Thanks for the reply, but of course I have some more questions.
To include Fiat is indeed a very interesting point. But how safe is it that it will happen?
Nothing is of course "safe". However our arrangements are further than anything I know of in the crypto sphere, except for maybe some of the XEM Japan hype that we haven't examined in detail. Haven't heard of any fiat licensing initiatives with WAVES or others. Your questions would fit perfectly on-target at their promo, and the answers would be interesting.
I looked into Waves and also found too much that wasn't convincing in my opinion so I did not invest. You say:
"our arrangements are further than anything I know of in the crypto sphere"What do you mean with "arrangements"? Which steps did you make to get Fiat approval? How will it be implemented technically? Do you plan a "Fiat-wallet"? Do you plan Heat as a mix of Paypal plus Multicoin-Wallet and decentralized exchange?
the author of that article even expresses his concern that the EU will nearly become a No-go-area for Crypto-startups.
It's just an article. I'd say such fears are not substantiated. Regulation will rather enhance the operations in part because it removes the business from the gray area and places it under the umbrella of legally accepted financial services.
Sorry, but to say "it's just an article" is naive or you are intentionally misleading here. It's not just an article. Besides the fact that there are multiple articles, you can read the press-release of the EU-commission right here:
http://europa.eu/rapid/press-release_MEMO-16-2381_en.htmOne example, and it's not even about Fiat - just about Crypto:
How can virtual currencies be used to finance terrorism and what can we do to prevent this?
Banks and payment institutions fall under the scope of the Fourth AMLD, which requires them to comply with specific rules, such as verifying customers’ identity and monitoring financial transactions. Virtual currency operators were initially not included in the scope of the Directive.
Virtual currencies are developing quickly and are an example of digital innovation. However, at the same time, there is a risk that virtual currencies could be used by terrorist organisations to circumvent the traditional financial system and conceal financial transactions as these can be carried out in an anonymous manner.
That is why the Commission proposes to bring virtual currency exchange platforms and custodian wallet providers under the scope of the Fourth AMLD, in order to help identify users who trade in virtual currencies. Bringing these two actors under the Fourth AMLD and making them "obliged entities" will ensure better controls, ensuring that they apply customer due diligence and contribute to preventing money laundering and terrorist financing.
What is the difference between a virtual currency exchange platform and a virtual wallet provider?
Virtual currency exchange platforms can be considered as 'electronic' currency exchange offices that trade virtual currencies for real currencies (or so-called 'fiat' currencies, such as the euro). On the other hand, virtual currency custodian wallet providers hold virtual currency accounts on behalf of their customers (by providing virtual wallets from which payments in virtual currencies can be done or received). In the 'virtual currency' world, they are the equivalent of a bank or payment institution offering a payment account.
If you think about what that means, you should understand that there might be some problems for Heat even if it's just about crypto-currencies. But you even say there are "pending agreements" for implementing Fiat.
The Commission proposes to bring virtual currency exchange platforms and custodian wallet providers under the scope of the Anti-Money Laundering Directive
These developments last week have scared many people I know. I'm not worried, as it's something to be expected sooner or later. The fast track that AML implementations within EU now seem to take doesn't affect HEAT, for two reasons:
a) Fiat operations are only one part of HEAT's many focus points. Not marginal as they have great potential, but not overly significant either.
b) More importantly, we're prepared for compliance. We have national money transmitter license application pending, coordinated through a JV partner Fintech company that can't be disclosed yet. This license, when obtained, will enable fiat payments on tech that uses HEAT or a white-label implementation of it. We expect it to be feasible, if not plain right simple, to extend the license to EU wide operations.
1. And again: It's not just about Fiat but of course, Fiat is even harder.
2. And again: Lack of information. When there would be something you could say to raise trust there is something like "can't be disclosed yet". I don't criticize if you can't give all details. But I believe to see some red flags if there is too much talking while giving basically not really informations.
3. And what is a "national money transmitter license"? Or was it just a typo and you wanted to say "international"?
For me it looks as if this project needs to implement a "know-your-customer-system" to have chances in the EU?
KYC is not a problem. Our JV partner uses it all the time, and also FIMK is using government approved KYC in its basic income structure. We can deploy sufficient KYC procedures both technically and otherwise at any time to either our own operations, or the operations of a customer / partner.
That said, the HEAT token itself won't be needing KYC / identification any time soon. HEAT is a virtual currency, decentralized p2p ledger like any cryptocoin. The legislation concerning virtual currencies apply here. While I'm not a legal counsel I know that everyone is responsible for her own usage of a cryptocurrency - not the developer of the token.
