How iComply is simplifying token sale compliance

0:00is a Jay Addison from event chain dot IO for investor pitch media and FinTech news network welcome to blockchain interviews today we have Matthew Unger the CEO of I comply I see Oh Matthew how are you doing today good are you Jay can i doing excellent Matthew what is I comply I see oh I comply as in in short version is compliance automation software so we

0:25have a kind of a platform approach towards compliance we focus currently on the ICO market so the initial coin offering space to bring some regulation and compliance tools a lot of people are raising money in this way without originally there was a little regard for regulation and now there's a lot of concern about being offside from a lot of ICO issuers and

0:51their law firms and accounting firms etc so that's really what we're there to solve this to provide an immutable do under me immutable ledger of the different compliance procedures that have been executed on on a trade in a decentralized economy or whether it's blockchain or measure or anything like that that sounds great the sector definitely needs it so I think you guys are right

1:15on target with that project who's on the team tell us a little bit about the team yeah well the team is quite big we've cut we've got a pretty high octane burn I guess you could say we've got our CTO is coming from the world's third largest and subnet our systems architect and a number of people on our tech team that come from the enterprise software world

1:44projects from SAPD to Siemens manufacturing to the cyber security could be Israeli military we've got quite a bit of expertise in both blockchain and decentralization as well as high-performance enterprise scalable esbit systems and that's really where retract I mean we really had to reach I come from the world of originally from the world of

2:11securities and finance and moved into tech about eight years ago and have worked a lot in the FinTech space a lot of different projects over the years and focused on any money laundering systems or trading trading platforms CRM – and Canada was a big big change for us that required a lot of technical changes and so I've kind of come from that space and we didn't have

2:39a lot of people directly in our team security side so a lot of our advisors come from leading firms in Canada one of the former compliance officers of the Nasdaq a leading tech firm in Austria watching firm in in Europe and a number of other legal and tactical advisors that we have and then some of our investors come from everywhere from MIT which is where I came up with the

3:06original concept of I comply and canvass idea of using blockchain to document compliance and and through that network came some of our earliest investors even some of our advisors it's actually been a very great and supportive community and then some of our other investors are coming from former finance executives from Apple family members of over a

3:34bunch of different projects along those lines where we're really trying to find people that are interested in not only just in the financial return of investing in a company like ours but also in really our vision of what we're trying to accomplish which is which is quite large and I know that you also have Peter piaseki on your team who is one of the most well known blockchain

3:55people in the world really and also one of the most brilliant so hats off to that one I'll tell you anyone in yeah Peter was as a gem for sure anyone who's more in the crypto space would probably know him as the Piazza yes exactly the moderator of the Bitcoin subreddit and this has been just an incredible resource on our team that's we're very lucky

4:21yeah he's great so for I comply I see oh who is your customer and what problem do you solve for them yeah so in the ico space we solved the problem of compliance and compliance is interesting I went through my first audit working in financial services when I was 21 it's eight days in the business and the regulator came in to do to do an audit of the office never wanted to get out of

4:47their desks and I remember sweating even though I hadn't zero clients remember sweating thinking like oh my goodness what if I get in trouble even though first I hadn't even done anything there's nothing to do wrong and a lot of people don't realize especially in the securities world compliance is kind of a there's three main things one you have to have proper procedures and like this

5:08is how we are going to maintain compliance and these are our compliance procedures etc then you actually have to do it and then you have to make sure that every single time you do it you keep documentation of how you've done it and when you come from a world of let's say database management you know there's this concept of garbage in garbage out and blockchain doesn't do that very well

5:30we need data that goes into blockchain has to meet certain requirements or the ledgers just not going to proceed and so this is this was where we saw a really unique opportunity for documenting compliance and so within that right nano the ICO market is big a kind of a hot space we see a lot of ICO exchanges wallets different integration partners and we actually have were actually

