We’re gonna talk about WaveCrest, we’re going to talk about banking license and more.
I think you deserve the answers to your questions
We have a lot of people here today, we have our entire support team here, helping me out. Nothing would be possible without Mike, Brendon, Steven, Bettina and more.
While you are coming in, I’m going to announce something that I will repeat later on. We have a number of meetups planned for this month. We are going to have a couple of them in Germany, in German. You can find them on the facebook groups, on our websites. It’s going to be in Frankfurt on the 15th of January, Switzerland on the 16th, Munich on the 20th, Singapore in the office on the 25th, and Paris on the 29th. We are still looking for a location for Paris, and will release more information in the future.
I will be in the U.S. Mid February, and will probably do a meetup in Dallas, Texas on February 15th. We will have an entire schedule released in the future, we are going to talk both about TenX but also the cryptocurrency ecosystem as a whole. The German ones will be in German, the rest will be in English.
We have over 500 people now, so let’s get started.
Let me start with the three topics that people keep asking about before answering the questions on Reddit.
The first topic is obviously WaveCrest losing their VISA license, which affects TenX.
I did an update on Friday, after I just landed in Singapore.
To be honest, even though we had very little time to react to the situation, looking back, I would have reacted in the same manner. For me, it’s very important that we are close to our users, be it through good times or tough times. Obviously, I always prefer announcing great news, but when it is tough news, I do not think it should be any different. I feel that even though it was tough news to break, it really is a huge opportunity for us. This is something that I will mention again later on.
I think we handled it well and responded well as a company. Also, I want to reiterate this point. We really didn’t know any earlier. I received a number of messages, which really hurt. People said “Julian, why are you taking holidays, you should have been online and contactable.” Even if I were, and I do have people monitoring my email and social media, if there was something urgent during this period of time, I would be notified. Toby was also travelling, and was not aware of the situation. We were notified only a couple of hours before we made that Youtube live. I talked to other companies that were similarly affected as well, and they were not notified either. We checked the legal contracts we have with WaveCrest, the legal recourse available to us. To be fair, while I do not know the exact reason they lost the license, and VISA was very clear that this has nothing to do specifically with Cryptocurrencies, it was specifically targeted at WaveCrest.
WaveCrest has this clause that if they lose the license, they have to cancel the contract with us.
We thought about going through the audit papers of WaveCrest, though I highly doubt that they would provide them to us. At this moment, we are focused on getting our funds back and that the data of our users is protected. I think this is more important than lamenting what could have been, I think it is more important to look forward to future possibilities.
We also had a meeting, just the co-founders, on how we could have prepared better for such a situation. To be fair, we have had considered the possibility of WaveCrest losing their license, but we never thought it to be a likely scenario. I still believe that we did our best and are not to blame, but we are also not a company that blames others. As a company, we take the pride and we take the blame. Yes, we do want to improve, yes, we do want to look for solutions on how we do certain things, such as looking for an alternative issuer. We have been in contact with an alternative issuer for about a year now. That issuer has told us that we are going to be the first program that is going to go live with them, and I am confident that it is going to happen.
WaveCrest did not let any other companies know about the loss of their license until the day itself. I think we are better prepared for such a scenario now, but I think we reacted well given the situation then.
The second topic is “What is this new issuer?”
We have received hundreds of questions and messages regarding our new issuer. Believe me, if we were allowed to announce that issuer now, I would do it. We even asked them if we were allowed to, having received many press requests from large news outlets worldwide. Currently, we are not allowed to confirm that they are our new issuer.
Just put yourself into their shoes for a moment. WaveCrest just lost their license. If they confirm that it is them, they are only going to be overwhelmed with even more press requests. Some people already know who it is, so I am sure that they are already getting requests. The reason we do not mention them is to protect them as well. Imagine that you are a large, well respected company, and suddenly you have a smaller company contacting you asking if they can announce the partnership. This is going to throw you into the focus of the press, which is not beneficial for them. If I could, I would. Trust me on this.
That brings us to the second part of this question, which is “Why are we delaying the release of this cards?”
We need this partner until we have a banking license. We don’t want to delay. We are ready, we have been ready since November. Everything is signed, we just have not been given the go ahead. You need to understand that there are a lot of small pieces that need to fall into place. If one small part is changed, it affects the rest as well. Furthermore, now that WaveCrest has lost their license, do you think our new issuer will be more careful or less careful? Obviously they will be more careful!
