NestEx Crypto Exchange - in BETA

[nestex_one]

so you have to obey whatever rules they tell you to do.

So strangely enough bunch of companies keep shifting jurisdictions as well. Some moved from HK to seychelles and and so on - so it's not like everyone is hard and fast about the rules.

Sad part about whey they do that, is they re-appropriate the customers' funds if KYC is not provided. I would NOT be surprised if the more unscrupulous among them actually started using the demanded kyc for illegal stuff. Lots of shady things going on. Really sad for the victims.

[joniboini]

Batching: Yes we'll batch transfers. It's cheaper that way. Also since the fees are congestion based we'll aim for a time congestion is low, or send it after checking the congestion on mempool.space

Okay, so what I get from this is that you'll take fees for each withdrawal independently even though you process them in batches. What happens if the fees increase when you're waiting for more transactions to be included in the next batch? Is it possible that you pay more fees to process that withdrawal instead of getting the 20% cut? I personally have no problem with flat withdrawal fee, as long as they're not ridiculously overpriced especially if an exchange process transaction in batches.

[Botnake]

So the licensing methodology seems to vary a lot across jurisdictions. Some require customer onboarding KYC (before they add money), some require KYC when fiat is first touched, some need the KYC documents only if there's a problem (but they say we need to collect it else if they audit and find we don't have the documents we're in trouble).

As I mentioned earlier in the thread this is an expression of our INTENT, but I do see where you're coming from. It can be written off as marketing, can't complain about that.

Our lawyer has committed to removing this ambiguity in our talk in the coming week. I will post the excepts here.

When it comes to rules, it’s better if they’re very specific and not misleading. For a regulated exchange, they follow a set of rules provided by the license issuer. It’s quite simple, if an exchange is regulated, KYC is mandatory, whether it’s required before or after depositing money. As you mentioned, failing to comply could put you in trouble if you don’t have proper documentation.

You also need to consider the risks of not complying with KYC. For example, we’ve seen cases like Binance, where they faced serious issues due to their failure to strictly enforce KYC requirements.

You can read about some of their violations and how they ended up paying huge penalties as a result.

https://www.justice.gov/opa/pr/binance-and-ceo-plead-guilty-federal-charges-4b-resolution

Binance also did not implement the core components of an effective AML program: Binance did not implement comprehensive know-your-customer (KYC) protocols or systematically monitor transactions, and Binance never filed a suspicious activity report (SAR) with FinCEN. For years, Binance allowed users to open accounts and trade without submitting any identifying information beyond an email address. Binance began requiring all users to provide KYC information in August 2021 but allowed users who had not provided KYC to continue trading on the exchange until May 2022. Between August 2017 and October 2022, U.S. users, including VIPs, conducted trillions of dollars in transactions on the platform, generating over $1.6 billion in profit for Binance.

[terrific]

so you have to obey whatever rules they tell you to do.

So strangely enough bunch of companies keep shifting jurisdictions as well. Some moved from HK to seychelles and and so on - so it's not like everyone is hard and fast about the rules.

It's understandable why they have to relocate and it's either about budget and expenses cut or mostly about the rules that they don't like that doesn't favor them wherever their headquarters are located at.

Sad part about whey they do that, is they re-appropriate the customers' funds if KYC is not provided. I would NOT be surprised if the more unscrupulous among them actually started using the demanded kyc for illegal stuff. Lots of shady things going on. Really sad for the victims.

You seem to understand the situation of a typical user and how the exchanges feel as well since you run one. When you make it to the top, hopefully you'll continue to prioritize customer service and users convenience.

[nestex_one]

Is it possible that you pay more fees to process that withdrawal instead of getting the 20% cut?

Yes over and above the regular withdrawal, we have in place a 'premium' withdrawal with higher fees (basically whatever is the current network fee)

When it comes to rules, it’s better if they’re very specific and not misleading. For a regulated exchange, they follow a set of rules provided by the license issuer. It’s quite simple, if an exchange is regulated, KYC is mandatory, whether it’s required before or after depositing money. As you mentioned, failing to comply could put you in trouble if you don’t have proper documentation.

Yes. We will only go with a legal process as we dont want to get into trouble like so many of the other known cases.

KYC. For example, we’ve seen cases like Binance, where they faced serious issues due to their failure to strictly enforce KYC requirements.

You can read about some of their violations and how they ended up paying huge penalties as a result.

Touche 🎯

You seem to understand the situation of a typical user and how the exchanges feel as well since you run one. When you make it to the top, hopefully you'll continue to prioritize customer service and users convenience.

We are all typical users right 😂

We slog to earn our keep and we invest some in btc. Just one of our co-founders was of the 'early bird' that got the btc worm when it was $5000 or something like that. Point to note is that he was still plenty rich to be able to spend more than $5000 on what (at that time) was thought to be vaporware.

