Bitcoin Queen on a Mission - Olga Feldmeier, Smart Valor

Transcript

[Music] hello and welcome to the blockchain and us we're pioneers and thought leaders talked about their journey in blockchain technology crypto assets and a token economy and I'm your host manuel staggers if you enjoyed this podcast please give it a top rating and review on iTunes and feel free to follow me on Twitter at Manuel's dagger this episode has support from shift crypto security the maker of fit box a minimalist Hardware wallet for crypto currencies big box is rock-solid compact portable easy to use and designed and manufactured in Switzerland to learn more and get your wallet today visit

www.cminds.com company building a decentralized market place for tokenized alternative investments Olga has worked for leading financial institutions such as Barclays Capital UBS Wealth Management and Boston Consulting Group and she has been commercial managing partner at Apple one of the largest Bitcoin custodians Olga is the producer of a series of blockchain conferences in Switzerland she's a mentor at kickstart accelerator and she often delivers talks about blockchain regulation the tokenization of assets and the

disruption of the banking industry and now to the interview hi Olga thanks a lot for making time today thank you very much for inviting me we met about a year ago when I made this blockchain interview series and since then I saw that the International Business Times called you the bitcoin queen of Switzerland so how did that come about to be honest I was surprised myself you know I remember I was at consensus last week and spoke to several journalists well it's America and you know it's quite different you know from how things are marketed here in Europe especially in Switzerland which is like really

really modest and understated culture so next thing I know there is an article about me called meet blockchain Bitcoin queen of Switzerland right and it's kind of like fine and you know I was a little bit larger but also funny because actually you know it's it's irony in itself right Bitcoin is is a decentralized network it does not belong to anybody right even Satoshi disappeared for a reason and it actually it would be very sad Queen if you think about it because it's kind of like Quinn without a kingdom so you know

I could have laughed about it but but I think you know media just love to make up stories since this is how it came around yes it's definitely a good title to have right when we met about a year ago you were still at SAP oh so what what have you done since well you know a lot of things happened the good one was that we were very successful with SAP of you managed that actually you know because became one of the first major Bitcoin regulatory cases here in Switzerland so you know encourage business success I thought we can do even more I can do even more so I founded great people and we created a company new company called smart

Muller that was April 2017 right so this is this is a great thing on the back of it you know there's negative effect was that actually is that led to complete stop off everything else so I quit biking I quit kite surfing I quit skiing basically all the fun things that I used to do before right well welcome welcome to entrepreneur life all right what is this is this the first company that you found it well as a company probably yes I had a lot of endeavors and challenging you know ventures in my

life but but I think as a companies that was first one but before before you started or before you worked at supper you you had a traditional banking background right yeah well there's no more or less right you see because I'm actually you know I came from Ukraine you know I got this great scholarship from German government and I was allowed to start in Germany so for me it was all about you know getting more mainstream getting like becoming an exam right so I basically you know after University I had two choices to join JPMorgan or BC cheap so I decided to go for this eg

Boston Consulting Group but still you know joining the banking financial services group and kind of like after five years at BCG which is was like really really tough job right well it's kind of like ninety hours per week and so on but after that I joined Barclays Capital in London and realized that actually you know if your consultant and she come to those banks and gives them advice and you charge them something like 10,000 per day they listen to you if you're the same person and you come to work for this Bank saying basically the same things but being an employee nobody nobody gives a damn

[Music] so consultant was scared of a little bit more you know privileged in that sense and for Broncos capitals and I I went to Switzerland and in Switzerland a joint UBS beaches you know the largest the largest private bank Wells wealth management specialized thing and one of the biggest here in Switzerland there I was an executive director in charge of distribution in Central and Eastern Europe involves management division

cool how did death switch happen took supper well you know that was like I believe in 2013 I started to read about Bitcoin and I'm very honest about it you know I really couldn't get it mm-hmm I was reading this stuff and that and I remember even article in The Economist came up like really trying to explain it and I thought like wow this is like such a nonsense and then I believe what what got me really you know interested and I started to look at it as you know Cyprus in Cyprus banks were on the brink of

default many was a banks dubbed you know been out money and and and then what happens that Bitcoin price like really expanded from something like $30 to 70 or $80 and and it was like such a change it was like for me the first time that I noticed Wow this something whatever currencies is digital something has a correlation a negative correlation to what's happening in the real economy in banking right so so you've even that little purple in financial system it's driving the price of this something digital what will happen if you really get in trouble

right and and if you have a war or major financial crisis right currency crisis and and then that was the time that I started to to really invest in Bitcoin I bought first portion of it right and started to look more and more in depth into it and then I think I was just trying to find entrance into this industry and for me is a fortunate moment was and was it like probably somewhere beginning of 2015 as I met Daniel Guttenberg who is father's major renowned investors based here in Switzerland but basically

international unicorn hunter a really really great guy and I lost him down here like if he would be me I have this banking background and and I really would like to get into something really exciting like Bitcoin and Technology stuff what would you do and she said like yeah oh this is a great company like what's what's the name she couldn't also remembers name she was like thinking yeah but it was like say they kind of like in yes but they have this problem with regulation and so on so so maybe and they're thinking about coming to Switzerland to solve this problem and then she finally remembered its name so it was example and I've written it down

and then I was like you know trying to find out who are the people behind it what is all about right and and I discovered through Sakai events is Cazares which is kind of like you know very famous guy over there in in Silicon Valley and there was a book written by not a proper called digital gold yes it's amazing you know this one worth absolutely I loved it but yeah it's kind of like the early history of Bitcoin all the people that were involved sir how's the soul you know happens right how Silicon Valley got invest in involved it means as well basically and later

business opportunity and that about Vance ascent and there were nice things written about Vance's so I kind of like became his fan even before I met him and and then like I was thinking oh how can I reach out to him I had no connections right so basically I wrote him a letter and amazingly enough two days later he answered to me and probably like a week later we sat together here in soup you know and in the bed and ice here from another how do you call it at the lake there you Malik League sightsee and he

