Security, Transparency and Compliance: An Interview with Mariana Gospodinova from Crypto.com

At Crypto.com, we build our services on the solid foundation of security, transparency, and compliance - these are the necessary prerequisites to scale a successful business.

1. Welcome to our series "Behind the Startup". Tell us about your story and your journey into the fintech industry?

I was born and raised in Bulgaria, at the very beginning of the 80s and grew up absorbing the country's pivotal regime changes to liberal democracy.  In the early 2000s, I moved to the capital Sofia for my university studies and a couple of years later, and I was incredibly lucky to stumble upon a job ad posted by Moneybookers (now Paysafe). At the time (2003) I had a very vague idea of what electronic money was, mainly because of Paypal, but was fascinated by the idea of a cashless society that transacts over the internet.

I joined Moneybookers at the beginning of 2004 as one of the first few
employees the company had on the ground and ever since then I fell in love with the idea of reimagining payments, making instant, cheap, borderless transfers to any country, in any currency using just a computer. Sixteen years later I have the same grit and determination to help build and popularize an even better payment platform, one that fosters financial inclusion, is transparent, affordable and allows individuals to take back the control over their money and identity. A payment platform that caters for every aspect of traditional finance but is built on a blockchain and is powered by cryptocurrencies.

2. You held leadership roles in the payment industry like Skrill (now Paysafe) and SysPay with a focus on building up a payment platform in line with regulatory requirements. The blockchain industry is still in its nascent stage, what kind of regulatory challenges do you face in the crypto industry?

Since its inception, the blockchain industry has faced a lot of skepticism and has seen more than one adversary, particularly in the face of authorities and law enforcement agencies. As the industry developed, we saw the emergence of on-chain due diligence companies, some of which made their first steps helping out law enforcement agencies to trace and intercept crypto transactions.

As the industry matures, so do the regulators. Plenty of jurisdictions have already announced their official stance on cryptocurrencies by either criminalizing the trade and possession of crypto or introducing local crypto licensing regime - Liechtenstein, Malta Gibraltar,  Germany, UAE to name a few. Earlier this year,  The European Securities and Markets Authority ("ESMA")  announced plans to develop a PAN European legal framework for cryptocurrencies and in the US the Cryptocurrency Act of 2020 is being discussed in the House of Representatives.

As crypto adoption and popularity grow, an increasing number of regulators worldwide will start looking into crypto. The key issues that industry players face come from the lack of uniformity across jurisdictions - crypto licenses, where available, are local and cannot be passported, local regulators do not have standard criteria when classifying digital assets thus leaving investors and service providers second-guessing if some crypto-assets may fall within the scope of the EU financial services legislation. The 5th AML Directive and the introduction of the Travel rule by the FATF pose technical challenges as to their implementation, particularly due to the lack of established on-chain providers that can cater to delivering compliance.

3. Crypto.com is the first cryptocurrency company in the world to have ISO 27001:2013, PCI: DSS 3.2.1, Level 1 compliance and CCSS. What is the importance of this compliance for a crypto exchange?

At Crypto.com, we build our services on the solid foundation of security,
transparency and compliance - these are the necessary prerequisites to scale a successful business. Obtaining industry-leading certifications is not only a great way to establish ourselves as a prominent market leader but also speaks volumes about our commitment to meeting customer expectations and requirements. Gaining and keeping customer trust is the fundamental of mass adoption.

4. Do you think that such compliance should be made mandatory for the crypto industry?

Conformity with different industry standards is mandatory and well defined in some cases (PCI DSS) and a matter of corporate governance and ethics in others. Companies that operate sustainable businesses should maintain appropriate programs defining the policies, procedures, and actions necessary to maintain regulatory and industry compliance.

5. Can you tell us about the objective and mission of Crypto.com?

Unlike many of the early players, we did not start as a crypto exchange, which makes us stand out from the crowd. We are one of the incumbent crypto payment companies which were born with the idea to bridge the gap between traditional finance and cryptocurrencies. Our mission is to put cryptocurrency in every wallet and empower individuals to take back the control over their money, data and identity.

6. Crypto.com is providing a cryptocurrency exchange service to its customers. How is the company trying to position itself in this highly-competitive market?