Yes. It's not illegal to develop a cryptocurrency and there is no problem so far to use it as a user etc. But you want to build a decentralized exchange, including a multi-coin-wallet. And if you say: "KYC is not a problem. Our JV partner uses it all the time" - why do you want to develop a decentralized exchange? If it will be all connected to a central "JV - partner" to get things legal, one important point of decentralization is missing in my opinion. And maybe it's possible, I don't know. But if you plan something like a know-your-customer-impementation it's something you should speak about before in my eyes, instead just saying "we have a pending fiat agreement" without giving any infos about that. And really, I'm not sure what to believe because I'm not sure if you really know what this is about.
I mean: You even say you can really deploy sufficient "KYC" - infos about FIMK-Users. You are aware that the "C" stands for Customers? It's not about your informations as a company. And it's not just about IP's that download software like a wallet. It's about the
real identities of Users. If you really can deploy that for FIMK-Users - that's kind of concerning for a cryptocurrency to say the least and I don't believe you can.
I believe they will close all possible ways to go into or out of Crypto without them knowing pretty much about it - because but not just because they want their taxes.
I don't think that's the case. If it is however, then nothing will help. HEAT is as prepared as can be.
It already is the case that they regulate a lot of possible doors from Fiat into Crypto and back --> exchanges. And that seems to be true for all Fiat-exchanges nearly all over the world. And to say "Heat is as prepared as it can be" - that's just another claim. I don't see much where I believe you are prepared.
I need to think about the possibility that it will run into a lot of problems because of hard EU laws and will be illegal very soon - or already is illegal
I know the laws rather well. We've successfully pushed FIMK through two accounting periods, full reporting with the accountants whom I consulted to take the necessary measures to make it smooth. All without issues with the authorities for a
nonprofit official organization that received 250 000 EUR in cruptocurrency funding. Not for the faint of heart.
HEAT Ledger is fully transparent, official limited company with reporting requirements fulfilled, constantly being advised by qualified accountants & legal team that helps us steer through the ICO & IPO phase.
ICO and subsequent options release and IPO in a high bureaucracy EU country, the whole process sanctified by the government authorities. That's what we're doing.
I believe that you are mostly on the safe side regarding the ICO. As I said: That seems to be the priority, while there is no transparency for your potential ICO-Investors. There is no Whitepaper, there are no Informations about how to make Fiat possible, technically and legally. Even the Crypto-part is pretty much of a black whole - at least for me. For example: Why 25% the first 4 years while only 5% after that? And why PoS? PoS is a very weak design. Ethereum tries a lot to find a solution for the weaknesses of PoS with their Casper-plan, but I don't believe that will work out. But at least Ethereum is really transparent. They discuss those things openly and there were a lot of informations long before their ICO. Same with Factom. There was a whitepaper and reviews and Feedback and there was a Thread months before the ICO.
Heat: Nearly all important informations are missing. But an ICO.
If I believe that you guys maybe not really know how and if you can make this legal but already saying you will even implement Fiat and that there are pending agreements about that - how can that be possible?
The HEAT token itself is not fiat related. Fiat is done through a separate fintech company that will receive the license(s). I can only say we've gone to great lengths with our accountants and lawyers clarifying the required processes since starting this plan about 6 months ago. Legislation is a moving variable, however our team is staying on top of it.
If you want to be invest in a crypto startup, the odds are you won't find a better setup anywhere in the Western world.I hope this has eased your concerns. I'll attend to the token technicalities in the next message.
are strong words for a project that asks for money without giving basic informations. You're not just saying that this will be a great project. It's already the best setup in the western world.
Let me tell you this: My criticism is not personal. But what I always focus on, besides the base idea (which I like) and the economical design (which I don't like) and the whitepaper (which is missing) - is the team behind. I try to find out if they are honest. I try to find out if they are professionals. I try to find out if they are precise and skilled and where they see the priorities.
And what I believe is that you both are most likely good coders. I'm not, so I can't say much about that. But at least you show your faces and you have coding experience. But besides the lack of information and the impression that this ICO is pretty much rushed out, you told me about your partner that he has not the proper knowledge to reply on my questions - not even regarding the token. And man, there is one team with only two guys. And you both want money for a very ambitious project without revealing much infos - and you want me (and readers) to believe that one of both has no proper knowledge about the basics of your own project? The thing is: I don't believe that you believe that. That's the reason for my impression that there could be some things you try not to reveal. But if you really should believe that your partner is not able to reply on such questions (what is the token for? - basics!), it's even worse.
Again, not meant personal. But I believe it becomes clear that I won't invest.