told me yeah look we have this problem like they receive this incredible funding from all the top pcs 40 million models this doesn't help because we have like really in us this trouble of you know become an illegal company and you know applying to basically there is no regulation and they don't know how to deal with us and it's very difficult to work with banking institutions and we looked at Hong Kong and Singapore and all those countries and it doesn't look much better there so what we are kind of trying to do now is basically trying to figure out if so what salon could work so if you want you can help us join us

and that was amazing for me because you know was my banking background I was actually somebody who you know could talk to regulator could talk to banks right but also kind of like understanding this technology so sad was also a big plus so I started to work books album suite I thought there was this article once with you in front of a vault somewhere in a mountain where I mean I don't quite recall what the article really was about but I remember that that picture where you sit there and that like this is where the cryptocurrency will be stored what was there yeah that's amazing I used to spent a lot of days in said

underground actually look very cold too dark sir it's not a great place to work but what was that was that where you guys store the keys or for the client yeah you know actually I can't talk too much about it I can give you a lot of details about specifically example you know infrastructure but basically you know this is a sense the concept to just secure in and store in crypto assets such as Bitcoin there are basically two concepts on multi sick and and cold storage right and multi seek is basically just about you know the private is a public public key is

connected to several private keys right so for action to go through it needs to be signed by several key so for example a lot of companies have three out of five so five private Kisa issued and for transaction to be confirmed it needs to be signed by at least three out of five keys and many companies such as cell possesses today quite a standard rate as they implement this procedure and on the other side there is this concept of cold storage which basically in simplified terms means that that private and public keys are created I generated on this you

know server computer that never goes online alright this is a term called cold storage or deep cold storage if it's like really never connected to any kind of internet or network as a network so and this is actually how this infrastructure is built today around the world that means that you have those you know offline servers a lot of them so each of them keeps one key so to say right so in this case five three out of five for companies like suppose they have on different continents different facilities like Hardin's facility like

you know military bunker or some kind of like high-security premises where they put those servers and and the only way how you know information is exchanged between those offline servers and an outside world is that in a completely different promise or a different room there is as a computer that is connected to internet and and the only things that happens is that security personnel goes to that as a computer puts a USB stick their use mystics reads the request informations and this person is walking to the other room where the other laptop is placed that is connected to that of offline server and and basically the

information that travels through the USB key is basically to the request does this address have enough deb credit for example to do this transaction yes or no right but but the private key is never transferred right was that so the private keys always on those offline servers right it doesn't leave them right and and with this process you you what you achieve is that you know once you store your Bitcoin since it's both it's called world what you see on the app it's it's called world but actually it's this offline offline servers right was that you achieve that that basically the private key never touches Internet

right and and you know you if you build this kind of infrastructure you want to make sure that those servers that nobody can touch them and here you can go into any lengths of security and depths of security you you want to and I think supper did a great great job to to make it to make it the most secure facility of all right so they found this security provider in Swiss Alps you know that is that it's providing those you know facilities and rooms for server infrastructure which is you know inside of this ex-military bunker of your Swiss Army actually in many countries because

you know since the end of the Cold War everybody was building this stuff ratings and Cold War was over and all of a sudden folks didn't know what to do with it right well and also many I mean I remember when when those news came out you know the dark there are whole mountains that are hollowed out in the Alps I mean nobody knew about that right there was exactly nobody has an idea that that kind of stuff was going on and then all of a sudden you know a few years ago there was opened up and you could go see them and it's really quite fascinating but that's definitely a good use for such a military facility I was also very impressed you know because

it's kind of like on the outside you don't see to anything so there is entrance into this mountain and inside of the mountain is the whole facility and it's like three three-story buildings you don't even see it right and huge doors you know like there is ancients from the from the other side of the mountain so this is huge huge doors through which you know the even even airplane can be rolled in right and and there is a detonation rooms right mm-hmm so basically built for the case you know they can sustain like I can't remember

but basically something like 20 Hiroshima nuclear bombs right no nation room is kind of like folding and unfolding without destroying the inner hmm you know inner buildings in the mountain right so that's that's quite incredible yeah of course aggression is like do you need to go into such lengths and do you really need to have this kind of you know security things this is great for marketing because it's so special right and but but basically do Swiss banks were their information in facilities like that no they don't right they have in Zurich they happen some gal and all the seek high-security

centers also basically normal buildings right yeah which other you know less less exciting to report about but anyways you know I was going there always with investors or was prospective institutional clients who would you know maybe consider using SAP as a store example storage solution for you know securing their Bitcoin keys and so on right so I was always trying to explain you know this security in this is procedures and so on and and normally people were very impressed because you know it's not just you know this is this

facility but it's also all the procedures around it that you know your weight is controlled when you go in and out there are so many like those control doors right there are movement detection there are like three commerce commerce in this room so people from cell phone watching you people from the security company watching user is like all the securities that you normally see only in Mission Impossible film right pretty cool I mean that was he said 2015 right so that was really quite early I think also with regulators back then in Switzerland I mean even though now Switzerland has done a lot of

stuff for the whole crypto in the crypto ecosystem and we'll talk about that a little later but back then I'm quite sure that not many people understood what you were even doing when you said I need a place for cold storage very new concept so um you said initially when you read the white paper or when you read up on on Bitcoin you didn't really get it and when you saw an application right like maybe Cyprus those bank runs that kind of then it kind of clicked for you today right what is for you what is the one of the main attractions still of

cryptocurrencies well you see a manual I grew up in the country which you know exposed people to all kind of ideology right so kind of like I love big ideas I you know tent myself to be very ideological about certain things and and you know what basically they preached you know the whole brainwash in which we grew up right in the Soviet Union was all about equality right so so that you know that people are born all the same with the same rights and and they are

all equal rights and everybody has the right to have a good life right and and also nationality wise so so Ukrainians eyes goodness that Shikha stance and and [Music] everybody's everybody's a browsing sister right right comrade you know comrades exactly and you know somehow well obviously it's still pretty much cut into the depths of my consciousness you know so later on than I you know when I started toward your info Western companies and I joined Barclays Capital you know it's used to be one of the

major investment banks and she saw those people getting incredibly rich right on the trading floor and driving their their hugely expensive cars after their five million dollars dissipate and and then late it got even worse right I was at UBS and I saw you know our division was consisting of high networks and ultra high-net-worth divisions right and this ultra it's basically defined as people who have 50 million plus rate so now a division we had something like 300 client advisors basically everybody based in Switzerland rate it's offshore

