- Brian Armstrong gets caught up with AML/KYC issues
- Coinbase has strict compliance measures, so Armstrong’s experience is ironic
Coinbase CEO Brian Armstrong took to Twitter to complain about his recent user experience with two popular legacy fiat payment apps. Armstrong reportedly tried to send a payment to a colleague and was denied twice, highlighting the need for crypto alternatives.
BRIAN ARMSTRONG GETS CAUGHT UP WITH AML/KYC ISSUES
Brian Armstrong was not able to make a peer to peer payment to his friend using two different but extremely popular payment apps, Paypal, and Jack Dorsey’s Square Cashapp.
Armstrong pointed out that he is facing these difficulties in the US, the world’s largest and most developed economy. He also pointed out that residents of smaller less economically developed nations would like face even larger obstacles than he had.
Further on in the thread, Armstrong elaborated on his take, explaining that regulatory restrictions are often to blame for lackluster customer experiences, as the companies themselves must comply with regulations and often have their hands tied.14 BTC & 30,000 Free Spins for every player, only in mBitcasino’s Crypto Love Affair! Play Now!
While crypto alternatives are still very early, and have similar problems with UX, Armstrong believes that crypto payments will be the payments alternative that “just works” in the future
Crypto has it’s own (numerous) UX challenges of course. But by building on new underlying infrastructure there is an opportunity to make things better, and finally have payments that “just work”
Ripple-backed remittances service, Moneygram also offered Armstrong a promo code in an effort to shill their services to Armstrong’s Twitter audience. It’s unclear if Armstrong took them up on the offer.
Armstrong also went on to mention that there’s plenty of space for innovators to introduce groundbreaking new alternatives in regulated markets, although doing so presents a series of challenges.
There is a lot of opportunity to launch products in regulated markets though. It is so much harder to be innovative, so most entrepreneurs shy away from it.
COINBASE HAS STRICT COMPLIANCE MEASURES, SO ARMSTRONG’S EXPERIENCE IS IRONIC
Coinbase is one of the largest cryptocurrency exchanges in the world with over 20 million customers across over 30 nations. As Coinbase has grown in popularity they have been extremely proactive in being regulatory-compliant, in an effort to establish a good relationship with regulatory agencies.
This overzealous regulatory approach has led to many customers having similar negative experiences with their Coinbase accounts, as Armstrong has had with Cashapp and Paypal. Many customers have had their accounts frozen for months before being allowed access to funds again.
With so many users, Coinbase’s customer service staff are often overwhelmed with new requests, causing frequent delays. The lack of customer service response to poor user experiences, led to a snowball of complaints.
Customers also complained about Coinbase’s alleged insider trading surround their Bitcoin Cash listing, and also the fact that Coinbase did not allow users access to their BCH tokens for months. Over a 100 pages of complaints against Coinbase were filed with the SEC.
Armstrong seems to be experiencing the same kind of frustrations as many Coinbase users, ironically
Coinbase and Two US Giants Invest in Hong Kong Crypto Startup
The firm has been offering services such as providing loans, electronic market trading, financial management, OTC trading, etc. to all institutional investors
In recent years, we have seen a lot of buzz for the Crypto market in Asia. Reportedly, 80% of the total Crypto trading is done from Asia. As a result, investors are aiming to plunge into the Asian market for profit-making.
Top US Crypto investors, Pantera Capital, Polychain, Paradigm, Coinbase, and Fenbushi Capital made a piece of great news when they decided to jump to an opportunity to invest in Hong Kong Crypto trading company, Amber. Investors have made a big announcement that they would pour $28 million into Amber.
In 2015, 4 Morgan Stanley traders and 1 Bloomberg engineer decided to start an Artificial Intelligence startup to trade Chinese Stocks and securities. They name the company as Amber AI.
In Summer 2017, they decided to divert their attention to Crypto trading when they found a huge arbitrage opportunity. Although their total profit was in single-digit million dollars, Amber made gains of 100% to 200% between October 2017 to December 2017.
Surprisingly, in 2018, when BTC rate fell from $7800 to $3800 (Approximate figures), Amber made a huge profit of $50 million with 40% return rates. They eventually decided to stop their focus on Artificial Intelligence and removed that AI from their venture name.
Over the past few months, since Amber switched its total attention to Crypto trading, the firm has been offering services like providing loans, electronic market trading, financial management, OTC trading, etc. to all the institutional investors.
