Exscudo Update: Andrew Zimine about the past and future of the project
As you might have noticed, the Exscudo team is currently getting prepared for a massive launch of new products. Now, we feel it’s a good time to take stock of the progress made and outline our future plans for you to know where we are going together.
I decided to make a short summary of the past 2 years as some of you may have joined us recently and are unfamiliar with complete Exscudo history of rises and falls.
We started our ICO when crypto was a hype, and there is a bad and a good side to it. The interest to cryptocurrencies was immense, meaning a crypto-related company had to pay a double price for any work or service done for it.
In May, 2017 we raised as much as USD 5.4 mln in BTC. A month later we exchanged these bitcoins for fiat to secure the assets. The Ethereum ICO negative experience was still fresh in our memory and we didn’t want to run the risk of losing the money we needed to start our project. As we all remember, starting from July, 2017 the price of BTC began to grow steadily and reached the impressive mark of USD 19,000 by the end of the year.
Though we had missed the chance to sell our BTC at the best price, we were not really unhappy about it. Our goal was to launch a new project, and we working on it. Besides, unlike many other ICOs no one remembers about now, we were concentrated on creating a stable and properly functioning ecosystem, and not on marketing tricks that would inflate the price of our token.
The year of 2018 brought us many surprises related to financial regulation initiatives introduced by many countries. They were numerous, and they all had an impact on us. But there were 2 regulations that influenced us the most. First, the USA recognized crypto as a security, meaning our project had to comply with the corresponding US regulations. In practice, it meant we had to be licensed in every US state where our investors resided (a separate procedure for every state), and send the info about all the US investors to SEC. Actually, it would have been the end of the project, as an average price of such a license (in each state) is USD 100,000 or even more, and the procedure takes 6 months (or even longer, if there are some complications). Instead, we preferred to refund the money to all our US investors, suffering inevitable financial losses as the price of BTC at that moment was higher than the one we sold it for, after the ICO.
Another challenge we faced then was the amendment #5 (PSD2) entering into force in Estonia, that equated crypto transactions to fiat ones. It meant that all the banks we planned to cooperate with, except GFC, were forced to leave the project. GFC, in its turn, demanded we should comply with the mandatory KYC/AML procedures (the existing Veriff service was not enough any more) and lower the limits to 15,000 EURO a year, that would have been be fatal for us.
This experience made us aware that that banks and regulator are actually scared of the advent of crypto, and they take every possible measure to prevent blockchain & crypto projects from going mainstream. These preventive measures included developing rules impossible to comply with, and inflated service fees.
Other challenges we faced at that time were related to the project team itself. The initial team consisted of 10 people, each working almost 24/7 for a minimum salary. We thought that a massive money flow will accelerate the development process and make the project launch date closer, but it didn’t work: many developers lacked motivation and were only interested in high salaried we offered. The results were far from expected, and the reasons are still unclear to me. All these factors combined, the project was almost a year behind the schedule.
Sounds like a failure story, but in fact what did not kill us made us stronger – and more flexible. Finally, we managed to create a strong team capable of working efficiently (they are responsible for all the product updates you saw during the past year). Also, we had to change the course, as some market niches we had targeted at initially, were already taken by others. In the beginning of 2019, we decided to focus on such a perspective direction as creating a mobile platform for social trading, funds management and investment.
Today, we are ready to move from a MVP to a fully-functional project. We have added SEPA and credit card transfer options, and successfully managed to comply with the regulations without losing the competitive advantages and raising fees. We are currently finalizing the credit cards (making accent on virtual cards) and preparing to launch unique services like Channels TeamShop and TeamTrading. There are other plans that we are unwilling to share publicly, as we seek to protect our ideas. As soon as the date of launch is determined, we will announce them, too.
In conclusion, I would like to thank all of Exscudo community members for staying with us, despite all the difficulties. Finally, we are entering a new stage, and there are a lot of really exciting things to wait for.