Topic: [HAVELOCK] Crypto Financial (CFIG) Official Thread - page 28. (Read 68624 times)

Well they are only raising 3 million, but based on a 15 million valuation. I agree, the valuation is out of sight for what amounts to an idea with only a slight chance of success.

They may be completely genuine in their intent, and the idea might even work for a person or group with capital and significant banking experience, but I have a feeling they decided to raise the capital before doing the sort of due diligence this kind of enterprise requires.

Thank you for your reply and for doing your homework.
We are based in Panama and several of our board members are directly involved in the Bank industry in Panama. 
We will not operate as a "Bank" and will not be regulated by the Superitendency of Banks of Panama as we will not lend out any of our customers funds or pay interest on account.
Instead we will operate as a licensed Financial Service provider very much like a Stock Broker in the U.S that has the ability to handle third party funds and licensed as a  in partnership with our local bank here in Panama. Our Banking platform will work on top of an existing Bank.
We will just do all the leg work for AML/KYC/SAR separately so they don't have to.

I like your idea, but if the majority of the capital, 3 million dollars, is only getting a 20% stake, I don't see that as a good deal. Are there any other investments that are being made? How much and for what portion of the company?

Let's say the $3 million is for the license. They aren't asking for $3 million. They are asking for $15 million. There's still a massive amount ($12 million) that is unaccounted for. And this is a start-up, so it's going to have problems.

The reason you need 3 million dollars, I'm guessing, is because that is the minimum capital required for a bank in Panama applying for an International License.

What are your plans if your application is denied by the Superitendency of Banks of Panama? Are you familiar with the requirements for this type of license and have you started the process? Unless you have experience in banking, I think the odds are that you will be denied.

http://www.superbancos.gob.pa/documentos_ing/laws_regulations/laws_regulations/licenses/acuerdo_3-2001.pdf

Also, are you aware that the issuance of bearer shares of any licensed bank in Panama is prohibited?

I can't fault you for ambition, but have you actually retained counsel? There are many dodgy websites promising that you can easily "own your own bank in Panama" but that really doesn't seem to be the case anymore.

As we are part of the potential shareholders, I'd love to see those PPTs to learn more about how CFIG wants to operate.

This.  /thread.

(or it should be, but it won't and they likely will sell some shares and later "investors" will be crying about lost funds and how they couldn't see it coming).

I'm completely baffled as to why anyone would invest in this at its current valuation. You want 3 million dollars for 20% on something that as of right now doesn't even exist. It isn't a proven model. It's not an already running business. It could tank right after it starts due to being improperly run and/or problems with customer acquisition and retention.

$15 million for an idea is asinine, at best. I'll sell some ideas for just $14 million!

Crypto Financial will provide services similar to a "Credit Union" but without lending out your funds.
All customers will go through AML/KYC prior to opening an account, the same as you would with any Bank Account.

While there is no doubt that a "global international Credit Union," as described in the prospectus would be beneficial to the Bitcoin economy, you must realize how difficult it will be to achieve your stated goals. The prospectus is very weak on details, which leads me to believe that this is just an idea at this point and not a fully developed plan, let alone an actual business that will be up and running anytime soon.

As others have mentioned, you have largely glossed over the significant regulatory hurdles that make your plan almost certain to fail. You haven't identified your jurisdiction, but your reference to the Bank Secrecy Act implies that you intend to be a U.S. institution. As you must know, a financial institution of the size you propose cannot possibly achieve a "global" presence, since the costs of licensing and compliance alone would exceed your raised capital. Therefore, I'm guessing that you are actually planning a small, local, credit union, perhaps similar to the IAFCU.

There is nothing wrong with a small credit union, but if you do plan to open in the United States, surely you must also realize that you cannot simply issue equity shares to the public on an unregulated exchange, and without registering the offering with the SEC and your state securities regulator.

Based on the above, as well as the rather amateur nature of your prospectus, it appears to me that you haven't yet sought out competent legal advice or even contacted the National Credit Union Administration for assistance. I would suggest you do both of those things before even considering a public offering of shares in your venture.

If your intention is simply to raise funds for exploratory purposes, then you should make that clear, and possibly consider crowdfunding to cover those preliminary costs. As it stands now, you seem to be selling shares in a business that will likely never actually exist, which may expose to you to far greater legal risks than you now appreciate.

Edit: So you are actually going to be a Panamanian entity? Why are you citing the Bank Secrecy Act and the SEC in your prospectus? Also, will you accept U.S. citizen depositors? If so, what is your plan to comply with FACTA?