I have seen a couple of messages from you guys like “If Julian doesn’t announce the new issuer, I am going to lose faith.” Honestly, if this is what makes you lose faith, I don’t even understand how you can even be in the crypto environment, where most of the projects are built on pure speculation, just a whitepaper or even fraudulent whitepaper. You know which coins I am talking about, because some of them are in the Top 10. This is where I really kind of urge you to come to your senses when you make such comments. If you sell your PAY tokens just because I cannot announce an issuer, the only thing that I can say is that you are probably not the right kind of person to buy PAY tokens in the first place. We are not a company that looks for the quick pumps. We are not the company that hypes our token. We are a company that wants growth, and obviously we want the PAY token to go up in value. Trust me, we do. We are going to do it standing behind our values. I cannot confirm and I cannot comment on the new issuer, due to an NDA. There are other companies that cannot comment on such things as well. It’s not because companies are unfair to you, it is because we cannot. Some things are beyond our control.
We are doing something about this, we now have a clear timeline to obtain our banking license. We will obtain it by Q2, and we will be able to issue our own cards by Q3. This will allow us to be completely independent in Europe. This is what is important, being able to control our entire value chain. Do not think that we are not trying alternative solutions. Alternative solutions take time, and building a real business takes time. I am one of the biggest critics of Cryptocurrency business that are not real business. We are looking into the same things for the U.S. and Asia.
Let’s say that this card issuer that we have signed an agreement with also loses their license. In this unlikely scenario, obviously it will delay our plans, but we already have alternative solutions in place. We do not want a repeat of the situation with WaveCrest. It takes time to ensure that such solutions are in place, and this is true for both our card issuer and banking license.
The third topic is the token structure. We get daily questions on our token structure, when we are going to pay out rewards. Please read our blog update that we made some time back, which states that you cannot expect rewards. We will not respond to such questions as that will lead to PAY being classified as a security. Let me reply to questions regarding the token structure instead. We are making good progress with our lawyers. I know you have heard this before and some of you are probably saying “if he doesn’t give me an update on the token structure, I am going to sell the token.” Trust me, you are not hurting me by doing this or saying this. You shouldn’t have bought the token in the first place if an answer like this discourages you. In fact, it should show you that we are a project that does our due diligence. Show me a project out there in the crypto ecosystem right now that intends to or wants to pay a reward. Currently, it is not possible. This is why you need a different way. One of the first things that we are going to do is to give the PAY token more utility. This was not in the whitepaper, but we will do this on the advice of our lawyers because it will move the token away from being classified as a security, even if we may include additional features at a later stage. This includes giving our users a discount on our card if they pay using PAY tokens, reducing the withdrawal or sending fees if they use PAY tokens. If we add trading functionalities in the app, we may even consider using the PAY token similar to BNB and Binance. We are also considering the possibility of giving PAY token holders that hold over a certain amount a better reward. Even if we set the benchmark at 100 PAY tokens, if we have 1 million card users, that’s 100 million PAY tokens. That’s the entire amount in circulation right now. We do want to add features to give the PAY tokens greater utility, but obviously we are subject to the changes in the legal landscape. Be it from the SEC or from Singapore, we are constantly being affected as our company is global. Every legislation around the world, where we may have token holders, affects us. This is compounded by the presence of groups of countries such as Europe, where AML rules are quite strict. If you do an airdrop tokens to people in Europe, it would instantly violate AML rules as you will be airdropping to anonymous people. If you want to do an airdrop, you need to know every single one of your users, as if you were an exchange.
Will our users all be willing to access their PAY tokens through an exchange, as opposed to their own hardware wallet? Then, the U.S. has a completely different set of rules, such as the Howie Test. This states that if you can expect to make money simply by doing nothing, this is deemed a security. I just had a meeting with the MAS here in Singapore, as well as Hong Kong and Korean regulators. It is very important that we proceed with caution, if not we risk being regulated, which will lead to trouble for the token and the company. Trust me, we have a very clear plan. I would love to roll all of this out right now, ideas that we believe and have confirmed is possible. I would love to start it right now, but the reality is that we do need to proceed with caution and work with the relevant authorities. To ensure that TenX remains 100% legal. Unless there is someone or some institution that tell me “If you do this, it is illegal, if you do this, you will get in trouble,” I will always do my best to give you more details. I have to stick to the law, to the rules. I hope that you understand that. I hope you respect us and understand that we have been doing everything that we can to deliver the best product possible. We will always be upfront about what we are doing. Those who criticise us by saying “Julian, you guys don’t even have a product”, I want to correct you. Yes, we don’t have live cards right now, but we have a working wallet and we have users. Trust me, at least we have some kind of revenue, even if it may be miniscule. These are the three points that I want to start with, and I hope that this answers some of your questions.