banking rates they are not they're not in those countries they just fly into those countries to serve clients right but everybody's on parada plants and I thought like wow how crazy is that right like exists all safety and those great investment products and all the service there's like everything for those rich people but there's nothing for everybody else right people outside of this range you know and and even likely forget ultra but even like high networks so so normally people was five million plus liquid assets right so those are the people that said you know for them the bank accountant UBS and Credit Suisse

and Co will be opened for the people below probably not in many cases not right so it was like you know for me you know growing up in the Soviet Union and ceno's has been brought up in sis equality and you fair society dogma it was kind of like quite quite a different world and I always thought like does it really have to be this way separate isn't there a way how we can how we can change that and I actually started to talk about it as I was was up I was started to talk about Bitcoin and how Bitcoin has actually arrived to challenge there's a predominance in a Wall Street driven

wealth driven system I'm not quite sure if people accept like that but I think they were very open and I mean when Susan because iris and and that Reuters those are probably really two of the best people I ever worked with I really really admire them a lot and I learned a lot I've worked a lot together with start activist advances that set Reuters and to me you know it was a guy like now when I'm taking decision how I lead my people I'm constantly thinking about him and and you know the reason being because status actually he's from sports he was you know part of the Redskins so he was like in professional sports and

what I learned that you know people who come from professional sports they have very strong ethics very strong isaacs rights they see follow-on passions they work they give it all to teach if some students at one area rate and and you know how you strive to deliver those results and and how you treat everybody fairly with respect this is amazing this is what I learned there but there was less you know probably you know this democratization and so on was also part of Safa ideology because when Cisco Cyrus is from Argentina you know and we

have very similar story he grew up it's somewhere in Patagonia in the middle of nowhere and his parents weren't very did you know they had this shipyards right and and he's like hundred percent self-made man he came from there from poor Archie Gina he made it to become one of the top Silicon Valley entrepreneurs trusted and respected by by the top VCS over there and and you know this is actually a real success story because you know of course Americans that grew up in America and the event in high school and everything was there and they made it to the top ranks of Goldman Sachs yes that's also success story but it's

quite different from story of the people like when she sent me and so many people that come from nothing mm-hmm and and achieve quite quite something right so so basically Avensis became to me for me later quite an inspiration as I worked with him fantastic yeah yeah are you guys still working together now with with your new co yeah like we're constantly in contact with that you know there are a lot of things that happen in here in Switzerland that I will list refer dad to a lot of people you know here in Switzerland because it's such a small country you know it's actually quite easier to become kind of like a little bit known right so a lot of

people remember me for cellphones they come back to me when they have question about Bitcoin or how to invest or what's the safest way to to invest to hold the guests let's talk about Switzerland a little bit I mean you you had you came here right after when you were working for UPS and with the whole example project you kind of probably became an expert in Switzerland right what is why it is a good place for crypto but since then a lot has happened right this whole crypto valleys idea and all this how do you think has has Switzerland evolved for for the cryptocurrency space I think you know what happened now was in the

last three years in other industries you would compares us to at least like 30 years period right and you know the amazing thing is that you know probably this country was ready to embrace this new technology and and look back in 2015 2014-15 your Krypto Valley who was that it was basically kind of like four or five companies right there was a cerium so the italic came here and printed his house across her father office no and they moved in and they were the first kind of ICO protocol ICO it's there on

in 2015 here out of Swiss foundation there was a Bitcoin Swiss there was a guy that founded Vanitas and there was Saba so we were basically you know one of the first so so to say founders of notion of crypto Valley which was basically introduced by Johan givers yes it is did you know that there was something special going on or was it just you know nobody had a clue there was just kind of a start-up vibe or what was it like really no nothing nothing no start up by nothing I remember I was looking for offices for example and and it was like really difficult because wherever events

all the people told me that he showed me offices to rent there were always these small rooms for two people where you can lock the door and nobody can hear anything and I was like but no guys I'm looking for co-working space like the queer also sells all startups mm-hmm and it appeared there is not such a place yeah that was before the time yeah exactly because you know because basically here who's who was here all the hedge funds right private equity don't you mean yeah yes those people's that earn a lot of money and suka Sivan of the Canton's was the lowest tax corporate tax rate so everybody was

coming here basically to save taxes one was in Switzerland right and all of those people you know they needed to have closely shut doors so that nobody listens right so this is a reason Falls of small offices and yeah and and you know since then several things happened to give you an executive summary like I think that two biggest development were following number one was said that FEMA decided FEMA well society as such decided that that it's interesting to to look into this technology and maybe open the door a little bit so how has this happened

just uh Falls there were some people raising the question about Bitcoin and what it is and you know one of the first questions that that they're all specs and it was kind of about value-added tax so do we need to taxes is it kind of commodity or is it currency and the first positive sign was well you don't need value-added tax on it so probably it's not commodity and the next things that came up in conversation was actually well custody of the crib tests it was a sample case and we initially started to work with Mme you know which is quite today became a quite renowned company in this field

exactly well these they help to cerium you know they had this first one two three cases right example being one of the early cases right in the space and and they did an amazing job of helping asked to communicate and to explain to FEMA Swiss financial regulator what it what it's all about right what is Bitcoin what what do we do with example like how you're storing those private keys how do we create them right but it's so special about it right and it was definitely not an easy job as you can imagine right yeah you know that's that's interesting start to interrupt um