EDIT:
Crypto Financial

Some background:

Members of this company are currently board members in a Medium size bank in Panama.
A few month ago, while Bitcoin was a daily occurrence on the international news, we were approached
with the idea of opening a Bitcoin Exchange account for a potential customer. We examined the idea very carefully
at the time, but were unable to see any potential long term profits for our bank in doing so.

1. The exchange would need to be licensed to be able to handle third party funds on behalf of their customers
2. Funds would just flow in and out from the exchange, leaving us with all the paperwork associated
3. The cost associated with due diligence of verifying and accounting for funds sent in and out internationally would exceed any transfer fees we may charge.

Due to those restrictions and many more we declined the account for this exchange.

Another idea was formed that may be more beneficial to both sides. We explored the option of not only charging in and out wire fees, but to actually
set up a new entity that will be licensed to handle third party funds and open accounts on their behalf, similar to a hedge fund or stock broker. This
new Financial Services company (Crypto Financial) would open and manage the accounts within our Bank but will handle all of the AML/KYC/SAR portion for these customers.
The revenue will be generated by charging fees plus and more importantly by charging a flat percentage fee from the various exchanges that would choose to open an account with
us and offer the Exchange Platform to our pre-approved customers. So we came up with:


Many of the current exchanges that deal with Fiat to Crypto Currencies are not currently licensed or equipped to handle the regulatory environment. These Exchanges are great in developing the software platform necessary to carry out and execute a trade between Fiat and Crypto Currency, but are unable to handle the need to verify and manage their customer’s funds in an appropriate manner. They were not setup as a Financial Services company and therefore lack the experience needed to comply with Banking rules and laws associated with Fiat Currencies. With the regulation over Crypto Currency ever expanding, the Exchanges need to concentrate on providing the software and not on hiring expensive lawyers, accountants and AML/KYC personal full time to sift through each transaction coming in and out of their system.

Our solution is to provide the Exchanges with pre-approved customers that they will not be required to verify. The same way a Stock broker handles and manages their customers account, and the actual trades are performed by a trading platform software provided by a third party; so will we offer our customers the ability to choose their own trading platform provided by the exchanges. As the Exchange companies will only offer software, their liability for reporting and compliance will be void and null.

We will offer several exchanges the opportunity to bid for and open an account with our company. Each Exchange platform company will be able to offer their own rates and fees for access to their platform to our customers. This will encourage competition among the different exchanges and offer our customers a choice when choosing an exchange. This will also encourage innovation for the Exchange Platform as the Exchanges will compete and will want to attract our customers by offering the best Trading Platform and Best Rates. The same way the free market dictates the rates offered by different Stock Brokers or Forex agents.


That way both the Bank and the Exchange benefit from each trade preformed, allowing us to share in the revenue and cover the cost of Account Maintenance and compliance.



Crypto Financial will be able to offer our customers the following products & services:
1.   Easy Fast Online Registration process to open an account with us, 24-72 Hrs depending on country of origin and paperwork provided by customer
2.   Free Online Banking access
3.   A Private Individual/Corporate International Bank account
4.   Support for more than 20 different Fiat Currencies; USD, JPY, EUR etc. (Regardles of the country of origin)
5.   The option for a Visa Debit Card with the ability to withdraw funds at any ATM worldwide
6.   Instant re-loadable Visa Debit Card controlled directly by the customer in Fiat
7.   Direct IBAN under Customer’s own account for direct funding via transfer wire
8.   Low fees for In and Out Transfers
9.   Multiple sub accounts, which may be funded and converted to over 20 different currencies
10.   Corporate accounts for Merchants with multiple sub accounts for better record keeping
11.   Merchants services where Crypto Currencies will be automatically converted to Fiat and placed into the Merchant’s Bank account with us or at his current Financial Institution
12.   Free Account and Merchant Services to approved NGOs and Non-Profit-Organizations


We will deal with Fiat currency only, and the exchanges will operate the Crypto Currency portion of the transaction.

