“This Week in Crypto” Summary for November 29, 2019


Latest crypto industry news and updates about CoinMetro.

Check out our weekly “This Week in Crypto” summary or watch the full video here.


Crypto Market News Highlights

1) China Shuts Down 173 Cryptocurrency Exchanges and Token-Issuing Platforms

Even during the ICO bubble, China pushed to not have ICOs in the country. China doesn’t want money to flow into areas they can’t control. That’s why there have been restrictions on how much money one can move out of the country, pretty much forever. Crypto is a way for people to move money without China being able to stop it, and this is a push to stop it. 

2) A state-owned quantum computer could break blockchains in as little as three years

And they could break everything else on the internet. Quantum computing will probably arrive at some point. Most industry leaders in every industry knows what’s happening, and they’re preparing. There will be some things that happen if and when quantum computing goes live. 

There are many other things to worry about in blockchain before worrying about quantum computing breaking the chain.

3) Crypto Exchange Upbit Confirms Theft of $49M in ETH

Another day, another exchange “hack”. Upbit has been around for quite some time. Just like every other hack, a lot of this is social engineering and protocols that were not created or not followed. Most of these companies are run by people that don’t have experience. 

4) Robinhood withdraws bank charter application due to regulatory challenges

You don’t need to be a bank to operate like a bank in crypto. There are many other licenses that can be acquired and that are much less of a headache.

Bank charters are not necessarily easier to get, and when you get them, you deal with the intermediate banks. It creates more problems. Kevin thinks it would make much more sense for Robinhood to go after a different type of license.

5) A Third of Crypto Exchanges Have Little or No KYC, Says CipherTrace

There was an article a year ago that said 90% of exchanges did no KYC. So we’re improving as an industry, that’s good. A lot of those exchanges that didn’t do it, no longer exists, or have started doing some KYC. This strengthens everyone’s ability to maintain the industry.


Live Questions

Any news on the market makers?

The initial guys we had lined up, still ready to roll. Kevin was introduced to another market maker by PARSIQ. They had made a deal for their PRQ token on our platform. We’re in discussions with this market maker as well to see if we can make a deal.

By next week, we should have made a decision on which market maker we’re going with. If we’re going with the new guys, it might take some extra time to get them integrated.

Have you received all funding from the last 2+ million round?

We have received all the funding. It was over 2 million but a part of that was allocated towards Ignium, the CSD company. 7 digits for CoinMetro, slightly under 2 million.

Has the user base grown or declined since September?

It has grown.

When is the next IEO?

Kevin will have a call with a company, possibly today. Been in discussions since earlier this year. Mid-way of the first quarter of 2020 is likely when the next project will be launched on CoinMetro Direct.

What’s going to be the biggest hurdle in getting CoinMetro into sustainability?

Client acquisition. We know how many clients we have, we know how much they trade, and we know how much revenue they generate, so we know how many clients we need for self-sustainability. Now it’s about getting those clients in the door. We haven’t had the budget to push any marketing up to this point. Now we do. We’ll make sure that we find the right marketing methods within the next 60-90 days using minimal funds, and then we’ll be pushing the best marketing method.

Do you feel the product (exchange and all it offers) is now good enough to push marketing?

Kevin thinks that it has been good enough for quite some time. If you look at many of CoinMetro’s competitors that have larger client lists than CoinMetro does, we were already better than them at some point in the past.

There are a few things Kevin would like to tweak before the major push. The Go! Dashboard, the mobile app (iPhone, Android), some clarity on the Pro platform, some rework on EXpress, and integrating SimplEX on the Dashboard.

Will the PARSIQ market makers be live upon trade launch?

It depends. They wanted to launch before the next of the month, but this market maker will likely take a week or two to integrate with us.

How about Head of Marketing?

Part of ramping up marketing within the 60-90 days time frame will include hiring more staff, not only marketing staff, but marketing is a key place.

Could margin posting still be live this year?

It’s definitely possible. Could be on demo before the end of the year.

Do you intend to build a staking program for XCM?

We’re building in use cases for XCM that give you benefits for holding more XCM. So, in general, it’s somewhat similar to staking. 

What about Montenegro?