I always thought that Mme was just a law firm that they did all the paperwork made sure it's on the right side of the law but I didn't know that they actually were quite instrumental maybe in explaining what this really is to the regulator definitely definitely but you know back then it was such a new topic that you know if you would hire even some the best brightest lawyers it was you know that that this conversation was in Finland within the people that were responsible for this case it could get just that far and there were internally some people that just fundamentally opposed

you know opening of the agency toward the Bitcoin and action right so as much as we had tried back then you know it was kind of like you know they reach the decisions that in a certain way what we do resembles deposit-taking activity you know because this private key is basically you as a user of a bullet you don't have access to that key right because the key is generated on those offline servers right that's that's the whole point that nobody has access to it's right so they argued they argued that Dennis custody yet said because the user does not have access to

his private key so view control in this example controlling the private key that means that be in control of the funds at the end of the day I mean which means you're okay it's correct technical which means it's a bank exactly right so this is what they said guys like you think you should apply for banking license and if you know if I start up even very well-funded like south of X and 49 it's still quite a burden right because that's what cellent you need to bring in minimal capital it's minimal capital requirements rate of 10 10 million plus you know all the stuff and all their organizational requirements that come your way

this is like plus you know the legal fees and so on and so on so you need to to be able to shelf of something like 15 million right and it wouldn't make sense you know from the business perspective so you know ANSYS was very disappointed and everybody was disappointed and she said like okay they spent so much money here in time on lawyers and all this and there is no result and she said okay you know what we just we just forget it you know okay sirs there's gotta be an ox whistle and I thought like wow this cannot be right because actually there's so much interest and there's so much will and actually Switzerland is the innovation leader right if you look at

all those international rankings World Economic Forum ranking it's one of the top countries in in in you know openness and innovation and and technologies right you know that actually it wasn't always like this I mean I had I had a start-up in 1996 in Switzerland in Zurich and you know then it was still I mean there was definitely no co-working space available back then they were even books on startup entrepreneurship you know easily available and people in general didn't quite understand why somebody you know who's who's around 20 years old would want to start a company

while they could just you know go to university at a master's degree and then work at a bank and and so it's quite recent that this whole startup wave you know swept so it's really meant that all you know that also that consciousness is there that'sthat's not I mean it hasn't always been the case that maybe has just been it just changed maybe around I'd say around 2010 you know that's when the first of those programs also emerged right I mean before it was impossible to get any funding there were no programs there was just nothing yeah and through this whole Drive with innovation and

Switzerland as a crypto valley and as a startup country that's fairly recent and so I was also surprised I mean I hadn't lived in Switzerland for a very long time and always when I visited you know after around 2010 it changed I saw something changed and people were much more open they tried things and then in recent years you know when this whole crypt Ecosystem just mushroomed then I think it really took off yes yes that's one aspect you know but but the ones that I'm probably talking about is you know innovation in terms of not startups but but companies right so it's on has one of the leading companies in pharma space

right in in different industries right yes and why because I mean it's just amazing place to live it's one of the countries was a top quality of life it's true so absolutely true you know but that's always been your right there has been a lot of innovation on a very high level right there was Pharma there was you know precision mechanics and things like these but that was generally not accessible to somebody who just wanted to start a company out of out of a bedroom all right that was very very hard you needed capital I mean to get into the pharma business that's not I mean that's capital intensive if you want to play there so that kind of

innovation on a very high level has existed for a while but that you know this whole movement from starting something new and fresh from the ground up you know just kind of learning by doing like you said right you wanted to do this in a co workspace not in a closed office space so that that is quite new I think yeah this choose it sure but I think you know also what what happened is that also banking you know used to be one of the key sectors of economies that is you know contributing Pro Buick I don't know 15 percent of GDP so banking is very important in Switzerland you know Switzerland is still today one

of the top five major banking centers worldwide in this you know banking center rankings well very specialized one great wealth management center but still banking is very important here and I think what what happened you know back in 2008 in 2008 and 9 after you know a financial crisis hit you bear so hard and it was on the brink of collapse and you know people started to think about saving UBS was public money right and then even worse you know

yes government was also hit by the same wave and started you know nervously look for new revenue channels right since they discovered oh wait a little bit like Switzerland and all our US citizen that has their bank succumb Sarah isn't that great way for us to get a little bit money to pay for all this bailouts yeah and and then you remember what happened was this you know whistle whistleblower case was his guys that that opened all the information just hand it over his information about us clients of us these data leaks at a time

right I mean to Steve does one after the next came out I mean it was really I think it was kind of a data crisis you know I had all these breaches of data and I always wondered why why do these people have access to these data even you know yeah well today these that you would not be possible anymore they learned lessons research days it access to the data is quite limited in the banks but but anyway like like you know begs an and oh and by the way the funny fact is that this guy who sold the data who handed over the data to use government she still needed to go to the jail for revealing the secrets rightful

fabrina as a stuff right and though basically for for supporting text donation right so because officially he was part of this organization and since he also handed in data us needed to put him in prison for for you know support of this tax evasion system right so he spent one year in the jail but then on the top of it US government beat him beat him a lot of money to get a détente I don't remember probably like 30 million oh really I don't know basically she earned like 602 million for one year in she'll be good yeah

from the level of a trader at UBS yeah it's true but basically what happens you know since and and you know in Switzerland this notion of banking secrecy it's been a big deal right this is how honkin Center became such a large and important institution because for the last 200 years all the world trusted this place and it obviously started with Wars you know first world war second world wars this is where you know money traveled here because you know all the world were on the lookout for this safe place and because Watson has its neutrality right so it wasn't involved

in the war that kind of like became you know place where to bring your wealth right and and and after the war after the Second World War this kind of like really became big saintly in 60 70s Switzerland amassed some 10 trillion assets offshore wells right and then they didn't know how to deal with all this you know tax money well partially people just came not not for safety later they came for for tax reasons right and and and basically this is banking grew so significantly on the back of all those developments so as yes

stroke in 2009 and and the Bank Secrecy was abandoned as Asajj the question of course you knows as the banking was in total crisis here UBS lost like from 10 trillion imagine it came to back to like what is this today to 0.53 like really offshore assets for in total so the house wasn't the half of all money left this country and and this crisis embankment and you know like that that probably was a call for redefinition of of this industry and everybody asks themselves so what's the way forward so of course

we need to become transparent and we need to throw away the shadow of tax evasion and so on and so on and there were several great solutions that was achieved there for example was European Union you know the agreement was to to have this regime where you you as a European Union country France for example you still don't know whom this account belong to user is like no name revealed but the taxes I just paid right there's certain percentage that this gist was drawn from your account at the end of the year and paid to the source country to just country where you're citizen right and this is actually great because it it gives people stills as privacy