Customers, Merchants, Traders and Investors will have a broad choice of Exchange platforms to choose from. We will open our Financial services to any qualified proven Exchange Platform company that will be pre-approved to conduct exchange of crypto currency to fiat currency and vice versa.  Since all the customers of our approved Exchange will have opened an account with our Financial Services company, all AML/KYC /SAR regulation will be performed by us and therefore negate the responsibility of the Exchange for such regulation. Allowing the Exchanges to concentrate on the technology side of the business and offer better trading platform to accommodate the demand of the global market place. A simple one click integration will allow our customers to integrate with the Exchange Platform, the same way Facebook or Google integrates today with other web sites and services.
In essence the Exchange platform will serve our customers when it comes to trading Fiat to Crypto Currency and vice versa, the same way a Stock trading platform company provides the software, but the Financial Services Company (“Broker”) represent the customers and takes care of the regulation side of the business.

Hi I have a few questions as well,

Where is your company located and have you registered as an official exchange in any jurisdiction?
Panama
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.

By being a Licensed Financial Services company we will be able to offer our customers the following services...

Your prospectus does say you are licensed may I request the License Identification I believe that in Panama it is called a Financial Services License or a Aviso de Operacion business license.

What is your business strategy and how do you plan on addressing non-written legal advisory's when legal regulations are still murky in many countries regarding bitcoin?

The Crypto Financial Corporation will be a Panamanian based corporation charted for the purpose
of providing Fiduciary Financial Services to Individuals, Companies, Merchants, Traders, Investors,
NGOs and Non-Profit Organizations that deal with Crypto Currencies.

A detailed explanation of the regulations of each country and where your currency exchange stands by country would alleviate the need to research the exchange capability and feasibility in each country.

The idea of independent entities trading in their accounts make sense with the proper documentation so I will leave that part for others to ask appropriate questions.

But I do have some questions with the bitcoin visa the last time someone went to create a bitcoin visa it was shut down by the FED so pertaining to goal 3 how will your company succeed in executing this strategy.

3.      The option for a Visa Debit Card with the ability to withdraw funds at any ATM worldwide

On another note besides the ability to finance business and act as an exchange in 20 countries what differentiates you from Cavirtex and is your API already established or will you be using inputs.io as I noticed your contact information links towards them.
Email:   [email protected]

Finally how successful have you been in implementing your strategy before the IPO.

Thanks for reading and best of luck the idea of a credit union regarding virtual currencies has been on my personal list for a while as well
Freedom

Yeah, so the prospectus doesn't reveal that much. Some questions that seem pretty important that are not answered:

- Who is behind the company? How many people? Who is CEO? What experience do they have in the field?
- Where is the company based? Or any contact information for that matter.
- What is the current legal climate in the country the company is based with respect to companies that transact fiat currencies and how will the company adhere to existing regulations?
- What is the $3,000,000 of IPO money being used for? The prospectus currently answers that question with a description of the product that will be produced, but it needs to be more specific "$X personnel costs for 1 yr, $Y hardware investments, $Z marketing, etc...".
- What is the expected revenue and on which timescale can investors expect the company to start running a profit? Related to that, what are estimated monthly expenses?
- What does the company bring to the table that warrants a $15,000,000 valuation?

IPOs tend to be done by companies that have an existing operation, clients, revenue-stream, etc... and need more money to expand. Companies that are little more than an idea should be getting their funds from venture capital, bank loans or plain old putting in your own time and money.

I read the prospectus and it summarizes "what" you want to accomplish, but not "how". I'd like to hear more about the operational and financial side and I'm sure you have a very detailed plan in hand, if you ask for 3000 Bitcoin to implement your goals.

Good luck though.

x2

another scam / doomed for failure Bitcoin entity.

either way, I hope the Bitcoin community can pull 3 million out of their ass for these guys... good luck

Many of the answers are in the prospectus.  Have a read and Crypto Financial will be able to follow up on any of the unanswered questions.

https://www.havelockinvestments.com/reports.php

20% of the company being sold for BTC 30,000? So the entire thing is valued at BTC 150,000? Or $15,000,000? That sounds extremely far-fetched, since the prospectus doesn't specify at all what warrants this valuation. The company has to bring something to the table that is worth $12,000,000 to warrant a 20% for BTC 30,000 IPO.

Is CFIG in essence a 'bank' / 'credit union' that is willing to deal with a 'mtgox' / 'bitstamp' type entity and act as its fiat front?  Is this like a new 'OKPAY'?  What jurisdiction is the corporation located?  If it is not a 'bank' / 'credit union', which country does its bank account resides (or more specially, which banks does the corporation has account with)?  Is there any legal consultation already done?  How is it going to make money?  Web site?  Fee schedule?  Any existing clients?  AML / KYC requirements?  Anything that deal with fiat is rather dicey.  At least cavirtex is easy to understand.  This sounds a little above my head unless it is like a new 'bank'.