Letter from the CEO to the community
Cashaa has become the biggest crypto-friendly neo-bank, providing services to hundreds of businesses in the crypto industry, thanks to our partners such as PaySafe Group, financial institutions regulated by the FCA and the Central Bank of Lithuania, who helped us validate our model and trusted us to onboard our customers until we are building our own system.
As you are aware, we are currently providing banking services to crypto businesses as they are the ones in need of immediate assistance. However, at the behest of our community, we have started personal wallets linked with DEX for users to acquire CAS, directly using GBP, EUR, and INR so that they don’t have to go through the complicated DEX platform. Post this, we also added BTC, ETH, and USDT into our system. However, this made us look like an exchange or a wallet, although that’s not our aspiration.
Current operational services for businesses onboarded on our partners’ platforms after due diligence:
- UK current account
- Euro IBAN account
- Credit and debit card processing
- Crypto wallet (personal and business)
Please find below the regulators’ approvals of our partners for:
Current Accounts: https://register.fca.org.uk/s/firm?id=001b000003LITLjAAP (CFS- ZIPP)
Card processing: https://register.fca.org.uk/s/firm?id=001b000000m4IWvAAM (Paysafe)
It is important to understand the foundation on which we are building Cashaa:
- Learning from the past
It’s a fact that over the years, most big or small banks in the world have been involved in one way or another in ‘money laundering’, ‘terrorist funding’, and PEP and sanction violations. This shows that irrespective of the size of banks, either they lacked the commitment to stop malicious activities or there was an incentive to continue with the malpractices. This proved that the whole compliance structure is only for the poor. At Cashaa, we want to build a banking platform where compliance will not just be a department but a core function of the technology! This will stop internal/external frauds and compromisations with compliances.
Here are a few points (out of many) on the fines paid by high street banks to give you an idea of the damage done to the global financial machinery.
- Building for the future
We want to build a financial institution that understands the needs of the current generation and those to come. The crypto industry is one of those emerging industries that are underbanked by banks. Technically, traditional banks have no interest in listening to the problems of our industry, as they tend to perceive us as a challenger to the existence of such institutions. Despite our best intentions, this will keep happening and there is no respite from this attitude.
However, at Cashaa, we want to help the users, entrepreneurs, and businesses with innovative business solutions and provide them with all banking tools they need in order to create more opportunities and shape a better world.
How has Cashaa been onboarding businesses applying for accounts without our own authorization?
We can now flaunt our secret recipe of ;
- how we have enabled hundreds of crypto businesses,
- and how we came so far ahead of others, gaining the trust of our peers 😉
In a world full of banking sharks, our journey started with a request for permission to create a banking platform dedicated to the crypto industry. At the onset itself, we were slapped with doubts about crypto businesses and the risk it posed on the prevailing financial systems.
At this juncture we had the choice, wait for years to be a fully developed bank and get the authorization by the regulators or take a different path. We were dealing with crypto businesses, therefore, at any stage, the chance of getting rejected was more than 50%. Hence, it’s easy to imagine the prospective complications of regulatory approvals. As a case study, when we introspect a cryptocurrency project like Bakkt, which had raised more than a whopping $182 million, pursued to have a license for the custody of Bitcoins (for its customers). In the end, the entire process took Bakkt more than a year to accomplish.
Meanwhile, in our case, we wanted to take authorization for providing banking services, primarily focused on the crypto industry which would allow us to connect with the real-world banking system.
We were in a classic chicken and egg situation. We needed the authorization to plug our system into payment networks and Central banks to generate bank accounts. This was easier said than done. The catch was, Cashaa could not get the authorization until we have experience of banking with crypto companies. During the same time, challenger banks like Revolut, Monzo, N26 were being fined for compliance violations. This made our job even more difficult. The regulators had the view that if these challenger banks were not dealing with crypto companies, yet had so many issues, then how was Cashaa not going to be an addition to the chaos?
At one point, we started weighing the option of letting expensive lawyers do the talking on our behalf for something which they could not comprehend or understand in terms of time and money. All our advisors and consultants were convinced that we should rather wait.
However, my team was dedicated to helping the crypto industry get banked. That’s why we chose to take a different path of acquiring customers, collect transaction data and use that to prove our point that similar to industries outside crypto, not all companies are doing money laundering. The same holds true for the crypto industry, and we cannot just assume a firm dealing in crypto is a money launderer.