that some people want for certain reasons without being without being involved in tax evasion mmm-hmm it was that withholding tax ran 35% or something like this exactly exactly and if you think about it like I spent a lot of time figuring out how blockchain technology now plays into that and basically if you think about your knowledge protocols about all these new things that came up in the recent years you could devise a system you know on the global banking level involving regulator like this global banking blockchain that that will enable exactly

said you know that people can bring their assets here to Switzerland from any country and they can store their wealth of those you know public or private keys so basically on their addresses but and then some banking institutions would not reveal their names but would just reveal to the source countries the the accounts that said are connected to citizens from those country and those countries could see like yes those console hours and there's so much money and we just pay average tax of eggs to those countries and and those

countries don't need to trust us that their government their citizens really have that much they can see it on the blockchain right it's a real data and one of the nodes that could run into in the system could be filmer you know if in my can see and and have transparency about every transaction right imagine the transparency of this scale I mean they never had this before right let's take a quick break for a message from our sponsors shift crypto security is the maker of big box a minimalist Hardware wallet for crypto currencies storing your digital assets safely should be a priority but software and

phone wallets can't protect your assets from hackers and malware the big box camp developed by team of experts who combined with pioneering spirit with a strong commitment to crypto security performance that is second to none the big box is rock-solid compact portable easy to use and designed and manufactured in Switzerland to learn more and get your wallet today with the WWF crypto CA imagine the transparency of this scale I mean they never had this before right yeah it's really quite remarkable I mean I wonder if fin ma also sees it that way yeah I think you know what is what is

like really great about Finn was that through all those cases working with Sabu cerium and now results I see us they develop quite expertise in this field right I would even go that far that I think today FEMA is one of the most knowledgeable regulators around the world right so helps this task force and this group of people that understand the stuff and pretty much technical details right and this is very important because if they understand sands they can really craft this regulation and and and you know guidelines that is appropriate right yeah they're definitely very advanced I mean that's the impression I get as well and that's what many people

I speak with what they tell me you know and what they also appreciate is that I mean Switzerland is a small country right it's a eight million people I think living here and it's flat that means you can approach even you know quite senior officials from governments and from your regulators quite easily totally yes this is experience that I've made so back to the example case what happens you know since FEMA said well you probably Bank and and kind of like you know that that moment it was the end of the end of 2015 you know our request started to be answered in the slower and slower please you know and it looked like this is it

and and that was the moment for me to realize that you know part of you know lawyers and all this works and just needed to be done they need something else we need to create some some like impact and influence on completely different level so I started to to ask some people here Swiss guys everybody like how do you do that how do you how we can create more not noise but but to let people know what we are doing and why this is good why they should support us and some very nice people here in Switzerland he brought me in contact with it's called Parliament Irish group for

digital a novelty right so Parliament area group for digital sustainability and it's group of people they're all parliament members that are looking at those topics like bags and it was all about open source software and and and production of data and they support different initiatives so amazingly enough they invited me to burn you know capital of of Switzerland for their regular meeting and there I had my ten minutes where I could you know pitch my case example and why we need support and surprisingly enough one of them was France gruta after this meeting he stood up came to me gave me

his business card and said I like what you guys are doing contact me I think I can help you hmm Angela okay and that was amazing right that is enough to several and then after several instructions was him he kind of like said that he the way he sees it said that he should you know submit a motion to the Parliament you know about requests to kind of extract the definition of cold storage from the definition of public deficit so cold storage should not be bad part of this

you know public deficit definition and and he did that he really submitted this motion to the Parliament it's amazing I was reading this in non non zone parliamentary website I mean you know something like that if you would be in Russia were in Argentina would cost you a lot of money and it's called political lobbying right here in Switzerland nobody wants your money it's it's really fair and democratic country if somebody thinks that makes sense they won't just do it yeah correct you can always go and talk with people that's that's one of the good things I mean I've I've lived all over the world right in the u.s. in Asia and here this is one of the few places in the world

where you can go to almost anyone and just plead your case and if they like it they'll say yes and if they don't then they say no what happened with that with that notion it's it's actually quite funny stories so I was totally excited I was like insisted he hears that like you see what we achieved this is like really if you're moving forward it's gonna be success and the next thing I know that Parliament declines its motion same kind of like you know guys we're working on this banking Liza's FinTech license and you're gonna you know candles this as a part of this banking light so not good but oaky anyway I started to rain some

more that wasn't right was that was a banking license but with lower thresholds right kind of like a light in quotes yes I was like that startups in the FinTech space mainly could get exactly unfortunately you know that was a big hope for me I was actually planning to apply for this one was smart Whaler but unfortunately it didn't it didn't happen it was moved forward to 2019 so hopefully it will come someday as a solution as a country surround just like Lichtenstein came up with even better solution so there are alternatives today but example keys you know basically apart from that I started

to talk to different organizations a lot of support came I was so surprised you know for example politician you know tender at and parliament member region osa was super helpful and supportive he enterpreneur himself he said Olga it cannot be that he has this great company coming here knocking at our doors wanted to become legal licensed business and we just shut down our doors in front of their house this cannot be and and he and so many other people it was like basically for me it was like probably eight months of this lobbying work you know but what I achieved you know that

that we we were so public sense there were news and newspapers everybody wrote about us I was constantly in some interviews and and I think it became such a visible kiss that that it became kind of difficult to to just say no and whatever right so we we came from being absolutely irrelevant small startup to become in the quite exposed prominent case that kind of needed to have a good solution mm-hmm yes but you know to cut the story short the result was done that female kind of change their decision and they said well it kind of understands

that it's not quite the same as banking what you guys do and you kind of like gonna give you green light and you can just work without banking license you can register as as financial intermediary was I am a license being you know supervised not by film about self-regulation organization and you can choose which one and you can go so that was you know for me personally one of the biggest you know achievements probably in my in my career you know well everybody already kind of gave up so I still found a way to move this case forward

became one of the first biggest regulator case cases for Bitcoin as a such worldwide but of course for Switzerland and that gave me hope and and understanding you know that actually here in this country if something is right and good for society and good for business here there is gonna be so much support right and you can go to those people you can even sign a you know public petition if you have hundred thousand signatures Parliament has to look at it and decide what to do with it that's direct democracy right yeah I want we'll need to decide it's amazing you know for me coming from Soviet Union

