My Crypto Year in Review as a CEO
Bitfineon CEO, Jared Grey about being a CEO in crypto
It’s hard to believe we’re a month away from 2020. I am only now getting used to jotting down the year correctly when I have to write the date on a document. All of that memory training will have been for naught as we enter into the new year, and the process begins again. Sigh. While lamenting this tragedy, it occurred to me that this year has included some of the most trying and rewarding times of my professional career. The majority of my past business experience consists of private consulting and almost zero social media involvement. The crypto industry, its lifeblood is social media, whether its Twitter, Discord, Reddit, you need to be involved in one or more platforms daily. Social media is powerful, and it took me time to understand and acclimate to its influence in crypto.
My year started off on somewhat of a somber note in Jan. As CEO of Bitfineon GmbH, I am responsible for the direction of the company and execution of its product roadmap. One of the key roles Bitfineon provides is for core development of the ALQO [ticker: XLQ] cryptocurrency. At the end of 2018, our team experienced several setbacks, which exacerbated by the market downturn, caused the depreciation in the value of our developer fund, the primary source of our funding at that time. Community members who have been long-time holders are aware of most of the setbacks, which included Bitfineon’s development delays, team member turnover, and more. However, these setbacks were minor in comparison to the problems we would face in 2019.
During Dec 2018, it became clear the developer fund would no longer support business operations for Bitfineon and ALQO, and the decision was made to seek funding via an equity sale in the company. During the last few weeks of Dec we were approached by a top-fund to make an investment, and their requests were standard, a product-code and financial audit. This sudden interest seemed tremendous, and we requested our lead developer at the time (Kevin Collmer) to make code available for several products. I was to provide a financial audit and our business plan. What happened next became a siren call for the next several months as we went from a potential funding partner to the next… Kevin failed to deliver any code for any product that wasn’t already available publicly. Obviously, this massively hindered our attempts at securing funding and put considerable strain on my business relationship with Kevin.
When last-minute negotiations produced a positive response, I flew to Germany to provide support to Kevin. My presence in Germany was to help him ready the code for audit and present it to the interested parties for review. During this time, the funding partner was in talks to purchase an established exchange’s user-base, and they wanted to re-brand it to Bitfineon, provide us funding, and re-launch immediately. While I was in Germany, it became clear that we would be unable to deliver on the contingency of the code audit, and the deal stalled and ultimately failed. What happened next is worse…
Towards the end of my Germany visit in Jan, we began receiving messages from community members that their Liberio accounts had been compromised. Liberio was an online wallet that we released under the development oversight of Kevin [Collmer], our lead developer. I was in a panic… I immediately requested that Kevin make a full review of the platform and address the community as to his findings. I know that brand integrity and trust are paramount in any industry. Still, in crypto, it can be an absolute death knell to lose confidence in your brand. And, if you have issues, you must fully disclose them to your community, the crypto public, and make right on them. Kevin informed me he would review the platform and issue a public response. What he released was a half-baked attempt to reassure the community the platform was safe. He suggested users had experienced brute-forced entry into their accounts and, he instituted 2FA for Liberio accounts, and business went ahead as usual.
Ultimately this was not the case, as later in 2019, we were able to confirm that the unauthorized access was most likely Kevin accessing user accounts on the Liberio platform, draining them of their XLQ, liquidating them via Crypto-Bridge, and withdrawing the funds for himself. (Side note: any affected users should join our Discord and make a claim for any loss associated with unauthorized access to their Liberio account, Discord link: https://discord.gg/TbJdXFs). I can’t begin to explain how disappointed I was with Kevin, as working closely with someone for a year-plus and having them lie to your face will, at minimum, make you question your judge of character and, at worse, make you feel like a fool for trusting them. C’est la vie…
Back to funding, since many have inquired about the process, presumably to satisfy their own curiosity into the process. What started in January ’19 as a search for a funding partner meandered through the spring months with little fanfare, as the market’s bearish outlook likely had an impact on overall industry investment. I traveled back and forth to Europe to meet with potential investors, fielded dozens of email inquiries, and executed no less the same amount in video and conference calls. I obsessed over our business plan for Bitfineon and ALQO. I wanted it to surpass the industry standard, as I researched industry examples from other successful pitch decks and business plans. This obsessive preparation slowly began to materialize into more fruitful leads.
One of the most promising leads led to a meeting with potential investors in Milan, IT. Again, mirroring the process with the investors in Jan, we seemed to be headed to a fruitful outcome; ultimately, the deal collapsed at the signing table after several weeks of talks and meetings. It was a humbling experience. I remember walking out of the Four Seasons in downtown Milan, totally stunned. Only moments prior, we were on cloud nine, with the deal moments away from completion when we were told, “we’ve decided not to meet your terms…”. The investors walked from the table at the last minute due to concessions we previously agreed would be in our favor, on which they ultimately rescinded. After the failed meeting in Milan, we returned to Germany and regrouped to continue with the funding search.
Fast forward to June, and with what I believe was the result of a positive and bullish market outlook, we began to receive more funding inquiries. Over 2 weeks, I spoke with 4 of the most promising leads which had materialized to date. From those leads came a group of individuals who had been invested in ALQO for some time. Ultimately they were interested in continuing with our original vision laid out in our product roadmap. And, they were located in the US, which was a welcome change for me; traveling had begun to wear at my resolve a bit. After speaking with the group, they would later form the investment fund, BIG Fintech, LP., we agreed to preliminary terms and began the process of due diligence.
After a successful round of virtual meetings and an investor dinner in Orlando, FL, the terms of the deal were agreed upon, and we executed the equity sale for 1M EUR to BIG Fintech, LP. In retrospect, this is one of the greatest single moments of my professional career. It’s a moment I share with ALQO supporters, who provided their support and encouragement over the preceding months providing me the resolve to continue in our search. It was a turning point in my attitude and outlook for the project too. The successful funding round provided validation our project had intrinsic value, and that people believed in us to execute our vision. The dichotomy of the two situations, the successful investor dinner, and the failed Milan dinner were not lost on me. It was one of those quintessential, “when we look back on this, we’ll laugh” moments, almost entirely scripted as if a movie plot.
In summation [the tl:dr version] looks something like this:
1) We need funding.
2) Liberio is hacked.
3) We lose funding multiple times.
4) We receive funding.
5) We’re accused of exit-scamming.
6) I fire my lead developer and business partner.
7) We rebuild the ALQO team.
8) We prepare a swap to a new chain.
9) Bitfineon is readied for launch.
What. A. Year!
My best to all that believe in us, your support means a lot to me personally. 2019 is nearly in the books. Here’s to a successful 2020!