[terrific]

You seem to understand the situation of a typical user and how the exchanges feel as well since you run one. When you make it to the top, hopefully you'll continue to prioritize customer service and users convenience.

We are all typical users right 😂

We slog to earn our keep and we invest some in btc. Just one of our co-founders was of the 'early bird' that got the btc worm when it was $5000 or something like that. Point to note is that he was still plenty rich to be able to spend more than $5000 on what (at that time) was thought to be vaporware.

That's good to hear that you're all dedicated in this and one of the co founders have been early. Some might argue that buying at $5k per BTC isn't early because there are the others that have bought at $3k and even 3 digits and two, but in fact it is.
With the price that we've got now, that's certainly have grown and multiplied a lot already. But for sure he has allotted some money and budget for this exchange, do you guys have a proof of reserve too?

[nestex_one]

With the price that we've got now, that's certainly have grown and multiplied a lot already. But for sure he has allotted some money and budget for this exchange, do you guys have a proof of reserve too?

Yes our proof of reserve is presented on the website at https://nestex.one/por.html

The audit for the PoR is pending, since our lawyer recommended we should get the audit done in the jurisdiction of incorporation instead of having it done arbitrarily in one of the founders' home jurisdictions, because that could 'tie' the funds to the laws of that region. Now sure how though.

We were told not publicly display founders' cold wallet public keys pre-formation because it can get scraped and land up on all kinds of lists, that limit our ability to use that in future. Same reason we don't display a list of Pledgers' public keys despite recording it internally.

Currently our lawyer will identify jurisdictions (in the coming week, we have a call on the 10th) that can be adaptive about small value kyc as long as
1. volume is below a certain threshold
2. the sending wallets are not outright blacklisted
3. we report any issues immediately (not too complicated, but they've not said what happens IF there's a problem)
4. we do periodic compliance reporting (which is easy enough if the data is in the system)

And I have an UPDATE! From our sharky. Here's a list of regions shortlisted. They are all no kyc mandates as long as no fiat is touched. List is in no particular order.
- Panama
- Peru
- Argentina
- Guatemala (they also have the huehuetenango coffee which in my opinion is a plus)
- Zambia
- Khazakhstan
- Scychelles
- Kiribati
- Marshall Islands
- Dominican Republic
- Cuba

So the regions noted all are compatible with our objective. And given the size of the list we'll likely be spending Christmas submerged in paperwork 😅

[bias]

I'm happy to get a cheaper BTC withdrawal instead of the usual 0.0005 BTC withdrawal.

Are you sure? Maybe you made a small mistake with the number? For instance, Kraken charges from 0.00003 to 0.00005. One zero makes a difference...

The audit for the PoR is pending, since our lawyer recommended we should get the audit done in the jurisdiction of incorporation instead of having it done arbitrarily in one of the founders' home jurisdictions, because that could 'tie' the funds to the laws of that region. Now sure how though.

By "PoR" are you referring to the "Percentage of Revenue"/ "Payout Ratio"? If you are talking about that, the explanation isn't so difficult. If you choose one of the founders' home to file the POR, then the funds of all shareholders, dividends, etc. will be subject to the jurisdiction from which the founder comes. This means that the corresponding taxes and anything else related to the funds will be imposed by the laws of this place. In other words, they will be tied to the specific framework of the specific region/country, with the result that everyone is affected. If you do it in the country where the company will be created, then the capital, etc. are tied there. Something that I imagine is better tax-wise for all of you and needs a bit more research.

And I have an UPDATE! From our sharky. Here's a list of regions shortlisted. They are all no kyc mandates as long as no fiat is touched. List is in no particular order.
- Panama
- Peru
- Argentina
- Guatemala (they also have the huehuetenango coffee which in my opinion is a plus)
- Zambia
- Khazakhstan
- Scychelles
- Kiribati
- Marshall Islands
- Dominican Republic
- Cuba

You can also check this Wiki's list and get a better view because I think that you missed some countries.

[nestex_one]

By "PoR" are you referring to the "Percentage of Revenue"/ "Payout Ratio"?

PoR = Proof of Reserves. I was actually answering terrific's query about proof of reserves, which I abbreviated to PoR in the second line.

Thanks for explaining the jurisdiction point; I'm still unclear on how that works given this is all online and the ownership & country of holding are both fungible points. Since there's no legal trust basis to show the private key to any government there's equally no way to demonstrate ownership either.

That's what I think. Lawyer thinks different though.

You can also check this Wiki's list and get a better view because I think that you missed some countries.

We saw that list quite a while back, but our lawyer says they're not all available to us. The point wasn't which about countries are kyc-free, but which countries can we safely incorporate in 😅

I think FATF greylist and blacklist countries would be a huge problem because then our funding could get stuck too

[YOSHIE]

PS: If you'd like to check out our prelaunch site, its https://nestex.one - happy to receive feedback on the site as well!