where you doesn't count you as an individual have absolutely no rights no voice whatever right it's been a very oppressive you know covenants so for me it's like really magical it's magic country I really underestimated it as I came here five years ago I didn't even realize that it's such such a great opportunities that you can talk to politicians you can talk to to regulator to authorities and they really gonna look at your case and if it's good and if it's good for society good for people's they will support you with with example this I think was a really good success but at the same time this whole

banking license light right it was just postponed to 2019 and I mean if you just put two years if you put something on hold for for something like two years that's just an eternity for the crypto space have you seen have you seen the regulator's here and fin ma maybe in particular have you seen them maybe also pick up the pace a little bit now that this space is moving so quick oh absolutely absolutely I mean for postponing banking license there are good reasons of a technical nature but but you know apart from that they moved forward to relax several things so you know for example as an exchange earlier

you would have only seven days that you can hold deficits on your or money on your platform but if it's not traded and changing you know into some other assets you would need to have a banking partner to hold the spun Swiss right so the extent it says from seven days to 60 days which is you know great for exchange business rate which is going to be very beneficial fast to and and also you know they moved forward quite well with ISO stuff was ISO regulation yes so as I see all wave came up probably became big beginning of the last year 2017 years

so basically last year probably around if you if you kind of like very broadly you know divide I feels in two groups you know less less good like poor ratio sent like like really great great projects in total last year some select 5.6 billion was raised in ICS worldwide so probably is the valve of number really great companies and from Z at half proximately one-third were conducted through Swiss companies so Switzerland kind of magically became this this hopeful eyes yellow business right what Duke in particular

exactly exactly that's true so basically Swiss companies last year around 1 billion US dollars was raised and and then of course you know if you came up like what is this like actually so of course it was all structured in many cases it was like playing utility token or payment currency like cerium but it's a phenomenon grew there were you know people's that were constructing as it were coming not from blockchain space you know from people build in social media business and then film business and put industry and whatever right so the question came up is just like really

everything like the same utility token or how do we deal with that and if you have to keep in mind that this whole thing was going on here on the background of US and China prohibiting icos u.s. Security and Exchange Commission taking a really tough stance on isil's shut him down ICO started investigation in many cases pulling the company to to pay back money to contributors right all the scary stuff phrase where a lot of great yes company said oh no no no we didn't want to deal with that we'd better go to Switzerland mmhmm yeah so spin must started to receive more and more

requests and and started itself investigating a lot of cases it became obvious that this space needs some kind of well if not regulations and at least guidance and this is what they did they were working for many months on on socio guidelines which were issued this February earlier this year and I've wrote and commented a lot in newspapers and television ons on this point but it keeps takeaways that you know those guidelines they're actually great because first of all they give a clear definition

what kind of tokens are out there what are the consequences of legal consequences of you know issuance is different types of tokens and and I mean under the lines advantage of doing this in Switzerland is that you know even if your token is a security token it's not a big deal of course you need to issue prospectus right we have this pectus requirement and you need to to leave you know the ledger or it's a registry of your shareholders and several other things but this is like everything is doable without such a huge huge burden on your resources right and this is why

you know I think Switzerland and female like you know it's actually interesting so there is this ICO guidelines but there is also like introduction to the ICO guidelines and in this introduction mark breaths in casinos as head of FEMA he says that the purpose of this guidelines yes to create an environment in which legitimate innovator can you know conduct their funding and and issuance of their token in a legitimate compliant way right so he's doing the statement that yes we want to have to create this you know legal environment

for this but but only like for really legitimate players yeah so this is a sign this is a direction you know is it females Givens if they want to establish Switzerland to become you know kind of like premium quality space for this right they want to enable this innovation but without compromising investor protection and anti-money laundering prevention right yeah yeah this is actually great this is exactly what we need you know because look at the ICO space it was like 1,000 ICS last year's this year it's gonna be I don't know maybe like four five thousand trade it's such a massive field like this global crowdfunding enabled by cryptocurrency enabled by smart

contracts it's becoming so big it's total eclipse in all what we've seen so far in venture capital industry right and and you know the space is now desperately in the need of quality and this quality stem so who's gonna give the bullet ystem why not Switzerland right exactly when she said it was always the quality in banking yes I mean data has been the big discussion too with with FinTech all right when that came up all the entrepreneurs in Switzerland I said Switzerland could be the leader in FinTech if only they understood right how to how to deal with it and how to regulate it they try to push it into the same framework that the big banks have

and it's all the disadvantages that you mentioned right it's too expensive it's too slow people don't understand and and now I think they really learned from that FinTech debacle in a sense and really moved forward with icos I think it's a very very clear guideline and you know of course they don't have all the questions answered but at least there's processes to learn about how to do it and that I think is really cool so you know to summarize this topic I think you know as a Swiss banking secrecy is falling away and the question of rent finition of this banking center arise the obvious answer is it's it should be about innovation new technologies and so

on and if approached in a proper way you know switz on can become again one of the leading financial center but not dogging on Bank Secrecy Bank in the building on innovation on technology because now is blocking what is happening you know via creating the new infrastructure layer for financial services and cryptocurrencies I mean they immersion as a new reserve currencies right so the countries that will be open to that innovation has a good chance to become in this global you know innovation happen as a in the thin tax base right so it's a huge opportunity and I think everybody in Berne understands this right yeah it's

just very very challenging thing to do because your Vulcans is verifying line how to enable this regulation innovation on one side without compromising protection and of masters and protection like how the industry works today right so it's I don't envy people at FEMA I think it's it's a very challenging task and I hope they will figure out there's a proper way forward yeah it's funny I mean just today I was I was writing an article about regulators I the title of the article is regulators are just as confused as investors and it's true right I mean there's so much nonsense in

this ICO space and it's very hard to find out which the good ones are I mean it's pretty easy to find out if if token is the total scam but to find the good ones that really takes a lot of work and a lot of understanding yes it's true so you're also you're also working on ICO for yourself well you know actually to give you a little bit background since this one like SS ICO they've rolled here through all the souk cafe in bars since you would hear is this word everywhere of course we also started to engage in this field and initially we just you know

