Next week, on September 1st, it will be two years ago that we started our Initial Coin Offering (ICO). Let's take this opportunity to reflect on the past.
[Q2 2017] April 2017, we started building an app that could do it all. Fiat money and cryptocurrency flowing through one app to enable people from all over the globe to add value to their daily lives. Faster and cheaper international transactions whilst totally being in control of their own assets. We also started our own dPOS blockchain, forked from Rise.
[Q3 2017] September 2017, we ran a successful ICO (Initial Coin Offering) after which we were able to hire more developers to speed-up the development process of our mobile app and blockchain.
[Q4 2017] In December 2017, we released a bèta of the mobile app (v1) to learn from our community members. You gave us a lot of pointers which were included in the design of the new mobile app (v2).
[Q1 2018] January 2018, we were reprimanded by our bank and had to start over if we wanted to keep doing business. Next to developing a TypeScript version of our dPOS blockchain, we started planning the development of an advanced back-end platform that could monitor transactions, monitor user actions, perform user screening, and a lot more. More developers were interviewed and hired.
[Q2 2018] In April 2018, the development team started building the new back-end platform at full power. We also successfully moved from our former NodeJS blockchain core to the new TypeScript core. And, to celebrate our unofficial 1-year anniversary, we organized an Anniversary Meetup on the 18th of May, 2018.
[Q3 2018] At the end of the third quarter, we decided to freeze our blockchain development for the time being, temporarily migrating from our dPOS chain to an Ethereum smart contract, to focus all of our resources on the development of said platform and new mobile application. For each old coin, 10 new tokens were distributed in the token swap. Also, we invited our community members to help test the new mobile application running on our advanced back-end platform and we published a new, more refined website.
[Q4 2018] In the last quarter of the year, working with the feedback from the Q3 tests, we developed a new design for the mobile app (v3) in preparation of the Public Release in December. We moved forward in our conversation with the bank and were allowed to enable the "Sell" feature. Since the process of getting approval under the current regulations was so depressing, we made the decision to leave out "Deposit" and "Withdraw" from the mobile app to speed-up the Public Release. In December, we published the app for an exclusive group of 500 (Dutch) users.
[Q1 2019] January 2019, we introduced RONIN to the people. A mobile app worthy of its own name. February and March were all about working with the feedback received from the first RONIN ONE users, and evolving from "just a development team" to a fully operational business responsible for treasure management, compliance with regulations and legislation, and the day-to-day tasks of screening users, and handling support tickets. The composition of the team changed accordingly. We said goodbye to some of the developers and we welcomed new colleagues for more operational roles.
[Q2 2019] The development team started expanding the platform to support our second app Akari, a crypto-only app to finally onboard our internationally located community members. The legal team searched for a solution to let our users hold the value of a euro in the RONIN ONE app. Because, without a financial license, our users were not allowed to hold a euro balance. To solve this issue, EuroX was minted on November 23, 2018, and successfully backed by physical euros on April 28, 2019, right before the release of RONIN ONE. Our very own stable coin.
[Q2 2019] On April 30, 2019, we published RONIN ONE in the Dutch app stores. Furthermore, the unique legal solution we came up with for EuroX gave us an idea for the OXY token. Our wish to share the profits of our apps with our token holders — without the need of becoming a security token — was suddenly within reach. On May 9th, 2019, the OXY was successfully backed by 100% of the profit shares or RONIN APPS BV (the entity that operates our mobile apps) as we explained in the article OXY Tokenomics. We also minted GoldX and SilverX (both backed by physical precious metals).
[Q3 2019] Most of the current team members are from the Amsterdam area. So earlier this year, we rented a new, smaller office in Amsterdam which is the place to be for crypto projects. The third quarter of 2019 was all about moving the core development team to the new office, finding the best solution to close the now too big office in The Hague, and solving new challenges involving Akari and the bank. More about that later.
Since the app release in April, we didn’t slow down at all. Releasing our app in the Netherlands is not enough. We want to expand our reach as our community is mainly international and currently unable to download the app because of all the major restrictions surrounding businesses like ours.
Payment Service Providers
To be able to onboard people from outside NL, partnerships with European Payment Service Providers are needed as well as a proper ID Verification Provider. We’ve had numerous talks with above-mentioned parties, but to no avail. The word “cryptocurrency” was in most cases enough for the PSP’s to end the conversation before we could explain why we are different and why there is less to no risk for them at all.
