InterMoney and 247 Exchange Founder: 'Doors Suddenly Close As Soon As the B-Word is Spoken' in Russia
by Diana Ngo
Anton Vereshchagin is the founder of InterMoney Exchange (IME), a firm that focuses on digital currency exchange services. Its flagship product, 247Exchange.com, allows users to purchase and sell bitcoins and altcoins through a number of methods; this includes buying cryptocurrencies with credit and debit cards.
IME has recently concluded a partnership with Vogogo Inc. to allow Canadians to use its services. No official announcement has been made yet because the company is still working on improving a couple of elements, Vereshchagin told BTCMANAGER.
Vereshchagin, a Russian native living abroad, initially planned to start his business with an exchange platform dedicated to the Russian market. However, the sudden regulatory change in Russia made him backtrack and change strategy.
He is still interested in the Russian market, though, and hopes that regulators will shortly bring more clarity when it comes to "money surrogates."
In an exclusive interview with BTCMANAGER, Vereshchagin relates how he got into Bitcoin, what led him to start this particular venture and the many challenges he faces in operating a cryptocurrency exchange. He also shares his views on what is holding back Bitcoin adoption, as well as his opinion on Russia's stance on cryptocurrencies.
I heard about Bitcoin in 2012 or so, I was very excited and extremely confused at the same time. I loved the idea of a fully decentralized alternative currency; a real global payment system without any issuing center, authority, etc.
Finally, I decided to purchase some coins. I found MtGox that was the most popular exchange, got my money ready and… I was shocked. I expected that I would be able to see how much coins I would get for, let’s say, my US$1000, or at least to see how much USD will be, say 200 BTC (prices were a bit different that time). I had very little experience with FX trading in 2012, so MtGox was kind of a big puzzle for me.
Thank God, my business partner Pavel Popkov, co-founder and CFO of IME, was a well-experienced Forex trader. We could "defeat" MtGox’s interface together, but that was a real struggle. The whole process took a much, much longer time and required much more effort than we expected.
So, when the idea of 247exchange came to us, we felt that there was a great potential in Bitcoin and that people would need an easy and safe way to buy/sell/exchange digital currencies. Although it took quite a long time to plan and build everything — especially the legal part of business — our clients’ testimonials prove that we were right.
On InterMoney Exchange
InterMoney Exchange is a group of companies specializing in digital currencies exchange. We have few B2C/B2B projects in development and operate the fully functional 247exchange.com website.
Our mission is to create the easiest, fastest and safest way to buy/sell bitcoins. Our vision is that it should be as easy as buying something in your favorite e-store. Some of the main features of 247exchange are:
- Easy, understandable user interface;
- Fully transparent pricing model;
- Extremely fast user identification;
- Instant delivery without holding the clients’ funds (in my personal opinion, this is probably the most important thing: even if our wallets will be emptied by someone, our users will not lose their funds);
- Wide range of payment/withdrawal methods;
- Skilled and friendly multilingual staff available 24/7.
On the current state of Bitcoin adoption
I can see the huge interest in Bitcoin, blockchain and all related technologies. If a few years ago almost no one knew what Bitcoin (or digital currency in general) was all about, now we can see that it’s almost common knowledge. In my opinion the main two problems (that we want to solve) are:
Lack of information about wallets; some of them are clearly not for average users and it’s hard to choose the right one.
Besides the fact that there are very good and safe alternatives, many first-time users believe that "official" Bitcoin Core is something they should use. This causes a lot of trouble. I’ve seen many people who have downloaded that software and (instantly) bought bitcoins from us just to wait for few days until their wallet will be synchronized with the network and they would be able to actually spend the coins. We are educating people but some of them don’t even ask; some think that it’s normal to wait for up to a few days for bitcoins to arrive, making the conclusion that it’s something as "fast" as SWIFT transfers.
We want to solve this education problem about alternative wallets and provide a possibility to integrate our service with the safest wallet providers, using APIs. I hope people who control bitcoin.org and other high traffic bitcoin-related websites will make the process of choosing the wallet for complete newbies easier, explaining advantages and disadvantages of different ones.
Lack of information and excess of outdated, too complex and confusing information about the process of buying bitcoins
It’s not so easy to get your first coins. Although early adopters are kind of used to it, in my opinion, it’s not normal that new users are usually referred to over-the-counter and other marketplaces. I remember my own shock after finally getting into bitcoin, getting a wallet, etc. You would have to figure out all the trading and/or "find a seller that won’t rip you off" thing.