provided some advisory services to ongoing Isis here we were you know opening companies helping to open companies foundations helping people to write their white papers and and so on and so on it's at certain point we understood that you know actually Advisory's interested in business but but what the space needs is basically you know somebody who solves US regulatory issues right the same good I did for example but now for this ico space right who's gonna solve the problem of tokens being been raised and been been issued and funds raised in a

compliant way who's gonna solve the problem and this token becomes not just utility children but security token and how and what are the opportunities that are around you know issuance of this on this global peer-to-peer platform right enabling you know direct flow of capital enable in smart securities right securities issued in a form of token governed by smart contracts I mean that's such a huge interest in space that is not yet there right said that some banks are working on and some you know stock exchanges are working on but but there is so much space it's like

complete new cosmos right and and that's not like it's gonna be also quite challenging in terms of regulation so how do we deal with that when the token becomes the security token and you still want to distribute it on a global scale and how do you you know comply with what's investor protection and investment suitability guidelines right how we can for example tokenized venture capital fund right or private equity or any kind of illiquid alternative investments right how we can create you know these fractional ownerships that can be changed in a seamless simple way over the blockchain but done in a legal and compliant way so

this question actually today nobody answer is that so there are no answers like 90% of exchange you say have no legal status or say operating is you know shady countries that don't require them even to register where do qia like today exchange business is really really like Cowboys face and you know people are doing some kind of stuff and there's no responsibilities or in exchanges yeah yeah exactly there's a few that are pretty reputable right whew yes but few right well they base right I mean you mean all the OTC stuff that nobody knows about and those yeah and you see like this has started

to change so Japan got more tough and yes started to require registration from crypto currency exchanges right but I think you're in Switzerland you know like there are still so many question marks there is no regulation no law no rules how to deal with all this stuff imagine we have we will have follow this real assets tokenized in the form of the token so so basically visa was selfie building you know marketplace for tokenized alternative investments which means you know they are looking at two categories of products first is like crypto like really crypto you know top five crypto

currencies i SEOs and crypto hedge funds or maybe even tokenized you know gold so this stuff set is already on the market and the other category is some sense that doesn't exist today this is kind of like tokenized alternative investments such as you know tokenized real estate tokenized private equity tokenized venture capital and of course the complexity of the second one is quite quite challenging right because they don't have it some still exist today there's no examples nobody ever tokenized venture capital and and there were very few examples of like really crowd funded to organization

of real estate this is common that's going to be a huge huge topic you know we decided that it doesn't make sense to to be the in the process of you know creating the structures and the process of tokenization of all those different assets much more make sense to specialize to be in just a platform just an exchange where people can come and bring their stuff right so they will have all these different assets from my ciose to venture capital companies but all of them will need gear key components all of them will need people who will write they're smart contract people who will onboard their investors

and to give a see and all the legal stuff they will all need an exchange that has legal status and can really distribute their token in a legal way and they will all need you know some kind of like due diligence and quality process said that will give them credibility one question just to go back before before you said you have two top five cryptocurrencies as well that means you'd make for example is it that you would make a synthetic Bitcoin token on the etherium some banks are doing sets but that's just a rap legal wrap around

it but I mean you know no just just having you know integration with other crypt exchanges and offering bitcoin and litecoin and you know the top cryptocurrencies we need to do this not not because I'm so excited about crypto exchanges I think this is actually you know this is it's not over but you know it's our businesses have been doing this for last seven years so I'm not so excited about being a crypto exchange right it's basically utility it's becoming utility but we need to have also crypto currencies because you know this is how people come to our platform so the idea is you know said that basically this is a key mission as I see it for ourselves

is enabling access to to to the best to finance to alternative investments to best crypto hedge funds through the cryptocurrency doorway and and and the fire mission is I define it as democratization of access to wealth and if you think about it this combination of cryptocurrencies you know today you can anywhere buy a Bitcoin doesn't matter where you live in China in Russian Indonesia you can meet with people and the local cafe you know you can meet them through local bitcoins that come however you want and you devices and promise' straight and and

you can get hold of this cryptocurrency and towards that you're out of your country right you can go anywhere right it's a global network completely outside of the banking system so so you can come to our platform with your bitcoins you can transfer as Bitcoin easier whatever and from there it's one click of a button you can transfer it into Swiss franc or you can transfer it into any real estate coins that is currently you know listed or going through initial list and you can invest in real estate you can invest in venture capital companies you can invest it's a crypto hedge funds wherever you want you know and this freedom of choice and this

global access but still be in the legal formal company and you know that you know who is responsible for that you know where your money Lent when you're somewhere in conversion from that asset enthusiasm I think this is something that there is just no value proposition for something exactly it doesn't exist today right and through you know opening this investment opportunities to to the world to people no matter where they're from or where they are living in which country rates this is democratization of banking and and wealth management I think this is like for me personally you know now you know my story coming from Soviet Union

living through hyperinflation having most ever seen been very poor myself and and looking at this rich world and this you know privileged Swiss of bankin which gives you safety but only if you reach like for me I decided that's gonna be my mission for the rest of my life right yes this is what what is worst given time away from my kids away from my family this is the only thing that is forced Julian says you know and I think you know like a lot of a lot of people that were early investors since the space they become very rich and they're looking for ways to diversify in this space like you know it was cool to keep Bitcoin if it's kind

of like 10% of your wealth but if it's turning into 90% of your else you might be very well advised to diversify it a little bit right so I see a lot of like you know I'm myself from bank event I see a lot of use cases and a lot of requests and I understand you know how you can on one side democratize the space and give people opportunity to to to have access to legitimate platform and legitimate investments right but also on the other side how this opportunity gives us way to build completely new financial institutions and at the end of the day also make a lot of money with this right as an

entrepreneur who is your role model well I think it's when Cisco's ours are there others others yes you know it's always like they come and go right so you meet those peoples inspire you and then then they leave your path and you forget about them right so I think about romances you know I have several friends that are also enterpreneurs the dancer is a hardship fight it were flat on their face you know picked it up fight it more and became very successful in fact one of our initial supporters and he's contributed investor another company who see mark Marcus Windsor