“Our policies state that we cannot conduct business with companies active in the cryptocurrency field.”
ID Verification Providers
Next to being shown the door by the PSP’s, many of the ID Verification Providers are not accustomed to service small companies like ours. Their clients are mostly banks and other financial institutions which gives them proper ground to save all of your credentials like passport, photo, SSN (or BSN). A regular company, operating in the EU without a financial license, is not allowed to store those credentials, but obviously the IDVP’s won’t modify their systems just for us. We still have to find the right IDVP for our use case.
Why don't you get your own financial license?
Applying for a license is not that easy. Next to the legal costs and all the ridiculous fees, it involves running a serious financial operation that includes multiple compliance officers, strict internal policies for all personnel, and a screening of not only our customers, but also their transactional behavior and sharing some of that information with the regulators. Something that goes against our principles. We don’t want to become a bank.
On top of that, our wish to accept crypto deposits through RONIN ONE was denied by the bank as it involves a lot more risk related to money laundering and the financing of terrorism. Combining cryptocurrencies with fiat money in one system is a no-no and if we continued to follow that path, we would lose our bank account. Needless to say, that would ruin our business.
RONIN ONE will continue running in the Netherlands. But expanding its reach…it might be too soon for that. That’s why we started working on Akari, a crypto-only app which (to a certain extent) eliminates the need for partnerships with PSP’s and banks.
Akari can be used to deposit cryptocurrencies, easily swap them for other tokens, send tokens to other platform users for free, and withdraw them to an external address. Unfortunately, bypassing the bank with a crypto-only app did not work. Since we’re still dependent on our bank account to pay for rent and to pay our employees, the bank “controls” what we can and can’t do. If we were to release Akari without the right ID Verification Provider, and accept cryptocurrencies from our customers and profits resulting from that land on our bank account, they would close it.
I hope this gives a bit of understanding in what we’re trying to deal with for over 1,5 years…
Last week, a rather heavy package was delivered to our office containing legal paperwork from a Polish law firm. They represent a European company that claims to have the exclusive ownership of the name “RONIN” and asked us for a rebranding. However, earlier this year, we registered RONIN as a trademark ourselves and started creating professional, online content.
A rebrand will cost us a lot of money, so we are weighing our options. We will let you know as soon as we have made a decision. It would be a shame to throw away our new marketing material, right?
As you know, the platform we built is capable of a lot of things. Not only can it handle crypto-related and fiat-related transactions, it also includes several payment processors, blockchain management, an aggregated market watcher, treasury services, and the ability to serve multiple front-end applications.
Running an operation like ours for over two years is costly. The big dip in 2018 did not help and many crypto projects had to shut their doors. That's why we have decided to find clients that would like to whitelabel our platform. It will save them a great amount of time and money that goes into research, finding the right people, development and operations.
We are currently in discussions with three potential customers. They all come from the Netherlands, are established companies and already have the right licenses and staff to run a fully regulated financial institution.
Once we sign a deal, we will let you know.
The 5th AML Directive
We expect Q4 to test our confidence, strength and patience even more than before. In 2020, the 5th Anti-Money Laundering Directive will affect many EU companies on how to conduct know-your-customer (KYC) research.
It also targets anonymous purchases and exchanges including virtual currencies such as Bitcoin. These changes classify virtual currency exchange platforms (VCEPs) and custodian wallet providers (CWPs) as “obliged entities” and are therefore subject to EU regulations that aim to increase ownership transparency.
RONIN ONE deserves to take off and onboard thousands of people living outside of the Netherlands, eagerly waiting for an easy-to-use app like ours. With everything that is going on in the area of regulation, we brace ourselves for the coming changes.
AKARI looked like a proper alternative, but the 5th AML Directive will be even harder on AKARI then on RONIN ONE as it involves accepting and swapping cryptocurrency, much of the time without a clear origin of capital.
That's it for now
I hope you have a better understanding of what we are dealing with every day. Building a mobile app of this size is a challenging task in itself. Add the development of an advanced back-end platform to that task and it will be a multi-year project. And then I have not yet talked about the amount of work that legislation and regulations entail.
We're determined to deliver our apps. No matter how long it takes. Thank you for your support!
To connect with our team and other community members, click the Connect button on our website: https://oxycoin.io
Our Token Contract: https://etherscan.io/token/0x869b1f57380ae501d387b19262efd3c0eb7501b0