In general, what I see is that KYC is required, especially for leading exchanges, but in the KYC process there are levels of KYC 1 and KYC 2, many exchanges that do not implement KYC have problems, especially in the authorities of that country, where the exchange is operated, I think KYC is necessary for crypto exchanges for now, no one passes KYC, it could be problematic for the local government, it could be considered illegal.

I reviewed the nestex.one exchange.

We will block FATF blacklisted countries/IPs to ensure better AML compliance.

Can you mention which countries are prohibited, meaning nestex.one does not operate globally like Binance and others.

My question....!
Is the nestex.one exchange officially registered with a responsible government authority, as acknowledged by the local Minister of Trade, I don't see support from government authorities.

Why do I ask that, because recently many crypto exchanges have been closed because they are illegal, do not comply with government regulations, because you want to launch a new exchange, I think before it is launched official support is important from the government, The fear is that one year the operation will be closed because it is illegal, so a letter to launch a new stock exchange is important from the local government so that it remains safe, at least within 1-5 years there will be supervision from the local government.

[nestex_one]

We will block FATF blacklisted countries/IPs to ensure better AML compliance.

Can you mention which countries are prohibited, meaning nestex.one does not operate globally like Binance and others.

Firstly, binance and other such exchanges also block FATF blacklist or greylist countries. So we will be at least as global as binance and similar exchanges 

My question....!
Is the nestex.one exchange officially registered with a responsible government authority, as acknowledged by the local Minister of Trade, I don't see support from government authorities.

We are yet to incorporate the company and that's why we're trying to identify suitable jurisdictions. We are at Pre-Launch and currently we're here to take valuable feedback (and pre-launch pledges where possible) from the community. If you see my previous post there are some countries we've identified as our likely incorporation locations.

Thanks for the feedback!

[bias]

Thanks for explaining the jurisdiction point; I'm still unclear on how that works given this is all online and the ownership & country of holding are both fungible points. Since there's no legal trust basis to show the private key to any government there's equally no way to demonstrate ownership either.

That's what I think. Lawyer thinks different though.

Yes, they are fungible, but it does matter where you write them and for what purpose, right? Whether online or not, you are passing the details and that is what the authorities care about. At least for the start. When and if the time comes, you may be asked to submit the details for the wallets. However, ownership is not recorded with a wallet alone, so I will take the lawyer's side.

We saw that list quite a while back, but our lawyer says they're not all available to us. The point wasn't which about countries are kyc-free, but which countries can we safely incorporate in 😅

I know that from the moment I post it. My way of thinking though, was that through the countries that are favorable to crypto, perhaps you stance better and more convenient ways for making the company. By the way, the countries that are favorable to crypto don't mean that are KYC-free for the clients who will be registered in this company.
Also, can you please tell me what you mean by "safely incorporate in"?

I think FATF greylist and blacklist countries would be a huge problem because then our funding could get stuck too

Well, yes and no. Because even if you are in their greylist, you can still "work" and receive international "money". Eg. Monaco is on their grey list while Russia isn't. Sounds a bit strange, doesn't it?

[nestex_one]

"safely incorporate in"

- Some of our founders are from the US and one from Singapore. We are avoiding countries that have an antagonistic relationship with these two.
- FATF and AML history of the country is also relevant.
- Also avoiding countries that dont have good business protection / privacy laws.
- Must have a good banking system
- Company owners registry should not be fully public.
- Low tax is also a key point, either zero tax or a conditional very low tax rate
... there were a few other points but mainly these

Eg. Monaco is on their grey list while Russia isn't. Sounds a bit strange, doesn't it?

So basically FATF feels Russia is managing their money well and monaco isn't? 🤷

[bias]

- Some of our founders are from the US and one from Singapore. We are avoiding countries that have an antagonistic relationship with these two.
- FATF and AML history of the country is also relevant.
- Also avoiding countries that dont have good business protection / privacy laws.
- Must have a good banking system
- Company owners registry should not be fully public.
- Low tax is also a key point, either zero tax or a conditional very low tax rate
... there were a few other points but mainly these

Based on these facts, almost half (if not more) of the countries you mentioned earlier are out. However, some of the above can be made/ fixed depending on how much money you intend to invest. Like keeping the company's owner's registry private and a better "banking system". In any case, you can also check Vanuatu (one of the best places but a bit difficult banking), the Bahamas, Beliz, UAE, and the Isle Of Man.

So basically FATF feels Russia is managing their money well and monaco isn't? 🤷

Actually, FATF isn't about how a country manages its money but whether this money (through their laws) is from laundry activities or "helping" terrorism financing. And that makes it even weirder than it was before, doesn't it?