which is he's basically also part of our advisory board he's exactly this kind of guy he's from Austria you know he started his company some 12 years ago you build it from scratch you know being one of the first payment gateways for credit card transactions he sold it several years ago to is a huge American company for fertilizer amount of money and and he's just so cool you know he's he fans are all this hardship you build up it wasn't easier they couldn't pay salaries sometimes two employees and and and you know make him even stronger after that right and now he's looking at us and we're starting this and he's

supporting us and I just you know I feel very privileged to be able to work with those people and being supported by them right it's amazing what's your advice you know for others who also maybe want to follow that path and and start their own company well you know I know I think there never been a better place to do that better place you're in Switzerland and better time why because you see you have was internet and you know with all this global workforce you have access to two resources in a way that was never possible before right and in terms of you know expertise and workforce but

also what you have today is this incredible opportunity also to to come up with a great idea to pull up great people around you and to raise funds for that and actually this I assume for us in Europe it's an amazing opportunity we were always so caught up off from investment right here in Switzerland but basically everywhere in Europe they were speaking about you know this funding gap of 30 billion I guess per year right said that we kind of like we cannot fund was with own resources coming from from issuing always yeah absolutely right so look now this money is all coming through I see us right he can raise

funds from all over the world right so I think people that understand how unique is this time so we have the technology the technology arrived blockchain I was those technologies that you can build amazing businesses on the top of this technology it has this global workforce and you have funding right I mean that's like like perfect you know a crossroads you know that you can do it on the top of glass here it's what so if you have formulators that it's open to the innovations that you can talk to right so I think it's it's unique opportunity and I'm so thankful that this has

happening during my short lifespan you know I I often speak with entrepreneurs and I think what entrepreneurs need maybe more than anything else is encouragement because so many people believe they cannot do it you know it's for others to be successful as with their own companies but you know oftentimes they just don't have the confidence to believe that they can also pull it off on this one I would disagree because I think you know the the amount of confidence in your own what you can achieve and what you can do it's so big that you need to pull through all of

those hard else like you know and startup you you can hard you can have a heart attack every day because something doesn't work out so you need not just a little bit confidence you need tons of confidence and if you're not born and raised this way you know no matter how much encouragement and great people you have around it will not be enough so it's basically you know a little bit like the culture and and family in which you were brought up or even your character so the combination of those so you really need to be like hundred percent sure you can do anything the sky's the limit and and and you know like this is not something that you can choose your aces this way and you were

blessed was being raised this way you had supportive families or parents or people's and trust it in you or you don't right so encouragement is good and useful but it's just it's part of it right sorry maybe it depends on kind of the kind of entrepreneur too I mean I worked a lot with entrepreneurs in academia and they often have analysis paralysis where they study something for the longest time and then even write a PhD about it and then you know five years down the road maybe they hope that they can do something in it's just I I think you know you just have to do it just do it

start something see what happens absolutely and it's the same it's the same truest business model you know like some people some people when they listen to me is they say like oh I have a feeling like you guys maybe didn't figure it out like completely so there are so many assets so which asset you're gonna tokenized first seventh first second third and and you know I used to feel also quite uncertain about it and I was like oh really do we know enough and then I figured out yes we do know enough because I remember the times that example you were you know trying to to support you know this in-game payments and this micro payments and there was at

times that we really believe that the future of a company license is micro payment but then next things that happened you know like Bitcoin failed to scale and and says this transaction fees exploded right which completely killed all the idea of micro payments right and and you know and here's a company and I saw this shift right so that you kind of like need to shift from one idea to the other and kind of like you know find your way around it or even listen into a coin base founder like he actually thought about coinbase being completely something different than what it became and it teaches me the lessons that you don't need to worry sad much you don't

need to have to figure out what you're gonna do in three years and what is the three-year rollout plan you just need to start going into the directions that you know kind of already showing promise inside science and you will figure out the loans away but you will be able to figure out much better than the people that still stand outside and watch so it's always better to jump and and means the game because you will have so much deeper inside what's happening and what's the right way to pivot your isn't smaller than all the peoples that you know think like oh it's not still not clear enough I'd better watch the space a little bit longer and then I know what to do yes then you definitely miss it if

that's how you approach it with this platform you know we need a place you know we need an exchange we need a place for this tokenized assets for security tokens right and prerequisite is that you have regulator with whom you can talk and have engaged in this conversation and who is open to enable this innovation right and while we build in global business being based here in sweat solid I think it's one of the core competitive advantages yeah absolutely do you do you sometimes get criticism if you are so open about your vision and how you want to achieve success with your company oh yes a lot lot we get you know attacked on all the different

levels right some people say yeah but how you gonna build this company here in Switzerland ever since so expensive and so that's true right we we cannot afford developers here in Switzerland right because good luck she developers that maybe was working for Google of five years he's like probably 250,000 key and we just cannot afford it right so now we have all our development stuff in Poland and in Buenos Aires and all those faraway places and if you would ask me is that perfect business model for me no I hate it I would love to have people here and talk to them every day but it's

just you know it's it's a global competition and we need to be very cost efficient yeah so if you become very expensive you know then we will need to charge also expensive piece and this is no not how you gonna win the global competition right so so there are there are a lot of question marks still around it right how do you create this you know distributed organizations that are still powerful and fast and deficient but again you know the same answer I think we will figure out along the way it's really a brave new world and I think the only way to explore it is to just do it yeah exactly yeah did I did I forget to ask anything oh you know

there are so many topics we could talk for you it was you probably the whole night you know just needs to have another a bottle of red wine and sit a little bit closer absolutely it's really fascinating I always I always love to listen to you when you describe what you want to do you know also at conferences or at events when you speak I think it's always I mean you're a very good storyteller and and that's it's very important right because this is such an abstract space and you know I think we need to make the space more accessible and the way you do it is with good stories true thanks so much Olga for taking time today yes thank you

thanks so much for joining us today want info on our guests and our sponsors is in the show notes of this episode and on the podcast web site the blockchain and us comm to help people find this podcast it's important that you download subscribe and give it a top rating and review on iTunes or on the podcast platform of your choice I'm Manuel baggers and I thank you very much for listening [Music]