I am now going to look into the chat if there are questions I have not answered.
There’s also one thing that I want to mention, which I mentioned on Friday. I am thankful for the Ethereum team. They worked through Christmas just to find out that the cards have been cancelled. I know how frustrating it is to work on something and right when you release it, it becomes useless because of something you have no control over. Also, thank you to the customer support and community management team because in the past four days, they have received more questions than ever before.
- Julian, how about having one card issuer instead of just relying on one?
Yes, this is one of the strategies we are already pursuing. We will have multiple issuers even within a certain region, and we will have multiple issuers that overlap in terms of region coverage.
2. When will current card holders receive replacement cards? Will current card holders receive cards first?
The plan with our new issuer has not been delayed. What this means is that we will send out cards by Q1. We are meeting them again on Thursday. In the event that there is a delay, we are just forwarding you a pessimistic view given by them. We have never given you guys an optimistic view, we have always given you a pessimistic view, but evidently things beyond our control have led to even more delays. With WaveCrest losing their license, obviously they are going to proceed with even greater caution. They are a really established company, and they are not going to risk losing their issuing license.
3. Why did you want to switch issuers anyway?
We wanted to do it because with our new issuer we have greater control over things. With WaveCrest, it was more of a plug and play solution.
4. Where will the new card be supported? Is it going to be supported worldwide?
The new card will be supported worldwide but we will be focusing on Asia first. This is just one issuer, we are working on several worldwide simultaneously. The one we release first will be targeted towards travellers. Crypto is perfect for this, international, cross border transactions. However, please also understand that we are working on several different solutions, not just one.
5. I see that you have a lot more questions in the chat, but please respect that we have an entire list of question on reddit and I do want to go through those as well. I also get a lot of questions on competitors, so let me be clear on this.
Yes, currently TenX does not have a live card. Most competitors to my knowledge also do not have a live card. Maybe I am forgetting a competitor who still has a live card in a small region. I am talking about cards that have been proven to work, not just someone on a social media account that says “we have a live card”.
6. Why do some companies not even have a wallet?
I don’t know. I really do not understand this. Why do some companies have just a sign up page? You know why? They don’t know how to build a product. They don’t have a tech team. Talking to some people and doing some business development is easy. The UX, the design, these are the processes where it gets tough. I met a friend of mine on Sunday, and he told me, “You know what your biggest downside of TenX is in crypto? You have a product.” This was also mentioned by the Chinese, who feedback to Bryan. When you have a product, you get measured, you can be evaluated. They are probably right. People like to invest in hype and speculation, it might actually be better to just have a sign up page instead of an actual app. Having an actual wallet is 10 steps ahead, and I am not sure why more competitors do not have a wallet yet. Those companies that claim to have a card, please send me one. I would love to test it. My office address here in Singapore. Send me a card and if your system works, I will definitely announce it on Twitter. TenX has done this. TenX has sent cards to people with a following asking them to test it. I am always up for the challenge.
7. What is your business model? Where do you get your money from in the short term and the long term?
Our vision at TenX is not to just be a payment service. We plan to be a platform that provides people access to any decentralised service that is out there. Payments is just one of these services, and we are starting with this because it is easy to understand for the average person. If I went to my mum and said “At TenX, we let you connect these Bitcoins to a debit card to let you spend them,” she would be able to understand. Compare this to telling her “We have this app and you login and you can access these services to buy gold or chat,” Obviously she will be able to understand the former better.
This is why we are starting with just one service, before expanding, similar to Amazon. This also means that we are not going to charge any major fees. We just need to break even as the goal instead is to onboard as many users as possible. In the long run, we hope that we will be able to monetise other services. Compare this to Facebook, Alibaba and WeChat. They are primarily a platform. In this industry, whoever manages to establish themselves as a platform will reap the benefits. Amazon did not start as a platform, it started as a method to buy books. This is the same reason Uber did go straight to self-driving cars. They need to get users. This is why they have drivers now. As soon as self-driving cars are commonplace, Uber is going to switch. It is obvious that having a short-term business model is so important. Even if it does not generate a profit, it ensures that the resources you have available do not diminish. This is also the reason that we have maintained a 50/50 split between crypto and fiat. This ensures that we will have enough funds to run the company even if cryptocurrencies decrease in value. If the value goes up, that is great. If the value goes down, even better because we will have the opportunity to buy other companies and developers. We believe that cryptocurrencies will experience a bear market eventually, and we want to be in a position where we are able to take advantage of that. This is the short term and long term vision of TenX.
