As we move from a phase where crypto was mostly the domain of the tech-savvy to one of much broader adoption, bridging the gap between the traditional banking and payment systems and the worlds of DeFi, NFTs and the Metaverse in a user-friendly manner is becoming ever more critical. Peter Wood joined our host Paul Gordon to discuss the foundations CoinBurp has laid over the past seven years that will underpin the development of their CeFi, DeFi and, NFT enabled wallet designed with UX at its core.
Peter entered the crypto space seven years ago. Prior, he was the everyday desktop support troubleshooting simple PC and peripheral problems for consumers. Peter scaled his first company, Bitbroker, a bitcoin broker started with a £1,000 overdraft, to a team of global developers and by 2017, that had made a turnover of about £ 100 million. After the success of Bitbroker, he started CoinBurp, a simplified exchange for crypto first-timers.
As someone who built a company in the early days of crypto, Peter has learnt quite some invaluable lessons.
(01:51) “The market moves so quickly don’t ever rest on your laurels. Don’t become complacent; if you are in the industry of crypto, you need to keep moving,” Peter said.
Peter sees the present terrain of regulatory approaches to crypto as a “second cycle.” Generally, Peter classifies companies into two: the ones that are forward-thinking and accepting of regulation and others that completely ignore it to profit from its non-existence in the short term. Peter took the long-term perspective of collaborating with regulators because he believes it is the only way to ensure the longevity of his company. The same applies now in DeFi, Peter said.
(05:04) “Some companies pop up and say we can get away with DeFi, no KYC, no AML for so long but I appreciate we’re in the same situation I was a few years ago where it is a matter of time before the regulators come knocking on the door and try to regulate the AML and KYC and enforce it for DeFi users,” Peter added.
Building the Coinbase for NFTs.
CoinBurp’s new product seeks to enable users to use fiat for custodial NFT purchases with fiat money. The NFT space has risen to popularity in the past few years and has enabled the evolution of digital art and online rarities. Yet, it is not easily accessible.
(05:40) “If you want to buy an NFT from OpenSea [an NFT marketpalce], you need to have an understanding of non-custodial wallets
and how to purchase ethereum. It’s quite technically savvy,” Peter explained.
(05:48) With its new platform, CoinBurp can leverage Bitgoals’s technology in addition to its fiat on-ramp to unlock value in existing blockchains, starting with ethereum.
(06:04) “What we’re saying is that the on-ramp into purchasing NFTs is so tricky for your everyday user. There’s demand from your general retail user on NFTs but should a user go to a YouTube video or google and find out that they have to download a metamask wallet and backup 12 words for a backup key, it just becomes too confusing,” Peter elaborated.
CoinBurp hopes to solve this problem for many retail users who cannot deal with that level of complexity.
(07:30) CoinBurp presently has two apps in the android and IOS stores; the centralised exchange app and the CoinBurp DeFi wallet. The latter is a non-custodial wallet with wallet connect functionality built-in that allows users to interact with other DeFi players like UniSwap by scanning a QR code for action like approving transactions.
By the end of the year, CoinBurp would be building a blend of centralized finance and decentralized finance within a single app to enable users to interact with “the best of both worlds,” Peter said.
(08:35) This yet-to-be-built app would allow fluid movement of funds between the two wallets. Its targets are users that want either a custodial or non-custodial wallet or a blend of both.
(08:52) “That’s our big goal but Coinbase for NFTs is to prove that through our custodial wallet that we have with BitGo, we can enable these interactions within the DeFi space and to begin with just NFTs but once we prove that concept and show it works, we are going to be moving on to other verticals and not only in ethereum,” Peter said
CoinBurp is blockchain agnostic and hopes that after the proof of concept, it can integrate the platform into multiple verticals and blockchains.
(10:21) venture into DeFi is grounded in the interest of its userbase. It is building the Coinbase for NFTs platform and launching its token after feedback from surveys asking its users about DeFi.
“We surveyed our existing customer base and asked them about DeFi and, a third of our customers came back and said that they’d heard of DeFi, they’re interested in DeFi but, they haven’t yet interacted with it. So we drilled down a bit deeper to find what’s stopping them from getting into DeFi,” Peter explained.
The survey showed that their users had concerns about private key management and the ease of using platforms like metamask extensions on browsers. Others also expressed interest in other DeFi verticles like insurance.
When customers, whether the retail or first-time users, were asked about what specifically within DeFi, they wanted, the response, perhaps fuelled by mass media, was NFTs. This led Peter and his team to build its Coinbase for NFTs platform.
About ten months ago, CoinBurp applied to the Financial Conduct Authority, a financial regulatory body in the United Kingdom that facilitates regulatory procedures for companies in finance. If a company registeres, it is assigned a case officer to see it through the regulatory process. Since its application, CoinBurp has made no progress. CoinBurp is not alone as some other 80 companies who applied are yet to hear from the FCA. Only about five companies have to date received approval to operate legally in the UK. This bodes a lot of uncertainty for the company’s future so its leadership is considering alternative jurisdictions. In the meantime, the FCA announced an extension of the temporary registration till March next year.
(13:53) “We’re exploring several jurisdictions like Gibraltar, Estonia, Lithuania and Ireland. The likelihood is that we are going to move to one of those jurisdictions and run it out of that country purely because we’re just not confident in the FCA’s handling of these crypto-assets registrations,” Peter said.
Tools to Enable Regulation
(15:59) Even before regulators are ready to provide outlines to DeFi companies, it is incumbent on the companies to be forward-thinking about the tools that would enable effective monitoring and oversight of their operations.
CoinBurp’s focus now is KYT, Know-Your-Transaction, using monitoring tools like ChainAnalysis and Elliptic. For instance, although FATF’s travel rule has not been imposed on CoinBurp because it is a UK company, it should be wary of it as virtual assets providers in other jurisdictions have complied. The travel rule helps companies like CoinBurp to track where the source of crypto is coming from, where it’s heading and how they can make risk-based assessments on customers.
On whether actors are also building for future compliance, Peter believes the technology behind decentralized exchanges are more ahead of centralized exchanges so that would not be a hurdle impossible to overcome. What is yet to be known is whether the business models and revenue streams of centralized exchanges can be translated to work as effectively in decentralised exchanges.
Funding and Financing
(20:13) The past few months have been a whirlwind for CoinBurp, as the company prepared to raise both private and public funding. CoinBurp accepted into the Web3 Accelerator in London called Outlines Ventures as part of its first cohort of 10 companies from over 600 applicants.
The company would be working on its Coinbase for NFTs concept in the accelerator, underpinned by the launch of the Burp token. It started raising private funding in March and since closed about USD 5.5 million from VCs.
(21:06) The Burp token would be launched for public sale on one of the top IDO platforms in the world simultaneously with two other IDO platforms, both in the platforms both in the global top 10.
(21:21) “I think that’s a testament to the belief in the project, not only because we’ve raised a chunk of money but also in the sustainability and future for our token,” Peter said.
The Industry's Next Biggest Opportunites.
(22:08) Peter believes NFTs, and emerging technologies in “decentraland” are the future. Despite the hype around NFTs that has made them into a get-rich-quick scheme, the tech beneath it all is brilliant, Peter said.
(22:48) “I imagine that we are moving to an environment where NFTs play a
pivotal role in the metaverse economy, the way you’re
able to exchange value between each other and not have to pay the game developer each time you have an asset, interoperability
of NFTs between different platforms are huge for me,” Peter explained.