5:58entering technical due diligence now with a couple different stock exchanges around the world to look at how can our compliance API actually be fed into their trading systems and possibly even to the point where crypto assets could be listed if they were issued within compliance of securities regulations could they actually be listed on a traditional Stock Exchange and available

6:24to the average investor through their regular portfolios interesting yeah so why is now the time for I comply ICO more than any other time you know it's a crux of a whole bunch of different factors that have played into this we've seen a massive decline in public listings over the last 10 years it's been more and more difficult more and more expensive for companies to issue a

6:51public security but then we also see you know we've seen this take off as being of icos that have really proven that the ICO is a very effective vehicle at raising capital July 25th of this year now the sec came out to say that actually these are could be considered securities they're not some utility or something else but they're if they meet

7:17the requirements or passed the requirements of paui test it's a security which actually was very exciting for us because that's really when things took off where all of a sudden two key things happened first these are now legitimized by the regulators to be able to be used as securities so for us it wasn't like oh no it was yes finally and then the other

7:42factor was the the fines of non-compliance and and not just securities compliance but also things like GDP are which is a global data protection regulation in basically Europe is a minimum twenty million dollar fine so compliance from an ICO perspective is I can have some pretty serious teeth if you don't follow through and that's kind of where we've

8:06where we're seeing ourselves the the interest in the market whether it's from a big four firm or us you know a CPA owed over their office or a small lawyer or a major law firm it seems to be across the board people are looking for a more efficient way to use technology and its really come to a point now where in this especially in the US which is kind of our we felt that if starting

8:30with the US Securities Act it was a lot easier to move into more lenient jurisdictions than trying to go the other way around and so we that's really we focused and now we see us there's this move towards the c80 the consolidated audit trail and a lot of these problems that they're trying to solve it turns out these are the same problem that we have to solve or compliance in

8:52the ico world so it's a very exciting time to be part of this so although we're in Canada the ico the I comply ICL platform will work globally is that the idea yes we're a global platform we started with the US Securities Act ISM even in Canada our securities regulation is very much I don't want to say that the US Securities Act as a grandfather but maybe like an uncle we would very

9:17closely follow it a lot of you know private placements or even just offerings in general reference different parts of the US Securities Act and then Canada has our national instruments laid over top of a lot of that and you see this in a lot of places in the world where the US Securities Act is considered in a lot of jurisdictions somewhat of a gold standard that's

9:36looked to and so we felt it was very important to start with the US so we are currently able to support issuers coming from Canada in the US which is something quite unique to a lot of platforms that only focus out of Grand Cayman or Gibraltar or Singapore as an example but we wanted to make the ICO as a financial instrument I don't agree with calling

9:58them an asset class we don't call a public listing an asset class this is a tool for raising money like a public listing or a private placement so we really wanted to make this this financial instrument for raising money available to just traditional North American businesses and out of the applications that we've received which is in the hundreds most of them to the tune of almost 80

10:22percent have nothing to do with blockchain really the first company to buy a license on our platform was a Canadian real estate developer since then we've had numerous others from projects all across Canada ranging anywhere from 12 to 340 million dollars and you know and then us everything food food manufacturers to FinTech startups it's kind of kind of across the board

10:49but it's it's really exciting to be at this place where there's actually this you know such a demand for being able to raise capital in an efficient way without having to pay the piper for doing something illegal yeah yeah absolutely so what's next for the platform well I guess a couple big things that we have coming up is that this this February here now and

11:14we're getting ready to were actually our dev teams right now migrating on to the etherium main net so we will be releasing our protocol and this is one thing that's very different about our solution for compliance versus any other platform coming out there to suggest the idea of offering a legal or a compliant ICO it's we we do help people with that

11:39offering component which which is very much at the interface level but with blockchain we have to solve compliance remotely right at the base where the blockchain functions which is in the in the protocol itself so we are releasing two products which we're very excited to do the first one is solving that compliance on the transaction by and the sell side of every trade and we call