8. You have previously talked about partnerships with banks to white-label the TenX card. Is this something that is signed?
No, this is not signed yet. This is because we need to have a properly scalable solutions before we can explore such an option. Our entire scalability challenge has slowly resolved itself, in December where I am sure everyone saw that the waitlist cleared up. This is something that we will pursue, most likely in Q2.
9. What can we expect in marketing in this upcoming quarter?
For Q1, it will depend on the speed of our new issuer. Let us adopt a pessimistic view and say that it is at the end of Q1. If that is the case, then we will not do much marketing because our focus will be getting replacement cards issued to our current users. We are still growing the team, hiring people to be in charge of digital marketing and branding and more. I want to build a team of around 20 people to be in charge of marketing. Our marketing plans will depend on factors that we have no control over at the moment, but I will give an update as soon as possible.
We also have plans to roll out new features, such as converting fiat into crypto and trading features. This also affects our marketing plans. We need to be clear of our audience, whether they are already familiar with cryptocurrencies. If we are targeting people who are not familiar with crypto, then we will be more likely to use platforms such as Facebook and Youtube as opposed to Twitter.
10. Can you give us an update for new exchanges?
We are specifically going after Binance and Bitfinex right now. I am still in touch with Kraken. We also have a confirmation with a new exchange that was supposed to list us that they have run into legal challenges in their country at the moment. They are not listing any ERC20 tokens at the moment. We had a listing date confirmed and everything already, but obviously this is now out of our control. In the business that we are in, there is such a great amount of uncertainty, simply because it is such a new and disruptive industry. Nobody has done what we are trying to achieve, and there is a simple reason for that- because it is not easy.
11. PAY is an ERC20 token. Even though Ethereum is a very prominent platform right now, what is your plan in the event that the Ethereum network collapses and everything goes away from Ethereum?
We would just switch to Ethereum Classic. I’m just kidding. You can look at other platforms, but currently Ethereum is the best. There is no other platform that is as advanced as Ethereum. Yes, other platforms have nice whitepapers and great ideas, but when it comes to actually using the platform, they are still worlds apart. In the unlikely scenario happens, which I think is a very unlikely scenario, obviously we will be affected. That said, TenX is not tied to Ethereum, it is the PAY token that is tied to Ethereum. We would just find another solution. This would also affect many other companies, and I am sure that we will find a common solution.
12. What is the progress on COMIT?
Let me give you an update on COMIT in the future. At the moment, I don’t really have any exciting updates. We are acquiring people from a research company so that we can scale and grow even more quickly. COMIT was also part of the discussion I had with MAS. Let me give you an update in the future when I will have more exciting news.
Now that we have no cards live, it frees up a lot of our resources. It allows us to have better infrastructure, to add new cryptocurrencies. It also allows us to develop a better trading engine. It sounds really strange but one of the hardest things in the company is when you have customers, as customers cause problems. If you have no customers, you probably have the most problems, but once you have customers, all these other small problems occur. Now that we do not have any live cards, it frees up a lot of our developers and this should expedite other aspects of our company.
We have hired another 5 developers, thanks to our recruiter Royce. I do the final interview for the developers since I am sort of the de facto Head of Culture, and I know that we are hiring even more.
13. I’m not 100% sure what this question about auditors showing up means, but if your question is whether we have these funds, yes we do and yes we will be able to provide the numbers. We have an audit trail as well.
14. Has the TenX team submitted their coin listing for Binance?
Yes we have, and obviously it would be great if our community would be able to vote for us as I do believe that Binance has a monthly vote to add coins. Mike and the rest of the team will obviously update you guys regarding that. I think Binance is very important, as it has the highest trading volume for altcoins at the moment.
15. The roadmap on our webpage is just a very pessimistic one. For example, the banking license is listed as planned for 2019, but we already have plans to get one in Q2 this year. Please understand that we have to be careful with what is on our website, and that progress might be faster than stated.
16. Will TenX request that WaveCrest erase the information that they have on TenX customers?
At the moment, WaveCrest actually has to store this information for a number of years to comply with potential audits. Of course, we will ensure that the data cannot be leaked or reused. We are doing our best to protect your personal information.
