Topic: [HAVELOCK] Crypto Financial (CFIG) Official Thread - page 18. (Read 68624 times)

Dear DeathAndTaxes,

We fall under FinCen Financial Institutions not MSB

http://www.fincen.gov/financial_institutions/di/index.html

Also, we will not transfer funds externally to an exchange at another Financial Institution. Both our Customers and Exchange Companies will hold Bank Accounts with our Company. A Fiduciary Financial service company regulated in Panama is already a "Licensed Money Transmitter" Registered with Swift and is able to handle IBAN transfers world-wide. Since we are only in one jurisdiction Panama, we are not required by FinCen or any other state in the U.S to be licensed their individually. You will be able to open a "Bank Account" with us. The same way you transfer funds between different Bank accounts you own now.  Remember when your Bank in the U.S transfers an International wire to your Bank now in Panama, it is transferred from your own bank account to your own bank account here in Panama. What you chose to do with those funds is up to you. The AML/KYC is solved. We know you sent a wire to your account with us from your U.S Bank account in your own name in the U.S.

The difference between our Financial Services and other Bitcoin Exchanges is that when you sent them fiat funds before, all of those funds were concentrated in one Bank account, the Bank account of the exchange. With us you are actually sending a wire to yourself. And if and when you choose to, you may transfer funds internally to an Exchange that also has an account with us, where you will be able to convert said fiat to crypto. The transfer will be instant, thereby eliminating the lag.

And as jedunnnigan commented while we were typing this, He is correct, we are held to much higher standards than an MSB.

They are trying to say this: If you are a bank you don't need to register as an MSB because you are an MSB and more. You have the licensing (under BSA) necessary to do these transactions and will be doing KYC/AML implicitly.

I think you are misreading their posts, it's partially the language barrier on their part.

No a MSB is what the regulations say an MSB is.  You are accepting funds from a customer and transferring them to an exchange for a profit.  That is a money transmitter.  It is the very definition of money transmission.


Are you saying accepting USD from a client and transferring those USD at the direction of the client to an exchange is NOT money transmission?  This is pretty cut and dry.  The regulatory status of Bitcoin may be vague but USD to USD transactions are not.  Then again i am just some guy so let me ask it another way.  Do you have any statement by legal counsel or FinCEN (via administrative ruling) that the activity is not regulated as a MSB?

Hi DeathAndTaxes,

We believe you are confusing two issues when it comes to FinCen. An MSB is a business like Western Union or Money Gram. They handle your money in a temporary matter and transmit it somewhere else on your behalf. They are required to be licensed as a Money Transmitter since they accept "funds" at their location, they must be licensed by someone in their jurisdiction to garner trust that they will be responsible for your funds and not just walk away with it.

On the other hand a Fiduciary Financial Service provider accepts Deposits on your behalf, Provide Loans and Credit (We won't), and may hold those funds indefinitely until you instruct them otherwise. Those Financial Service providers are not MSBs, but actually operate their business as a Bank and therefore are required to comply with the BSA when working with U.S Citizens.

You may perform a search under the FinCen MSB search page and look for "Registered Entities" and put Panama as the location or any other country for that matter. You will only find some
Money Exchanges and Transfers there. You will not see HSBC or Citibank there.

Also any Software Exchange Platform that will offer their services to our customers will not be required to follow any AML/KYC/SAR regulations, since we will take care of that. They will only offer the Exchange as a trading platform from crypto to fiat and vice versa. They will not have any personal information related to our customers.

We hope this clears it up.

Crypto Financial

Well glad you put that out there in black and white.  Investors can judge the merit of those arguments themselves.


http://www.fincen.gov/statutes_regs/guidance/html/FIN-2012-A001.html

It seems confusing to say you will comply with the requirements of the BSA and won't register as a MSB as registration is one the requirements.  