We got feedback on our application from Montenegro, and we are working on putting together the requested information. Kevin will make sure that this information is sent to them next week. Hopefully, we will get approval before the holidays and early 2020 we will start to get the branch officially setup.

Will these products like TraM and margin posting boost profitability?

Yes. In Kevin’s experience with FX, it’s much more difficult to acquire a client as a trader than to acquire a client as an investor. Most people are afraid to trade for themselves. We can market TraM as a passive investment in crypto. It’s an easy sale. We both make money from the exchange, and it’s traded on the margin, meaning we make interest. We also make a percentage of the profit pulled in by the manager.

Margin posting makes higher leverage possible on our margin platform, which increases trade volumes, commissions, and interest payment.

Weren’t you looking to acquire licensing in Australia?

We did acquire Australian licensing a long time ago. We needed to acquire them to serve Australian clients. We didn’t have the marketing dollars to promote that in Australia. We now do and it might be part of our first marketing push.

This time next year, where do you see CoinMetro?

A lot of speculation in this question. The goal with the money we raised is to have sustainability within the next 6-7 months from today. To get to sustainability, we need roughly 70,000 active clients.

Everything in our original whitepaper should be done. Additional auxiliary products built around the main exchange. Challenger banking fully in effect, meaning the ability to move funds between third parties and between users, as well as merchant payments.

Would like to see around 100,000 users, and some real, visible profitability. Kevin thinks this is within our grasp.

Will you push marketing around TraM?

We will push some marketing after TraM is released. Not exactly when TraM is released. We need to develop a good marketing strategy.

What are you looking for in terms of active users with marketing?

We need 70,000 active users in order to hit self-sustainability based on our current per-user profitability. We’re going to see that profitability number grow with TraM and margin posting, as they’re more profitable platforms for us. 70,000 users is still our target.

What is an active user?

An active user is someone who generates revenue on a monthly basis.


Reddit Questions

What was the hardest thing to achieve (so far) for CoinMetro?

Fundraising is always difficult. In every startup industry, you get more pats on the back for finalizing funding rounds than getting into profitability, which is a bit ridiculous. We’re happy that we got through this round of funding.

We’ve achieved a lot, but we still have a lot more to achieve.

Does it frustrate you that CoinMetro has automated KYC/AML for over a year, and when Coinbase does it, it’s huge news?

It doesn’t frustrate us. Coinbase paid for some PR. They did it because they have some eyes on them, that they don’t want to have. 

Kevin has said it before, when CoinMetro does any type of KYT on the blockchain, a very high percentage — 60-80% — has touched Coinbase in some way. Coinbase hasn’t done anything near a good job for AML screening on the blockchain. They probably got hit on that, some inquiries, audits. This could scare some of their customers away. They likely did this to mitigate some risk.

Doing something like this could help CoinMetro, and now with money in the bank, we might. As Kevin put it: “Thanks Coinbase for pushing a news article that we could have pushed 1,5 years ago”.

If CoinMetro gets a request from the IRS like Coinbase, would you hand over the records of American accounts?

If we were to get a request, we would make sure from a legal perspective if we are obligated to provide it, or if we had the option to fight it. Kevin is not in the business of helping people evade taxes. CoinMetro is a regulated financial institution. CoinMetro would not give up client records unless they were absolutely obligated to. It would depend on why we’re asked, who asked, and the legal precedence behind them asking.

“Kevin Explains Crypto” Term: Interoperability

Interoperability means that if you have one type of blockchain, and another type of DLT or blockchain, there are ways for them to interoperate — they can operate between themselves. For example, a smart contract on the Ethereum blockchain could trigger actions on the Bitcoin blockchain.

Interested in learning more? Have a look at the video where Kevin explains “Interoperability”: 

Listen to Last Week’s TWiC on the Go

Get the complete scoop by tuning in to our audio version of last week’s TWiC on SoundCloud. Happy listening!


That’s a wrap for this week’s AMA with CoinMetro Founder Kevin Murcko! Please join us next week on CoinMetro’s Facebook and YouTube Channel at 1 PM (UTC) for another round and make sure you submit your questions to the CoinMetro subReddit!

As always, we’re available to answer any questions you may have on our Telegram Group 24/7.