12:03that the pre facto compliance protocol why we call it prefect in a let's say centralized stock exchange the there's a trade plus 2 and that plus 2 is typically there to verify the checks and balances to make sure that compliance has occurred whereas in blockchain as you know it's immutable so the transaction goes through and is on the ledger you can't

12:27roll it back without pretty much wreaking havoc on the entire market so we looked at this to say well wait a minute we can actually if we do this in a computational way we can move compliance to the other side of the transaction and and that's really what what the prefactor protocol does so we're going live on a period and we are offering the protocol out that's a

12:49private label to people if they want to integrate into their own exchanges or their own exchanges or wallets or even you to other chains we're agnostic to the blockchain that's used so we built out the availability for any IC o—- on aetherium – calling – the contracts – to have the kind of the cluster of contracts that we require to do it in this way

13:15and we're going to continue to build up new new chains as there's market demand for it so that's the first one the second product that we are really excited about is there's a what a lot of people don't realize with things like Bitcoin is there's about 400 million Bitcoin addresses out there over 300 million of those addresses are linked to and known identity now and so when you

13:41deal with somebody who has a good concept of data mining and web scraping and things like this you can actually map a lot of these networks so there's no end on the midde T that you should expect with blockchain as things continue to move in this way with public chains and we felt that there was a big concern around this with the idea of my personal information being available to

14:05everyone every IC o—- that I go and I launched you know that I go and I want to invest in you know it's we kind of have the same we're just because of some genius 13 year old in their basement comes up with a world-changing concept that can be solved with some sort of decentralized solution doesn't necessarily mean that they need every investors passport photo on their hard

14:31drive in their basement yeah and and so we really wanted to come at this from a different angle and we really focused on what we call what's referred to as zero knowledge proof the issuer still has access to things like the address and the trade and the trade information but the individuals personal information is they have the ability to keep it to

14:54themselves so we're calling it the I comply ID product and it's essentially a portable kyc that they can go from one offering to another without having to go through and do all this verification again and if you're in Canada like we are as of March every time you get your verification done in Canada that's gonna pay your credit score and you're gonna

15:12lose a few points on your credit score so it's not really sustainable and there's many other jurisdictions that require credit scores for identity verification as well so we really wanted to do this in a way that was kind of the best case for the investor and and also try to minimize the amount of friction it takes even if you take a look outside the ico world and you go to

15:33a private broker exam mark the dealer it can be half a day if not longer to verify that you're accredited investor it doesn't need to be that way anymore we have technology that can verify these things in a much more efficient manner great idea yeah so how can people find I can ply I see oh well right now we're kind of all over the place things are quite busy we are if you know just in

16:01connecting in person we're actually next week we're holding a small private event for investors we're doing a seed round right now so we're just on the tail end of our seed round at closing this month so we're doing a little investor made on 13 but then the 15th and 16th I'll be speaking at the Bitcoin super conference and actually speaking towards you know

16:24talking about how blockchain can be used to bridge the gap from this you know the new cryptic way of doing things in the old traditional way and we can actually use this technology built to the standard of what the markets will are for security and investor protection and we can actually bridge this gap between the two and and enable block team to start doing more than a few billion per

16:47quarter and maybe talk about trillions instead so that's that's gonna be here in February and March I'll be speaking at money 2020 Eva will talk a little release that topic later on and then we're actually going to be at the IMF World Bank conference in April and just discussing how this can be used for you know some harmonization of global legislation and things along these lines

17:12so those are some key things that people want to reach out to us digitally we have AI comply I co calm as our website I comply I am calm and then our Twitter Facebook telegram we just said I comply I see oh we did just open up our telegram channel so if anyone's interested in getting in there we're going to be putting out some very very exciting announcements over the next

17:34little while and giving people some some peeks into what's happening that's exciting Matthew Unger from I comply ICO is certainly being a pleasure speaking you today a great project I love the project very exciting thank you so much for your time thanks and let's do this again sometime in the coming weeks and give everybody an update yeah that sounds great

17:53okay thanks kindly take care