However for the sake of the argument lets say you are right (quote from FinCEN notwithstanding) and foreign entities aren't subject to US federal and state regulations even when offering products & services to US residents then .... why would foreign exchanges need your service?  If you aren't subject to the definition of MSB then they aren't either so they might as well accept funds directly from customers and cut out the expensive middle man (CFIG).

I have to say I am disappointed, I was at least hoping for some clever legal "loophole".

Dear DeathAndTaxes (Relevant username for a relevant question),

We will serve U.S based customers. Crypto Financial is not located within the U.S so it is not subject to State by State Jurisdiction of those states. All funds that any of our customers will transfer to us or receive by us will be transferred via your Bank institution directly to us, or via an intermediary partner Bank that we work within your country.

We are not an MSB or require a different Money Transmitter License. We will however comply with all BSA (Bank Secrecy Act) Requirements, which is also controlled by FinCen. Any Financial Services provider regardless of their location worldwide comply with the countless U.S Government entities when dealing with U.S Citizens or U.S based corporations.  That is why it is getting harder and harder for U.S Citizens to open Bank accounts in foreign Banks, the paperwork and related cost just lowers the incentive. Which I believe is the ultimate goal of the U.S, not to have foreign Banks provide services to U.S customers.


Thank you,

Crypto Financial

Right, but the bank is allowing them to be agents of their license it appears. That's my assumption. If I am wrong I will be very shocked, because even if they have the funds to get licenses, (as you know) it will be a year minimum before they can get approved. And that's if they are lucky.

guess we just wait for them to clarify

Well the prospectus and business plan doesn't indicate they plan to. Maybe they do but the omission just simply means another thing clients need to assume.

If they intend to register with FinCEN how to they intend to deal with potentially expensive state licensing?
If they don't intend to register with FinCEN because they are not accepting US based clients then why isn't that explained?
If they don't intend to register with FinCEN or exclude US customers, what is the rational and what are the potential risks?

Right now it is simply left open ended.

I thought [international] licensing was implicit in their relationship with a bank, no? If not this whole thing is a wash.

Have you (or is it your intent) to register with FinCEN as a Money Service Business?
If not do you intend to exclude US customers?

No Problem!

We have issued a lot of statements through our Prospectus and Business Plan.  It is easy to miss or misunderstand some of them. We are here to work as a team and many of the members of this forum have been a great help. Feels like we are running an open source Financial Services if you ask me.

Thank you,

Crypto Financial

Ah missed that, thanks.

This question has been answered on the first page of our Prospectus, as it states the following:

"Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is false."


Thank you,

Crypto Financial

Sorry, that wasn't clear. I've already started a dialogue with you outside the forum, but the question I asked (are you registered with the SEC) I would prefer a public response.

Dear jedunnigan,

If you would like to have a dialogue with us please feel free to contact us at:
[email protected] or call us! The number is on our site.

Thank you,

Crypto Financial

Lol, perhaps you missed the entire thread. These guys are trying to be above-board, as is reflected in their [supposed] backing by a Panamanian bank. As an extension of this you would assume they are trying to run a legit operation, so it's only fair I ask. Or perhaps you would prefer me to just assume one way or the other. That always ends well.

Regardless, what I think really shouldn't matter to you, as we should deduce our own judgments about these guys, so I'm curious as to why you really care what I think anyway? Not to mention you have no idea why I asked the question (as is very clear by your response) in the first place, so again, thanks for that worthless post!

To be clear, the reason I asked is because I want to start a dialogue with them. I assume they aren't and want to ask why.

+1
LOL

+1
LOL

Really? Just to clarify, you're asking if a company without a US presence, listed on a Canadian crypto currency exchange and accepting bitcoin investments from 'anonymous' participants is registered with the SEC? And if the answer were yes, would you view this as a positive aspect?

Are you registered with the SEC?

Thank you kleeck,

We have had many discussions on and off the board with Investors and Potential Investors and we believe that our revised Dividends Policy is fair for everyone.
Also we would like to thank the countless of Bitcoin supporters that have purchased our Shares so far since our IPO went public last Monday.

Crypto Financial