I’ve even seen quick-start guides recommend that users mine their first bitcoins. Well, it was possible some years ago, but now… And who in his or her right mind would get into bitcoin mining just to try out how to use bitcoins? It may be fun and even profitable for some, but who will recommend graduating from casino dealer school to a person wanting to play roulette for the first time in his life?
That's a problem that we want to solve for some for our clients. I also hope that the administrators of some of the most popular bitcoin-related websites will consider the points I mentioned above. It’s perfect that the users have a lot of choices to get their first coins. But in my opinion, it’s wiser to point the "complete noob" to a list with a fewer options compared to the "10th level bitcoiner."
On the main challenges of running a bitcoin startup
The first challenge that took a lot of time was finding a bitcoin-friendly jurisdiction for incorporating our HQ company and to find really knowledgeable lawyers and compliance specialists who could understand what we were going to do. Right now, it has become a lot easier, but it was very hard to find these resources in 2013-2014 when we started the preparatory part of our business.
We faced a lot of difficulties opening bank accounts, merchant accounts etc.
A lot of doors would suddenly close as soon as the B-word is spoken.
We are regulated entity with a MSB license, complex Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT), etc., but even that is not enough for some institutions. Most banks and traditional finance companies are still unsure whether they should work with bitcoin businesses or not. The situation’s changed in a positive way but that took a while...
Our original plan was to start in 2014 with the xbt24.ru website that was targeted to the Russian market. The website was ready, we opened accounts in most popular banks and payment systems, did a lot of tests and were going to start the business.
But the sudden regulatory change in Russia raised a lot of concerns, so our Russian attorneys recommended us to postpone the start. That project is still "unborn," but we hope one day it will finally happen.
Add a number of daily attempts to defraud the exchange by people that are trying to pay with stolen cards/bank accounts etc., and you’ll understand that this is not the easiest business to run. But we love it, and difficulties just make us stronger and the service better.
On the Russian market
The Russian market is still very interesting to us. It’s hard to say what will be next there; when we were doing none-bitcoin-related business in Russia, we had seen a lot of quite significant changes in different industries happening all of a sudden. Let’s see what the Duma, the Russian Parliament, will decide regarding money surrogates this February; maybe it will add certainty to the situation.
Is Russia missing out on the next big thing?
I do believe it’s illogical to miss such an opportunity — it’s like blocking the Internet and GMT networks, supposing that people will read newspapers and send telegraph messages like they did decades ago.
I hope that the regulators will understand that it’s impossible to really stop people from using Bitcoin or the Internet, etc.
In my opinion, prohibition is pointless and regulation is the key. We all remember when both USSR and the USA attempted multiple times to ban alcohol in the last century. Did it make these nations healthier?
On plans for 2016
We are preparing a lot of pleasant surprises for our users and the community. Some of the things we are focused on right now are:
We are working hard on making the most requested service — buying bitcoins with credit/debit cards — as smooth, affordable and straightforward as possible. In a couple of months, we'll make some kind of revolutionary change. A lot of improvements have been made and we have already solved one of the most disappointing things: the delay period between the user registration and obtaining the "verified" status that signifies that you are good to pay. We verify most of our newcomers in 1-2 hours, sometimes almost instantly.
Thanks to our partnership with Vogogo, Inc., our service is now available to Canadians. Although we had not officially announced it yet because we still need to improve a couple of features, Canadian users can purchase bitcoins and altcoins instantly with INTERAC® Online or use slower but very affordable eCheck/EFT transfers. We already accept almost all kinds of cards and are preparing to launch some other instant methods to buy and sell cryptocurrencies.
We are also working on adding a lot of other payment and withdrawal options and are going to increase the number of altcoins we support. We are in the process of establishing strategic business relationship with both traditional finance and cryptocurrency companies.
We are constantly improving the User Interface and are going to add a lot of features that users have been requesting during the past year, including mobile applications.
We definitely do our best to be the most customer-centric companies in the industry (if not the world) and I personally speak with users a lot to understand how they see their dream service.
So I would like to invite everyone to participate in our polls and discussions about what we should add, change or make first. Please tell us what you think; we are always open for dialogue.
On the long-term audacious goal
InterMoney Exchange’s long-term goal is to become the company of choice for (at least) millions of users, to provide all possible services (websites, apps.) allowing users to exchange virtually everything from "good old" USD/EUR (and BTC/USD, EUR etc., of course) to something like "J.P.Morgan coin" to "nano-peso."
But if we are speaking about the nearest goals, our priority is to make 247exchange the ideal exchange service and the easiest way to buy and sell bitcoins.