This was just the beginning, just when we were clearing one obstacle, we were also in need for some entity with licenses, someone who would believe in us and understands that we were not in the industry to make quick money. Our aim was simple and clear to create a serious financial institution and a legacy around it. It was not an easy task to convince institutions/people to risk their licenses by allowing our customers (crypto businesses) to onboard. Keeping in mind that we were still building our systems only on Cashaa’s assurance. But after 10 months of work, we were able to convince one partner to hold accounts for our customers in Clearbank. This is the chance we have been looking for.
We started slowly by onboarding companies in August 2019, around the same time when Barclays shut down Coinbase’s U.K. bank account. The impact of this news was such that even after our compliance was passing the application, our partner was rejecting the application. This impacted our onboarding rate, which dipped to a frustrating 14%. Alas, we barely had any other choice. During this time, even if companies like Kraken, Binance, Circle, and many more applied to us, we had to let them go as we were dependent on someone else’s license.
But still, we did not lose our motivation and kept working hard so that we could onboard as many companies as we could and have enough data to prove to the regulator why we were the right team to do it.
Now in the last 11 months, we have hundreds of crypto brands using us to run their operations, while serving more than 250,000 individuals worldwide. Also, our last quarter’s onboarding ratio grew to 83.16%. Thanks to our strategy, this is generating a massive amount of transactional data that enables us to validate our point, which indeed gave the regulators comfort to allow us to build our own system. Also, this data has given us a huge competitive advantage when compared to any bank/startup which intended to launch a crypto-friendly banking service in the future. This includes the likes of Revolut who have totally blocked crypto-related transactions after the regulatory crackdown.
We are expecting to get our audit completed and get the go-ahead to release our own proprietary internet banking application in the next few weeks. It is very much possible that we may have to do a few more rounds of iterations, which may delay our plans by a few weeks. However, I do not see any reason for rejection at this stage and I am very confident for the approvals to come soon.
Ideally, all this time if we would have stayed in hibernation waiting for things to get right by themselves:
- All money would’ve gone to the lawyers’ pockets.
- We may have been rejected or passed.
- We would have had zero transactional data and would have been only as good as a company starting afresh, today!
- May have gone bankrupt after the Bitcoin price crashed! Bear in mind, we raised money with an ICO at $17,500 a Bitcoin, while we were spending it at an average price of $5,000.
Instead, what Cashaa achieved…
- Hundreds of businesses with banking access through us.
- A large amount of transactional data collected in the last 11 months with patterns from every kind of crypto business such as exchange, IEO, wallet, lending, Defi, etc.
- Our team gained experience in running full operations, in the worst condition.
- Long sales funnel waiting to be onboarded.
- Generating profits to cover our operating expenses since March 2020.
- Ready to execute business plans to generate huge revenue from existing customers.
Definitely, building utilities for CAS on the partners’ platforms was not possible but we tried our best to keep CAS involved since day 1 of our operations. Hence once our system is fully operational, CAS will be the key for the world’s first financial institution with crypto-friendly banking services, where our users’ funds are protected by the world’s most advanced and strict regulators like FCA and Bank of England. Existing business customers will be onboarded on a new platform, and after 4-6 weeks we will start the personal accounts.
As we are entering into the next stage of our development, we are hiring for multiple roles in compliance, Business Development, Marketing. View all the open jobs here.
The current live utility of CAS
- Enhanced due diligence fees of 100,000 CAS for business accounts
- Discount on exchange fees through our wallet
The proposed utility of CAS
- Discount on all banking transactions
- Cheaper international transfer
- Discount on exchange fees of fiat and cryptocurrencies
As soon as we finish building a model financial institution as “Cashaa” in the UK, more utilities will be announced with our updated whitepaper for the banks to create the future of the banking industry on the Cashaa network. Just to give an idea, it’s much more than XRP or any Defi protocol you have seen. Stay tuned, our journey is just about to begin in 2020!
Follow me at twitter @kg_Cashaa
Join our monthly August AMA and ask Kumar anything on the advancement of Cashaa Banking services, regulatory approvals & more on 11th August 2020.
Link to join and subscribe to our AMA channel: youtu.be/qdpM-cXeMHc