For the past four years, we have built a platform that addresses nearly every aspect of crypto offerings - payments, trading and finance traditional
finance - payments, investment, deposits, credit, merchant services and
last but not least - DeFi solutions that start with our  Non-Custodial Wallet app and will further venture into a wide range of decentralized solutions. We do not believe in competition but in partnership. To drive real adoption, we must all work together. We operate a new-age financial ecosystem built on the base of strong partnerships and compliance, and we continue improving and adding more value to better address the needs of our community.

7. The safety of funds remains a significant concern for investors and users. How do you ensure the safety of user funds?

Safeguarding of customer funds is a key objective for us. As a responsible
crypto custodian, we have developed a flow where all client assets are kept in cold storage, and daily transactions are pre-funded with our own fund. In addition to that, we have recently secured a total of the record $360M
insurance cover for our offline vaults.

8. Crypto.com offers a debit card as one of its products, tells us about its adoption, and where users are using it?

The MCO Visa Card is one of our stickiest products, and it has been in high
demand ever since inception. At present, we are the only crypto company that offers a prepaid card across the world, covering 31 European countries, 49 US states, and Asian large portion of APAC countries. The card is quickly gaining popularity in Europe after its launch in AprilMay this
year, and the European program is catching up with the rest of the regions.

9. Can you tell us about the MCO visa card, card tiers, and its features?

We offer five tiers of MCO Visa cards that feature no annual or monthly fees, up to 5% cashback in crypto, 100% rebate on Spotify, Netflix and Amazon Prime, airport lounge access for select cards, no-fee ATM
withdrawals, tap-and-pay functionality, and competitive interbank rates. The MCO Visa cards are high-quality metal cards that come in a variety of colors based on the card tier - Obsidian Black (50,000 MCO stake required), Icy White/Frosted Rose (5,000 MCO stake required), Jade Green/Royal Indigo (500 MCO stake), offers 5% cashback , Ruby Steel (50 MCO stake) and the Midnight Blue (Free plastic card), the higher the tier of your card, the greater the perks that come with it!

11. With already more than  2 million users, what is the future roadmap for the company?

In the short term, our focus is to continue building up our ecosystem by
improvising the existing services and adding new ones to address all aspects of payments, trading, and finance, in preparation for the ATH that we believe will come next year. We will continue improving the matching engine and liquidity of our crypto.com exchange, add new partnerships and assets, and build new DeFi solutions to complement our ecosystem. We are quickly moving into a new card issuing markets, such as Canada and Australia, and we continuously grow our user base and keep on evolving as a company as well, now having more than 350 team members across the globe.

12. What has been the impact of Coronavirus pandemic on Crypto.com products? Have you seen an increase in the use and adoption of your products?

We were incredibly fortunate during these extraordinary circumstances, and our business has seen significant growth, partially due to the market volatility, partially due to the key new projects we rolled out such as the European card, our non-custodial wallet, and our new and improved exchange matching engine.

13. According to you, what is going to be the effect of coronavirus pandemic on the economy? Can we expect widespread bankruptcies all over the world?

The COVID19 outbreak has wreaked havoc in over 185 countries across the world, and while there are no exact calculations on the economic damage it has caused it will have a significant negative impact on the global economy. Despite the numerous attempts of governments to save the markets by injecting fresh capital into the economy and introduce monetary policy measures in support of corporations, there is a good chance that the virus spread will dampen destroy economic growth.

The substantial rise of unemployment levels, particularly amongst those engaged in the gig economy puts additional pressure on governments - in the US alone, over 30m people have filed for unemployment benefits within the first month of the lockdown, and the rest of the world is facing similar trends. According to the IMF, the global economy will shrink by 3% in 2020, and many of the top economies are expected to enter into an unprecedented recession.

This would test the ability of central banks to control and overcome crises, and it's already evident that the massive quantitative easing would create only short term positive outcomes, but when markets correct themselves after the next quarter results, we will most likely face another plunge in stock prices. The biggest concern of all in a failing economy is when people are afraid of losing everything. In settings like this, crypto stands out as a secure and desirable store of value that offers full transparency and mobility as well as can be a great investment vehicle.

The purpose of this article is to remove informational asymmetry existing today in our digital markets by performing due diligence by asking the right questions and equipping readers with better opinions to make informed decisions. The views in these articles are purely personal and educational; the material does not constitute any investment, financial, or legal advice. Please do your research before investing in any digital assets or tokens, etc. The writer does not have any vested interest in the company. Interviewer - Ishan Pandey, Founder of Blockchain Research.