which will mean it will be difficult to run your business.
I come across examples like this all the time in the Crypto space, Headlines don’t equal reality.
Anything to add?
I think that banking for the Crypto industry will continue to be difficult for the foreseeable future. I say this because when I look around at other unloved/out of favour industries like adult, gaming, gambling, cannabis, etc., many of these industries have been “legal, tax paying citizens” for a decade or more and they still have ever-present banking and payments issues.
Given that Crypto has the potential to challenge Fiat currencies, I fear we cannot rely on governments to make it “easy” for Crypto businesses to obtain the banking and payments relationships they require.
That being said, if in 2–3 years PostRaise has no clients because it’s become so simple and straightforward for Crypto businesses to obtain and maintain the banking they need, no one will be happier than me.