[nestex_one]

snip

Based on these facts, almost half (if not more) of the countries you mentioned earlier are out. However, some of the above can be made/ fixed depending on how much money you intend to invest. Like keeping the company's owner's registry private and a better "banking system". In any case, you can also check Vanuatu (one of the best places but a bit difficult banking), the Bahamas, Beliz, UAE, and the Isle Of Man.

Are they? Lawyer said these are ok tho. I dunno, I will take your feedback to my team and we'll evaluate it independently as well.

Vanuatu - if there are banking issues would this not be a problem?
UAE - I thought is out because they are direct Level 2 KYC (must retain identity & address proof documents even for pure crypto-to-crypto exchange)
Will check out the others.

So basically FATF feels Russia is managing their money well and monaco isn't? 🤷

Actually, FATF isn't about how a country manages its money but whether this money (through their laws) is from laundry activities or "helping" terrorism financing. And that makes it even weirder than it was before, doesn't it?

Ahhhh right it does make it weird. Are war and terrorism different? Maybe they think it's different no idea about that.

So, what kind of terrorism financing does Monaco do again? 🤔

[bias]

snip

Based on these facts, almost half (if not more) of the countries you mentioned earlier are out. However, some of the above can be made/ fixed depending on how much money you intend to invest. Like keeping the company's owner's registry private and a better "banking system". In any case, you can also check Vanuatu (one of the best places but a bit difficult banking), the Bahamas, Beliz, UAE, and the Isle Of Man.

Are they? Lawyer said these are ok tho. I dunno, I will take your feedback to my team and we'll evaluate it independently as well.

I guess that he says it because he knows all the facts as it should be. Since this will be a more tailor/ custom-made business creation, sharing that info will be the best that you can do and I'm positive that you will find the right destination. Your lawyer seems good, congrats on your choice. Maybe I can use his services as well...👍

Vanuatu - if there are banking issues would this not be a problem?
UAE - I thought is out because they are direct Level 2 KYC (must retain identity & address proof documents even for pure crypto-to-crypto exchange)
Will check out the others.

Vanuatu - It depends on the bank "brands", the money volume involved, if this money can be considered as CBI (Citizenship by Investment), etc factors. So depending on your needs (as a company), maybe you find some formula that can fit you.
UAE - It is, my mistake. My brain stuck only to the low taxation necessity. Sorry.

So, what kind of terrorism financing does Monaco do again? 🤔

The best kind. Finance terrorism.

[nestex_one]

Your lawyer seems good, congrats on your choice. Maybe I can use his services as well...👍

He's brought in by one of the founders' dad who's a hotshot lawyer in his region. Good? Maybe in his field but he's rude as fck always talking down to us. I'll ask him for his card and if I get it (no promises) I'll dm it to you.

Thanks for the inputs! We have our weekly tomorrow so we'll be hoping for another sudden btc spike while we're chewing through pizza and Nestex tactical plans

By the way, we got a simple new website up so we can start taking on some 'character' instead of the sloppy one we handcrafted inhouse. It's at https://nestex.one if anyone wants to take a peek!

Does anyone have any inputs on "binary trading"? It was on my last week's list to put up here & request feedback but I forgot 🤦

[bias]

Your lawyer seems good, congrats on your choice. Maybe I can use his services as well...👍

He's brought in by one of the founders' dad who's a hotshot lawyer in his region. Good? Maybe in his field but he's rude as fck always talking down to us. I'll ask him for his card and if I get it (no promises) I'll dm it to you.

Great, thank you in advance. Even if I don't like rude people, sometimes you need to endure it in the shake of knowledge, safety, etc.

By the way, we got a simple new website up so we can start taking on some 'character' instead of the sloppy one we handcrafted inhouse. It's at https://nestex.one if anyone wants to take a peek!

Does anyone have any inputs on "binary trading"? It was on my last week's list to put up here & request feedback but I forgot 🤦

What do you mean and what kind of feedback do you want? I mean, besides the obvious, regarding your site.

[nestex_one]

Does anyone have any inputs on "binary trading"? It was on my last week's list to put up here & request feedback but I forgot 🤦

What do you mean and what kind of feedback do you want? I mean, besides the obvious, regarding your site.
[/quote]


I wanted generic feedback on binary. Binance for example doesn't have it and maybe some others don't either. Not clear why that is.

[bias]

I wanted generic feedback on binary. Binance for example doesn't have it and maybe some others don't either. Not clear why that is.

Maybe because binary trading is high-risk trading with specific characteristics and it can be considered as "gambling trading". You will either win a lot or lose everything but not like arbitrage. Probably, this is the main reason, why exchanges don't enter the process of introducing binary. Arbitrage is more convenient for them, they earn more and their clients don't get destroyed for a single mistake. Also, I don't know if there are additional laws and financial requirements for any exchanger that wants to add binary trading. I guess though that as an exchanger, you will probably need more money reserves in case of a customer's big win.