17. Once again, no comment on our card issuer, we are not allowed to comment on it simply for their protection.
18. Thinking of TenX in the long term, would you every consider releasing a special card for token holders who have held since 2017?
I would be very open to that. I would love to support people who have been long time supporters. I know that some of you have switched accounts, I also have my PAY stored in multiple wallets. I am supportive of this, but our current focus is to get the replacement card issued.
Currently, our priority is to issue replacement cards to our current users. We want to be able to issue cards globally, especially for travellers. Next, we want to ensure that we have alternative solutions. We want to have multiple issuers, and we want to add even more cryptocurrencies to our wallet. Regarding the banking license, Yana is doing a fantastic job. Desmond, our in-house legal, is also doing a great job. This will allow us to solve a lot of the current challenges, allowing us to be more independent. Our legal team is here to deal with the PAY Token structure, dealing with lawyers in the US and Europe. We want to have legal opinions written and confirmed for our token structure. If we can do this within a year of our token sale, I think we have done a great job.
A year ago, there was just five of us, with little to no funding. We did not have funding from Fenbushi yet. We had about 100 test users, which is weird because we had more cards out than we have right now. Our cards were constantly rejected because of one reason or another. Now, we have 50 people, we have funding for the next few years whether crypto increases or decreases in value. We are very long-term visioned, and yes, while we would love for PAY to increase in price, that is not something we will compromise our values for.
19) Regarding the refunds for the card.
You will be refunded into the wallet. The card is independent of the app. If you do cancel your card, obviously we will refund your $15 into your wallet.
That’s all the questions from reddit, I hope I didn’t miss any crucial question. I will now answer the questions from the chat.
20) What is the update on the upcoming office in Australia?
I am currently interviewing the director for that office, it is going well.
21) I am not making comments on all these other tokens. We can do this at meetups or at a non-TenX Q&A.
22) Why is the Q2 banking license so fast?
We have a really experienced person working on this, so the process is streamlined.
23) Yes, I do understand that the wait for the cards is very frustrating. I wish I could do something about it, but we are already doing our best. The entire team is working on this.
24) Do we have a 2018 roadmap. We are going to have a meetup here on the 25th of January in Singapore. We will publish the 2018 roadmap there. I can talk about it during the next Q&A, but we will be streaming the meetup anyways so you will be able to find out more about this then. Today I really wanted to address the questions regarding the new issuer and the token structure.
25) Regarding Meetups: We have a couple of meetups this month. Meeting people in person is always better than over the internet. We have Frankfurt on 15th, Switzerland on the 16th, Munich on the 20th before returning to Singapore. We have a meetup in the office on the 25th, and on the 29th I am going to be in Paris. 15th of February I will be in Dallas, Texas. From the 16th to the 18th I will be attending a conference there, and I will release an entire list of other conferences that I am attending.
We want to do stuff that other companies don’t. We want to be close to the community, we want to let you ask questions, while simultaneously engaging regulators and attending relevant events.
26) Yes, the new cards will have NFC capabilities.
27) Will having more control affect the KYC procedures for TenX? What happens to the old KYC approved users?
This is a question that we do not have an answer to at the moment. We are trying to streamline the process right now, to make it as seamless as possible for the user. We are not yet sure if the new issuer can just reuse the KYC data. This is because we did not expect to have to replace everyone from WaveCrest to the new issuer, we initially wanted to have both systems being run parallel to one another before transitioning over time. Now, we have to integrate everyone and I do not have a final answer for you yet.
Lastly, I will make a German video on all this once I have more time.
The company will always come first, and I hope you understand and appreciate that.
28) Will the limits be changed?
Yes, there will be new limits with the new issuer.
I hope that I have answered most of your questions. For those who thought that we were going to give up, I hope that you see that it is in fact the direct opposite. The two-week break during Christmas was exactly what I needed so that I could be ready for 2018. Thank you for your support in 2017, and I hope that I will continue to have it in 2018. I am sure that 2018 will have even more interesting developments.
With that, thank you for being here and listening for over an hour. You can be sure that TenX is doing our best and we will deliver. Thank you, we are working on getting on new exchanges. We always need your support, be it educating inexperienced users or dealing with people spreading FUD. Don’t hate on other projects. We have to support each other. I look forward to seeing you at the meetups. Thank you for your support, for your trust. We are doing our best.
See you in two weeks, I am looking forward to that.
It is always an honour to do this live Q&A.
See you in two weeks.