As per one report, Amber generated revenue between $10 million to $20 million in 2019. Tiantian Kullander, the CFO of the Crypto startup, aims to double the revenue generation in 2020.
Amber with 105-employees in Hong Kong creates a lot of opportunities. Firstly, they are sitting native to the top Crypto giants namely the Binance of Singapore, Huobi of Beijing, Bitmex of Hong Kong.
Secondly, unlike the US government, the Hong Kong government does not count Cryptocurrency as a security asset. As a result, Amber’s clients are can trade more than 700 coins on up to 30 Crypto exchanges as compared to 30 digital assets in the US.
For now, as per Kullander, the Coronavirus has created a downside in Asia. As a result, Amber’s current employees are working from home. Coordination and visiting clients have considerably reduced.
Reportedly, this has not reduced the revenue of the startup. Kullander commented on the situation. He said,
“The beauty of Crypto trading is its 24*7 availability. You can sit at home and run your investment regime.”
Arjun Balaji, an investment partner at Paradigm, said that they were quite positive about investing in Amber. As per him, Amber has a good potential to earn good profits in the coming months. A world-class team combined with a sophisticated approach made them become a partner with the Hong Kong Crypto startup.
Coinbase Users Keep Their Funds on the Exchange for far too Long
The concept of buying cryptocurrency and storing it on exchanges has been problematic for some time now. A recent chart shared on Twitter shows hat Coinbase users keep funds on the platform for far too long.
It is convenient when an exchange also lets users store funds on the platform.
COINBASE USERS NEED TO WAKE UP
Especially for novice users, this seems like a logical approach.
In reality, it is one of the worst things anyone can do.
Funds stored on an exchange or other trading platform is not the property of the buyer or trader.
While it is linked to their account, they have no direct control over the money.
It is always better to withdraw funds as quickly as possible to a wallet the end user controls.
However, as far as Coinbase users are concerned, that message isn’t getting through.
They tend to hold certain currencies for well over 80 days in their account balances.
Only EOS, Tezos, and Stellar are withdrawn relatively quickly.
There is no reason to keep BCH, XRP, BTC, ETH, or LTC on Coinbase or any other platform for more than 10 minutes.
None of these currencies provide staking functionality, nor do they generate interest by other means.
One can only hope that these statistics regarding Coinbase improve for the better as time progresses.
Coinbase, Pantera, Paradigm, and Polychain Invest $28 Million In Amber
As the crypto world continues to grow, Asia has taken great strides within it. As it stands now, a minimum of 80% of the world’s crypto trading is done within the Asian continent. As one would imagine, the Western crypto industries have borne witness to this new trend, very eagerly trying to dip their fingers in the pie.
Seeing Opportunity Where It Stands
The top crypto investors of the US, Paradigm, Pantera Capital, Coinbase, PolyChain, and Dragonfly have all taken part in this new venture opportunity. The companies have collectively sunk $28 million into Amber, a Hong Kong-based company with a valuation totaling in at $100 million.
Amber was founded back in 2015. Five bold twenty-somethings within Hong Kong, four of which former traders at Morgan Stanley, founded a company named Amber AI. Initially, the group focused primarily on AI algorithms to trade various securities, Chinese stocks included. However, the group quickly discovered the enormous volatility of crypto in during the 2017 year of the crypto bubble. There was a rife opportunity for arbitrage within that time, something that shocked even the Amber team. They were capable of buying BTC at $7,300, then proceeded to sell it for $7,700 on another exchange. The gain was pocketed, making a pleased trader.
200% Profit Instead of 0.01%
Tiantian Kullander, the CFO of Amber, fondly recalled the first time the team tried it out. They explained that they simply couldn’t believe what they were seeing. The Amber team had come from a primarily fixed income, bond trading market. Volatility was next to nothing, and Kullander explained that they had to fight for every basis point they earned in that market.
In contrast, Amar managed to gain 100% to 200% profits per month during the Crypto Bubble of 2017, during the months of October to December. Even so, Kullander states that they only managed to garner a total asset value within single-digit millions. An insurmountable amount of money, sure, but the global heavyweights wouldn’t even cough at that amount.
Green Pastures Ahead
Just last year, Amber managed to garner anything between $10 million and $20 million in revenue. The net profit margins were always above 50%, as well. Kullander aims to double this revenue numbers in 2020, he says. With that amount of cash injection, the company will have a good start. Amber has already proved itself a capable company, so the likelihood of it going under with even more of a funding injection is next to nothing.